“A decision is a choice associated with an action.”
– Chris Spetzler, DecisionEducation.org
Today’s blog post is a guest post from Dr. George Huang of Freedompreneur.com. Once a surgeon, Dr. Huang now works with business owners and thought leaders to help them raise their revenue while expanding their influence. Over the years, he has been a client of Partners for Prosperity and has been directly involved with our business development. We are grateful to include his wisdom on our blog.
The stories we tell about ourselves and others shape and define our experience of life. The choices and decisions we make, as well as the outcomes of those choices and decisions, create the canvas of those stories we tell.
Most of us strive to make good decisions in our personal and professional lives. Clearly, some decisions are more important than others. Some decisions are life-changing, such as deciding who to marry and where to go college. Some decisions are significant, such as what investments to make and which house to buy. Other decisions are spontaneous, ranging from casual (what color shirt should I wear today?) to potentially life-altering (should I drive to work when the roads are icy?)
Why Important Decisions Tie Us in Knots
For the most part, we’re counting on a good decision leading to a good outcome. However, making a good decision does not guarantee a good outcome. For instance, choosing to move your investment portfolio from high-risk stocks to mutual funds doesn’t guarantee the preservation of capital.
On the other hand, one could make a bad decision and still get a good outcome. For example, suppose you canceled your health insurance this year because you never used it during the previous 10 years. You saved thousands of dollars in premiums. And you also got away with it, because past health history doesn’t guarantee future health and well-being.
Logic dictates that making a bad decision will invariably lead to a bad outcome. While this is necessarily not true, the fear of making a wrong or bad decision influences the freedom one has in making good decisions. Yet, caution alone does not enhance making quality decisions and may actually hamper it.
We mistakenly judge ourselves based on the outcomes of our decisions. It’s all too common to have a bad or undesirable outcome, despite making a good decision, then criticize the person making the decision, mistakenly thinking a bad decision was made. This is a common error in critical thinking that can and does have destructive and lasting effects on the quality of one’s self-image and life.
Conversely, your uninformed next-door neighbor could make a real estate investment based on faulty information, turn a healthy profit, then strut around acting like an all-knowing big shot.
“Whether a decision is good or bad depends on how we make the decision, not on the outcome.” – Decision Quality: The Fundamentals of Making Good Decisions, www.DecisionEducation.org
What Makes a Good Decision?
In essence, a quality decision is one that makes sense (head/logic) and feels right (heart/intuition), not one or the other.
The Decision Education Foundation offers a free publication, Decision Quality: The Fundamentals of Making Good Decisions, which I highly recommend. In this publication, they define the six elements of decision quality, each of which is linked as in a chain:
- Helpful frame: What are the goals to be achieved by making this decision? What should be included and excluded in the decision? What points of view should be considered?
- Clear values: Have we clarified and acknowledged our personal preferences – wants, needs, desires, and aversions – that influence the decisions we make.
- Creative alternatives: Good alternatives come from using one’s head and heart and are: a) actionable, b) potentially attractive, c) significantly different from each other, and d) under your control
- Useful information: Useful information consists of facts, opinions, acknowledgment of uncertainties, and consideration of pros, cons, and fixes for the cons of the various alternatives.
- Sound reasoning: Sound reasoning is the process of combining head (facts and logic) and heart (values and intuition) with useful information and creative alternatives to arrive at a decision that makes rational sense and feels right at a gut level.
- Commitment to follow through: This means being willing and prepared to do what is necessary to take bold, decisive action and overcome obstacles and setbacks.
Decision Traps and Biases
Unless you are Dr. Spock from Star Trek or a computer, the decisions you make are influenced by “filters” that affect how you prioritize and interpret cognitive and intuitive information.
Remember the last time you felt slighted because of lousy customer service from a company representative after making a purchase? Chances are you shared your bad experiences with your friends (and anyone else who would listen). Frequently, we’re hoping for sympathy and confirmation that, indeed, the company is in the wrong to disrespect and disappoint us. This is an example of “confirmation bias,” selectively seeking out people and/or evidence who agree with our perspective and beliefs.
At one time or another, we’ve been victims of “overconfidence bias” and “under confidence bias.” Overconfidence bias is the tendency to overestimate our ability to influence a particular outcome; under confidence bias is the tendency to underestimate our ability to contribute to a particular outcome.
For more information about decision-making biases and what to do about them, I encourage you to study the wealth of materials provided at no cost from the Decision Education Foundation.
“Good decision-making is an essential life skill, but most people acquire it only through a process of trial and error—if at all.” – Decision Quality: The Fundamentals of Making Good Decisions, www.DecisionEducation.org
Making a Quality Decision Involves Learning
A decision-making framework, such as the one described above from the Decision Education Foundation, provides a starting point for making better decisions. This framework depends upon your openness to learning, to growing your awareness of limiting decision-making bias, and cultivating an attitude of learning from outcomes, rather than condemning yourself and others based on outcomes.
We wear multiple hats in life: parent, sibling, teacher, entrepreneur, spouse, business partners, professional advisor, etc. Whatever the hat, we’d all benefit from sharpening our critical thinking, intuitive listening, and decision-making skills.
While outcomes are uncertain, good decisions increase the likelihood of desirable outcomes; similarly, bad decisions increase the likelihood of undesirable outcomes.
Given the stakes involved, learning and practicing how to make quality decisions benefits each of us personally and professionally, and contributes to the quality of lives for others. That makes for the ultimate win-win scenario!
About the Author
Many entrepreneurs suffer from “EDD,” “entrepreneurial deficit disorder,” where they have big hearts, but too many ideas and talents to focus and make the best strategic business decisions. George Huang helps these gifted entrepreneurs accelerate their business growth and profitability through his company, Freedompreneur Coaching & Consulting (www.Freedompreneur.com) and a related company he co-founded, Business Money Insights (www.SmartBusinessMoneyHabits.com).
In his previous career as a plastic surgeon, George consulted with many patients who sought cosmetic surgery for the wrong reasons. Today, he uses the same diagnostic approach in his work with entrepreneurs from various countries and enterprises, ranging from startups to Fortune 500 companies: searching for root causes of business challenges and addressing them with decisive action. His initial struggles with the business side of medicine inspired him to become the business mentor he wished he had had when he needed a helping hand.
Do You Need Assistance with Financial Decisions?
We agree with George that good decisions involve learning! We’re here to help educate you on your financial choices, and help you obtain the information you need to make an informed decision when it comes to your finances. Contact Partners for Prosperity if we can help.