Clear Thinking

The quality of our thinking determines every decision we make.

For smaller, low-impact decisions, trusting your intuition is fine — you can even use a coin flip trick. But when something has a greater impact, clear thinking and a systematic approach are key.

I’ll cover the most important factors influencing decision-making, based on Shane Parrish’s “Clear Thinking: Turning Ordinary Moments into Extraordinary Results” — blended with my thoughts.

Bad Decisions Can Result in Good Outcomes

When someone puts all their money into one risky financial asset, they may get lucky and make a lot of money. But that doesn’t make it a good decision.

Decision quality is independent of outcome quality.

Self-serving bias makes us think that if the outcome is good, then it was our abilities that caused it, and we did well. When the outcome is unfavourable, we often blame it on bad luck or external factors.

Our Defaults — Human Nature

I'm incapable of making important decisions early in the morning. I need at least an hour for my brain to process information properly.

Our biology plays a huge role in our ability to make good judgments. Knowing when you are at your best is valuable information to use.

We are affected by hunger, thirst, sleep deprivation and other basic needs of our bodies.

Being aware of these factors can help us reduce their influence.

• Emotional: We respond to the emotions of others. We feel attacked when someone gives us negative feedback. It helps to wait until emotions calm down before reacting.

• Ego: We have a strong desire to feel right, not necessarily be right. Each time someone rejects our proposed solution, we feel attacked, even if their solution is objectively better. It’s good to detach what we do from who we are.

• Social: We lean towards conformity, we want to be liked, when someone omits us from the invitation to the meeting, then we get scared and assume bad intentions. It’s important to know our self-worth and not pay that much attention to what others think about us.

• Inertia: We seek stability and avoid changes. Avoiding conflicts is easier than having a difficult conversation. Breaking inertia requires effort, and we tend to choose the easier option.

It’s impossible to turn our reactions off, but being aware of these defaults helps with understanding how we behave.

Preventing — Automatic Rules

If we know what our weaknesses are, then we can create automatic rules that prevent them from happening.

Imagine that you have problems with on-the-spot estimations that you are making when a client or PM asks about estimation during an update call. You want to be helpful and rush to give them an estimate, but then they attach to it, and it leads to missed expectations.

Create a rule for yourself: "Never estimate on the spot during calls".

So, the next time someone asks for an estimation, say:

"I’m sorry, but I'll get back to you in 30 minutes.

I have a rule not to estimate on the spot."

People tend to follow rules and do not question them, so they will rarely challenge you. Automatic rules help a lot!

Checklists work the same way, with rules to follow: Less space for human error means more chances to get it right.

Decision Steps

Problem Definition

Write the problem down. It helps with “making invisible visible”. Writing things down shows us gaps in our understanding.

When working with teams, create two separate meetings with separate goals:

• The first is dedicated to problem definition.

• The second one is dedicated to solutions.

Evaluate Possibilities

Evaluate options:

• Force yourself to come up with as many possible options as you can, and if there are just two possibilities, force yourself to find the 3rd one.

• For each option, answer the question “and then what?”, trying to predict its consequences. It’s second-order thinking.

• Imagine that one of the options is off the table, and you have to evaluate the rest without this possibility.

• Imagine that you must combine two options instead of choosing one, and that this is the only possibility.

• Think of the opportunity cost of each option.

Seek high-quality information from original sources. Keep in mind that different groups have different incentives that might influence the information you get from them.

When to stop gathering options for new information?

• When the first negative consequences of waiting for too long appear.

• When you no longer find useful information.

• When it is already evident which options to choose.

Time Needed — Deciding

Assess decisions by figuring out how they are consequential and reversible.

If the cost to reverse the decision is low, and the consequences are low, make it ASAP (As Soon As Possible, bottom left)

When the cost to reverse is high, or even impossible, and the consequences are high, make it ALAP (As Late As Possible, top right)

Keep in mind the margin of safety. If you know what the maximum traffic on the website might be, then it is good to add some margin of safety to keep servers running or introduce proper load balancing.

The decision = the judgement that a certain option is the best one

— Shane Parrish

Reflection & Learning

We learn by making mistakes and preventing the same mistakes in the future.

Document the decision that you are making the best you can — write down all your thoughts and opinions. Don't rely on memory because you won't remember it clearly.

When making decisions in teams, create a record that is clear to everyone so people can get back to previous decisions and understand them.

Summary

When deciding:

• Know how emotions and your defaults play their role

• Spend time on defining problems

• Evaluate possible options

• Make a decision

• Reflect

Thanks for reading!

— Michał

P.S. I wrote this article originally for Tech Books publication a year ago. It's a refreshed and polished version of it: Secrets of Clear Thinking. The book itself was reviewed here:

Book Review: “Clear Thinking: Turning Ordinary Moments into Extraordinary Results” by Shane Parrish 5/5