How to Decide: Tools for Making Better Choices

Executive overview

Most of us confuse outcome quality with decision quality—a mistake called "resulting." A good decision can fail due to luck; a bad decision can succeed. This framework teaches you to separate luck from decision quality, improve information inputs, and build team decision processes that reduce bias. The core insight: focus on decision quality and information gathering, not just outcomes.

The luck problem and resulting bias

• Good decisions can produce bad outcomes; bad decisions can produce good outcomes (both through luck)
• We judge others by outcomes and excuse our own results—the reverse of how we should think
• Pete Carroll's Super Bowl pass play was mathematically excellent but produced an intercepted touchdown
• Andy Reid's unusual pass play worked out, but success doesn't make a mediocre call great
• Car accident reporting shows people blame external factors for failures—even 40% of single-car crashes get blamed on circumstance
• Hindsight bias prevents us from seeing what we actually knew at the time; we can't reconstruct our past knowledge without records

How information quality drives decisions

• Better information reduces the effect of what you don't know
• Amateur poker players play with less information than professionals, not because the info doesn't exist but because they can't process it
• Decision quality depends entirely on input quality—a flawless process built on junk beliefs produces junk outcomes
• You can control information quality; you cannot control luck
• Uncertainty is what enables cognitive bias (confirmation, overconfidence, availability, omission-commission biases)
• Chess players can't use luck as an excuse; poker players easily can, which encourages biased thinking

Separating decision quality from outcome

• Create a knowledge record at the time of decision: what you knew, what you believed, what you predicted
• The grocery store example: observing someone with an accent, guessing Italian, being told they're Greek—you didn't actually know, even in retrospect
• Zoom investment example: you may have predicted work-from-home trends correctly, but not the pandemic—the decision quality differs from the outcome driver
• A record shows whether reality matched your predictions; if not, update your models for next time
• A good process applied over time produces good outcomes, even if individual decisions sometimes fail
• Even with good outcomes, if your predictions didn't materialize, you had a poor understanding of the world

Building team decision processes

• Group discussions produce the worst information discovery: first speaker anchors, status dominates, extroverts heard more, persuasion suppresses disagreement
• Asynchronous independent work is the entry point: have team members answer decision prompts individually, privately, with rationales
• Define upfront what feedback you need—the facts you'll provide and the specific opinions/predictions you'll request
• Ask for specific answers (timelines with bounds, market ratings on 0-5 scale) rather than vague judgments
• Collect responses before the meeting; reveal them so team sees dispersion and rationales
• This approach surfaces disagreements safely, shows where knowledge differs, focuses meetings on areas of genuine dispute
• Creates a record of beliefs for later feedback loops
• Makes meetings shorter and more efficient by eliminating false consensus discussion

Calibration, not extremes

• Perseverance and quitting must live together; perseverance alone kills you (metaphorically and literally, like Everest mountaineers)
• Overconfidence and underconfidence both harm decisions; true calibration means knowing which to apply when
• Speed and deliberation are both required—understand the robust process, then know when you can compress it
• Low-impact, easily reversible decisions (two-way doors) can be fast; high-stakes decisions need deliberation
• Sunk cost, status quo, and omission-commission biases all protect past choices at the expense of opportunity cost
• "Move fast and break things" doesn't mean breaking a two-year lease; it means picking spots strategically

Identity and ego in decision-making

• We use ego for good or evil: protecting ourselves from admitting failure (evil) or updating our self-image to become better learners (good)
• Outsiders see clearly what insiders can't—that pivoting is smarter than persevering down a losing path
• The goal is second-order thinking: take pride in being a good quitter and admitting mistakes, not in appearing infallible
• When you stop connecting your self-worth to outcomes, you unlock the lessons the world is offering
• Long-term meta-thinking beats short-term ego protection
• Other people's perspectives are essential because they lack your identity investment in past choices

Getting feedback from other people

• Most decision-making is individual (your gut, your pros-cons list) or inefficient (group discussion)
• Your gut and informal pros-cons lists are where cognitive bias lives undetected
• An objective process must include other people's perspectives to counterbalance your blind spots
• Set up a simple system: email, Coda, Airtable, or Google Sheets with hidden responses
• Rationales should be brief—2-3 sentences explaining why, not dissertations
• Once responses are collected, the group can see where they actually disagree and dive deep into those areas
• This removes the social pressure to conform to early opinions or leadership views

Shifting from outcome to process accountability

• Culture change: stop asking "did it work?" and start asking "how did we decide?"
• This is the real homework—doing the work of writing down beliefs, rationales, and predictions prospectively
• Process accountability is the only accountability that produces better decisions over time
• Outcome accountability drives defensive reasoning, blame-shifting, and self-protective bias
• Once you internalize this shift, speed follows naturally—you know where to invest deliberation and where to save time