This article is the first installment in a new series.
Over the next several weeks, I'll be picking one podcast guest, applying what I learn from them to my life, and share my lessons learned with you.
We kick off the series with decision-making expert, the "Duchess of Poker"- Annie Duke, who taught me how to make better decisions by thinking in bets.
Now retired, Annie used to be the leading money winner among women in World Series of Poker history - and now she's translating what she learned into lessons directly applicable to our everyday lives.
Making decisions is an essential life skill, but we seem to only learn how to do it through trial and error.
Every day we make hundreds of decisions. Many of those decisions like what to eat or wear, links to click on, and what to buy on Amazon are inconsequential. They don't have a significant long term impact on our lives. Other decisions like what we do for a living and who we marry are consequential decisions.
But many people spend more time on minor decisions than on major ones. And in the process end up making major decisions they regret. The good news is that we can learn to make better decisions.
The Anatomy of A Decision
For every decision you make, there are critical elements you have to take into consideration:
- The decision
- The stakes of the decision
- The outcome
- The probability of the outcome
- The Payoff
- The consequences of your decision
One decision that we make almost every week is what to order at a restaurant. This is a low-stakes decision. You might not like your food. But the consequences aren't severe. Unless it was 24 hours ago, you probably don't even remember the last meal you didn't like at a restaurant.
The stakes of a decision can also change based on where you are in your life. If you're in college, you might feel like your course of study is a high stakes decision. But talk to most people who have been out of college for a long time, and you'll learn that their careers have nothing to do with their majors. People who go to medical school are the rare exception to this.
A high stakes decision we all make at some point in our lives is choosing a romantic partner. A few years ago, I had a long-distance relationship that blew up in my face and made a mess of my life. I swore off long-distance relationships and Indian women. Brian, my old business partner said, "Dude, you can't swear off an entire race, particularly your own." Touché. When I mentioned this to Annie, she said the following to me:
"If you'd thought through the multiple outcomes and assigned probabilities to them, you wouldn't have gone off the deep end after the break up. Knowing the odds were already against you, you wouldn't have been so quick to throw caution to the wind."
The Cost of Reversing a Decision
The cost of reversing a decision varies with life-stage. If you're in college or in your early 20's, it's easy to change your major or change jobs. It's not going to cost you much to reverse your decision.
But say, that you're established in your career. You make plenty of money, and you have the responsibilities of raising kids or paying a mortgage, reversing your decisions becomes much harder. It's not impossible, but the cost of reversing is much higher.
Separating Decisions from Outcomes
Our decisions are always in our control. Our outcomes are not. Yet, we tend to blame ourselves for the outcomes by saying we made a bad decision. It's a bit like blaming yourself that you can't predict the future.
Shitty Decisions vs Good Ones
If you go to Vegas and bet this month's entire rent on one number on the roulette wheel, you're not risk tolerant; you're an idiot. That's a shitty decision. If you step on the gas in bumper-to- bumper traffic, there's a near 100% probability you'll rear-end someone.
Say you hire someone to work for you. You interview them, check their references, and they seem qualified. But when they start working for you, the results don't meet your expectations. You made a good decision. But you ended up with a bad outcome.
There is value in bad outcomes as long as we learn from them. A few months ago, my friend Matt Cooke and I offered a book-writing retreat. Only one customer signed up. While I wasn't happy with the outcome, it gave me very useful insight: Most of the people in my audience don't want to write books.
However, the weekend was invaluable for the one client who did buy. Not only that, it became apparent that it didn't make sense to do this as a group workshop. So we gutted it, raised the price, and rebranded it as a VIP one-on-one weekend.
In the case of the book-writing retreat, it was a good decision with a bad outcome.
The Power of Options
If you married your high school sweetheart and are madly in love, congratulations. You're an outlier and this doesn't apply to you. Same to those of you who found the perfect mate when you got out of college.
For the rest of us, having some options is a good thing. When you hedge your bets, you reduce risk. Whether it's a career or a romantic partner, when you choose your first available option, you make a decision from a place of scarcity. If you're making a decision from a place of scarcity, it's likely you will settle for less than what you want.
The Power of Options in You Career
In the fall of 2006, I got laid off from a job. My boss knew I was applying to business school, so I was an easy target. He made the right choice and even wrote me a recommendation letter. But I had to earn a living for the next nine months.
After a month, I had two offers on the table.
- One was in San Francisco.
- The other meant a one-hour commute to Mountain View each day.
If you live in the Bay Area, you know what a dreadful commute that is. Even though I liked the boss, the opportunity and everything about the Mountain View opportunity more, I didn't want to commute.
Every couple of days, the recruiter would call me with a revised offer. I'd gone in expecting a salary of 60k and within a few weeks, it was an $80,000 a year offer. I ultimately didn't take the job because I liked my future boss too much and didn't want to screw him by leaving for grad school.
I also chose the second job because it was somewhat aligned with my long term dream of working in media and entertainment.
But, having two offers gave me leverage. I didn't even have to ask for the increase in salary.
At the beginning of 2015, I was in talks with a publisher about writing a book. The editor I was speaking with told me they paid low advances and we couldn't agree with what my book should be about.
A few weeks later, I got an email from my editor at Penguin. When I mentioned this on Facebook, the editor at the first publisher saw it and said, "Go with them, they'll be much better for your career." The advance was ten times the original. And a few months later, the division I was talking to at the first publisher folded.
Having options gives you leverage and can have a positive impact on your career.
The Power of Multiple Options in Romance
"If you are seeing only him/her, the result is that, at a very early stage, you lose your ability to judge whether he or she is really right for you. By using the abundance philosophy, you maintain your ability to evaluate potential partners more objectively" - Attached: The New Science of Adult Attachment and How It Can Help You Find - and Keep - Love
Having more than one option for a potential partner doesn't make you a player or a slut. It makes you somebody with discernment. With discernment comes better judgment. And with better judgment comes better decisions.
I have what the authors of the book Attached would call an anxious attachment style. I get emotionally invested in people a bit too quickly. It's something I have to work hard on to keep in check. Having options is a good way to do that.
When you only have one option, you're desperate. And there's nothing attractive about being desperate. Not only that, you'll put up with people who treat you like shit when you'd better off walking away. You won't be objective in evaluating partners.
The single biggest thread in all my past relationship was a lack of boundaries. I spent money I didn't have, let the girls I dated yell at me, scream at me, and treat me like shit. But if I'd seen I had options and had a higher opinion of myself, I would have left.
With a few options, you're more likely to end up with the person who is the right one.
The Most Important Decisions You'll Ever Make
All decisions involve a large measure of uncertainty about the future. What makes transformational choices especially tough is you don't know what your transformed self will be like or will want, after the vagaries of life begin to have their effects. - David Brooks
Over our lifetime, all of us will make two high stakes decisions, in which the consequences will have an almost irreversible impact on how our life turns out: who we marry and what we do for a living. It's not that we can't change jobs or get divorced. But the impact of a divorce is far more significant than ordering food you don't like off a restaurant menu.
Choosing a Romantic Partner
Unless you married your high school sweetheart, who you take to the prom is an inconsequential decision. Who you marry on the other hand is incredibly consequential. Making a bad decision in this part of your life has a high opportunity cost, not just in terms of money, but also time. "Who you marry is the most important decision you will ever make. Marriage colors your life and everything in it" says David Brooks in his book The Second Mountain.
I come from a culture in which there is a lot of pressure to make this decision as soon as possible. Sadly, many people get married just because of this pressure. And in many cases, they stay together only because it's frowned upon to separate. My parents have been smart enough to recognize this. They said, "If we pressure you and it blows up in your face, then we're going to be the ones who feel guilty about it." If you're going to spend the rest of your life with someone, that's not a decision you take lightly.
When it comes to romantic partners, our cultural programming teaches us that we need to be married by a certain age. So we settle instead of settle down.
We make one of the most important decisions of our lives as if we're a ticking time bomb with an expiration date. I've seen friends marry people because "it was time." Some of those friends stopped talking to their friends and others are miserable. As dating consultant Nick Notas says in this blog post, "People give more thought to choosing their next Amazon purchase than to choosing their next relationship." That's completely insane.
Deciding on a Career Path
There's one common pattern between every person I've interviewed on Unmistakable Creative. Their career paths aren't linear. I thought this might have been a coincidence. But thanks to a conversation with a recent podcast guest, I learned that there's research to back this up. According to David Epstein's book Range: Why Generalist Thrive in a Specialized World, people who have a long sampling period end up being more successful in the long run even though they appear to be directionless in the short run.
Passion follows engagement. But to discover what you find engaging, you have to try lots of things. It's the rare person who comes hardwired with some form of passion or destiny. Despite this, people commit to career paths, blindly follow passions, and wake up 15 years into a career disillusioned with their lives.
They approach their careers like they are ordering off a fast-food menu.
- Students in MBA programs choose from the companies who recruit at their school.
- Others believe the only available jobs are the ones posted on LinkedIn or other career websites.
If it's the greatest job in the world, chances are you're not going to find it by submitting your resumé along with the masses.
People early in their careers often focus on resumé values and make decisions based on the size of a paycheck, or prestige of an employer. I certainly did and it was a disaster. But pedigree is rarely the precursor to meaning and purpose.
Toward or Away from the Mountain?
Six months after I graduated from business school, I finally got a job offer. Within a few days of being there, I realized I was doing exactly what I had gone to business school to avoid. I found myself smoking on lunch breaks and all my IBS symptoms were flaring up.
My second week on the job, I shut my laptop on a Friday afternoon and walked out the door.
Every decision you make carries you in the direction of a dream or away from it. In his amazing speech, "Make Good Art", Neil Gaiman said this of the decisions we make regarding our goals:
"If you have an idea of what you want to make, what you were put here to do, then just go and do that.
Sometimes the way to do what you hope to do will be clear cut, and sometimes it will be almost impossible to decide whether or not you are doing the correct thing, because you'll have to balance your goals and hopes with feeding yourself, paying debts, finding work, settling for what you can get.
Something that worked for me was imagining that where I wanted to be – an author, primarily of fiction, making good books, making good comics and supporting myself through my words – was a mountain. A distant mountain. My goal.
And I knew that as long as I kept walking towards the mountain I would be all right. And when I truly was not sure what to do, I could stop, and think about whether it was taking me towards or away from the mountain."
Despite how difficult my job search had been, I knew if I stayed there for another minute, I'd be walking away from my own distant mountain, which at that point was doing anything other than sitting at a desk, making cold calls.
We spend a substantial percentage of our lives at work. If you hate your job, you basically hate your life. While you may not be able to leave immediately, you do have the option to take the first step out. You can do something today that you'll be glad you did ten years from now.
Here's what you have to consider:
If you stay where you are, and keep doing what you've been doing, what's your life going to look like a year from now? Probably very much the same. It's like Trinity says to Neo in the Matrix when he wants to get out of the car, "You know where that road ends."
This is true for the job you hate or the girl who never returns your calls, ghosts you, or the guy who treats you like shit. As my friend AJ Leon likes to say, "This is not your practice life. Stop treating it like that."
We've all made good decisions and bad ones. We've had favorable and unfavorable outcomes. When you let your past outcomes define the decisions you make in your future, you invite limitation into your life instead of possibility. By all means, learn from your mistakes. But let the mistakes you've made inform you, not define you.