How to Decide · Annie Duke · 2020
The fundamental problem with human decision-making isn't that we make bad choices but that we can't distinguish good decisions from bad ones. We judge decisions by their outcomes, a mental shortcut called "resulting" that corrupts our ability to learn. When a risky bet succeeds, we declare ourselves brilliant; when a careful plan fails, we question our judgement. This backwards reasoning leads us to repeat weak processes that happened to succeed while abandoning strong ones that got unlucky.
Outcomes cast shadows over the decisions that preceded them. A startup founder who bets everything on an untested product becomes either visionary or reckless depending solely on customer response. Yet the decision quality was identical in both cases. Only luck differed. This creates a learning disability: we cannot improve what we cannot accurately evaluate.
The problem compounds through hindsight bias, our tendency to see outcomes as inevitable after they occur. Memory creep happens when knowledge gained after the outcome seeps into our recollection of what we knew at decision time. Our minds don't time-stamp beliefs, so we unconsciously rewrite history, making outcomes feel obvious. The cure requires discipline: write decision memos before outcomes arrive, documenting context, options, expected ranges, reasons, and uncertainties. After the outcome, revisit the memo to separate process quality from result quality.
Before any decision, multiple futures branch out like a tree, with thick branches representing likely outcomes and thin twigs representing long shots. After the outcome arrives, we mentally chainsaw away all other branches, leaving only what happened standing as if it were inevitable. This retrospective narrowing makes single experiences terrible teachers. To combat this, reconstruct the tree after outcomes arrive. Write down the decision and actual outcome, then add other reasonable outcomes that were possible, noting which were better or worse. The reconstructed tree should look identical whether you succeeded or failed.
Effective decision-making requires mastering three elements: preferences, payoffs, and probabilities. Preferences reflect your personal goals and values. Payoffs measure how far outcomes move you toward or away from those goals, accounting for magnitude rather than just counting pros and cons. A single catastrophic downside can outweigh numerous small benefits. Probabilities express how likely different outcomes are. Without them, you'll over-credit lucky wins and over-blame unlucky losses.
Quality choices follow six disciplined steps organised around the Three Ps: Preferences, Payoffs, Probabilities.
- Map the plausible outcome tree for each option (not just best/worst).
- Order outcomes by preferences grounded in your values and goals
- Attach probabilities (even rough ones).
- Quantify payoffs: how far each outcome moves you toward or away from goals (magnitude and direction)
- Repeat for competing options on the same payoff dimension to enable apples-to-apples comparison.
- Choose the option with the most favourable likelihood-weighted payoff profile.
Natural language terms like "likely" or "rarely" are dangerously ambiguous. One person's "fair chance" might be 30% while another's is 70%. This fuzziness hides disagreement and blocks useful feedback. Instead, put numbers on beliefs. Add ranges to show uncertainty with a bull's-eye estimate plus reasonable bounds. Treat all estimates as educated guesses where you score points for getting close, not just for perfect accuracy.
The outside view provides powerful perspective by seeing your situation as others would rather than from your own position. People excel at solving others' problems while fumbling their own because the inside view corrupts judgement through confirmation bias and overconfidence. Base rates offer the quickest path to the outside view. Newlyweds estimate their divorce risk at nearly zero while accurately assigning 40-50% to strangers. If most restaurants fail within three years, your "this time is different" estimate should still orbit that statistic unless you have credible reasons to deviate.
Not all decisions deserve equal attention. Analysis paralysis wastes time on trivial choices while rushed thinking damages high-stakes calls. The time-accuracy trade-off governs every decision: increasing accuracy costs time, while deciding quickly costs accuracy. Reserve careful work for options with large potential losses. If a decision won't meaningfully affect your happiness in a week, month, or year, go fast.
Two-way-door decisions that are reversible with low quit costs invite faster choices and experimentation. One-way-door decisions that are irreversible with high quit costs merit slower work. Before committing, explicitly ask what it would cost to quit. Improve high-stakes calls by preceding them with low-impact trials like renting before buying.
Positive thinking helps set destinations but fails at route planning. The behaviour gap between intentions and execution closes through negative thinking that imagines obstacles and failure modes. Pre-mortems generate failure reasons split between factors you control and luck you don't. Pre-commitment contracts translate foresight into behaviour by creating friction for failure behaviours and removing friction for success behaviours.
Quality feedback requires quality inputs. Provide evaluators with relevant goals, constraints, and uncertainties rather than spinning narratives. Groups amplify biases through contagion while suppressing unique data. Combat groupthink through independent idea generation before discussion. Decision records preserve your state of knowledge at choice time, creating a laboratory for improving judgement.
The ultimate goal isn't perfection but portfolio improvement. Luck and incomplete information guarantee some bad outcomes even from excellent processes. A good decision wins more often across many iterations, not one that guarantees a single win. By separating process from outcome, documenting decisions before results arrive, considering alternative outcomes, and balancing inside and outside views, we can escape the trap of resulting and actually learn from experience.
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Nine Ways to Improve an Ad · Fred Manley · 1963
I'm sure you've seen a certain ad for the Volkswagen car, and heard it praised, and watched it pick up prizes the length and breadth of the land. I'd like to nominate this ad as one of the most inept, most ineffectual, most misguided efforts of recent years.
A historical takedown of those in advertising who over-index to win acclaim from their peers. Fred introduces 9 rules that’ll help fix the ad:
- Show the product.
- Don't use negative headlines.
- Whenever possible, mention your product name in the headline.
- Whenever possible, show people enjoying your product.
- Always feature news in your advertisement.
- Always give prominent display to your product logo.
- Think BIG and you'll choose VOLKSWAGEN!
- Show people enjoying your product.
- Always give prominent display to your product logo.
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Book Highlights
Be on time for meetings, share your know-how, focus on users and outcomes, be positive, delegate authority and responsibilities, be collaborative, communicate, and don’t hesitate to make decisions when necessary (but make sure people see how you came to your conclusions). Perta Wille, Marty Cagan and Martin Eriksson · Strong Product People
When I say fish where the fish are, it is really important to remember the flip side to that statement: don’t fish where the fish are not. If a method isn’t working, try something new. Giff Contable · Talking to Humans
Social Outcome: how customers want to be perceived by others by using your product. Wes Bush · Product-Led Growth
Escalators are more resilient than elevators because they revert to stairs when they stop working. Amber Case · Calm Technology
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Quotes & Tweets
When we work in silos, we do more work, we take longer to complete that work, and we often build sub-optimal solutions. Teresa Torres
I really like the term ‘context engineering’ over prompt engineering. It describes the core skill better: the art of providing all the context for the task to be plausibly solvable by the LLM. Tobi Lutke