Quote of the Day: “We were surprised and very happy. We don’t know for who, but we are happy for somebody.”
—Richard Ravenscroft, owner of Coney Market, a convenience store in Lonaconing, Pennsylvania, pop. 1,200, where somebody bought a winning $731 million Powerball ticket this week.
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I’m starting to feel as if we are finally past the election season, and all the associated issues—things that often sucked all of the oxygen out of the ecosystem. Not without good reason, but it still made it hard to breathe.
So, while I will continue to write and opine on those things when they’re important, I’m also really happy to get back to writing with a little more variety.
Today: how to make good decisions.
People say great leaders don’t overthink. They don't succumb to “analysis paralysis.”
That makes sense for many decisions. But that positive quality—decisiveness—can also bleed into impetuousness, and gut-level thinking.
So, writing in MIT Sloan Management Review, Daniel Kahneman (winner of the Nobel prize in economics), along with Dan Lovallo, and Olivier Sibony, took on this paradox.
Their theory is that most bad strategic decisions are the result of deciding too quickly—which leaves people vulnerable to responding to biases, not facts.
Their solution is an approach they call the Mediating Assessments Protocol (MAP). As Jena McGregor of The Washington Post summarized, MAP has a single goal:
"To put off gut-based decision-making until a choice can be informed by a number of separate factors."
Evidence first, decisions later.
Now, this is a business leadership paper, so Kahneman and his colleagues use business decisions as their examples to illustrate the point. But they’re applicable in most settings, I think.
Suppose an investment firm is looking at a startup. Some of the partners have already had a chance to watch a product demo, and they came away impressed and excited. But then they have to consider other factors:
Sure, the product is cool, but is the management team up to the challenge?
Is the market really big enough?
Are there other competitors with products that are just as great or even better?
The more excited they are about the first factor—the product—the more vulnerable they might be to letting emotions, rather than facts, guide their assessment of the other factors.
So, an initial point of the Mediating Assessments Protocol is to force yourself make each assessment independently—and to be as quantifiable as possible, to make it less likely you’ll cheat on yourself.
OK, here’s the twist. The MAP process can seem a bit robotic. It might suggest there is a single “right” answer to complicated problems, or else that decision-makers are interchangeable.
Enter the final 10 percent.
"Unlike algorithmic decision-making, which aims to take subjectivity out of the decision entirely, MAP values intuition, provided that it is informed," Kahneman writes. "The holistic judgment of experienced executives is valuable, but it must first be prepared by a profile of mediating assessments."
If I can summarize my own way: It’s decisiveness, and gut-level decision making — but only after giving your gut every advantage, and eliminating as much uncertainty as possible.
7 other things worth your time
Remember there was a study that said past $75,000 or maybe $100,000 with inflation, more money doesn’t make you happier? A new study out of the University of Pennsylvania reaches an opposite conclusion: You’d be just a little bit happier if you made a little bit more. (University of Pennsylvania)
Biden’s team told CNN they’re basically “starting from scratch” to build a covid vaccination distribution plan, that 500,000 people will have died from the disease within the U.S. by the end of February, and that “it will take months to turn things around.” They’re also saying the plan is to try to vaccinate 100 million Americans within 100 days: but that sounds like a very slow schedule, doesn’t it? (CNN, The Hill)
Parler lost its bid in federal court to make Amazon host it again; I assume they’ll appeal. Separately the House is asking the FBI to investigate the social media network along with others, to determine how insurgents communicated with it before and during the Jan. 6 assault on the Capitol. (Reuters, WashPost)
Trump’s Facebook ban will now be reviewed by an independent oversight board. (The Verge)
Instacart had 10 unionized workers among its employees. They all just lost their jobs, part of 2,000 layoffs. (Vice)
Netflix now has 200 million paying subscribers. I guess this is what happens when half the world is told they have to stay home for nearly a year. (TechCrunch)
Have you seen the Bernie Sanders meme from the inauguration? The one where he looks like he stopped by Biden’s swearing on the way to the post office on a Saturday morning? It’s amusing, and now there’s a website that lets you add his photo in front of any address listed on Google Maps. (The Verge)
Thanks for reading. I wrote about MAP once before, over at Inc.com. If you liked this post, and you’re not yet a subscriber, now’s your chance! Please sign up for the daily Understandably.com email newsletter, with thousands and thousands and thousands and thousands of 5-star ratings from happy readers.
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