Introduction

This blog will be a journey of exploring the art of decision making, starting with an introduction of some key aspects of decision making.

Acceptable Outcomes

It goes without saying that decisions are about achieving outcomes, achieving a goal, solving a problem, etc.

Not all outcomes are acceptable. If a decision will lead with certainty to a death by a lion, then most people are not going to make that decision. Most people will not make that decision if there is a high probability.

Whether your language is statistical confidence levels, expected value, risk tolerance zones, utility, KPI, must-haves, or boundary conditions, you are expressing the same basic idea; there is a range of outcomes that are or are not acceptable.

The knowns and the unknowns

There are:

• Things we know (known knowns)
• Things we know we don't know (known unknowns)
• Things we don't know we don't know (unknown unknowns)

For people new to a context, there are often many unknowns, and those unknowns can be killers - rookie mistakes. The gut feeling intuition that served them so well in another context may fail them in a new one.

Those who know their context well and are prepared can instinctively adjust quickly. There are many upsides to being prepared.

However, few, if any, know all the unknowns, so reserve capacity, scenario plans, and more can aid decision-making. The context for decision-making is the path you believe will be most beneficial and how you prepare for the path that you did not think would eventuate. That preparation does not have to be specific; it can be general.

The Chessboard

Many decisions have a context; they are not in a vacuum. Decision-makers have many ways of thinking about that context: PESTEL, SWOT, Five Forces, STEEPLE, Game Theory, etc. Their essence is awareness, adaptation, alignment, and interaction.

The thesis - our best current belief

In science, we may often act like something is a black-and-white truth, but when corned in an argument, we quickly give up the reality that science is merely our best current understanding - pending further information.

Decisions have a similar nature to them. A decision is based on the best path forward based on what we know within the context of different risk tolerances. Also, like science, decisions are often not a one-shot thing. They are an iterative process, subject to nuanced changes or significant course decisions based on new information.

Part of the art of decision-making is comfort with imperfect knowledge and foresight, making the best decision possible, and then testing the decision to improve it.

Timing

As I have been fond of saying over the years, "Information cannot be reduced below what is necessary" (https://internetdynamics.substack.com/p/axioms-information). In other words, every information function needs a specific type and level of information. No different for decision-making. If you don't have an acceptable level of necessary information at an acceptable error rate, you may delay the decision - if you can.

Life is a game

Game theory significantly emphasizes two essential concepts: information asymmetries and (non) cooperation, and whether actors on the chessboard will make moves or are in the best position they can be.

Life is not static; it is constantly changing, evolving, moved, and shaped by interactions.

Conclusion

The art of decision-making includes:

• Alignment with acceptable outcomes
• Being prepared for when the decision does not achieve the desired outcome.
• Knowing your surroundings
• Comfort with imperfect knowledge and foresight, making the best decision possible, and then testing the decision to improve it.
• Knowing what decisions must be made and when.
• Understanding who has what information, what motivates others, who will or will not cooperate, and the uncontrollable reality that interactions change the game.

As we explore decision-making, these are just some of the fundamental ideas we will explore. We will dig deeper, and we will also simplify. An approach to decision-making cannot be so overwhelming and taxing that decisions cannot be made because, after all, decisions must be made every day of our life.