Decision Frameworks For Better Thinking
As Einstein wrote in 1936: “All of science is nothing more than the refinement of everyday thinking.” Why is it that a skill as important as thinking is not a key focus in traditional schools? Why don’t we have classes on decision-making, cognitive biases, and mental models? Can we learn how to think better?
It’s a common misconception that brilliant thinkers are born that way, but thinking is a skill which can be practiced just as any other skill. And the good news is: it’s never too late to start proactively applying thinking tools and strategies.
The average human mind is fairly similar across the board. What differentiates between poor thinking and good thinking is the way we decide to use our mind. Lazy shortcuts and cognitive biases will result in poor thinking. Conscious mental models and emotional awareness will result in better thinking.
Critically thinking through problems can lead to more efficient solutions. Networked thinking ie thinking non- linearly can lead to combinatorial and more creative ideas. Being skeptical of your memories and intuitions can prevent painful mistakes. This article will explore how to think better with decision frameworks.
Frameworks for better thinking
Beyond general ways to think better, there are structured frameworks that can be used to make better decisions.
“The more you learn, the more you have a framework that the knowledge fits into.” — Bill Gates.
- Eisenhower matrix. Very few decision-making frameworks are as simple and powerful as the 2×2 Eisenhower matrix of prioritization. First, you make a list of everything you want to do. Then, you categorize them based on the following criteria: urgent and important, important but not urgent, urgent but not important, neither urgent nor important. The categories determine whether you should prioritize, delay, delegate, or remove a task from your list.
- DECIDE framework. The DECIDE framework is incredibly simple to memorize and to apply: define the problem, establish the criteria, consider the alternatives, identify the best alternative, develop and implement a plan of action, and finally, evaluate the solution. Because it carefully evaluates the alternatives and the selected solution, it helps avoid first-level thinking and linear decision-making.
- Define the problem - Taking a step back to ensure you really understand the problem at hand should be the first priority when trying to make a decision.
- Establish the criteria - If you’re about to purchase a piece of software, what are the criteria? Is it price, great support, ease of use? List all the factors you want to consider before making a decision.
- Consider the alternatives - Try to spend the right amount of time on this step. Too much time spent considering all the alternatives can drive to overthinking and analysis paralysis. Just make sure you have done enough research to have a few solid alternatives.
- Identify the best alternative -Weight the list of criteria you have created in the second step, and rate each of the alternatives. Then, compute the result to see which alternative makes most sense based on your criteria.
- Develop and implement a plan of action - Time to act on that decision. Especially if you have a maximizing thinking style, it’s important to force yourself to not go back to the previous steps and to move forward with the decision.
- Evaluate the solution - In order to make better decisions over time, examine the outcomes and the feedback you get.
- NASA Risk Matrix. NASA is known to have a process for everything. The NASA Risk Matrix—also called risk scorecard—helps determine the level of risk associated with a particular situation, and decide how to react.
On the y axis, you can see the likelihood, which is rated from 1 at the bottom to 5 at the top. On the x axis, we measure the consequence, which is also rated from 1 on the left to 5 on the right. So how do you rate both of these factors exactly?
For the likelihood score, you estimate how certain you are the risk will materialise.
- Not likely (under 20% probability of happening)
- Not very likely (between 20% and 40% probability)
- Likely (between 40% and 60%)
- Highly likely (between 60% and 80%)
- Near certainty (over 80% probability)
Then, for the consequence score, you use the consequence scorecard:
Obviously, if you don’t work at NASA and need to evaluate risk in daily life, many of these criteria will be over the top. Most of the decisions we make at work don’t involve evaluating the impact of a potential risk on human safety—even though many manual workers do need to consider that criterion on a daily basis.
The consequence scorecard is great to understand the principles behind determining a consequence score. Once you are familiar with it, you can decide on a score based on your expertise and your general knowledge of the project.
- Validity and Reliability Matrix. Are your mental models accurate? Are they consistent? This 2×2 matrix looks at the validity and reliability of mental models so you can make sure you are using the right mental models for the appropriate situation, and that you can trust to obtain similar results when using the same mental models repeatedly.
- Pre-mortem. In the case of complex projects, anticipate failure with prospective hindsight by performing a pre-mortem. The exercise consists in imagining that a project has failed, and working backward to determine what could have led to the failure.
- SPADE and Principles(Inspired By Ray Dalio) Framework.
SPADE Framework stands for S- Setting ,P - People , A - Alternatives , D- Decide , E - Explain. This was introduced by Gokul Rajaram in Square Inc, a payments company based in USA. It's usually used for product management, project management and other business decision scenarios. You can find it here.
Principles Framework is inspired as per the eponymous book by Ray Dalio of Bridgewater Associates, a Hedge Fund. It is a process promoting radical transparency and thoughtful discussions for teams in business decisions. It can be used as an effective tool for team decision making. Use this template as explained by Coinbase team.
Wrapping Up
As with all frameworks, they are not universal, and need to be applied based on the context, the particular challenge, and the goal we want to achieve. Some of these frameworks are quick and easy to use, such as the Eisenhower matrix which can help clean up a to-do list, whereas others are more involved, such as a pre-mortem. Pick the most appropriate frameworks for the job, and feel free to tweak them so they work for your particular use case. Ultimately, the process itself of learning how to think better requires hard work, but it can be fun and fulfilling. Good thinking is a precious skill it is worth investing in.
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4yInteresting read!!