Stacking Up: Navigating the Complexity of Decision-Making

Life is full of decisions, from the seemingly trivial to the monumental. Each choice we make, no matter how small, contributes to the overall structure of our lives. Recently, a simple game of Jenga with my son provided an insight into this concept.

As we began the game, the tower stood tall and stable, a sturdy foundation of wooden blocks. We took turns carefully selecting and removing blocks, each of us trying to maintain the tower's integrity. With every move, the structure became increasingly precarious, teetering on the brink of collapse. Then, inevitably, one block too many was removed, and the tower came crashing down.

This game served as a metaphor for the decisions we face in life. Each choice we make is like removing a block from our personal Jenga tower. Some decisions are small and seemingly inconsequential, while others are weighty and transformative. But just as in the game, there comes a critical point where one more decision can cause everything to collapse, a point of no return where the cost of reversing course becomes too high.

Farnam Street's "Decision by Design" course offers valuable insights into navigating this complex landscape of decision-making. The concept of the "lead domino" represents that tipping point beyond which a decision cannot be easily reversed, much like the Jenga block that finally topples the tower. The cost of rebuilding after such a collapse, whether in terms of time, effort, money, or emotional capital, can be immense.

To better understand how to approach decisions, we can consider them along two axes: the cost of being wrong and the reversibility of the decision. This creates four distinct quadrants, each with its own set of strategies and considerations.

The first quadrant contains low-cost, reversible decisions. These make up the majority of our daily choices, such as what to wear, what to eat, or whether to go out or stay in. While these decisions still require cognitive energy, they are relatively easy to manage. Establishing rules and habits can help streamline these choices, reducing decision fatigue. When faced with these decisions, it's best to make them quickly and avoid overthinking. Delegating these choices to others, such as empowering children to make their own low-stakes decisions, can also be an effective strategy.

The second quadrant involves high-cost, reversible decisions. These choices, such as buying a car, moving to a new city, accepting a job offer, or investing in a particular stock, can have significant consequences but are still reversible, albeit at a cost. When faced with these decisions, thorough research and information gathering are essential. Understanding the potential upsides and downsides, as well as preserving flexibility and optionality, can help mitigate the risks. Renting before buying, test-driving before purchasing, or investing a small portion of a portfolio before going all-in are all examples of maintaining reversibility in high-cost decisions.

The third quadrant, containing low-cost, irreversible decisions, is relatively rare but can serve as valuable learning opportunities. Choices like getting a tattoo fall into this category. While the consequences are permanent, the cost is relatively low. These decisions can teach us important lessons about living with the outcomes of our choices and can be delegated to others, such as allowing children to make irreversible low-cost decisions, to help them develop resilience and adaptability.

The fourth and final quadrant is the most critical, containing high-cost, irreversible decisions. These are the most consequential choices we face in life, such as deciding to get married, have children, leave a relationship, fire an employee, or bet a career on a particular path. The cost of reversing these decisions is often prohibitively high, not just in terms of money but also in emotional and psychological terms. When faced with these decisions, it's crucial to delay the choice until the last responsible moment, gathering as much information as possible and engaging in scenario planning to simulate potential outcomes. Breaking the decision down into smaller, reversible steps can also help manage the risk.

Amazon founder Jeff Bezos refers to these irreversible, high-consequence decisions as "one-way doors." He emphasizes the importance of careful deliberation before stepping through such a door, keeping a foot in the doorway to gather information and break the problem down into manageable components.

By understanding the nature of the decisions, we face and applying appropriate strategies, we can navigate life's challenges more effectively. Breaking down decisions enables delegation, teaches judgment, and allows us to move quickly on reversible choices while taking more time with irreversible ones. This approach empowers high-judgment individuals and teams to be effective without getting bogged down in unnecessary friction.

The game of Jenga serves as a simple but powerful metaphor for the weight and complexity of the decisions we face throughout our lives. Each choice we make, from the seemingly insignificant to the monumental, contributes to the stability or fragility of our personal towers. By recognizing the potential consequences of our decisions, gathering information, maintaining flexibility when possible, and carefully deliberating on irreversible choices, we can build more resilient structures and minimize the risk of a costly collapse.

In the end, life, like Jenga, is a balancing act. We must learn to navigate the constantly shifting landscape of decisions, adapting to new challenges and opportunities as they arise. By applying the principles of decision-making, we can develop the wisdom and judgment necessary to build stable, fulfilling lives, one block at a time. The game of Jenga may be simple, but the lessons it teaches us about the art of decision-making are enduring.

References:

• Decision by Design
• Invent and Wander: The Collected Writings of Jeff Bezos, With an Introduction by Walter Isaacson