To become a better decision maker, consider the costs of quitting upfront. If the costs are low, say yes quickly to gain experience about your likes and values. Also, quit as quickly as you know it isn’t for you or isn’t working out. In dating I recommend three dates as the optimal trial period. On the first date most people are too nervous to relax enough to be themselves. After three dates you should know whether this is a person you want to spend more time with or not.
When the costs of the decision are high, then take more time to gather more information. Can you do a trial project with a potential business partner before committing? Could you hire someone on a temporary basis before you sign them on as a permanent employee?
When faced with low-impact decisions, you can say yes quickly and quit quickly. This allows you to learn more about what you like and don’t like and gather information. So, then when you are faced with a high-impact decision that has high costs to quitting you’ll be better informed and prepared. This is why dating lots of different people is a good thing to do before you marry.
This is why you might want to rent in a town or neighborhood before you buy a house. Or why you might test drive a car before you buy it. This all minimizes the risk and cost of making the wrong high-impact decision. And some decisions are high impact and have an outsized effect on every area of our lives. Decisions about who to marry, whether or not to have kids, how many kids to have, and career choices all have a massive impact on our lives. And some of these decisions, like whether to have children, are irreversible.
Because choosing a career is a high-impact decision, I ask my clients to first gather more knowledge about themselves by taking a few objective career assessment tests that reveal which options are most likely to lead to a happy and optimal career choose. The tests also reveal choices that might be very unfulfilling or challenging and not a natural fit to your hard-wired talents and abilities.
Any career that is in alignment with your natural abilities, talents and core values is a better choice than careers that don’t align. The more you know yourself, the easier it is to make the optimal decision. And this is why Annie Duke says to experiment with low-impact decisions so that you can learn more about your likes and dislikes.
To learn more about the career assessment tests click here.
Annie Duke shows us that the key to making better decisions is to know yourself well. Once you can lump your choices into likes and dislikes then you can choose quickly amongst the likes with little risk of failure. She says it is much like deciding what to eat on a menu. Once you quickly eliminate your dislikes then you can flip a coin and quickly choose from your likes with little repercussion.
Duke reminds us that getting to 100% certainty with a decision isn’t the goal. If you want 100% certainty you may never decide. This becomes a default choice of staying the same. You’ll never know with 100% certainty if the job you say yes to will be as great as you hope. But at some point, you’ll have to decide yes or no or the opportunity will go to someone else. It may help to ask yourself, “What’s the worst that could happen if I say yes?
It might be that you are in a job that you don’t love for a year before you can leave for a different job without raising too many eyebrows or damaging your career.
A client whose entire department was eliminated due to a restructuring wondered what she should do. Should she take the option to remain in the company in a different department (the safest option given she liked the company) or take the one year’s severance salary package and look for a new job?
I asked her what were the downsides to staying?
1. If she stayed, she would not get a full year’s salary and she might not like her new job in that company.
What were the downsides of quitting?
1. She might not like the new job in a new company, but she’d get a full year’s pay up front.
2. She’d gain new experience in a company that could enhance her resume (so actually an upside of quitting).
In the end, she quickly found a new job with a new company and got a better title and more responsibility and she pocketed that extra year’s salary. Looking back, she now wonders why this wasn’t obvious at the time. It felt like a high impact decision because it was. Any career choice or change is high impact. However, if you consider the costs of quitting, the worst case was that she would work in a job for a year that she didn’t like and then could reapply to her old company. Either way, she’d get that year’s extra salary.
This sort of decision is what Duke would a “free roll.”
It’s “…a choice where there is very little downside or a situation where there is an asymmetry between the upside and the downside because the potential losses are insignificant.”
It may be obvious in hindsight, but in the moment it feels like a major life and career defining decision. What if you find your dream house, but it is outside your price range? You could make an offer within your price range. If they say no, you’ve lost nothing. If they say yes, then you get your dream house! The only cost is a willingness to be rejected. While you move quickly to say yes to the opportunity, take your time to make sure the house is sound of structure. Say yes fast, then slow down to get it right after.
A client said that her dream was to find a 2-bedroom apartment in her apartment complex, but when one finally came up for sale, she hesitated. It needed some renovations and she had recently paid off her mortgage in full. She was reluctant to go into mortgage debt again, even though she knew she’d have to if she wanted to buy a bigger place. I suggested that she release equity from the first apartment to buy the second. Then she should rent out the first for rental income after she had done the renovations so she wouldn’t be inconvenienced by builders coming in and out. She hemmed and hawed until someone else saw the apartment and immediately bought it, making the decision for her. She could have made the offer, asked them to take the apartment off the market, and then take a bit more time to consider the apartment without the pressure while the inspection and other checks were being done.
You don’t ask that beautiful woman out because you are afraid of rejection. You don’t make the lower offer on your dream house for fear the sellers will think it is ridiculous or insulting.
Could we be missing out on life’s free rolls for fear of a minor, momentary rejection? You don’t apply for the dream job because you are afraid they won’t hire you. You prefer to hang onto the dream instead of making it a reality.
Remember free rolls have very little downside cost, other than the initial sting of rejection. But the upside could be huge! When the asymmetry of the bet works in your favor, go for it!
Let’s consider some of life’s free rolls:
- Asking someone on a date.
- Buying a nice home in a good neighborhood on a 25 to 30 year fully amortized mortgage with no penalty to prepay .
- Getting the company matching contribution on your 401K plan (instantly doubles your money).
- Applying for scholarships or grants.
- Pre-applying to your dream university.
- Making an offer you can comfortably afford on your dream house or apartment even if the asking price is higher.
- Applying for a dream job that is a bit of a stretch.
- Asking for a raise.
What about stuff that masquerades as a free roll but has a high hidden cost?
- Those free donuts at the office look like a bargain until you gain weight. Not such a great idea in the long run. Same goes for that free basket of bread at the restaurant.
- Lottery tickets looks like a free roll…a small price to pay for huge riches. However, if purchased weekly, you are actually locking in real monetary loss given the odds are mightily stacked against you in the lottery. You’d be better off putting that money in the bank and saving up for a deposit on a home which is a real free roll!
- Sleeping around. It looks like fun on the surface, but could have lasting damage to your health (picking up AIDS or STDs) and reputation.
It’s not a free roll if there are long term damages to your wealth, health or reputation!
The key to success and happiness is to get lady luck working in your favor whenever you can, which means being able to seize upon life’s opportunities by taking that chance when the odds are truly in your favor. It also requires having enough self-confidence that you aren’t afraid of what people will say or think.
You lose big time if you stay in a job you don’t like when there are other opportunities out there you could enjoy. That is guaranteed loss of your precious life energy. On the other hand, there is no need to flail about blindly. We have the most sophisticated tools to help you figure out what that ideal career might be.