Life Principle 5: Learn How to Make Decisions Effectively
page 234 Much of the purpose of this chapter seems to focus on having our processes for making decisions so understood that we could give the process to someone and they would make the same quality decisions in the same circumstances. In my world, like a babysitter or substitute teacher in the classroom, but for most people, this would be for a person high in an organization. For many things in our lives, we probably don’t need the processes dialed in like this but I have to wonder if it would help. The fear of doing this? Becoming too rigid. But maybe he’s not talking about scheduling out every single minute, in fact, I think Dalio would hate this idea because he seems to be much more focused on quality of work. If it takes me 3.5 minutes to brush my teeth well then that’s better than dogmatically declaring that 2 minutes is the max brush time…right?
Don’t Cherry-Pick Evidence to Support Your Decision
Page 235 “Learning must come before deciding…but no matter how much you learn… what is most important is that what you know paints a true and rich picture of the realities that will affect your decision.” I’ve been guilty many times of assuming I have all the information or dismissing the missing information at superfluous, just so I can go on doing what I want to do. Dalio refers to paying attention to the first, second, and third-order consequences of our decisions but I’m not sure I fully grasp what those are. In short, “the first pitfall of bad decision making is to subconsciously make the decision first and then cherry-pick the evidence that supports it.”
The concepts in this chapter are deep and challenging; I’m not entirely sure how to apply them yet. One Situation that comes to mind is a business plan — a tool that we tend to use to ensure we are making good decisions but it is a daunting task to try and write a business plan.
Page 244 Dalio makes an interesting and surprising point: “Be imprecise.” Most people will multiply two numbers exactly when knowing the approximate product is useful.” I’m not sure I fully grasp the importance of this. He seems to be saying that we want to recognize general patterns in evidence instead of trying to construct a complete and exact understanding of every nuance. This sort of precision may impede decision-making because it’s time-consuming. I hope I can recognize situations in the coming weeks where being imprecise is helpful.
Don’t Mistake Possibilities for Probabilities
Page 254 “Don’t mistake possibilities for probabilities” “Things should be prioritized in terms of likelihood. There are three main business things I’m working on right now. I’m writing music in hopes that I can find listeners who value my music enough to purchase it. I’m writing content about respectful parenting in order to sell coaching services for parents who want to create peaceful and respectful relationships with their children. And, I’m helping Sun FundED create social media content. Which one of these is possible? All of them! If I work hard and creatively on any one of these they are possible to achieve my goals with. Which are probable? That’s a different question and I’m not exactly sure how to evaluate it. Fortunately, I don’t think it’s ever too late to start asking ourselves these questions.
Questions I’m reflecting on:
How do I evaluate when someone is credible?
Do I allow myself to dive deep into a problem before declaring a solution?
If not, why?
Do I talk to the right people when tackling a problem or do I merely talk to people?
A Few Misc. Items
I didn’t double-check this but was intrigued by it; apparently the term “Artificial Intelligence” was first used in a conference at Dartmouth College in 1956.
The short version of the 5-step-process, which is Life Principle 2:
- Set goals
- Identify problems and then don’t tolerate them.
- Diagnose problems
- Design tasks to get around them.
- Do the tasks required.
Life Principle 1 is “Embrace Reality and Deal with it.” I did not record a blog entry with my reflections on this chapter but I may do so if requested.
Thank you for sharing in this reflection with me!