General Thoughts on Decisions and Principles

Decisions are tough. They activate our system 2 thinking (see the wonderful book by Daniel Kahnemann: “Thinking Fast and Slow”) and therefore require more energy than our everyday, mundane thought processes.

Decisions also cause fatigue. We have a much harder time making decisions when we are tired. Likewise, when we are forced to make too many decisions over the course of our day, we diminish our ability to concentrate.

Enter principles. Principles are distilled expressions of how we think about the world. They mirror our values and our beliefs. Incidentally, our values and beliefs are also major factors in our decision-making. I therefore consider principles to make makros, little programs that run on autopilot when I need to make a decision. This takes away some, but not all, of the mental cost of decision making.

Because principles play such a large role in our decision-making, we should make them explicit. To ourselves and ideally to our environment. We must also regularly review our principles - outdated principles lead to terrible, potentially ruinous decisions.

My own Principles

This being said, here are my own principles (for now):

General Principles

  1. Don’t oversolve
    YAGNI (You aren’t going to need it). KISS (Keep it stupid simple). Gall’s Law.
    There are many expressions for the same thing. For any given problem, I try to find a solution that is “just right”. This even applies when I can expect to need a “bigger” solution in the future
  2. Use heuristics deliberately
    Kahnemann told us about System 1 (fast, automatic) and System 2 (slow, deliberate). System 2 has enormous computational power, but is expensive and slow - we want this for major decisions and important, high-leverage tasks. Our “system 2” budget gets eaten up whenever we make a decision. By contrast, System 1 is energetically cheap - we can use this practically all day. Therefore it follows that we want to run as many of our low-stakes, daily decisions on system 1 so that we conserve our important system 2 energy.

Rules ‘stolen’ from consulting

  • always reply within 24 hours (I try to extend this to private messages as well, to keep my social life from dying. I have less time to meet people, the least I can do is reply quickly and keep text conversations going)
    • prefer to reply on same business day
  • If ‘important’ meeting (e.g. first meeting with new client / stakeholder / other relationship): send follow-up on the same day.
    • always include meeting minutes in this first follow up
    • do not send follow up immediately after the meeting - let a few hours pass to a) indicate that I have other priorities and b) let my thoughts ‘stew’ for a bit
  • keep your own minutes
    • even if other people keep minutes: assume they are missing something that is important to me
    • never send out minutes un-edited. Edit at least for MECE, preferably for hierarchy, priority and sort by action item, decisions and dates
  • Take care of appearances:
    • be slightly better dressed than the client’s employees, but not overdressed (unless deliberate, as a tactic - will have to explore this as I dive deeper into sales)
    • have good camera + microphone for remote calls and ALWAYS set up teams / zoom / whatever a few minutes before the call to take care of technical issues
  • Keep basic business hygiene: Be punctual, respectful, etc

Rules I gathered from various books

  • Trust, but verify
  • “Be stubborn on the vision, but flexible on the details” (Jeff Bezos)
    • “Responding to change over following a plan” (Agile Manifesto)
  • “Know yourself and know your enemies…” (Sun Tzu)
  • „Mr. market is a maniac“ (Ben Graham)
    • more generally: „be contrarian“ (Peter Thiel)
  • progress = motivation (Amabile et al.)
  • „become someone who is successful in 999/1000 parallel universes“ (Naval Ravikant)
  • „control the inputs and the process“ (Andy Grove)
    • corrobated by „the score takes care of itself“ (Jack Walsh)
  • Research > Opinion (Peter Ogilvy)
    • corrobated by “In god we trust, all others bring data” (Bezos? He’s certainly also a proponent of data-driven decision-making) + Lean Analytics (always forget the authors) *…more to come

Rules I learned from (painful) experience

  • Discomfort is a small price to pay for (personal) growth
  • Don’t sign anything on the first meeting
  • focus beats hustle
  • preparation allows spontaneity
  • Micro-management sets standards (deviates from conventional wisdom, but ‘avoiding micromanagement’ led me to be too hands off)
    • corrobated by ‘leadership style laissez-faire is least effective’ (empirical finding, got to check the author) and ‘micro-management helped Bob Iger turn Disney World Shanghai into a success’ (Robert Iger)
  • use heuristics for low-stakes stuff, keep cognitive bandwidth for high-stakes stuff (e.g. have ‘uniforms’ for different context so I don’t have to think about what to wear)
    • corrobated by System 1 vs. System 2 (Daniel Kahnemann) and always-black-turtleneck Steve Jobs
  • If somebody tells you ‘you are exactly what I have been waiting for’: RUN! Chances are, you will get burnt by the other party’s over-expectations.
  • …others to follow