This is about how we aspire to seek and make impact by making smart and meaningful decisions by viewing them as smart, bold and purposeful bets on future outcomes.
How
A first step to be good decision makers under uncertain conditions is to acknowledge that predicting the future is impossible, and that there is some degree of uncertainty in pretty much every decision we make.
Play Poker, not Chess
In placing small and big ”bets” on what road to follow and how we should distribute our coming efforts is based on an underlying assumption or expectation of a coming pay-off. To increase the possibility of maximising the return of that investment, we naturally aspire to take those decisions based on as much information and knowledge as possible. Based on that often very limited body of ”real” knowledge, we update our beliefs about what’s coming next and how that can have an impact on us, and place our bets accordingly.
How well we update and calibrate our assumptions and understanding about ourselves and what’s significant for us in the near and more distant future, determine the quality of our decision making and with that our future success. Not to paint us into new corners by deciding and investing too much too fast, but to point out a general direction to keep our feet moving and learn and decide further as we go. Based on emergent information and our calibrated outlook. And an efficient way to sort as much signal as possible from the noise.
There is of course a logical strain between ”predicting the future is impossible” on one hand and ”take those decisions based on as much information and knowledge as possible” on the other. This is where life is more like poker than chess. This is very much true also when it comes to our modern business context. But true success lies in how well we resolve this very strain, how well be can cope with and learn to live with it. And make the best play we can of the hand we are dealt.
Probability Planning
For this to happen we need some kind of framework, some kind of railings in otherwise too ambiguous surroundings for us as structure seeking creatures to handle successfully. In other words, we need some kind of structure to hold on to, just not the one we are used to. And we still need to come to terms with a larger portion of ambiguity and emergent properties in our ”business-as-usual” than before.
This framework and structure is based on different ways of modelling the future, and understanding what influences that future state and how by ”reverse engineering” or backcasting probable steps towards it. And not modelling just one future, but different possible futures, and continuously estimating the probability of them and make your bets/decisions accordingly. We call this Probability Planning.
To bring this way of thinking and working to life, we need to work with confidence levels and measuring/quantifying our confidence, and not just thinking of confidence as an all-or-nothing, black or white thing. We need to see and learn from the grey areas to make meaningful progress. Consequently the focus shifts from how right or wrong to how accurate we are/were. This will steer our update and calibration mechanism of our future outlook system in the more appropriate direction.
Why
When treating decisions more as bets on future outcomes, it becomes more natural for us to face reality and overcoming all the biases that has such a stronghold on our decision making – by actively seeking ”true” knowledge and really learn what’s most important for us, and based on that what our beliefs are, and then let this form the basis for our decisions.
This ”truth seeking” process should progress and be communicated based on confidence levels rather than thinking of confidence in our beliefs as an all-or-nothing thing. Openly, ambitiously and curiously. By sharing, supporting and collaborating. We are in this together, so let’s face it head on that way!
Whether we actually win or loose because of a decision is a weak signal of decision quality. There are exactly two things that determine how things turn out for us: the quality of the decisions we make and luck. We need to accept the fact that there is some degree of uncertainty in almost every decision we make. So, we have to look at information around us and learn from the results of our decisions in a more rational way.
Information at hand influence our beliefs which in turn form the basis for our decisions. How well we continuously manage to objectively update and adapt our beliefs to accurately represent the world will determine the quality of our decision making. The basis for that decision making, the bets we make, will always be a moving target, will always change. And we need to change and adapt along with it. By being agile and efficient belief calibrators and ”truth seekers”.