How to Simplify Decision-Making

Every single day, we are faced with thousands of choices that require decisions. From small ones like whether I should take the escalator or the stairs or bigger decisions like who to hire or not. Taken in sum, no matter how big or small, decisions can quickly exhaust us and lead to what researchers call “decision fatigue”.

In the most famous study on decision fatigue, some researchers analyzed 1100 parole hearing decisions made by judges. Surprisingly, they found that the single most influential factor in whether or not someone received parole wasn’t the crime itself, or the length of the sentence, but what time their case was heard. Essentially, the more fatigued the judges became, the less likely they were to grant parole.

I’m very happy not to have to make decisions as consequential as deciding whether to release a prisoner on a daily basis. But being able to make rational, informed choices is still a very important part of my work and life philosophy. This is why I came up with a framework to simplify my decision making as much as possible.

Video transcript

Hey everyone. I recently talked to Silvan, one from Swissburner, about decision-making and decision-making frameworks. I thought that was a very interesting chat that later on led me to think a bit more structured about the way I approach decisions.

Obviously, all of us make hundreds and thousands of decisions every day, from the simple things like what we’re going to wear when we’re going to get out, what we’re going to eat, or what we’re drinking, what music we listen to, where we work from, what we decide to work, on how we prioritize… all the way up to very strategic things like, whom we date, whom we marry, what investments we make, what company we start, and so on and so forth.

Different types of decisions

There are different types of decisions, or at least the way I think about it is these decisions that have a different weight based on the consequences that they cost. And over the years, I’ve developed a few rituals and systems and processes that helped me focus my decision energy on the most important decisions, at least in my value system.

Before I talk about what those are, I want to speak about what is decision energy. I believe that no matter how small or how inconsequential, or how big and how many steps come afterwards, every decision takes some form of energy from us. Having to decide what to wear in the morning that’s already a few decisions made that I can now not spend on something that I consider more valuable.

Outsource or delegate as many decisions as possible

So for me, how do I approach this dilemma that we only have a very limited amount of decision energy per any given time interval you today? Well, number one, I outsource or delegate as many decisions as possible, either to a process or someone else in my life. An example of this what I’m wearing. I’ve once decided what my outfit is, and I’m wearing it every single day. Another example is what I’m eating. I eat a keto diet just once a day, so I only eat once only: to make the decision after my workday. When I’m fully focused on now relaxing and calming down. For yet another way of how I outsource decisions is by only drinking water. So for more than six or seven years now, I’ve only had still water. I don’t drink coffee, tea, fruit juice, or anything else. And that’s a decision that I would otherwise make a few times a day.

Number two, ask me, am I the person that needs to make that decision or someone else better suited to make that decision? For example, my team Claude looks at a lot of the deal flow that we have, and he looks at a lot of the legal stuff that we need to work with. And so often for those areas, I just like to ask him for a recommendation, before even getting into the weeds of things. And if I sense that he has a high conviction that this is the way to go, I didn’t even question it. I focus on hiring great people that can take responsibility. And then I make sure they also have it, and they own it by giving them a certain amount of freedom. And I just, from time to time, checked in and challenged them.

Number three. So if it’s my decision, and it’s not one that I have delegated, there are only two types of decisions for me that remain. One is like smaller decisions where I can be data driven. What I mean by that is I can use my head to make the decision. And those are usually easy to make; I just write down my logic, maybe it requires a table, and I weight for some of the options. Most of the time, I just write about it. And then at the end of a few paragraphs, usually I know which way I’m going to go.

Hard decisions

And now, the hardest and fourth step of this process is my gut feeling decisions that I need to make with my gut with, my heart, my soft factors come into play; those are usually hard, and often in my life, that’s the important decisions. It’s whom to spend time with, what companies to invest in, how to go forward with a certain company, how much to invest in, what the terms are, and so on and so forth. And for these what usually help me is just to create enough space for me to really think and feel about this. So I’m really bad at making these decisions if it’s between two calls, and I have exactly 15 minutes within which I need to come to a conclusion. So typically, I try to think about these at least overnight. Sometimes I dream about these kinds of decisions. And that usually is a good insight as well.

One thing that I’ve definitely learned over the years is that all the important decisions in my life, I have to make them with my gut, and I make him with my gut independent from whether I want to make him with my head or not. Those are decisions that really matter. And so over the past ten years, I’ve learned to be a lot more in tune with my body size, what my gut says with my heart size.

If you’re also thinking about making decisions, it’d be super interesting to hear how you approach it. If you use any steps that I don’t consider if you have any other particular views or any other frameworks that you typically use that bring you value, please leave them in the comments or send me a direct message on Twitter. And with that, have a beautiful day. Stay curious, and I will talk to you soon.