How We Decide

November 13, 2009

My MBA at Babson continues and I am currently taking a course on Decisions. The professor is Tom Davenport who is a big fan of analytics as a decision process. Part of the reading for this course included the book “How We Decide” by Jonah Leherer. Blink was also assigned reading for the course and the two books provide some insights into the the very messy way in which our minds work. Leherer’s book concludes with some general guidelines, I’ve summarized below:

  • Simple problems require reason. Use the rational brain (that part where you actively think about a problem) when the number of factors is less than 7. Beyond seven factors and the mind gets easily confused. For more complex problems such as buying a car, business decisions, use your emotional brain. Give yourself time for the unconscious brain to ruminate on these choices that have a myriad of options and linkages. A selection will present itself.
  • Novel problems also require reason. Does your past experience provide insights? Use your rational brain to focus on the problem.
  • Embrace uncertainty. Hard problems have no single Goldilocks solution. Give yourself time to let the argument unfold in your mind before making a decision. Look at what you don’t know and don’t assume that you’ve heard and seen it all.
  • In the end Leherer asks you to study how your own mind works in decision making and understand which decisions were right and which weren’t. Think about how you think.