The Essential Guide to Effective Decision Making

Decision Making

Decisions shape our lives. “Should I change careers?” “Where should I live?” “How should I invest my savings?” Making decisions is a fundamental life skill, and we can all learn to become much better at it. In this post, I present a simple, systematic approach you can use to make smarter choices starting today.

The PrOACT Approach to Decision Making

The PrOACT approach (outlined in the book Smart Choices) is by far the best model for decision making that I have seen. It helps you see both the tangible and intangible aspects of your situation more clearly and to translate all pertinent facts, feelings, opinions, beliefs and advice into the best possible decision.

‘PrOACT’ is a mnemonic that stands for five key elements in the model:

  • Problem statement
  • Objectives
  • Alternatives
  • Consequences
  • Tradeoffs

The method consists of examining each of these core elements separately, using them to clarify and organize your thoughts as you go. Let’s take a look at each of its components.

1. Problem Statement

Behind every decision you make there’s a problem you’re trying to solve. The way you state your problem frames your decision. It determines the alternatives you consider and how you will evaluate them. Effectively posing the problem is paramount, as it influences all your subsequent thinking in the decision making process.

In spite of its importance, many of us just skip this step altogether: it’s too easy to state problems as they come to our minds. The better-defined your problem is, the easier it will be to solve it — to the point of the solution becoming self-evident.

Want an example? A friend of mine loved to work for his company, but hated his boss. His dilemma was to resign or to stay in the company. Instead of choosing between these two options, he redefined the problem as how to keep his job, but getting rid of this boss. What did he do? He sent his boss’ CV out and got him interviews for higher-paying jobs. His boss ended up moving to another job — and my friend ended up staying in the same company — promoted to his boss’ previous position. Smart problem redefinition trumps hard thinking.

For a primer on problem definition and many techniques you can use to tweak your problem statement, the article Einstein’s Secret to Amazing Problem Solving is a good starting point.

2. Objectives

After you have a better definition of your problem, now it’s time to get crystal-clear about what you’re trying to accomplish with your decision.

This is another step most of us get wrong: we regard our objectives as obvious and skip explicitly defining them — allowing them to fuzzily float in our minds.
Objectives are the elements that will guide our decision. Clarifying them improves our understanding of the problem, and sets expectations for the possible solutions. It also helps you better communicate what you want as you explain the problem to others.

So, sit down and make a bullet point list of objectives, as explicit and clear as possible. Why exactly do you want to change jobs? Is it your boss? Maybe you want a shorter commute time? Make these reasons clear in writing.

If you find that your objectives don’t come naturally to you, journaling is a tool that can really help. Asking why repeatedly is also a great way to look at your objectives from different viewpoints.

3. Alternatives

Now that you have a well-defined problem and clear objectives, it’s time to finally assess your alternatives and decide, right? Not so fast! First, we should generate alternatives — expand and explore possibilities. The payoff for looking for new, fresh alternatives can be extremely high, so there’s no excuse to skip this step.

There’s a simple aphorism in decision making that says your final choice can never be better than the best alternative you considered. Yes, it’s obvious, I know, but it serves as a reminder of how important it is to take our time and generate as many alternatives as possible before spending time choosing between unsatisfactory choices.

Indeed, it’s much easier (and fun!) to generate better alternatives than to find yourself stuck choosing between two poor ones. Never take the first alternative that comes to your mind. Don’t settle for two, either — shoot for more, way more.

The way to generate new alternatives is to take each of your objectives and ask “How?” or “In what ways can I fulfill this objective?”. Remember, go for quantity, and don’t evaluate the ideas you gathered just yet. Idea-generation techniques such as lists of 100 or idea quotas are your friends here.

4. Consequences

Now comes the time to finally start assessing the merits of each of the alternatives you considered. And the primary way of doing this is by evaluating the consequences of each choice.

After you discard the clearly inferior alternatives you generated, take each of the remaining ones and describe, in writing if possible, what are the consequences of choosing them. That is, imagine how the future will look like for each of them. If you foresee each alternative’s consequences well enough, your decision will become obvious.

Unfortunately, this is much easier said than done. Anticipating consequences in complete and precise terms is hard. Predicting the future is something we humans are notoriously bad at — and that’s particularly true when it comes to predict our own future.

So, don’t take the process of foreseeing consequences sloppily — be as realistic as you can and use every tool in your reach to paint as precise a picture of your future as possible. Talk to experienced people who have already ‘been there, done that’ and get as much information as you can from them.

Also, don’t just imagine you might choose an alternative: imagine yourself in a future where you already chose it. How do you feel about each of the objectives you set? Is it what you first anticipated?

5. Tradeoffs

If you got this far without a solution, it’s probably because your decision is really tricky. It also means that it has conflicting objectives — and that you’ll need to consider some hard tradeoffs between them.

As you might have expected, this is seldom something easy to do. Choosing between unrelated objectives feels like comparing apples with oranges — except that, depending on the number of objectives you have, it may feel more like comparing apples with oranges with elephants with washing powder.

So, before anything else, now is a great time to revisit your objectives, looking for ways to simplify them, based on the extra information you gathered so far.

If that’s still not enough, and the decision is not obvious just by mentally evaluating the tradeoffs, you’ll need a systematic approach to make your tradeoffs.

I’ve seen a couple of these approaches, but the best one I found is the Even Swaps method (which is also described in detail in the same book). I’ve used the method twice already, and I found it fascinating! It’s beyond the scope of this article to go into detail about it, but the basic idea is to take consequences and isolate them in pairs — making a series of small, easy tradeoffs instead of trying to compare each alternative as a big blob of conflicting consequences.

If you think that a complete, detailed explanation about the Even Swaps method would be valuable to you, let me know in the comments. If enough people are interested, I’ll write an article about it.

Final Words

This process may seem like a lot of work to go through. However, after you use it a couple of times, you’ll realize that, if you walk through the steps in order, you’ll seldom need to go through them all.

An interesting characteristic of this method is that each of the five components helps clarify each other. When outlining consequences, you might find out about a new objective. By looking at tradeoffs, you may decide to redefine your problem. That means you should frequently go back and forth between the steps in the model.

Smart Choices on Amazon.com

The book Smart Choices explores even more elements that are required when analyzing the hardest of decisions, such as uncertainty and linked choices. So, I end this article recommending it: Smart Choices: A Practical Guide to Making Better Life Decisions is an easy read full of practical examples, and definitely worth reading by everybody interested in taking their life decisions to the next level.

Update: For a downloadable, ready-to-use PrOACT mind map template (which also includes the information from this article), check out the this post on the Mindjet Blog. Thanks Michael Deutch for creating and sharing it!