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Ecaterina Sanalatii

Consultant, MooD International

TEDCRED 10+

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What is the key to smarter decisions?

My question to the TED community is what is the key to smarter decisions?

As individuals, how can we make smarter decisions in everyday life?
How is this different in business decision making?
Can we help others make a better decision or should this be done out of own will?

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    Oct 3 2012: First, I think there is a mis-conception that decisions need to be fast and somehow society equates speed and "decisiveness" with being smart. I think perspective is important - allowing a bit of time to pass (unless the decision about running from a bengal tiger that's come loose in the suburbs).

    So, the key is about processing impact and thinking through the chain of events that are set off by decisions. We often think of how the decision effects the outcome of the current choice, but try to predict the ripple effect. What choices will be presented as an outcome of this first decision? What/who will be impacted?

    Also, really think about the magnitude of the decision and allow for unpredictable outcomes. No matter how carefully you process information, the energy flow and randomness shape what happens next
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    Oct 2 2012: We can make smarter decisions by being clear about our personal vision, goals and purpose; seeking knowledge and information concerning the issue to be decided; learning from the experiences of those who have made similar decisions; and seeking wise counsel from those whose life and career successes are evident to all.
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      Oct 10 2012: I think this also applies in the business environment. A decision could be considered smarter, if it aligns to the organisation's vision, goal and purpose; seeking knowledge from experts and research in the market/industry research concerning the issue to decide; learning from the experience of others- bench marking...
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    Oct 4 2012: I made a post earlier in this thread, but after reading other posts since then, I'd like to add another thought that has been implied by several here.

    The speed at which you make the decision should be directly related to the "cost" of correcting it if it was a "wrong" decision.

    I learned this concept when I was young while reading a book written by a "corporate executive" describing his life (I don't remember who it was right now). He said (this is not a firm quote, but paraphrased):

    "If your decision is whether to buy Baby Blue or Buffalo Brown coffee cups to hand out to your employees, pick one and make it a fast decision. It won't cost much to buy the other color cups again if you were wrong. And depending on your own salary, it might cost the company more in your salary pay if you take 30 minutes agonizing over it than the cost of the coffee cups. But if your decision might cost the company a few million dollars if you are wrong, that is the decision you want to spend your time on making."

    Made perfect sense to me. A decision to buy a Snickers bar vs a Milky Way takes me about 3 seconds (OK, I admit...sometimes I just buy one of each to make it easier). ;-)
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      . . 100+

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      Oct 4 2012: 1 second : snickers ;-)
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        Oct 4 2012: Woo-Hoo! A doctor who likes Snickers! If I lived near you, you'd be my physician! ;-)
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      Oct 4 2012: Elementary Dr Ryan, rudimentary logic, what is important and what ain't
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        Oct 4 2012: Might be elementary, but I see and know a lot of people who don't use it.
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      Oct 10 2012: I think it might be better to associate a decision to value rather than cost... though it might be slightly harder to measure, I think it would result in less 'wrong' decisions
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    Oct 3 2012: One method of smarter decision is removing human errors. There are several ways to do this.
    I like S.T.A.R.
    Stop - Take a minute and clear your head and focus
    Think - Concentrate on task at hand one step at a time
    Act - Perform task
    Review - Verify correct actions taken and proper indications of action occure

    The last step is the most important.
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    Oct 3 2012: What helps me make smarter decisions in my daily life is the 20/80 rule, which means 20% of what you do creates 80% of your life it can even be a lot less. For example if someone skips breakfast or even just there morning cup of coffee it's going to have an effect on there mood and performance which then can affect other things such as being in a bad mood around there boss in the morning etc. That's why I believe it's so important for us to be kind,compassionate and caring in our daily lives for we are having more of an impact on each other then we could ever imagine.
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    Oct 2 2012: In my opinion...

    Game Theory, Risk Management, and understanding Human Nature and how it applies to both.

    We live on a planet with 7 Billion people. The decsion you make will be "smart" only if it results in the outcome you are hoping for. That is not hard to achieve if the other 6,999,999,999 people have no ability to impact the result of your decision. However, there are very few decisions you will make where that is how it works. But, if the decision really ONLY will effect you, with no one else being able to affect the outcome of it, AND your decision will not adversly affect anyone ELSE, then it can be argued (usually) it was a "smart" decision for you to make.

    The problem with making decisions that affect groups of people are complicated by the Human Nature issue. Solving "world problems" becomes increasingly difficult as the number of people involved concerning the decision itself AND the results of that decision are considered. The more "players" involved, the more difficult it is to find a solution that will make everybody "happy"...or may even be "fair" concerning everybody for that one decision. Expect dischord and discontent...and maybe even violent reactions...from a least some of them, regardless of what course of action you finally decide to take.

    Your question asks about decision making in "everyday life". Every decision is a "daily life" decision, regardless of who is making it or the scope of the decision. World Leaders trying to solve "world problems" are all making "everyday life" decisions.

    As for businesses? The decison making is dependant on accepted expectations of the business model. Is it a for-profit business? The decision-makers should be making for-profit decisions. Does it have investors? The decisions should be aimed at maximizing the returns for those investors. Yes, I know that is not a popular concept...but it is the realistic one. Just like anyone looking for the highest interest returning bank account.
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      Oct 2 2012: Rick,

      You touch on an excellent point. While it would be optimal to use reason and leave emotions out of the decision making process, fact is human nature is such that emotions cannot be simply ignored, nor can we pretend that we can rationally suppress them all.

      Funny that you mention game theory and risk management... I am a big fan of Kahneman and Tversky and their work on prospect theory, and the process of decision under uncertainty. Any decision process that aspires to be a bit smarter, has to take into account the innate flaws that our own decision making process has embedded.

      Epicurus used to say (or so i am told) that in a social environment the best decisions are those that minimize suffering (versus maximizing joy and pleasure, something he was frequently accused of preaching). I tend to like that idea as a guide in my decision making process when the outcome affects more than one individual.

      Being aware of our own biases helps, and making the effort of letting go of deep rooted beliefs helps too.

      Sometimes i use a quote: good judgement mostly comes from experience, but experience mostly comes from bad judgement.

      So we must allow ourselves to try and fail.
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        Oct 2 2012: Andres,

        I like your qoute, "good judgement mostly comes from experience, but experience mostly comes form bad judgement." It is so true.

        One of my favorite quotes is, "Luck happens when preparation meets opportunity."

        Most people who survive "crisis" do so because they were prepared for it. They weren't just "lucky". They learned good decision making skills, then used those skills on a daily basis to avoid any "crisis" from occuring to them. For the crisis that they had no control over, they were prepared to weather the storm from it while others just got swallowed up by it.
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          Oct 10 2012: "Most people who survive "crisis" do so because they were prepared for it." - I like your point on being prepared for a crisis as a result of good decision making skills. I think it is a point very well made. A lot of individuals/ businesses sink because when the crisis occurs, they are swallowed up but its development rather than deciding on how to improve/stop whatever is occurring by carefully implementing decisions.
  • Oct 31 2012: There are two ways you can make smarter decisions, one by sheer luck; you chose the best option with limited knowledge of the consequences of every option available and then it turned out to be the best decision possible. The other is by fully knowing the consequences of each option and then choosing the more suitable. So basically you need better knowledge tools (intelligence), but you also need a very well calibrated system to ponder the pros and cons of every option at hand (experience), because the best knowledge wont give you the best decision possible if you are not able to properly measure the pros and cons. And finally you need to have your priorities sorted (vision) otherwise you may end up making the right decision at the wrong time.
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    R H 30+

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    Oct 24 2012: There is much research on 'decision making' and what makes for a 'good' decision. Many books have been written, many classes have been taught, on how to make them. 'The key' to me is not how they are determined, but how they are received and/or implemented. We do not live in a vacuum, so our actions (decisions) are being assimilated into the group. How our decisions effect that group (including our personal world) will reflect whether a decision is a 'smart' one or not - in my opinion.
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      Oct 24 2012: Very interesting thoughts. What do you think constitutes leading research in this area?
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        R H 30+

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        Oct 25 2012: Oh, guys/gals with PhD's who study this stuff. One has to have credentials to have the credibility to have their work considered "leading research".
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    Oct 22 2012: All the decisions that one make can never be smarter. Only time tells whether the decision taken at some point of time was correct (i.e., smart) or incorrect (i.e., not so smart). When one makes a decision, depending upon one's background, education, experience, knowledge and experience about the matter itself etc. one takes a decision. Thereafter, whether the decision taken was a smart one or not would also depend upon how the developments take place. The so-called non-smart decisions work as lessons of life and help one to make smarter decisions in future.
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    Oct 17 2012: Smart decision simply means that it is an educated decision. Otherwise it can never be a smart decision. An educated decision is always the smartest one. The more you know the subject or object etc.. the smarter the decision. Without all of this, it becomes only a decision.
  • Oct 16 2012: Emotional intelligence on the impact of decision-making can possibly be the "key" to smarter decisions. What I mean by this is being in control of the emotions when the time comes to make a decision. Research shows that when you are angry you are more likely to take riskier decisions whereas when you are fearful you will be more cautious.

    One aspect of being emotionally intelligent is having greater awareness over ones feelings. By being aware of these feelings you can ensure that these feelings do not come in the way of a rational decision.

    In addition by being more aware, when you are in the final stages of the decision, you will be aware of your confidence, if it is the right decision.

    Emotion and rationality need to be balanced in order to ensure an effective decision.

    Under emotional intelligence also comes the ability to understand others feelings, so in the scenario of a group decision, an emotionally intelligent individual that can feel another person’s emotion will be able to lean towards a decision in all favours.
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    Oct 11 2012: Smarter is relative to your own perception of the world around you. It's not important what other's think might be the best decision, ultimately you must choose your own path. Know thyself and act accordingly.

    Business is completely opposite because it is important to know what other people think about your products and services. And you must convince your patrons that they made a smart decision for going with your company.
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    Oct 10 2012: Another thought about decision making. Decisions require both Management and Leadership skills, depending on the type of decision being made.

    A person in a decision-making position has four distinct resources available to them...Equipment, Money, Time, and People.

    The first three are limited resources, and they need to be Managed.

    The fourth resource...People...can be an unlimited resource depending on what you can get them to accomplish. It's not just the number of people you may have available (as in being "limited"), but whether you can provide them a means to motivate themselves to use their full potential. People are an amazing resource when you can get them self-motivated to achieve something. But this requires that you LEAD people, not Manage them. The failure of many supervisors making decisions about their "people resource" is that they try to Manage them instead of Leading them.
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      Oct 11 2012: So if we return back to the point of assessing the information we have (made by Colleen earlier in the thread), I think it is fair to say that the start of the journey to smarter decisions would be in assessing the four elements you've outlined before making the decision
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        Oct 13 2012: Absolutely. And even though I addressed those four resources as applying to a "supervisor of (other) people", it is just as important to realize that I, as an individual, am "the supervisor of myself".

        Even when making decisions that may only affect me, I need to evaluate all four of those resources as they apply to myself too before making a "smart" decision. I need to manage the first three resources as they apply to me, but "lead" the fourth resource...myself...because I myself am "a people".
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    Oct 10 2012: I have 2 great answers for this question but I can not decide which to present.
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      Oct 10 2012: haha! two great answers wouldnt count for much if you have not decided which one to present..
      what you have chosen is not a "smarter decision" you gotta learn how to decide man..hehehe..peace! ^^,)
  • Oct 8 2012: In my opinion to make smarter decision is fairly simple. First you must have an open mind. Second you must have the ability to retain the information given. Third, you must look at the information critically. Fourth, follow through with your decision.

    I find making decisions easy but having the discipline to follow through is the hardest. Its not really the "make" the decision that gets me. Its in fact do have the discipline to maintain and stick to my decision.
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      Oct 10 2012: I think there's a fifth point as well, which was made in several of the thread's comments: assess what is the impact of the decision that has been implemented
  • Oct 5 2012: Understanding the long term and short term consequences of the decision.
  • Oct 3 2012: David Campbell: Discipline is remembering what you want.

    This is difficult when faced with choices of alternative goods, whether it is a house, an automobile or your next meal. Decide what you really want before looking at the catalog, the menu, or in the refrigerator; then remember.
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    Oct 3 2012: I don't think there is smart decision in absolute term because you will know the decision you made was smart after you see how the result of your decison turn out. It depends on every single situation and the decision you concluded as smart at the one situaion might not be smart at the other situation. So, the point that I am trying to make here is we have to develop the ability to distinguish which decision wll be better in certain situation. In order to do that, we should analyze the situation we face considering every possible variables that might affect your decision and find the fittest one.
  • Oct 3 2012: Be informed and thoughtful decision makers. Put the appropriate amount of research time in to big decisions. Understand rewards vs benefits trade-offs. There will always be risk, but we can reduce it with information and thought. The decision to buy a car should be based on needs, resources, and comparative costs. The decision to eat a hamburger or hot dog at lunch is less complex. Spending the same amount of time and thought making the car decision as the lunch decision may lead to unintended consequences such a s living with a lemon, or hunger pains, depending on which way you go.

    As for helping others with decisions, it depends on many variables. How old are they? What is the urgency of the decision? What is your risk by helping? Telling someone to not pet a cobra if they are intending to do so is worthwhile if the person has no knowledge of snakes. Telling someone who to vote for in an election is not allowing them the opportunity to think for themselves.

    In mentoring, I try and point out what I consider to be the major considerations in a decision, then let others make their own decisions. In doing so, their decision should at least be more informed.

    In parenting, I tried to let the kids make all the decisions they were capable of making at any given age in hopes they would learn how to make good decisions on their own. I only stepped in after bad decisions were made, health or welfare were at stake, or there were factors that could not be considered by a child necessary to make the decision. So far, both of my adult children have made good decisions in general.
  • Oct 3 2012: Well the first step is to make sure what you want or need. After you are sure about what you want or need then the rest of the decision making process "unfolds" by itself.
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    Oct 3 2012: I use to take decisions very fast after when I read the book Blink by Malcolm Gladwell he describes that how the decisions which are taken in small period of time are sometimes better than the well planned ones. He have given the examples of gambling, war games and the movies.

    Before reading this book I use to think, think and think but was oftenly unable to start the task so I like to recommend this book to you.
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      Oct 4 2012: Hello Noveed,
      Going around with "thinking" is a cycle we sometimes get "stuck" in when trying to make decisions by putting things in some kind of logical order. I find that at times, what seems logical, is not necessarily the best decision. That's why I feel it is important to listen also to instinct/intuition:>)
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        Oct 5 2012: Ofcourse colleen without instincts and intuitions making decisions is like one taking decisions without mind and one thing more how can I disagree with my mentor so quite agree with you. :)
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    Oct 3 2012: A good situation analysis could be the key.....
    Whether HEAD / HEART / GUT should take the lead in doing so usually is the point of debate which is also evident here.
    In everyday life at personal level "HEART / GUT driven decision seems to be smarter ....while in business most tend be more "HEAD" driven while taking decision......but are those all smart ?
    Afterall businesses are run by human being who are emotional.....pure HEAD driven decision can sound very smart but until it is implemented / executed nothing will change. It is people who will implement it and they are emotional. So my feeling is a mix of HEART is always good regardless whether it is at business or personal level.
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      Oct 3 2012: I agree Salim,
      I use the same process for all decisions...gather all available information, listen to the head/logic/reason AND the heart/instinct/intuition. Either one may be more pronounced depending on the situation, but I would not deny myself the opportunity to be open to ALL information, when considering any decision:>)
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        Oct 4 2012: Hi Colleen
        Can't agree more about being open always..........
        Critical is which button or combination of buttons to be pressed (i.e. Head/Herat/Gut) when / in which situation ....that's my feeling
        Have a good day
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          Oct 4 2012: Dear Salim,
          I reflect back to you, your own words at times, and also remind myself...
          "Know thyself" is one BIG key to smarter decisions:>)
          Good day indeed....you too my friend:>)
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    Oct 3 2012: Taking a breath. Taking a breath can almost stop time for that brief second. And many times, that one extra moment is all you need.
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    Oct 2 2012: Even with all of the facts and many advisors leaders throughout history have made bonehead decisions. Why would we expect to be more likely to make all the right decisions.

    The cure, as in most things, is time. At 70 I make less decisions based on emotions and hormones.

    Perhaps the facts that we all make thousands of great decisions everyday is overridden by the one decision that we beat ourselves up over. My advice is to learn from it and grow from it ...

    All the best. Bob.
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      Oct 2 2012: Dear Robert,
      You may be right about that "age" thing!!! Sometimes my decisions don't matter any more because I cannot remember them anyway!!! I simply could not resist...please forgive me because I'm old, and I do not remember what I do..........LOL.............LOL..........LOL:>)
      Love,
      Pollyanna:>)

      P.S.
      Seriously, I suggest that the "bonehead" decisions made by leaders were to serve their own agenda, so they were not very good decisions that served the whole. Learn and grow.....good advice which I agree with Bob:>)
    • Oct 17 2012: Robert I have to wonder if high-powered leaders who make disasterous decisions are really able to get good, true, objective information about the situations they will influence, or if the structure of leadership often evolves in a way that isolates people with great power over large populations from getting unbiased information.
      I would hope that, given 21st century technology, leaders of powerful organizations and countries would sometimes abandon the briefing books and pre-digested information served up to them, then just get on the world wide web and see what people outside of their own power structure and experiencing and saying.
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    Oct 2 2012: Hi Ecaterina!
    For me personally, the best decisions are made after gathering all available information, pondering, and letting the decision unfold. I study and research information if that is appropriate, and also listen to instinct/intuition.

    Often, after gathering information, I ask the question of myself before going to sleep, because I believe our subconscious mind often works things out while we are sleeping. There may be information we are not aware of on a conscious level, so the subconscious helps us out:>)

    I see no logical reason to deprive myself of ANY information which might facilitate a good decision, so I remain open minded and open hearted to everything available. As thinking, feeling, evolving humans, we have the ability to sift through information logically AND intuitively when those functions are working together.

    We've seen discussions here on TED where folks ask...what is better...logic OR intuition? I see no reason to seperate these valuable sources of information.
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      Oct 10 2012: Colleen, what I like most in your answer, is that you concentrate on the question at hand. I think a lot of not such smart decisions are made because people's judgement takes them too far away from the original issue/ problem where the decision is required. I think by actually concentrating on the question at hand, one is opened to a structured thinking process (conscious or unconscious) and is enabled to make a smarter decisions.
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        Oct 16 2012: Thanks for the feedback Ecaterina:>)
        I believe that being clear in ourselves and focusing on the question at hand provides a better path to more useful, beneficial decisions. I agree that decisions that are sometimes not so good, are often because of mental/emotional/logical wandering.
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          Oct 16 2012: Hi dear Colleen you are absolutely right but I am curious that did you regret any of your decision after you made because I really do with almost all of my decision I made like I started a small business after my graduation instead of doing a job although it is running smoothly and according to my expectations but sometimes I think that job may be better than it even it happens to me in my social and personal life like I have a circle of friends around me whom with I feel comfortable but sometimes I think that I must leave them because they are BAD in the views of people whom I want etc. Is it a regret or something else and does it happen to me or almost all human beings??

          (you might be feel difficulty to understand what I want to say due to language problems but if you get it please reply me)
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        Oct 17 2012: Hello Noveed:>)
        Good question, and it is a factor which often keeps people from moving forward. It is very common to question ourselves and our choices/decisions. An important question is, how much energy do you want to give to something from the past?

        Regret means..."to mourn the loss or death of; to miss very much; to be very sorry for; grief or pain tinged with emotions;an expression of distressing emotion; sorrow; disappointment". Personally, I do not see any benefit in carrying that baggage.

        I have no regrets. I believe that the life experience is an exploration, so I do not perceive "failures", "mistakes", or spend my time and energy on regret. When we believe, as I do, that the life adventure is an exploration in which we can learn, grow and evolve as human beings, there is no need to spend time and energy on regret.

        As I said in a previous comment on this thread, when facing a decision, I seek all available information, listen to my logical mind and intuitive/instinct, ponder the information and make the decision. I feel confident that I have done everything possible at that time to make a good decision. If, at a later date I am aware of more information, I realize that the decision I made was for the purpose of learning, and another stepping stone on the path of life.

        Regarding your decision about starting a small business/or doing another job. You say..."sometimes I think that job may be better..." That is not the reality in the present moment, so why give that thought energy? It's a thought...allow it to move through you and spend your energy on what you are doing in the moment.....make any sense?

        The past is gone by, and we can use information from the past to learn. The future is not yet a reality, and it is good to have plans and dreams. Being fully engaged in the present moment, and using my energy in the present, is the most desirable for me, because the present moment is the only reality:>)
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    Gail . 50+

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    Oct 2 2012: FIRST, FOREMOST, AND LAST: Learn the difference between a rational thought and an emotional reaction.

    We can help those who are willing to learn this, but cannot help those who are not.
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    Oct 31 2012: The 18 tips offered here are worth considering:
    http://www.umakes.com/pages/view/28689/18-tips-on-making-smarter-decisions
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      Nov 1 2012: Theodore, thanks for sharing. However, I think there are two conflicting points within the list in the article:

      "Adopting someone else's perspective helps us make smarter decisions." and "Most people get it wrong when trying to take others' perspectives."
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        Nov 1 2012: The two points you are asking about are really the same point, I'll explain.
        It can be helpful to imagine ourself in the point of view of others to understand why others act as they do and not as we think they should. (Adopting someone else's perspective) But this can be a difficult thing to do so we might avoid doing it, perhaps not do it actively, or we might let a form of conditioned thinking prevent us from fully considering the other. (Most people get it wrong )

        There is a saying, Walk a mile in someone else shoes. It means, try and put yourself in another person's situation if you what to understand them. This is what can help us make better decisions.
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    Oct 29 2012: You've asked a key question, the answer of which makes it more or less likely that you will live a full life.
    When it comes to important decisions, your ability to evaluate the consequences of your decision before making it is prerequisite to making good decisions.
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    Oct 25 2012: We cannot focus on making smarter decisions, just take risks and accept theiir consecuences.

    Sometimes silliest ideas are the greatest.
  • Oct 25 2012: Smarter decision.
    It is simple and yet complex.You need to have wisdom and in order to attain it,you must educate yourself about the effects and the morals that an idea/decision holds,morals meaning the benefit of an idea for all.You need to reflect upon an idea repeatedly and think of the consequences and effects that an idea holds.A great thinker always think morally,for the good of all.Every thought we make affects the world directly and indirectly/law of attraction.

    Smarter decision is made of thinking with great unselfishness,and morally.
    in order to attain it you must have a clear mind and be in higher state of consciousness.
    I suggest meditation.