What makes a good decision maker? — — Study notes from Cassie Kozyrkov’s Decision Intelligence course (Part One)
I got to know Cassie Kozyrkov from Google Certificate of Advanced Analytics and yesterday I saw the big news that she left Google after 10 years of work. She wrote about how she made such decision in 3 posts and you can read them here:
https://kozyrkov.medium.com/why-i-quit-my-job-as-googles-chief-decision-scientist-f3a818150807
“Why I quit my job as Google’s Chief Decision Scientist”
https://kozyrkov.medium.com/what-was-the-hardest-thing-about-quitting-my-job-at-google-6bc5a17ff83d
“What was the hardest thing about quitting my job at Google?”
https://kozyrkov.medium.com/why-quitting-your-job-might-be-the-best-decision-youve-ever-made-4949b62ad319
“Why quitting your job might be the best decision you’ve ever made”
After reading these three posts, I was surprised to know that a decision scientist could have the same hesitation, fear, uncertainty, and self-doubt as we do when making decisions. Just like Cassie said in her posts:
“Do they love me because of me or because of the title behind me?”
“I’m just human.”
I then watched her free course “Decision Intelligence” on LinkedIn Learning and found it was so helpful, no matter for my personal life, or for my career as a entry level data analyst. If you are interested, you can watch it here:
It’s free for watching, but if you want to do the quiz and get a LinkedIn Learning Certificate, you need to activate the LinkedIn learning program. It’s about $50 per month.
Below is my study note for this course, and it is about 5 minutes read. If you have 1 hour and a half for this course, please go for it. The concrete details and examples will help you grow better as a decision maker. If you are busy, you may find my note helpful to grasp the key ideas.
- What is decision making?
The task of decision making is turning information into better action at any scale, in any setting.
As a data analyst or data scientist, we learned the term “data-driven decision” since we first started our training, but we have never truly received any training on “decision making”. Making decision seems to be stakeholders’ task and we just need to work with the data and present the results and deliverable to them. However, Cassie told us that everyone can practice and improve his/her decision skills and become the best decision maker.
2. Outcome bias
We make decisions everyday. Big or small. Small as what to eat for lunch. Big as where to live or whom to marry.
Decision is irrevocable allocation of resources. If you choose one, you have to give up another, and in economics, we call it opportunity cost.
Every decision leads to outcome, and outcome is how things come out later. A decision can lead to good or bad outcome. Outcome has two components, one is quality of the decision and the other is luck. Cassie warned us that we should not be over sensitive to outcome. When the outcome is bad, we don’t need to beat ourselves hard and give a penalty. The right thing to do is going back to the moment of making decision, and see how that decision was made and if it was a good decision based on the resources in that moment, and no judge or penalty based on outcome. If you do this, you can learn the lesson from bad decisions.
3. How decisions are made?
Usurally, it’s easier to make a decision if:
a. the situation is less complicated,
b. there are fewer choices,
c. there is one obvious winner, such as what you will eat, rock or apple,
d. there is a clear objective,
e. the cost of making mistake is low,
f. the outcome of decision is reversible.
g. etc.
Otherwise, the decision can be difficult to make.
Decision making also takes cognitive effort. If there are a lot of distractions, and emotion triggers, and if the person is under pressure, it is usually hard to make a decision, or hard to make a good decision.
We also need reliable information and adequate time to make good decisions. If we are under time pressure, we usually rush to make a decision and the outcome may not be what we have expected.
The social environment can also influence how we make decisions. If the consequence of certain decisions can affect a lot of people, or have greater social effectiveness, then it’s a difficult decision to make.
If people experience internal conflicts, it’s difficult to make a decision. For example, should I play outside or study for exam? How to make a good decision in a situation like this? In later section, the principal-agent-problem will introduced and a solution will be provided there.
4. How to make a good decision?
When a decision is difficult, pause, slow down, and reevaluate.
When a decision is easy, approach with confidence.
There is no one-size-fits-all for decision making.
A great way to make good decision is setting realistic goals. When setting goals, you need to set priorities and know the opportunity costs because each decision making takes time, attention, money and effort. You need to form priorities and non-priorities. Let’s take the “play outside vs. study for exam” example. If the exam is tomorrow, then studying at home is the priority.
The best way of goal setting is having 3 layers of goals:
a. Outcome goals, which are out of your control and hard to measure.
b. Performance goals, which are measurable and under control.
c. Process goals, which are measurable and fully under your control.
For example, if your outcome goal is “stay healthy”, it’s usually hard to achieve, because it’s hard to define “healthy” and hard to measure it. We can then set up a second layer goal, the performance goal — — “running for 40 minutes”. “running” is a clear action and how much time you spend on running is measurable. However, the performance goal is still not realistic enough. What if you run for two days and then give up? Have you achieved your outcome goal? No. You need a third layer goal to bring the “goal” to action, the “process goal”. For example, “running for 40 minutes every other day”. It’s measurable, and fully under your control.
By using this 3-layer-goal-setting method, it’s easier for you to track the decision-making progress and stay motivated.
This is the part one of my study notes. More will be coming.
I can be reached at https://www.linkedin.com/in/hong-yan-alice/.
Until next time.
