Two way doors in personal decision making
Have you considered the decisions that you took that led to your current circumstances be it personal or professional? Have you considered that when you choose one specific path, this has the propensity to change the entire trajectory of your life? There are decisions that you make that you can take back and decisions that you make that you can’t take back.
Consider the below as it applies to companies:
Companies contend with situations that can financially ruin them. There is no going back. Jeff Bezos calls these "One Way Doors". On the flip side, there are decisions that you can backtrack, such as poorly hired employees. These are "Two Way Doors".
Companies have the benefit of large teams that will dissect any problems before they happen. They’ll do their best to ensure that the company doesn’t cross a one-way door that could be fatal to its very existence. Companies will also perform post mortems of situations that go wrong and figure out plans to ensure that they cross as few two-way doors as possible. Quite simply if they don’t and continue to make mistakes the employee is either fired or the CEO is removed by the board for repeated egregious mistakes.
Below I’ll argue that for individuals most decisions are one-way doors even if it does not seem that way. I have wished for a time machine, to go back and take that other job, go on a date with that other person, repair that broken relationship. Haven’t we all?
You’ve probably heard the saying that “Hindsight is 20/20”? The idea is that when looking back at a past situation, you can see it much more clearly and identify how it could have gone awry. If I had a dollar for every time I heard that I'd not only buy Twitter but also Tesla! Let's say when you signed up for the previous job you had two options. Can you predict how the job that you didn’t take would have been?
Why are these one-way doors for individuals?
Firstly, the resultant wasted time and opportunity cost. Human beings, unlike companies that theoretically live forever, have limited lifespans, and time spent in a specific company has the direct opportunity cost of not spending time at another company. Imagine if you were offered a job at LinkedIn circa 2007 versus working at a more established company such as Cisco. If you didn’t take that chance, you have likely suffered a significant financial downside since LinkedIn’s stock skyrocketed and many employees are very rich people. Cisco? Not so much.
Trust me I know because I made the mistake of not joining LinkedIn and chose to stay at a more “stable” company. Do you think that was a One-way or a Two-way door?
Secondly, such decisions have the propensity to ruin you. Imagine taking student loans for school because of a predicted demand in a specific occupation and when you graduate the specific occupation does not exist. You have hundreds of thousands of dollars of loans on an education that was .. somewhat … useless
Why do we fall into this trap more in our personal lives than our professional lives?
It’s several things:
Firstly, we don’t apply the same frameworks and rigor to our decisions as we do to “professional” decisions as employees of companies. Why? Quite simply because we don’t have frameworks. Did you date a few partners before you got married? Did you use a spreadsheet with criteria or emotions to evaluate this relationship? Analytical personal decision-making prowess is something that most of us lack.
Secondly, human beings are not entirely rational creatures. Have you ever looked at a decision a fellow human-made and thought “what the hell was that dumb decision?”
Thirdly, lack of sufficient time to evaluate every single possible option.
Finally, we sometimes don’t have any choice. It's either take the only job offer or not have a paycheck.
All these reasons result in suboptimal decisions. So how do we improve making decisions? To understand which parts of this framework we can apply to our personal lives, let's examine how companies make decisions.
Daily decision-making is the primary job of most middle management and senior leadership at any company. Each day there are hundreds of decisions made. A few examples:
Should we sell this product in the market?
Do we hire this person?
What tech stack should we use?
Do we prioritize x or y?
At companies, a large team of well-educated, experienced individuals will make progressively harder decisions in concert with other teams. This slows decisions down drastically but allows a company to not make a decision that is life-threatening or crippling. Or worse gets the educated, experienced middle management employee fired.
In a McKinsey article titled “If we’re all so busy, why isn’t anything getting done?” The author asks why it's so difficult to get things done in business today. The answer? Companies spend TOO much time on pointless interactions that result in information overload and energy drain... Consider that you are one of these middle managers and you hear a new piece of information. Your professional self considers it as the cost of slowing down the decision because you don’t want to get fired. In his book Superforecasting, Philip Tetlock talks about how humans can become super-forecasters by updating their forecasts with newly gained information. But consider this, Decision Fatigue which is the psychological phenomenon surrounding a human's ability or capacity to make decisions gets worse after making many decisions, as their brain will be more fatigued. Now you the same human being has very little decision-making capacity for making your own decisions
None of this is to mean that companies always make the best decisions! Ha, if only! In a Medium post Eric Migicovsky, the founder of Pebble talks about a core decision that resulted in them not going beyond a geeky user base. I found that statement humbling and so interesting and a perfect example of a one-way door for a company. Eric says:
“Pebble Time did not succeed because in a quest for huge growth we attempted to expand beyond our initial geeky/hacker user base and failed to reposition it — first as a productivity device, then as a fitness watch. In hindsight, this was stupid and obvious and 100% my fault. We didn’t know if there was a market for a more ‘productivity’ smartwatch and we weren’t a fitness company at the core”
The key thing to note here is that companies can invest a lot into making decisions as well as invest a lot of time into looking into those decisions in retrospect and learning from those decisions. In our personal lives, however, we lack the discipline and energy to do so both before and after the decision to analyze the situation deeply and prevent it from happening again
Why does this matter in your personal life?
Think back to one of several key personal decisions you’ve made:
What field of education should I pursue after high school?
Should I work for company X or Company Y upon graduation?
Should I relocate and move to a different city?
Should I stay in my current job or switch jobs?
In my personal experience, some of these were not really decisions and I never gave it much thought because .. well .. there was not any choice. It just happened! If I had a say in the decision I’d probably have screwed it up. I got lucky. Let's take an example: I wasn’t a brilliant (or even an average) student in high school. The option for me to take Computer Science did not exist; it was reserved for the geekiest and smartest kids. So I took .. Economics. This resulted in me not being able to apply to any engineering colleges which resulted in me choosing a business degree as my undergrad only to in turn choose to work as an engineer after college. I got lucky to be able to work as an engineer but had I not gotten a job with a Bachelor’s degree in business would not only have been hard but also not very lucrative. On my recent trip to India, I saw a store that was looking for “associates” that had a minimum requirement of a Bachelor’s degree.
I think a lot about decision-making and to what extent decisions such as these are in our control and how much of this is plain dumb luck! The deeper question in my mind is could I calculate all the various paths (similar to what a company would do) to figure out the best course of action? Of course, as human beings, this is a much harder thing to do and so we apply heuristics (More on this in a future essay!) Consider the below example in Smart Heuristics. Gerd Gigerenzer talks about how a human tries to find a partner to marry. If human beings were truly applying a rational framework they would have to find out all the possible options and all the possible consequences of marrying each partner. Whether the partner would help with the children, be a good earner, cook, or protect the children. Do we do these calculations in our heads or in a spreadsheet? We don't. We just fall in love with the person. Framework out of the window! We are satisficers rather than maximizers (satisficers make better decisions) and can't possibly calculate matches for 7 people let alone 7 billion people. Even if we can calculate as quantum computers do, do we even really know which potential paths a relationship would lead us down? Your argument might be that this is romance we’re talking about. But think about a new job. How rigorously do we apply a managerial decision framework, the same one that we apply to the very job we’re hired to do, to the decision to join a company. Zilch. Nada
So where does this leave us? I think it's important to apply frameworks where possible for personal decision making since a significant part of personal decision making is one-way doors. A good place to start applying these frameworks and building muscle would be with jobs/work, where to live, saving and spending. I strongly recommend that you do not apply a framework to your current significant other (or do it without their knowledge) if you intend to stay in that relationship :)
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Acknowledgments
Thank you so much to Michael Dean and Arthur Plainview, and Katherine Mora for feedback on early drafts and for making this more understandable and relatable. You beautiful people!
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