“Wanna bet?” or what I learned from Annie Duke on improving decisions
Pete Carroll had a decision to make.
The Seattle Seahawks, with 26 seconds remaining and trailing by four points, had the ball on second down at the New England Patriots’ one-yard line. Everybody expected Seahawks coach Pete Caroll to call for a handoff to running back Marshawn Lynch. Why wouldn’t you expect that call? It was a short yardage situation and Lynch was one of the best running backs in the NFL.
Instead, Caroll called for quarterback Russell Wilson to pass. New England intercepted the ball, winning the Super Bowl moments later.
Annie Duke. Thinking in Bets.
Afterwards, news outlets lambasted Carroll for the decision that was made. Annie Duke (and a few analysts) noted otherwise. She argued that just because the result was a bad outcome did not make the decision itself bad. Hypothetically, if you and I played a fair game where you could win 99% of the time and I win 1% of the time and each time either you would win $1 or I would win $1, would you play the game? And then let’s just say that the first time we play, I win the game, does that make your decision to play the game bad? No, not at all.
Annie Duke wrote an excellent book on how to improve decision making and here is what I learned from her:
The concept of resulting
Resulting is what happens when you judge a decision based on the outcome — if it was a bad outcome, it was a bad decision and likewise if it was a good outcome, it was a good decision. For example, if in poker, you decide to play 2–7 off suit (i.e., the worst starting hand in Hold’em) and you win, that does not make your decision to play 2–7 good (although there are certainly other factors to consider but generally, you will lose money playing 2–7 off suit if you play it all the time). When we make decisions, we need to examine the way we make decisions to judge our decision making ability and not let the outcomes sway our judgment of our decisions.
Life is a game of poker and not a game of chess
I’ve heard the saying that life is a game of chess. In chess, all the information that you need to solve the ‘puzzle’ is on the board. When one person loses, it is because they made some choices that were objective mistakes. Annie argues that life is more like a game of poker — you don’t necessarily have all the information needed to make a decision. Another complication with the decisions that we make in life is that we make decisions without really having the experience of past / similar decisions — that is, if we decide to purchase a home, fix it up and then sell it for more money than when we bought it, does that make us smart at flipping houses? Not necessarily. One house just isn’t enough information to tell us that we are smart at flipping houses; however, I know that based on my own experience, I can do things once (such as projects or buying homes) and consider myself an expert (which is ludicrous).
Think about a moment in your life where maybe you were hanging out with friends, watching a hockey game. You and your friends banter and then you make a passing remark that Sidney Crosby has never scored 50 goals in a season in his life. One of your friends says that you are wrong and then says the following question: “wanna bet?”
Immediately, you think about how you came to know that Sidney has never scored 50 goals in a season. Did someone tell you this information? Did you look it up one day? Did you see a buzz feed article? What was the reliability and confidence of the article or website that you saw the information from?
Interestingly, Annie argues that all decisions are bets in some shape or form. In fact, this question really helps to frame your decision making in the right way — are you missing information? What is your confidence level on your current information? How do you know you are right?
The concepts of backcasting and premortems
Backcasting is the idea that we imagine a successful future and we work backwards from there to understand the steps that we took to reach our goals. This can be different from imagining from the present towards a successful future because in conjunction with a premortem, you can understand what are the different risks and variability in your steps that may lead to a negative outcome.
A premortem is similar to backcasting but you imagine a negative future and work backwards from there to understand the steps that may have steered us poorly. This can be a great way, say, at the start of a project, to understand the key project risks and to mitigate them early on. It can also be a great question to ask the team — sometimes people think that projects can be too big to fail and be chastised for bringing up project concerns and so they don’t do it, but then find out later that the project failed because they had not raised their concerns.
These two ways of thinking can help provide you with objective information and make better decisions rather than thinking that negative futures will never happen.
There’s a lot of great nuggets in this book and certainly a lot of great concepts that I have / will incorporate into my own decision making. If you are interested in learning more about decision making and how we can improve them, I’d recommend Annie Duke’s book but also a newsletter from Shane Parrish who runs the Farnam Street blog where every week he shares what he has learned about decision making.