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Making Better Decisions

16 August 2016

Daily life requires us to make many choices, all of which effect where we are in our personal lives and our careers. Some decisions seem to make themselves, as our minds automatically compute known information, and access our memories and our prior knowledge. Other decisions require more time and deliberation before reaching a conclusion and before we can decide on a course of action.

Psychologist and Nobel Prize winner Daniel Kahneman describes these two methods of decision making as System 1 and 2, the former being instantaneous, and the latter, deliberate. He believes the more deliberately we make some of our more important choices, the better off we will be, and encourages people to strengthen their System 2 decision-making skills by being aware of the two systems of thinking.

While System 1 thinking is instinctual and essential for our survival, System 2 thinking is slower and enables us to control our thoughts and make complicated decisions and more accurate calculations. Slowing ourselves down allows us to see the bigger picture more clearly, and notice things not immediately apparent, which is important if we are making decisions that will have widening consequences far into the future, such as making investments or marketing our businesses. Gathering as much information as possible will allow for better, more informed decisions.

Although we often believe we are making decisions based on reason and proper consideration, often that is not the case. System 2 thinking is intricately linked to System 1, making use of impressions and emotions. This information is worthy of inclusion when making big decisions, but the process must not stop there if we are to guard ourselves against making mistakes. Unfortunately, not all mistakes are avoidable, as System 1 cannot be switched off entirely, and even rigorous System 2 thinking might not detect all biases that occur. However, being aware of the possibility of error, and endeavouring to consider all available information will help us avoid making decisions based on cognitive illusion or previously established bias.

Despite what pop-psychology sometimes teaches, our 'gut instincts' are not our best guides. Relying on System 1 thinking, and acting impulsively is likely to lead us to make more mistakes than a System 2 approach. The age old advice to “sleep on it” supports a System 2 approach. Following first impressions and first instincts might be permissible if we are experts with a great deal of knowledge and experience behind us, but in most cases a more deliberate, effortful, System 2 approach to decision making will be ultimately more successful.

Never be afraid to ask for the time you need to think a decision through thoroughly. We often assume we are obliged to decide in the moment - that's not necessarily the case.

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