I’m going to share the group’s results for the confidence test, but first, let’s get level set on why I’m focusing on decision making.
- I introduced you to the ideas of systems thinking and how to apply them to your business. We will formalize this further after we explore your decision-making process.
- I just gave you my take on broader business trends and how these overall trends will influence your business. There I touched on some essential business tools to help you navigate those waters. As a sea-faring captain navigating troubled waters, more important is your ability to decide within uncertainty (AKA life).
If you choose to, by the end of you reading Wynn-ing Ways, you’ll have the foundation of a business system and a decision-making system.
Why?
Because publishing is an ever-changing, tumultuous business powered by a cumulative advantage, you need an anti-fragile and sustainable business.
This business will be a perpetual work in progress that you will look to scale and shape to its full potential. You’ll also need to make the right calls and trust your choices.
Now we begin the work on how to decide.
Developing a decision system will make you more successful. It will be the most significant edge you can get in creating advantage.
By challenging your decision-making process, you’ll have a new viewpoint when thinking critically about how your business system will be designed.
We will amplify success by having a better decision-making system.
You’ll have a Meta-feedback loop of an improving decision-making system influencing your improving business system—two robust positive feedback systems working together to fuel your success.
WOW!
So, let’s get after this…
I would like you to think about the best decision you’ve ever made.
Write a sentence or two that describes it.
Now think about the worse decision you ever made.
Again, write a sentence or two that relates to that decision.
If you’re like most people, those words relate to the outcome of the decision, not the actual decision-making process.
Huh…
This isn’t anything I’ve come up with but something I learned from Annie Duke.
It’s called resulting—this is when you associate the outcome with the process.
The reality for most is that the decision-making process is identical in both cases, just the result was different.
We rationalize good or bad decisions based on the outcome. The reality is our decision-making has no repeatable or reliable processes.
If I can help the CEO of your publishing business improve his/her decision-making, then they will run a better business for you.
Better decisions improve the probability of success—and there is no reason you can’t apply that decision-making process to other parts of your life as well.
As a solopreneur, you’re everything; the CEO, investor, marketer, author, limo driver, you name it. This makes it hard to get a perspective on the business.
One misconception is that if you build a business system, it will magically do everything for you.
Wrong.
Not in your case, because you’ve got so many vital roles to play.
A system allows you to “step out” of it, observe, and improve your business system.
You still must step back in and turn the crank to make it work but having something to work on rather than in is how you get the system to improve and scale.
The same holds true for a decision-making system. Having a decision-making process will help you get better. Certainly, experience is an enormous factor, but distilling learning from experience is more important.
Without a system, we leave experience to become fogged by memory and emotion — that’s going to make it harder to be objective.
Instead, we build an objective system. Let’s begin with the group’s test results.
On the test, I asked you true and false questions. I then asked you to rank your certainty of the answer. If you did not know the topic, the worse was a 50/50 shot at getting the question right.
Why this test?
This is part of calibrating your gut. The more in touch with your certainty and uncertainty, the better you’ll feel about making decisions.
Let me help you understand your results.
The group was 68% confident in its answers, and the actual result correct was 67%. This highlights the wisdom of the crowd and its ability to predict. I’ll go deeper on that in a later email.
From the chart below, you can see a sampling of the results. Only a few had the confidence, and results line up. Often confidence was higher than the actual result.
Is your confidence higher than your actual results? That’s over-confidence. Your belief in your answer is skewed higher than the actual results.
Conversely, you can be correct, but don’t trust yourself. That’s shown by lower mean confidence than your actual answered correct.
Being overconfident or under-confidence in your answers results in inaction or the wrong action in a situation.
With a decision-making system, we can tune in your confidence in your answers and give you a process to get confident in your decisions. We can also increase your comfort with uncertainty.
Examples E and F show an excellent calibration. The actual correct and confidence lined up. We can see in this second chart that E and F both had high confidence in the answers they answered correctly and low confidence in the answers they got wrong.
Knowing you don’t know becomes a trigger for you to ask others or look up the correct answer.
Go back to the chart and look at example U. Here is a case of severe under-confidence. With nearly 90% of the correct answers but only 50% confidence. This is a case of an effective person that could be rendered ineffective through lack of confidence.
You just took the first step in improving your decision-making process through the act of thinking about how certain you are in an answer.
This is the process of stepping out of your decision-making system and learning about how it works. This level of awareness will have profound effects on your success. Few go to this level of effort and make it a lifetime practice.
When you face uncertainty, the best you can do is have a process to analyze and make an educated guess.
If you have a way to calibrate how certain you are in your decision, you begin to remove ambiguity.
Life is full of choices, and most aren’t binary. You get limited information and uncertainty as to the stakes for your future self.
Let’s revisit some decisions from the “I’m here for the Action” email.
It started with a hunch about going to the Mirage. That wasn’t a decision. It was a reaction to a feeling. Did my chakras manifest a vision of the future? I doubt I was channeling Doctor Strange using the Eye of Agamoto.
The story is remembered because of the results. I’m biased because I won.
There have been countless other hunches that didn’t result in a big win.
Where decision-making diverged for Jack and I was when I proposed a path forward where we went home with our winnings.
I looked at the probabilities.
I just had a massive win in the first few hours of a Vegas trip.
Experience had shown me that those “streaks” didn’t continue.
I looked at a financial result and saw little upside (risk/reward).
For Jack, the objective was to stay on the roller coaster. The money was secondary.
For me, I went to a rational probability approach.
I had learned from other trips that trying to catch the streak again had failed. I knew from experience and had guidance from the old man about the pitfalls of chasing a streak.
Business is like poker, not chess. You build success by making a series of choices with limited data that send you along a path. A path that will result in successes and failures while eliminating old and opening new decision branches.
I’m not promising you’ll always make decisions that result in success. That would be bullshit.
If you implement what I share, what I offer is optimizing the probability of success and doing a post-mortem on outcomes that didn’t go as expected.
This brings me the ultimate question for this email…
Do you journal?
I suggest you get a journal for decision-making.
As we move forward, I’m going to be sharing some ideas of a decision-making process, and it all starts with recording the process.
This isn’t about making a pro/con list. It’s bigger than that but think about this, have you made a pros and cons list for a difficult choice you had?
Have you ever revisited that list?
What was the last colossal decision you had to make?
Can you even remember what it was?
Can you go back and find that pro/con list to review it?
Most people just throw the list out and never go back and look at them.
So here is a suggestion — start a “big decision” notebook.
Next week we will begin building your system, and that journal is a great place to capture your ideas on decision making as you read future emails.
Joe