During the Christmas holiday, I was accompanying my family skiing at Lake Tahoe in California. For various reasons, I don’t ski, so with nothing much to do, I continued to entertain myself by writing something. The full title of this series of articles is “Thinking About the Nature of Intelligence, to Guide Education and Self-Improvement.” The first two articles have already been published, links are below: Part 1, Part 2. This article offers some humble thoughts (抛砖引玉 - pāo zhuān yǐn yù, lit. ‘casting a brick to attract jade’) to discuss one of the next important modules of intelligence: Decision Making.

6. Decision Making Ability

Decision making is making a choice among various options (plans). Decision science is an independent field of study with many theories and methods. I haven’t studied it systematically, so here I can only superficially discuss some key points that come to mind.

Decision Making is Like Finding a Path on a Map

The process of achieving goals in life and work can be seen as a search problem on a map: how to get from a current point (current situation) to a target point (goal) using the fewest resources. In between, there are various search attempts, various dead ends (failures), then changing paths and trying again.

Searching on this map of life and work involves infinite ways to interact with surrounding people and institutions, leading to infinite choices and branches. Decision making is the problem of deciding how to choose among them. Taking a wrong turn at a major intersection means the cost of turning back is high. Therefore, choice is even more important than effort. To choose, one needs to evaluate; evaluation requires prediction. Prediction requires a real understanding of the various interacting things. Understanding only comes through learning. These are the core modules of intelligent life.

Understanding Human’s Two Decision Systems

Human decision-making actually involves two systems: instinctive, unconscious fast reactions + acquired, conscious, thought-based slow reactions. Humans evolved from lower organisms, retaining the lower-level intuitive, instinctive decision-making system, and later evolved brains for advanced logical thinking, analysis, and decision-making. Even so, we still retain the primitive decision system. An important reason is: decision-making is a process under multiple constraints, requiring energy consumption, time consumption, and having varying degrees of urgency. Therefore, it’s impossible to always have people sit down and slowly use their brains for hours before deciding what to do. Emergencies and daily behaviors are automatically handled by the instinctive fast decision system, without consuming much energy or time, allowing people to live their daily lives efficiently. For example, suddenly touching fire triggers an instinctive fast reaction decision. By the time the slow brain reacts, the hand would likely already be burned.

Obviously, between the two human decision systems, the instinctive system takes priority. An emotional outburst is the instinctive, emotional decision system hijacking the rational thinking decision system, causing people to do impulsive things they regret. Many people rely on intuition to do things, which mainly relies on instinctive fast reactions. The drawbacks of intuitive decision-making are the lack of systematic analysis, the inability to express the process textually, non-repeatability, and the inability to be reviewed by others. Therefore, major decisions should avoid being made emotionally right from the start.

Any human decision is a mixture of emotion + rationality. Professor Stephen P. Hinshaw of UC Berkeley mentioned in his course “Origins of the Human Mind”: by observing the decision-making processes of people with brain damage, it was found that if the emotional part is damaged, a person cannot make any decisions. In other words, without the drive of emotion, no rational decision can be completed.

This finding is very interesting; often we hear that decisions must be rational, rational. But in reality, humans are essentially emotional animals; the underlying operating system is driven by emotion to make decisions. Thinking carefully, it makes sense; only with passion can people do things well. Various “chicken soup” (inspirational content) constantly advocates finding ‘true love’ (passion/calling) to plan one’s life, work, and study, aiming to lay a solid emotional foundation for personal development. Entrepreneurs who build large enterprises are masters at mobilizing people’s emotions, like Jack Ma, “drawing big cakes” (making grand promises), painting a wonderful future for people, making investors excited and eager to invest.

Set Priorities Properly

Often there are many choices, and one doesn’t know where to start. A common root cause of difficulty in choosing is wanting the best of everything. The solution should be to set one’s own priorities (what is most desired), make trade-offs, and then choose. An example is wanting my job to be easy, fun, something I love, high-paying, prestigious, and close to home. In reality, it’s impossible to achieve all of these; one can only sacrifice some goals based on the current situation to achieve the main goal.

Gathering Validated, Actionable, Multi-faceted Information

Before any decision, relevant information needs to be collected; the reliability of the information is crucial. One needs to cultivate the ability to discern the authenticity of information. When collecting information, focus on finding first-hand information from official websites, primary sources. When obtaining second-hand information (e.g., information relayed by third parties), be aware of the need to verify the source and authenticity – trust but verify. When hearing anyone’s opinion (argument), ask for the supporting evidence (basis/grounds). Also cultivate the habit of understanding the same information from multiple channels. For example, when checking US school rankings, one should find three ranking methods, understand their respective pros and cons, and then choose the ranking that best suits oneself. If one knows how to “scientifically access the internet” (circumvent censorship), the first step to understanding something is usually checking its Wikipedia entry. The information there is relatively impartial.

Information comes in two types: actionable or not. Actionable information is information that can be converted into action or guide action. One should focus on collecting information that can be converted into action. When communicating with others, also pay attention to providing actionable info. Avoid information that has no impact on people’s actions.

The authenticity of information is also related to the motives of the person providing it. Therefore, TV commercials are not credible because the motive of the advertisers is to get the money from your wallet into their pockets. Information provided by neutral people without conflicts of interest, people whose interests align with yours, or people who have already earned enough money and want to give back to society is more credible.

There can be infinitely much information relevant to a decision. Identifying information on the key 5-10 factors is sufficient. More information beyond that does not improve the quality of the decision but instead increases its difficulty. For example, when deciding whether to change jobs, the main information to list includes employer reputation, quality of the boss, career prospects, job content, match with personal interests and abilities, colleague harmony, salary, distance from home, and office environment.

The information collected should be multi-faceted; one should not selectively gather information biased towards a particular option. A simple example is collecting information both for and against.

Making Decisions Like Deriving a Mathematical Formula

For important decisions, it is recommended to record the details of the decision: what key information was gathered, how its reliability was verified, and how the decision was made. Basically, it’s like doing a mathematical proof, solid and step-by-step (扎扎实实步步为营 - zhā zhā shí shí bù bù wéi yíng). This allows checking the decision process for flaws and also allows trusted others to help review it.

Quantitative and Qualitative Decision Making

Systematic decision-making methods mainly fall into two categories: quantitative methods and qualitative methods. Quantitative methods require rigorous data and calculations, evaluating the scores of outcomes for different choices, then selecting the choice with the highest score. Qualitative methods do not focus on data but on the essential characteristics of different choices, selecting the desired characteristics. Of course, the two methods can also be applied comprehensively.

One type of quantitative decision-making is the value calculation method: viewing the decision of whether to do something as a problem with two outcomes, win or lose, each with different probabilities. For example, the probability of winning is 0.6, gaining a value of 100; the probability of losing is 0.4, losing 100 units. Then the expected value calculation is: expected gain from winning = 0.6 100 = 60, expected loss from losing = 0.4 100 = 40. Comparing the overall calculated values: gain (60) > loss (40). Therefore, one should do this thing. This method is the same as calculating odds and payoffs in gambling. The premise is that one can afford the consequences of failure, and has sufficient resources and opportunities to participate multiple times; then the final payoff is foreseeable.

For some decisions, if the consequences of failure cannot be borne, one must take a conservative approach, even if the potential gain from taking the risk is very large. Warren Buffett gave an example: a revolver has a million chambers, with only one bullet inside. If a bet involves shooting oneself in the head, winning 10 million if unharmed, he wouldn’t take the bet. Because although the probability of failure is small, the consequence is unbearable.

Prioritize Doing High-Density Tasks Among Multiple Things

Here, Density = Importance / Time. High-density tasks are those with high value that take little time. This should be easy to understand and use. It means prioritizing tasks that have high value and take less time. Facing the same problem at work, with too many projects, density can help decide how to choose. Many books to read, how to prioritize selection – same problem and solution.

Beyond Instinct, Borrow Tools

Decision-making primarily relies on oneself. Our brains have evolved over millions of years and already contain many good algorithms; it’s just that most people haven’t stepped outside themselves to examine and further optimize them. Also, when encountering decisions one cannot handle or is struggling with, they don’t use others’ brains (books, technology, software…).

Many large companies and institutions already have expensive intelligent software to assist decision-making. For example, Bridgewater Associates (桥水公司) internally uses computer models to help evaluate the outcomes of different investment options to aid decision-making. Currently, there isn’t much decision-support software for individuals, but there will be in the future. Developing such software is very costly. Currently, it’s only used for decisions with huge economic stakes. Current business competition is already a competition driven by big data, involving AI modeling, prediction, optimized decision-making, and then execution. The general trend for competition between individuals is also like this: using data, technology to assist personal decision-making and execution. In the future, those who use more external technological aids (‘plugins’/’enhancements’ - 外挂, wài guà) will be more competitive.

Other people are also a type of tool. For major personal decisions, besides careful consideration by oneself, the most effective way is to find the right person to consult. This person should be experienced in the relevant issue and someone you can trust. Asking the right person for advice on a decision basically solves most of the problem.

Identifying Extreme Decisions.

Regarding a major decision issue, if an individual or a group hastily agrees or disagrees without quantitative/qualitative analysis, without rational/emotional assessment, without seriously analyzing pros and cons, it can be considered an extreme decision. Therefore, a decision without controversy is not necessarily a good decision. The worst decisions are often made quickly by a group driven by emotion after a major event, without going through a rigorous and serious decision-making process. Unfortunately, many teams, and even government legislative bodies, often make one-sided, immature decisions. Personal decision-making is the same. The first principle of decision-making in the book Principles (《原则》) is to avoid harmful emotions, check if participants in the decision are in an impulsive or angry state, and if so, wait until emotions calm down before deciding.

How to Conduct Team Decision Making

A comprehensive team decision-making method integrates quantitative and qualitative methods, considers opinions from both supporters and opponents, and combines rationality and emotion. A popular tool is Six Thinking Hats (《六顶思考帽》). This tool is particularly suitable for group decision-making, though it can also be used for individual decisions. Because within a group, due to differences in personality and experience, different perspectives on the same decision issue will emerge. This is inherently good, but if these differing opinions are not handled well, unpleasant arguments and deadlocks involving personal emotions can easily arise. Six Thinking Hats provides a systematic process that allows everyone to examine the same decision problem from different angles, integrating different opinions to reach a more optimized decision. These six hats are:

  1. Blue Hat (Control): The decision group selects an experienced person to wear this (virtual) hat, responsible for controlling and regulating the entire decision process, defining the problem, the current context, and the decision objectives. Decides when everyone wears which other hat for thinking. Final summarization, etc.

  2. Red Hat (Emotion): This step allows everyone to put aside rational thinking and decide purely based on personal feelings and intuition. Each person’s opinion is a quick agreement or disagreement without needing justification.

  3. White Hat (Information): This is a step in the decision process. All personnel wear this hat (virtual) and focus solely on collectively gathering objective facts and data, without personal bias or emotion. The key point of this step is that everyone must participate neutrally and objectively.

  4. Yellow Hat (Optimism): This step makes everyone consider the issue positively, offering constructive viewpoints from an optimistic, hopeful perspective. Everyone states the benefits of something, even if they have already expressed opposition based on emotion or intuition.

  5. Green Hat (Creativity): This step encourages everyone to think outside the box, brainstorm, and propose creative and imaginative ideas. Pursue new ideas and divergent thinking.

  6. Black Hat (Caution/Judgment): This step requires everyone to approach from a cautious, conservative angle, looking at potential downsides, risks, difficulties, uncertainties, etc. Even the most enthusiastic supporters must participate in finding this negative information.

Finally, the Blue Hat leads everyone to synthesize the opinions from the above steps and make a decision. The above process can be repeated according to how things develop. The Six Thinking Hats decision method transforms the common different thinking angles of different people into a shared team experience, reducing the risk of injecting personal emotions and causing personal conflicts. It also breaks down complex decisions involving multiple factors, tackling them one by one, focusing on one factor at a time for discussion. Such a decision process is more comprehensive and more peaceful. It can lead to high-quality decisions and a united team.

Where to Find More Decision-Making Methods?

Computer science offers many ready-made algorithms for decision-making, such as decision trees and decision matrices. There are also big data, artificial intelligence, and deep learning algorithms guiding decisions. Interestingly, random decision-making (coin toss) is also a decision method, often used as a baseline to see how much better other methods are compared to it.

Of course, there are also many books on how to make decisions. An introductory one recommended is: Algorithms to Live By: The Computer Science of Human Decisions (《指导生活的算法：人类决策中的计算机科学》). Book notes in Chinese for this book can be read here:
https://docs.qq.com/doc/DSWdvTUJpcXljb1NF)

The book Principles (《原则》) dedicates a separate chapter to a very detailed decision-making process for life and work. Highly recommended reading.

》To Be Continued《

The next article is the final one in this series, exploring the assessment and improvement of execution ability.

Original Chinese version of this article: https://mp.weixin.qq.com/s/qE0eHbZzDqWkwJS8aUzMDw