[0:08] There are simple reasons why people consistently make bad decisions.

[0:13] Your decisions determine your success or your failure at work and in life more broadly. We're going to unpack the reasons why people make bad decisions and three simple steps you can take to consistently make better decisions. This is Do Something Different. I'm Rusty Gaillard. This is a podcast for high achievers who want to continue upping their game and delivering more impact with less stress and less work.

[0:42] Let's start first with why people make bad decisions.

[0:48] I'm going to give you, share before I get started, something that I read not long ago from originally came from Shane Parrish, and it was in a conversation that he had with Adam Robinson. It was called How Not to Be Stupid. I love the title of that. and the idea is there are seven factors that cause people to make less than optimal decisions, and this is not about a decision making framework or something else this is more about your mental capacity and where you are in that time when you're making decisions if you know i talk often about skill set and mindset this is going to be a blend of both of those but these seven factors about how not to be stupid are largely in the mindset category here they are when you listen to them, listen for how often you think this relates to you. Just as I read each of these seven, think about, is this a situation that I find myself in often? And pay attention to that because these are factors that cause you to make less than optimal decisions. Here you go. Number one, you're outside your circle of competence. You're being asked to make a decision about something that you don't know about that you're not an expert at. That does happen, but I'm wagering that in the work context, that does not happen often for most of you. Listen to the remainders. Number two, stress. Mental stress, physical stress, including being tired. You're tired or you're stressed. You make less than optimal decisions.

[2:14] Number three, you're fixated on the outcome. This is a do or die. I've got to be successful. This is the kind of goal I need to get. And your decision is based on fixation on that outcome. Number four, information overload. There's so many factors going on. There's so many, it's so complex that you're, it's hard to hold it all in your head and to make an effective decision.

[2:38] Number five, you're in a group where there's social cohesion that's important. In other words, you feel like you need to be a part of that group. You need to belong. There's some social pressure, some peer pressure going on. Number six, there's rushing or urgency that you're in a hurry. You have to make a decision. There's something urgent that has to be decided. You need to act. And number seven, there's an expert or authority present in the space.

[3:06] Think back across those and recognize how often those are at play in work stress fixation on the outcome information overload social cohesion rushing an expert or authority is present that describes the workplace for most people and yet those are the very same factors that tend to make you make a bad decision here's one of the biggest challenges with these things this is what we're used to in the work environment it's inertia you were just like that is the environment they're in we've you've got ways that you've developed of coping and operating in that environment and you continue to operate by those in those same ways that is inertia you're used to the fast pace you're used to working hard you're used to being smart you're used to looking for the right answer focusing on the outcome, looking good in front of other people. All of these things are a normal way of approaching your work. And when you're faced with the same environment, these same seven factors that

[4:09] make you stupid, and you respond to them in the same way, you've got inertia. And that inertia is blocking you from doing something different and from making a better decision.

[4:20] When you talk about decision-making, one of the people that often comes up in terms of making great decisions is Jeff Bezos. And I think Jeff Bezos is such a great example because you can go find video of him when he was running a company of like 10 people and he's sitting in an office and he's goofy and he's laughing and he's got this crazy laugh if you've never heard it, but he just seems like a normal dude. And he grew this company through good decisions from a tiny, tiny business, a startup, to one of the most valuable companies in the world, one of the biggest companies in the world, certainly one of the magnificent seven tech companies that has continued to innovate and drive value. And not only did he build that business himself, but he built himself as a leader. He changed. He did not stay stuck repeating the same patterns over and over again. He became a different person, a different leader, a bigger leader, someone who not only could lead a 10-person startup, but could lead a company with hundreds of thousands of employees. Those are totally different skill sets, totally different mindsets, and he was able to make that journey.

[5:30] He did that by continuing to reinvent himself, by learning new ways of operating. He did not operate by inertia. He did not continue to use the same techniques that he used over and over again in the past because what worked in the past will not work in the future. What works in a 10-person startup will not work in a multi-hundred-thousand-employee company the size of Amazon. He had to continue to reinvent himself and grow as a leader. And my premise is that you need that same growth trajectory. If you are continuing to use the same tools and techniques and the same mindset and the same approach that has made you successful thus far, that is wonderful, but it is blocking you from your next level of success. That inertia, that continuing to repeat the same patterns is what is holding you back.

[6:18] I want to give you a little story about Jeff Bezos, and this came from someone I used to work with who went on to work at Amazon.

[6:25] And he was describing to me one of the times that he was in a meeting with Jeff Bezos and he got royally chewed out by Jeff Bezos. Especially earlier in his career, this was somewhat common. There were stories about this where Jeff just ripped into people. And this person that I know described a situation where that happened to him. He got completely yelled at by Jeff Bezos. But partway through this, and this is where it gets interesting, Jeff Bezos stopped and he said, do you know I am mad at you? And this person was a little bit taken aback by that. He's like, I'm not sure. And Jeff Bezos went on to explain, it's not because you made the wrong decision.

[7:03] We all were sitting in the room. We had the information. We made the best decision we could with the information that was available at the time. This is one of Jeff basis principles you don't check and guess yourself you make the best decision you make at the time based on the information you have and you move forward he said i'm not yelling at you because it was the bad decision that decision it turned out had some negative implications for amazon and there were some costs associated with that and jeff said i'm not yelling at you because of the cost we made the best decision we have some decisions are good and you make money some decisions are bad and you lose money i'm not yelling at you because we lost money on this decision? Do you know why I'm yelling at you? And this person I know said, no, I don't. And Jeff said, I'm yelling at you because you had a different opinion at the time we were making this decision and you did not share it.

[7:54] Think about the power of that conversation for a moment. Jeff Bezos, first of all, yelling at someone, which can be very intimidating and it's going to most likely makes someone more conservative and less likely to speak up. Again, inertia. When you get yelled at for something, you're more likely to put your head down and to be cautious. That's worked in the past and you expect that's going to work in the future. Jeff Bezos made the explicit point of, I'm angry at you because you had a different opinion. You had information. You did not bring it to the table. It takes risk to speak up. And especially when you're in a meeting with a position someone with a big authority and jeff bezos obviously has a ton of authority as at that time that at that time the ceo of amazon.

[8:38] So he's challenging this person to say, it doesn't matter who's in the room. It doesn't matter if there's authority. It doesn't matter if nine people out of 10 are going in direction A. If you think there's evidence to go in direction B and you have an opinion, it is your responsibility to speak up and share that. Now that takes some courage. It takes some mental strength. It takes some energy in order to be that person who's willing to go against the grain and speak up with different energy. And this is the mindset element that's at the key of making good decisions because if you are going fast if you are rushing if you're trying to get things right if you're worried about getting it wrong if you're worried about what your boss is going to think all of those things tend to make you less likely to make a good decision they're all on the list of seven factors that make you stupid and not only that but you're not in a good mental place when you are stressed when you are rushed, your fear centers of your brain are activated. And when the fear centers of your brain are activated, you have less access to your prefrontal cortex, the part of your brain that thinks strategically and thoughtfully and rationally and calmly. Because when you're stressed, you're in a fight or flight and you're in a survival mode. And that is not conducive to making a good decision.

[9:55] So let's talk about three steps you can take to be more effective at making decisions consistently.

[10:02] The first step that I'm going to encourage you to take is to create space. Create space for yourself. And what I mean by that is to literally change your physical environment. If you're sitting at your desk, if you're at work, whether you're in the office or whether you're at home, literally get up and walk to a different environment because your environment is in provides clues to you about how you operate in that place. And when you're at your desk, many of us are in the mode of get stuff done, be productive, make a decision, move forward, make sure other people are happy, be a good team player, impress your boss, look good. All of these factors, all of this noise that comes in to the daily operation of work.

[10:46] Get up, walk away from your desk, change your environment, even better if you go outside in nature, because nature has been proven time and again to have a calming effect. You want to get out of that fight or flight kind of mode, that stress mode in your brain, take some deep breaths, calm down, get access to the full capacity of your brain so you can think more clearly, so you can think more calmly, so you can see things from a different perspective. Space is the key to doing that.

[11:15] That is your first step to consistently making better decisions. Create space. Your second step to consistently making good decisions is make it simple. So often we think about politics. We think about social cohesion. We think about the boss and what is the boss going to think? We think about rushing and what is the timeline for doing this? All of these factors that tend to make these decisions much more complicated than they need to be.

[11:41] I have a client that I worked with in the past that was struggling with a decision in the very same way. And this was an HR oriented kind of decision about, can I grant someone extra vacation time, even though they've already used their vacation time, or do I need to deny it? And this person was so caught up in what is my boss going to think? What is my peer going to think? Who's working on a new vacation policy? Are people going to think it's equitable? There are all of these other considerations, as opposed to just zoning in and honing in on the very specific question of this is a person who has a vacation they want they're wanting to take am i okay giving them a few extra days to take that vacation or not make it simple so oftentimes we make these decisions much more complicated than we need to and that leads to the information overload especially when we're worried about impressions and what other people are going to think if you can simplify this down to the

[12:34] business question at hand and make your decision based on that. You're going to be much more effective.

[12:40] The third criteria for making better decisions consistently is success. So many of, and what I mean by that is to take your perspective and orient yourself towards the perspective that this decision is going to lead to success. So many people make a decision out of fear of failure, and that is the path towards a bad decision. Don't be afraid of failure. Don't try to minimize downside in your decisions. And this is one of Jeff Bezos' principles about decision-making. Bet big. Make an assumption that this is going to be a successful project and you're going to learn from it. And that's the key about success. Either the decision is going to be successful on its own right, or you're going to be smarter because the decision is not successful, but you learn from it and you're able to adjust and going forward be more effective.

[13:34] Assume that this decision is going to lead to success and make the best decision you can at the time keeping it simple stripping out all those other things and once you've created space for yourself so you'll notice these three keys to a powerful decision making to making better consistent decisions are space simplicity and success all starting with the letter the letter S to make super decisions.

[14:00] Put this into practice because your patterns and habits around the way you make decisions likely are the way you've made decisions in the past and they've worked for you very well. But if you want to get to the next level, you need to do something different. Just like Jeff Bezos did something different time and time again, which allowed him to elevate himself from the manager of a handful of people in a startup to leading one of the largest companies in the world. You can grow in that same way. It's going to require you doing something different. So go back, listen to those seven factors that make you stupid and recognize how often they show up and think about how you can apply these three S's to make better decisions more consistently. Create space for yourself, keep it simple, and orient yourself around success, not fear of failure.

[14:53] Take this think about a decision that you have coming up and put it into practice i encourage you to be specific about that it's so much easier to say oh that was really cool and walk away and never apply this but application is everything think about a decision you have coming up how can you apply this how can you give yourself space make the decision simple assume that you're going to be successful make a powerful decision and go forward.