reading review - thinking in bets (riff offs)

Hi all,

Let’s wrap up my series of posts about Annie Duke’s Thinking In Bets with a brief riff off on a few lingering ideas.

The seven ‘dog years’ idea is widely believed yet not based on any verified facts.

I was a little surprised to learn this but when I think about it I suppose the idea that a dog ages in direct proportion to humans was a little silly all along.

Experience is not what happens to us but rather what we do with what happens to us.

I like this definition because it addresses the concern I have that people consider mere exposure sufficient as a way to learn. I think learning requires an active and often deliberate step by the student and the way experience is defined here is an important reminder – learning is what we do with what we are taught.

The introduction of uncertainty drastically slows learning.

I would take this a little further and suggest that uncertainty slows everything.

Habits mean a cue, routine, and reward. To change a habit, keep the same cue and reward but change the routine.

I’m not sure if I wrote this down correctly because my intuition suggests that considering the reward is the most important step. A few years ago, I was worried about how I would go into CVS whenever I was returning home late at night for a candy bar or ice cream. I changed the habit by forcing myself into a CVS anytime I knew I could resist the temptation in the hope that I could deliberately reset the way my mind processed the cue (I see a CVS) and routine (I walk into a CVS). Eventually, I rewired myself to recognize that this cue-routine combination did not always need to result in the same reward (candy and/or ice cream). These days, it’s exceedingly rare for me to walk into any store and feel tempted to buy a sweet.

When two salespeople experience different outcomes, it isn’t good enough to simply say one outperformed the other. We must also account for any factor that might have influenced sales – did they perform in different time periods, did they work in different territories, did they sell to customers with different profiles, etc.

I don’t think this is a major revelation for anyone. My assumption is that most people who make comparisons understand the importance of comparing apples to apples. And yet, I bet people are still judged when the apples to apples comparison isn’t possible. I suspect this is because it’s hard to imagine dismissing data about one salesperson outperforming due solely to the impossibility of a fair comparison. In these situations, it’s probably easier to try guessing what explains the outcome (or simply use the outcome itself as the explanation) instead of making it seem like no effort is being made to understand the discrepant results.

Instead of dismissing others, actively look for the things they do well.

This is another thought that I think many understand but few manage to consistently apply in practice. I think the barrier is a natural tendency to assume people are good at what they do relatively well to others. This might be a good way to define ‘passively look for the things they do well’. I’ve often been accused of doing something well merely because the accuser knows someone else who does the same thing poorly. The task of actively determining what someone does well means determining what is done best within the a person’s set of skills.

The goal of a group decision shouldn’t be full agreement. Agreement is needed after the decision is made (in terms of a commitment to action) but groups that find consensus often fail to make the best overall decision.

I learned when I interviewed with Amazon that one of the company’s stated principles was ‘disagree and commit’. I thought this described one of my strengths. Over the years, I’ve found that it’s far more productive to separate my thoughts on a decision from my commitment to executing the plan. I don’t think this comes easily, however, and I’ve found over the years that many people would prefer to say ‘I told you so’ after something fails rather than pointing out that ‘my full commitment to your stupid idea allowed this to succeed’.

A good combination tends to be setting positive goals and understanding negative futures. The best balance is recognizing that we can handle a bad outcome so that we are not discouraged from trying.

This is a good thought for those whose fear of bad outcomes prevents them from executing good decisions. Often, we consider bad outcomes and acknowledge their unpleasantness without considering how we might handle the situation. In some cases, a closer examination helps us recognize that although a bad outcome is hardly cause for celebration, its possibility isn’t a good reason to avoid trying because we know that we can handle any difficulty that might result from a bad outcome.

If you’ve got a spare half a million, you can knock it down and start rebuilding.

As I noted in a prior post, a critical component of sound decision-making is to consider good alternatives. The more possibilities we are able to consider, the better chance we have of making the best decision for ourselves in a given situation.

What?

Fine…

That thought isn’t from the book, it’s from Courtney Barnett’s ‘Depreston’. But you know, when in a riff off…

Thanks for reading.

reading review - thinking in bets (the sympathetic ear)

One challenge to helping others make improved decisions is how it often requires the helper to violate the implicit social contract that we should always lend a sympathetic ear to hard luck stories. Although some situations do require this approach, consoling someone for their poor outcome rarely helps them make better decisions in the future. One of Duke’s suggestions for overcoming this problem is to form a group dedicated to improving decision-making skills. I thought this was good advice but perhaps not always realistic. For the most part, the only opportunity we get with others is conversation, so I figured today I should think about such conversations and consider ways to help a person become better at making decisions without jeopardizing the social contracts that govern our closest bonds.

The goal at the start of any conversation is to establish an open dialogue and this applies to any discussion aiming at improving decisions. My first objective would be to gently steer the conversation away from any self-pity that might otherwise prevent honest reflection. A good way to do this is by avoiding disagreement. This doesn’t mean both parties must agree throughout, it just means using certain words and phrases to keep both parties in a conversation on the same side of the table. The age-old improv standard of ‘yes, and…’ is the most important expression to use for these conversations. By starting a comment with these words, a sense of agreement is established and the next step in the conversation starts with the previous exchange as a building block.

The key point to remember is that it rarely matters if both sides agree. Even if the listener feels that bad luck actually played no role in the outcome, the point here is to establish a sense of agreement with the aggrieved party before moving forward. Once the listener's sympathy is established, the conversation can move forward to talk about what happened. I recommend putting this sympathy on active display rather than passively implying via merely listening to someone's extended sob story. Once the sympathetic foundation is established, the conversation can move forward to explore the decisions that led to the outcome. If the initial response to this attempt results in defensiveness, just revert back to providing reinforcement or validation. Eventually, it should become possible to explore ways to improve the decision-making process without backlash.

Finally, always remember that dismissing another’s decision is a sure path to disaster. The better approach is to focus actively on what someone does well and frame everything in that context. This way, a might help someone see that a decision went poorly not because of a bad choice but because of a failure to stick with strengths. The best way to help others improve their decision-making skills is to help them recognize ways to leverage their own strengths or abilities. This is always challenging in the aftermath of a bad outcome but a sympathetic listener can do a world of good by helping someone gradually recognize how good outcomes are linked to decisions that position us to do what we know we do best.

reading review - thinking in bets (decision making)

The main purpose of Annie Duke’s Thinking In Bets is to help others improve their decision-making skills. Although her book is full of many helpful tips and strategies, I thought a handful of specific ideas stood out in comparison to the rest.

First, I liked the suggestion to always identify as many alternative approaches as possible. The thought reminded me of something I read in a different book – a lack of good alternatives often leads to poor decisions. Duke recommends starting this process by analyzing winning outcomes and thinking of different ways to replicate the same result. This approach is a little easier than doing the same with a losing outcome because the positive result removes the ‘what-if’ factor that might cloud an inexperienced thinker’s analysis.

A second tactic I wish to highlight is the importance of remaining outcome-blind when considering a decision. This is a problem we might encounter when we are repeatedly faced with the same choice and have a history of results to consider as part of the decision. Although there is always a certain wisdom in sticking to a winning plan, it’s crucial to take the time to analyze those past outcomes and ensure that luck did not play an outsized role in creating the positive result.

I liked Duke’s explanation of how working backward from a goal or target is one helpful way to envision a successful decision. The idea also works in reverse if we think about what obstacles might prevent our success and plan ways to maneuver around those impediments. This advice strikes me as particularly useful for long-term or complex decisions where the inputs or factors we can influence today do not have any obvious or visible immediate consequences – working out the process in this manner will prevent us from making any irreversible choices that will doom our potential for success in the future.

Finally, Duke reminds us that the recent past does more to shape our emotions than the big picture. Those making important decisions must assess their emotional fitness to do so and seek out appropriate assistance as needed. If a decision must be made alone, we should always consider recent events and ask ourselves whether our emotions associated with those events are influencing the way we are considering the factors involved in the current decision.

reading review - thinking in bets (analyzing outcomes)

Thinking in Bets by Annie Duke (November 2018)

A critical skill for any decision maker is knowing how to analyze the outcome of a decision. This means a person must know how to weigh the importance of the factors that went into a decision and understand how each factor influenced the final observed outcome. This isn’t as simple as it sounds because most people are unable to overcome the biases in their own views or positions.

The most obvious way people do this is by interpreting events through filters that allow their analysis to remain consistent with prior conclusions. A person who believes people run faster in the sunlight, for example, will always consider weather conditions when assessing the outcome of a road race and might dismiss the presence of other more important variables. This tendency is natural and therefore somewhat unavoidable – plus, the difference between a bias and a variable is often a matter of openness to rethink. The issue isn’t necessarily the filter itself but our unwillingness to acknowledge when a filter is self-serving.

People who use their intelligence to construct narratives that explain away contradicting information compound this problem. Instead of recognizing a possible bias, these people construct ever more elaborate explanations that preserve their worldview. A good example might be the student who believes his or her failing test scores are first the fault of the questions, then the teacher – anyone but the student! In the context of Thinking In Bets, what these narratives prevent is the kind of open analysis required for cultivating an ongoing process of continuously improving a decision making process.

The way most people consider the roles of luck and skill in their outcomes undergoes a similar process. A poor analysis will involve seeking plausible reasons for an outcome that paints us in a flattering light. This usually means someone analyzing an outcome that had a lot more to do with luck than skill will explain the result with a series of characteristics or factors that are difficult to prove – character, toughness, perseverance, and so on. As stated a couple of times above, the key to overcoming this flaw in the way we naturally assess outcomes is to be aware of how our explanations serve our interests, positions, or worldviews and to question any conclusion that paints us in too flattering a light.

One up: Of course, I fail to acknowledge above how difficult it is to analyze outcomes without bias. My guess is that although some people can come pretty close to being entirely without bias in their individual analysis, no one out there is above benefiting from a little help. Duke cites research that two people will often move closer together on an issue after a debate or skilled explanation of the opposing position and leveraging the wisdom of this finding is one way to strip away bias in an analysis. A good start toward this goal might be to find a trustworthy partner or form a diverse group that will always find ways to play Devil’s advocate and explore the many possible factors involved in a certain outcome.

One down: My adventures in business and analytics often bring me across KPI – key performance indicators. This magical-sounding concept is a way to proactively track important outcomes. The methodology for calculating these metrics ranges from the simple to the complex. The important thing isn’t the difficulty level of the math but rather what the metrics reveal about performance.

Now, though helpful in many ways, one significant danger of a KPI is how it encourages lazy outcome analysis. Even if a truth about a KPI is well established – for example, when everyone agrees that if ‘X’ goes down, it’s because ‘Y’ went up – someone should investigate the underlying causes of why the metric moved as it always did. The teams and organizations that can maintain a fresh perspective to data they’ve seen before will always do well while those who glance at the outcome before moving on will someday find themselves blindsided by the unexpected.

Just saying: I liked the thought that a good scientist should report everything that might make his or her findings invalid. It really captures the essence of this book – no individual is infallible to certain reasoning errors, so we must do everything in our power to leverage different perspectives and make it easy for our peers or colleagues to check our thinking.

i read thinking in bets so you don't have to

Annie Duke’s Thinking In Bets is a thorough examination of decision-making. Her book studies the way people make decisions and offers suggestions for how we can improve our decision-making in the future. A bet, which she defines as a decision about an uncertain future, is a manner of making decisions that she is familiar with from her career as a poker player and much of her book focuses on the mental techniques she used in her playing days to determine whether or not to wager on a given hand.

This book is basically about how to apply a gambler’s thought process to all manners of decision making. The underlying assumption of Thinking In Bets is that bettors tend to make better predictions about the future than those who only make predictions without betting. It isn’t perfectly clear to me why this is the case but it certainly feels true to me after decades of reading and observation. The simplest explanation is probably the best one – when people wager, they have more at risk than those who do not. Therefore, they work harder to make a correct prediction because their bet acts as a way to protect and profit from a prediction.

One common mistake Duke warns against is equating the quality of a decision with the quality of the outcome. I suspect most people know this intuitively but often forget it as soon as a decision leads to a particularly poor (or good) outcome. Over a couple of upcoming posts, we’ll take a closer look at the way Duke recommends analyzing outcomes before considering how this analysis can improve our decision making skills.