Facing Big Decisions – A Framework for Optimal Decision Making

Facing Big Decisions – A Framework for Optimal Decision Making

A few weeks ago I wrote about how I was tackling a big decision. A decision has been made. Although at the moment it’s rather a stern preference where some logistics are still to be worked out, I am quite confident that it will play out in a way that all pieces will fit the preferred puzzle.

In the meanwhile I have talked to a few people that are in front of similar challenges. The decisions they’ll make will have a profound impact on how their lives will play out in the near and/or far future. A danger that accompanies decisions like these is decision paralysis, doing nothing at all! It’s heavily related to the “paradox of choice” (look it up if you haven’t heard about it yet, knowledge is power). I can tell by other people’s experience that it’s not a happymaker.

In the light of this paralysis and a recent discovery I made while studying I feel obligated and delighted to share the process I have followed to come to a conclusion regarding my challenge. The delighted part is due to the fact that my method appeared to be backed by ‘decision-making-science‘. The scientific way is quite intuitive, hence it matched my strategy.

Decision Making Steps

The steps for reaching a decision are as follows:

  1. Set up a decision tree and walk through all paths and outcomes
  2. Determine chances
  3. Value the outcomes
  4. Determine (and value) additional variables
  5. Calculate the return on each alternative
  6. Choose the alternative with the highest return

Step 1 & 4

For the situation I wrote about a while ago the decision tree would’ve looked somewhat like this:

Decision Making Tree

The challenge was choosing a path forward after my bachelors (masters or working), those choices are accompanied by some additional variables, and they all have a similar or separate outcome. Although, I could’ve added another column on the right, in which they probably would have the same outcome in the end (equifinality).

Step 2

Then, in step 2, you start calculating the chances of achieving the second column. The way you calculate these depends on the situation. You can estimate them intuitively, or look at success rate based on notes in the past and experience from other people for example. The first is quicker, the second is more statistically rooted and probably more accurate.

Let’s assume the chances here are distributed as follows:

  • Masters BE: 1
  • Masters NL: 0.8
  • Job: 0.6

Step 3 and the rest of 4

In step 3 and step 4 you value the outcomes and the additional variables from an upfront chosen scale. This of course is 100% subjective as it is you who decides how much value a single variable or outcome has for you. You’ll see in the table later on that I used a 1-10 scale for the valuation of the variables and outcomes. But you can use a scale from 1-100 or from -5 to 5 and so forth if you’d like to.

Step 5 and 6

And last you calculate your yield (step 5), or return, based on the chances and outcomes. This is done as follows:

Table decision making

For the geeks among us, formalized it would look like this:

Y(A) = P(A) * V(A) + VAA(A) + VAB(A) + VAC(A) + VAD(A)

  • Y(A) = Yield outcome A (Msc. Science Belgium)
  • P(A) = Chance of achieving outcome A
  • V(A) = Value of outcome A
  • VAA(A) = Value of additional variable A for outcome A
  • etc.

After performing the same calculation for Y(B) and Y(C) you can decide which decision gives you the most return, or yield, and decide (step 6). According to these calculations I should choose the option ‘Masters in Belgium’, as that is the one with the highest yield.

NB: This is fictional data and doesn’t represent the whole decision process and the real outcome of the decision made in this situation. The formula is not a necessity. Excuse the bad quality of the pictures.

Good luck on whatever decisions you’ll have to make. Life is made up of decisions and the memories they leave behind. If they are important enough, don’t hesitate to take your time and start deliberating in a timely manner, and be excited about the opportunity being able to shape your own future. If you have any questions, we’d be glad to help a hand based on what we have encountered until this day.

It is in moments of decision that your destiny is shaped ~ Tony Robbins

Did you like this article? Or do you know someone who could benefit by it? Please like or share it. And let us know what you think, by commenting or reacting. Like our page and subscribe on our website, to get the latest updates.



Geef een reactie

Het e-mailadres wordt niet gepubliceerd.