Wethey, Decide

We are constantly making decisions, operating for the most part on autopilot. But then there are the decisions that are part and parcel of how we manage our ambitions and achieve our goals. These kinds of decisions, the ones that require dealing with opportunities and problems, are the focus of David Wethey’s Decide: Better Ways of Making Better Decisions (Kogan Page, 2013). Wethey’s own life decisions include a career first as an ad man and now as a client-side consultant. He also writes the blog Making Better Decisions, Better.

Much of Wethey’s analysis is set within a business context, where teamwork and “buy-ins” are critical. But five of his six rules for making an important decision in the right way, and then managing it, are applicable to the individual trader and investor as well. To wit, (1) “Every important decision is a journey, not a single step.” (2) “You must ask the right questions at the outset to make sure you are operating within the correct frame.” (3) “Plotting scenarios is how you come to the right decision, and for that you need the best possible intelligence.” (4) “Execution is critical. A great decision badly executed will fail.” (5) “Learning and feedback are fundamental, because decision making is a constant activity—every decision you take will inform every other decision you have to make in the future.” (p. 94)

Wethey conducted some fascinating interviews for his book to learn how people actually make decisions—decisions about everything from war and sports to love and buying a consumer product. Among his findings (from the literature as well as his own research), “the best option is often the one with the second-best upside and the least-damaging downside (a bit like a wine list, when you want to balance hospitality with frugality!).” Or two problems are often better than one; if you can’t make a decision about issue A, move down your “to do” list and tackle problem B, then, “refreshed and motivated by your winning performance,” go back to A.

Smart decision making is not a purely rational process; it “has to be a mixture of good thinking and harnessing the power of the subconscious brain.” The subconscious is dominant when the time available to decide is short. But unless, like a soldier or firefighter, you’re meticulously trained to make snap decisions or (my example), like Warren Buffett, you can make a decision quickly because you’ve spent years studying business metrics, faster is not necessarily better. In fact, where a fast decision is an early decision, it can be downright insidious.

Wethey’s exploration of, among other things, decision traps, the role of luck in decision outcomes, and how we capitalize on or waste opportunities is bracketed by a Theodore Roosevelt quotation and his own final words. “In any moment of decision, the best thing you can do is the right thing. The worst thing you can do is nothing.” And “Decide! Success comes from making decisions, not putting them off, or fudging them.” (p. 278)

I decided to spend part of my weekend reading this book and consider my decision to have been a good one.