How to Make Better Decisions: Recognize Uncertainty

It’s a complex world, and we are constantly making decisions.  Just imagine the number of decisions we make about breakfast:  How big a breakfast should I have?  Should I have coffee?  If so, how much?  Should I have toast?  Should I use butter?  Should I have one piece or two?  Should I cut the toast?  If so, should they be cut into rectangles or triangles?  Should I keep the crust? Should I have juice?  Should it be apple juice or orange juice?  How about milk?  I haven’t even gotten to the pancakes, waffles, syrup, sausage, cereal, bacon… (mmm, bacon…)

question-mark

And these aren’t the really important ones!  How do we know we’re making good decisions, and can we make better ones?

In my professional life, I’ve spent decades understanding and applying the theory of making decisions.  Our teams have worked to teach computers to make decisions automatically from tons and tons of data.  In fact, these disciplines are now incredibly important for new technology development.

But understanding how decisions are made doesn’t only apply to technology.  There are definitely things we can learn from this understanding to help us make better decisions ourselves.

Here are three things that are important to recognize about making decisions:

  • We don’t know everything.  We may not have all the information we might like in order to make our decisions.  For example, if you’re playing a card game like poker or bridge, you don’t know what cards the other players have.  This lack of knowledge is called uncertainty.  Recognizing uncertainty is the first key to making better decisions, since uncertainty is all around us.
  • We can’t know everything.  The sheer number of possibilities for what we see in life makes it impossible to know things with certainty.  (In fact, if you can believe it, quantum physics tells us we aren’t able to know everything, at least through our observations, but that’s another story…).  There are things that we can get to the bottom of, but don’t sweat trying to get to the bottom of everything; you actually can’t.
  • There are likely many possible explanations to what we see.  Since we don’t (and can’t) know everything, there might be multiple reasons why the information we have came to us.  This doesn’t mean that we should get overwhelmed and be afraid of making a wrong decision.  Our job is to figure out the most likely explanation and then make our decision with the knowledge.

Making better decisions means first recognizing that life is filled with uncertainty and we’re never getting rid of it.  However, we can take steps to reduce this uncertainty and learn how to make better decisions as a result.

P.S. If you’re interested in a good book on uncertainty and how to make better predictions in light of this uncertainty, I have a review of Nate Silver’s book here.

Question:  Have you ever been uncomfortable making decisions because you felt you didn’t know enough?  You can leave a comment below.

I currently serve as Director in the Advanced Risk & Compliance Analytics (ARCA) practice at PricewaterhouseCoopers (PwC). I've served as Director of Data Science & Analytics Engineering at Areté Associates and in leadership positions with Elanix, Inc. (now Agilent Technologies) and Mentor Graphics. I've served the public as Chair of the Thousand Oaks, CA Planning Commission and now work in New York City. I have been married to my wife Stephanie since 1993, and we have a wonderful daughter Monroe. Learn more about me »

Please note: I reserve the right to delete comments that are offensive or off-topic.