In this article, I will guide you through the universal decision-making framework – a framework I developed to deal with complex decisions. As we move through each stage of the framework, step-by-step, I will show you all the relevant decision-making concepts you need to know. My hope is that by the end of this article you will be able to implement the universal decision framework on your own use cases.
Who you are now is the result of decisions you have made during the course of your life. So the quality of your current life is determined by the quality of your decision-making.
Decision-making is everything. In fact, someone who makes decisions right 80 percent of the time instead of 70 percent of the time will be valued and compensated in the market hundreds of times more.
– Naval Ravikant
Yet, despite its importance, very few people study decision-making.
So today we're going to change that and dive into an interdisciplinary field of decision science. It incorporates economics, statistics, behavioral science, and cognitive psychology.
Decision Science offers a range of valuable models, practical strategies, guidelines and tactics. In this article we will explore some of them, while covering a situation that you may be familiar with.
An important life decision.
Let us consider the story of a guy named Dan. Here are a few facts about his life:
- Dan, an experienced software engineer, currently resides and works in Austin, Texas.
- Dan is 29. He started to code at 19.
- He has been with his current company, a mid-sized tech firm, for six years.
- He enjoys his work and the company culture.
- Yet he starts to feel that he got a bit stuck in his career.
- Dan is deeply connected to Austin, where he grew up, and has a tight-knit circle of family and friends.
Out of the blue, Dan's manager offers him a significant promotion within the company, which would see him lead a new innovative project. However, this role is based in the company's San Francisco office and would require immediate relocation.
The offer includes a substantial salary increase, which reflects the high cost of living in San Francisco, but also the higher level of responsibility.
What should Dan do?
Where should he start our process?
Dan needs a plan, or what we call in Decision Science: a meta-decision.
Meta-decision is basically a decision about decision. It gives structure to our decision making process.
To start working on a plan, Dan needs to consider two questions:
- How much time does he have to make this decision?
- Is he in a good mental state to make decisions?
He knows that has one week to make this decision. So timing doesn't seem to be a major issue. Also, he's in a good mental state, with a clear head.
Passing through this checkpoint, he can start to develop his meta-decision.
Dan's plan will follow the Universal decision-making framework:
- Start with sensemaking
- Frame the problem
- Explore the alternatives
- Make a decision
- Track and Learn
Dan needs to allocate an adequate amount of time for every stage.
Dan is a smart decision-maker, so he plans roughly equal time for each of the four stages.
- Two days for sensemaking
- Two days for framing
- Two days for alternative exploration
- One day to make a decision
Dan made sure that he wouldn't spend too much time on one stage while neglecting the others. As he moves through the stages, he can always update his meta-decision in terms of timing and structure.
Meta-decision is not fixed. Instead, it is constantly modified as part of the decision-making process.You can correct your course at anytime. In decision science we all it adaptive decision-making.
Let’s get back to Dan. Now he has a plan, and it's time to get to work.
Starting with sensemaking.
The main goal of the sensemaking stage is to answer the question: what is going on?
Here you collect as much information as possible, make sense of it, and try to get the full picture.
- Look at the context.
- Look at other actors' motivation.
- Look at what may be concealed in your blind spot or purposely hidden from view.
Dan was offered the promotion out of the blue:
- Why him?
- What changed?
- Why did this happen now?
- What is the company's agenda?
- Does he have enough information?
- Is this information of a good quality?
Dan started to learn more about the project.
He found out that it is a new product launched in a very competitive market. Which obviously involves a lot of risk.
- So what would happen if the team launched the product and it failed?
- Will Dan need to go back home?
- Will he be transferred to another position in the San Francisco office?
- How reversible is this decision?
- If Dan changes his mind after a month of work, can he get back to his old role?
Dan also finds out that the company has no other candidates for this role and no time to hire a new person.That means Dan has more opportunities to negotiate.
How about the context?
- The economy is in a recession
- Tech companies fire employees
- Also many companies leaving California
- There's the AI revolution going on, which threatens programmers' jobs
Learning the context is important, but It's also important to look inwards. Reflect to understand your own position in life at the moment and to clear up your vision for the future.
To do so, Dan can ask himself:
- What do I want from it?
- Am I the right person to make this decision?
- Do I have enough competence?
- Should I delegate it?
- Should I consult someone?
- Who should also be involved in this decision?
The last question is particularly important for Dan since he values his family so much. He spends a day talking to his mother, and by the end, he realizes he's a bit lost. It's hard to make a decision when you don't have a clear vision for the future.
Dan decided to negotiate more time to make a decision (+1 week) and do some soul-searching. So he adjusted his meta-decision accordingly.
Re / Framing
Dan spent the next four days soul-searching. He realized that although he liked Texas, he was not satisfied with it.
He reflected on his core values: curiosity, exploration, and personal growth.
He wants to go to the next level, but he’s not sure whether he’s ready or not.
Dan works as an iOS app developer. But he has an aspiration to move to AI / Machine learning space. Yet, he lacks the necessary experience to seek a job there.
By the end of four days of reflection, Dan realizes:
"This is not a career decision! In fact, it is a decision about his life's vision. Probably the most important life choice he will make in his life!"
Dan reframed the problem such that now it reflects his situation more adequately.
A Problem Well Stated is Half Solved
– Charles Kettering
From initial framing: "Accept or decline a promotion"
It evolved into: "I'm at the turning point of my life. I need to make an important choice about my whole life and form my vision. The promotion gives me optionality. It's a wake-up call!"
Now, Dan understands his situation way better. But the time is ticking…
So it's a good moment to explore some options.
Exploring the Options
When we think about options, it is better to explore alternative strategies and alternative courses of action, not just discrete options.
In the initial framing, Dan would choose between two discrete choices:
(a) Accept promotion and move, or (b) Decline promotion and stay.
But there are plenty more options:
- Find a better position in Texas
- Find another position in San Francisco or any other city, and maybe even in a different country
- Ask for more time to make a decision
- Explore opportunities for combined/remote work (part Texas/part SF)
- Negotiate transitional period
And we can see how these options can be a part of the overall strategy:
Let’s say that Dan can first negotiate more time, then explore alternative jobs in the area, and only then get back to the main decision.
Another important aspect when you think about options would be the criteria by which you evaluate them.
The crucial order of criteria for Dan would be:
- Family and friends
- Job satisfaction
- Job alignment with his vision and values
- Cost of living
- Professional growth
- Overall quality of life
- Adaptation to new environment
- Job security
- Potential cultural shift in new workplace
- Work-life balance
This is the stage where you evaluate the options and choose.
There are many approaches you can use on this stage. Most of the time, I use a combination of these three:
- Risk-benefit analysis
- Factor analysis
- Decision tree approach
One practice that helps me a lot is o draw some kind of general schema on a piece of paper or iPad:
- Outlining the factors
- Exploring scenarios
- Estimating risks.
Dan used the same approach here. Check out the piece of his schema:
Usually this process is pretty messy. I know some people who evaluate their decision using an Excel sheet with tens of parameters. But for most decisions – it’s a struggle. You use one method, you go and think, you try different perspectives, you iterate.
After analyzing many options, Dan finds the following strategy that will maximize his chances of getting the outcome he wants:
- He accepts the promotion yet switches to hybrid work, spending most of his time in Texas. This way, he gets a nice transition period when he won't separate abruptly from his family.
- He will fly to San Francisco once every two weeks or once a month, with his company covering the costs of these trips ( Negotiated☑️)
- While in San Francisco, he will attend networking events, meetups, and conferences related to AI/Machine learning to expand his connections in the industry.
- In addition to working on the new project, he begins developing his AI/Machine learning skills.
- After about three months of this routine, he will have enough information to evaluate the project's status - whether it's likely to be a success or a failure.
Even if, after three months the project seems likely to fail, Dan will still have an updated skill set, a valuable network, and an understanding of how well he can adapt to a new city (San Francisco).
Now that the decision is taken, what else should Dan do?
Tracking and Learning
When the decision is made, everything is just getting started.
We need to have clear checkpoints and backup plans.
In Dan's case:
- How is the project going?
- How well does Dan’s network grow?
- How effectively is Dan able to learn?
- What new opportunities have emerged?
By tracking and evaluating his experience, Dan can always correct his course of action.
And here we are, after going through each stage of the Universal decision-making framework. A framework to help you make sound decisions and improve the quality of your life.
Thank you for making the decision to come on this journey with me and Dan!
ABOUT THE AUTHOR
Andrew Altshuler is a researcher turned consultant & educator. He helps people & businesses to transform the chaos of information into an efficient, AI-optimized knowledge system. You can find more about Andrew's work at: altshuler.io