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Decisions Part I - What's a decision anyway?

The word decision pops up very often in our day to day conversations, and it is not that surprising. Decisions form a very central role in our lives: we can sum up someone’s life by telling the sequence of decisions they made throughout it. We judge ourselves and other people by the decisions that we make:

  • I can’t believe they are moving in together, that is just a nightmare waiting to happen…
  • You should ask your brother to go with when buying your car, he bought a really good one himself.

The sad thing is that most of us never really learn anything about making decisions. So a few years ago, when a friend of mine told me that they actually taught this in certain courses, I wanted to sign up right away! Unfortunately for me, that wasn’t really possible, so I did the next best thing. I started reading books, watching talks and having long discussions on the topic, and I came to realize that this information is worth sharing. Having this knowledge makes me look at software in a completely different way. I finally have a framework to think about making a decision and I want to share that with you. So…

Let’s start by trying to answer a very basic question: what exactly is a decision?

What is a decision?

If I had to explain a decision to someone unfamiliar with the concept, this is what I would say:

You have to do something, and there a few options you could pick from to do it and you need to pick just one of them.

It is not easy to come up with a good description of a concept. Before you read on, it would be fun to try and come up with a better explanation for a decision yourself.

Not that easy, right? But luckily for us, we don’t have to come up with them all by ourselves, other people have done that for us. Let’s have a look how official sources explain it!

According to Cambridge dictionary, a decision is:

Decision: a choice that you make about something after thinking about several possibilities.

and here is another one, from the textbook Foundations of Decision Analysis:

Decision: a choice between two or more alternatives that involves an irrevocable allocation of resources.

Although the definitions seem very different at first glance, they do have a couple of key concepts in common.

Alternatives

To start with, the concept of things you can select from can be found in all three of the definitions. Whether it is called an option, a possibility or an alternative, they all try to express the same idea: there are multiple things available that you can choose from, or to use the definition of the textbook:

Alternatives/Options are available courses of action that the person believes would lead to different futures.

An option is defined here as something that will lead to a different future, which makes a lot of sense. If all your options have the same outcome, it doesn’t matter which one you pick. When it doesn’t matter which one you pick, you don’t have a decision to make.

All three also give an indication that you have to boil the options down to one. So, this implies that there is always more than one option available. This is true when you think about it in this way: not making a decision, is a decision. We will get more into this in part II, making quality decisions

Irrevocable allocation of resources

The second part of the definition talks about irrevocable allocation of resources. What this means is that there is a cost in being wrong. Undoing your decision will cost a loss of time, money or energy. This is important to determine whether or not a person has made a decision.

Think back on all those New Year’s resolutions… All those to-dos made on the first day of the year and most of them will never even start with the resolution. Declaring that you have made a decision is cheap, in order to actually make one, you need to put your money, euh, I mean resource, where your mouth is!

A decision can be …

Decisions can be classified according to a variety of characteristics. By categorising your decisions according to the following 3 categories, you will be able to make better decisions over time and it will help you to look more objectively to the decision that you make.

Easy or hard

What makes a decision easy or hard is how well informed you feel about the decision you have to make. Picking your ice cream flavor can be labelled as an easy decision. Whether or not you want to invest money in a start-up is already a lot harder. Why is that?

Because the knowledge readily available for those two decisions is very different. I don’t have any knowledge that will help me assess whether or not a start-up is worth investing in, and most people don’t have that either. There is a lot of uncertainty involved here.

Uncertainty and the difficulty of a decision are intertwined with one another. In order to make a decision easier, you need to gain more information or get the right information. That way the uncertainty goes down, and the decision is easier to make than it was before.

Reactive or proactive

When you have to make a decision, there are two ways you could have reached this point:

  1. Something happened and now you have to make a decision.

    This is called a reactive decision, because you are reacting to an event. Couple of examples:

    • You got fired and now you need a new job.
    • Your house stops being for rent, and now you need a new place to live.
  2. You want something, so you are going to make a decision.

    You want something to change, so you take charge and try to change it. You are being proactive, so the decision is a proactive decision. For example:

    • you are starting to lose interest at work, so you want a new job.
    • your rent is getting too high, so you want a new living space.

It might not seem important to know what kind of decision you are making, but it is. Think about our first reactive example. Getting fired is something which will trigger different kind of emotions than when you just want to get a new job. So, the way you look at all the options available to you will be influenced, consciously or unconsciously by these emotions. The time you can spend to make the decision will also be different. So even though it might not seem important, it has a big impact on the decision and its process.

Good or bad

A decision can be either good or bad, there is not much to it. Don’t confuse this with a decision has a good or bad outcome. The quality of the decision and the outcome of that decision are things that are not tightly coupled. A good decision can have a bad outcome, and a bad decision can still have a good outcome. I will talk about this more in a different part of the decision series.

Conclusion

It is time to go back to our original question: What is a decision? A decision is not a thing, but a process you have to go through. In that process you choose one option from multiple options that will give you a different outcome and there has a cost in being wrong. You want to avoid paying this cost, you want to make good decisions. In order to make good decisions, you need to understand the elements that need to be present when making a decision. In my next blogpost I will walk you through all these elements!


Resources definitions of decision:

  • Abbas, Ali E.; Howard, Ronald A.. Foundations of Decision Analysis, Global Edition (Page 30). Kindle Edition.
  • https://dictionary.cambridge.org/dictionary/english/decision

Resource definition of alternatives:

  • Abbas, Ali E.; Howard, Ronald A.. Foundations of Decision Analysis, Global Edition (Page 37). Kindle Edition.