When Legg Mason chief investment strategist Michael J. Mauboussin met Nobel Prize-winning psychologist Daniel Kahneman, the investor asked the Thinking, Fast and Slow author how to best improve his decision making. Kahneman had a hestitation-free reply: Go to the drug store, buy a notebook.
This tome-to-be is now your decision notebook. (Feel free to take a big fat marker and scrawl that across the front.) What’s it for?
Mauboussin explains:
Whenever you’re making a consequential decision … just take a moment to think, write down what you expect to happen, why you expect it to happen and then actually, and this is optional, but probably a great idea, is write down how you feel about the situation, both physically and even emotionally. Just, how do you feel?
While it may seem cheap–that Bic and Mead combo will run you about the cost of laundry money–the consequences are high quality: Tracing your decisions in this way prevents what psychologists call hindsight bias, also known as the knew-it-all-along effect. This is a particularly surreptitious (and self-pleasing) bias, in which you tend to look back at events as more predictable than they really are–and quite possibly with more generosity toward yourself or blame on circumstance than is called for. In other words, hindsight isn’t quite 20-20.
How a journal helps you find patterns
And as Mauboussin observes, the decision notebook, by prompting you to write out the reasons you’re doing something, will become a source of “accurate and honest feedback” on your decisions. By keeping diligent records of your decisions, you’ll (with time) start to spot yourself making the same decision-making mistakes again and again. This will train you to see the pattern, recognize it, and not so quickly fall victim to it yet again–a cornerstone of mindfulness.
But while such journaling helps you make better decisions in your career, it can create lots of value for organizations, too, as Farnam Street scribe Shane Parrish rightly observes. Given the thousands (or more) of dollars that are put into making a single decision within an organization, he says it “seems idiotic” to not openly and honestly track what, how, and why calls get made.
And if the decision is only being made because the highest-paid person in the room says so, Parrish notes, that’s all the more reason to map it out.
Hat tip: Farnam Street
[Composition Notebook: Margaret M Stewart via Shutterstock]