The Secret to Making Good Decisions Lies in Weighing the Tradeoffs
"You can watch a movie on TV tonight, or you can go to your friend's house for a sleepover on Saturday. You choose." And, over the years ... do I take this smaller university where I get a generous scholarship or do I opt for the prestigious one which will mean steep fees? You are now an adult with a job. Do I continue at this safe but boring job, or do I quit and join the exciting startup that wants me?
We make thousands of decisions every day. Most of them hardly reach our consciousness. When they do, decision making often poses a dilemma. You want something, but you have to give up something else: a tradeoff. Some other benefit or opportunity is at stake -- the opportunity cos t of your decision.
Yin and Yang
In our lives, there are a few everyday ingredients that require tradeoffs. Here are a few.
- Time: As we grow in our professions, time becomes a scarce commodity. Many decisions have to be made based on how much time is available. Time spent on the opportunity will inevitably mean that there is less for something else. Stay longer in the office and miss out on your child's appearance in a school play.
- Accountability: The more number of people and projects you are in charge, the higher the demand on your mind share. Stress levels zoom up.
- Opportunity: New horizons mean risks. The opening might be exciting, but your steady paycheck may disappear.
- People: The role and salary at a new job may be fantastic, but your present boss is a joy and delight to work with. Moving to the other company might mean dealing with the prospect of an unfriendly superior. Relationships are an essential part of job satisfaction.
- Brand identity: It feels good to mention the name of a well-known firm as your employer, but the competition and lack of personal touch could be a downer. Your present employer is a small, family-owned business but everyone knows everyone and the owners treat you like family.
On the back burner
Tradeoffs aren't always comfortable, which is why we try to disregard them. We seldom consider tradeoffs when we make decisions. Quite often, the compulsions of the moment do not give us the luxury of time for weighing options.
Tradeoffs can take a while to become visible. They may only show up in the long term. In the meanwhile, life goes on with or without you. As Einstein said:
"Life is like riding a bicycle. To keep your balance, you must keep moving.”
If we pause to reflect on the options, without losing our forward momentum and balance, we can end up with more satisfying choices. Impulsive choices extract a price. The price may be more than you can afford.
Six of one, half dozen the other
Tradeoffs carry opportunity costs: what you must forgo to get what you want. The higher the value is of what you could be doing versus what you are doing, the larger the opportunity cost.
You didn't take a vacation because you wanted the money to buy a new car. The holiday is your opportunity cost. Life is full of hundreds of similar examples.
Tiger by the Tail
The consequences of ignoring tradeoffs and opportunity costs play out in the same fashion time and again. Here are some situations where you might want to stop and reflect.
- You feel like you are always behind, always trying to catch up. There's no time to stop and smell the roses. Understanding tradeoffs in time usage is an excellent way to cut out unhelpful behaviours and wastage.
- You are working as hard as you can, but don't appear to be making any progress. The working day feels like drudgery. You feel trapped in "zero-sum" situations where one gain is offset by another loss.
- Multitasking doesn't work. When you multitask, you are constantly shifting attention. This endless flitting between activities has a very steep energy cost. In the long run, you lose. You will be much better off doing them one at a time.
Taming the tiger
There is always a space between the tradeoffs we're making and the ones we'd rather be doing. Once you notice this gap, it's easier to work on changing circumstances. Here are some strategies.
- Reframe the situation: Spending more time at home could be a significant opportunity cost. Your present work situation demands long hours in the office. Maybe you should consider working from home.
- Alter boundaries: Examine your self-imposed limits. Go to work at transcending them. A lot of things that we think we can't do are from never trying.
- Bargain: Tradeoffs are not written in stone. There’s always room for negotiating and reaching a happy compromise. Don’t be inflexible.
- Accept: You need to be able to let go of not being great at something. "Kill your darlings" -- a piece of advice which editors give to aspiring writers holds good here.
Get into the habit of writing a diary for the more significant decisions you make. Put down brief statements about the following items:
- The nature of the situation that needs a resolution.
- A list of the possible routes of action.
- The pros and cons of each of them.
- Your choice and why you did so.
- What tradeoffs did you have to make?
- What do you expect from this selection?
As the diary grows, review your entries now and then. You will get a good insight into your decision-making process and an insight into your mind.
Ironically, knowing how to make tradeoffs is a valuable skill; those who can do this well, get more out of life than others who aspire for everything.
"There are moments that define a person's whole life. Moments in which everything they are and everything they may possibly become balance on a single decision. ... These are moments ungoverned by happenstance, untroubled by luck. These are the moments in which a person earns the right to live, or not." ― Jonathan Maberry, Rot & Ruin*
Dr Arjun Rajagopalan
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