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“The essence of strategy is choosing what not to do” –  Michael Porter

How do you feel about making choices and decisions?  Does decision-making get you stressed out, take up a lot of your time, and have you running around in circles? I hear you!

Business strategy expert Michael Porter‘s quotes is one of my favourites – simply because it is so true.  Way back when I was in business school taking consumer behaviour marketing classes, we learned a lot about decision matrices. They work so well.

Not only for choosing what to do, but exactly as Porter says – for choosing what not to do.
 
I’ll get to those further down in the post, but…
First, let’s talk about why we make decisions in an illogical way:

4 Reasons We Make Decisions Irrationally

1.  Sunk Costs

One of my favourite business concepts is the concept of sunk costs. In case you aren’t familiar with it, a sunk cost is an expense that you’ve already spent money on, or some action that you’ve already taken.

Freedom of Choice

Logically, the cost you’ve already spent should not stop you from spending on the next decision.  They are separate events.
If you’ve already spent money trying one strategy, and it would cost money to try another, you shouldn’t base your decision of trying the strategy (or not) based on money you spent on your last try.
But we do this.
For example:
Casino players think “they’ve already spent so much”, so they should hang in there and spent until they win. But the previous money is a sunk cost – it has no bearing on the outcome, and whether or not you should spend the next bunch of money on a new decision.
Think about that the next time you have a decision to make!

2.  Emotions

Emotions aren’t rational, right? At times, it’s so difficult to use a strategy to make decisions when you’re emotionally involved. When I get stuck, I find the best way is to turn to an objective third party. Now, if you’re stubborn like I am, it makes it so difficult to ignore your emotions. Well, maybe ignore is a strong word – gently shove them aside to make way for rational decision making.

3.  Perception of Others

I see so many people get caught up in what other people think. I’ve always been a non-conformist, and as the “outcast” kind of kid, I learned early on to not care what others think.  In fact, books were always my solace. In the literary world, there are so many characters that I looked up to. Strong, independent women who wouldn’t conform. 

So, I took my cue from them.  When choosing what not to do, don’t worry so much about what others think. Forging your own path is so much more satisfying!

4.  Social Bias – What We “Should” Do

 Actually, I was just Skyping with one of my good friends about this last night. As humans, we are often influenced by social pressure. That is, what we ought to do according to some social norm.  
 
Sometimes we forget to keep in mind that we need to make the best decision for ourselves  (and perhaps those people and pets we are responsible for), but not what society wants us to do.
We were talking about the topic of wanting to have kids (or not), but in my view this applies to almost every decision.
Social pressure to get a “good job”, rather than discovering one that suits you personally. To be in a relationship, or not. To value certain aspects of life, or not. Try taking this out of the equation next time you make an important decision!

How To Choose What “Not” To Do  (Strategy)

1  Understand Opportunity Cost

Here’s another business term:
Opportunity Cost:  The cost of the next best decision.
That’s right.
What are you giving up by making this choice? What is the cost/benefit of the decision you didn’t make? For example, imagine you decide to do a one year’s Masters program that costs $20,000, and you had been working full-time before that. If you calculate the total cost including opportunity cost, it should include the salary you are giving up by making that decision. So, the true cost may be closer to $80,000.  Of course, opportunity cost doesn’t have to only be in terms of money, and sometimes certain benefits outweight financial costs – but don’t forget to consider it!

2. Decide What You Really WantMotivational Mondays - Willpower & Vision

Now, I don’t mean what society wants. I mean what you want.  You need to find a strategy to live the life you want.

Next, I suggest making a list, or “decision matrix” if you will, of the pros and cons of each decision or route you could take.

  • List out all the options
  • Make categories of values or attributes that are important to you.  For example, if you’re buying a car they may be features of the car. If you’re deciding on a career path, they may be features of working in the field. Assign each attribute a weighting
  • Score each option according to each category you’ve created, on a scale of 1 to 10 (1 being terrible, 10 being ideal)
  • Multiply each score by each weighting (e.g. maybe certain features in a car, like safety rating, have a weighting of 2, while the others have a weighting of 1
  • Add up all the points for each option. The one with the best score wins!

 

3.  Define and Understand Your Priorities

Someday is Not A Day of the Week - Priority

This final step goes hand-in-hand with Step #2.  If you have decided what you really want, you need to then decide what tasks and events to make priorities. You should make choices that align with your priorities. It sounds simple, but I’ve found it difficult in the past.  Which is the more tempting choice? Sometimes the “tempting” choice would be a complete diversion from the one that aligns with your priorities.

I would even write it out, with specific timelines.

For example:  For the next 3 months, my main priority is my PhD. I will accept and schedule PhD work events over other events in my life.  (That example’s real, in case you couldn’t tell 😉  )

How do you make decisions? What strategies do you use, and what do you choose to do, or not do? I’d love to hear from you in the comments below.

Have a lovely and productive Monday!

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P.S.  Photography fans, the photo for today’s post (and poster!) is one I took in Plitvice Lakes, Croatia last fall


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