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Evidence-Based Decision-Making is more like Poker than Chess

In her book Thinking in Bets, Annie Duke, former professional poker player and (almost) a PhD in Psychology from the University of Pennsylvania, describes making decisions as a process more like poker than chess. One of her main points is that good decision-making requires that the leader not fall into the trap of "resulting." This is the term professional poker players use to describe judging your decisions on short-term, insufficient data. Frequently, all gamblers are tempted to see patterns that don't exist and start modifying their decisions on these phantom patterns. They look at short-term results and begin to prematurely doubt their basic strategies only to find that they were chasing a mirage.

Business leaders do the same thing. They look at the latest decision and judge it good or bad based on the short-term, small sampling of results. They often judge poor decisions with "lucky" outcomes as "pure genius" that should be the topic of a best-selling business book. Likewise, they can prematurely abandon a good strategy because bad luck or exogenous events gave short-term bad results.Thinking in Bets.jpg

The key is to use objective measures to collect enough of the right data to make a solid decision and stick with it. This requires patience, discipline and training in using objective methods for collecting the data, evaluating the data, modeling the data, implementing a plan and objectively evaluating that plan. Not very many leaders fully understand how this is done and are often too close to the "problems" to remain completely objective. This is where SALLC can help. We can show you how:

  • EBDM removes much of the fear and animosity around decision making
  • EBDM can be understood by almost everyone
  • EBDM can be implemented using a variety of readily available tools that take care of the "difficult math"
  • EBDM can become a way of doing business that permanently improves your organization's decision-making abilities

For more information contact Ron Stites via email at ron@tek-dev.net.

 

Evidence-Based Decision-Making is more like Poker than Chess

In her book Thinking in Bets, Annie Duke, former professional poker player and (almost) a PhD in Psychology from the University of Pennsylvania, describes making decisions as a process more like poker than chess. One of her main points is that good decision-making requires that the leader not fall into the trap of "resulting." This is the term professional poker players use to describe judging your decisions on short-term, insufficient data. Frequently, all gamblers are tempted to see patterns that don't exist and start modifying their decisions on these phantom patterns. They look at short-term results and begin to prematurely doubt their basic strategies only to find that they were chasing a mirage.

Business leaders do the same thing. They look at the latest decision and judge it good or bad based on the short-term, small sampling of results. They often judge poor decisions with "lucky" outcomes as "pure genius" that should be the topic of a best-selling business book. Likewise, they can prematurely abandon a good strategy because bad luck or exogenous events gave short-term bad results.Thinking in Bets.jpg

The key is to use objective measures to collect enough of the right data to make a solid decision and stick with it. This requires patience, discipline and training in using objective methods for collecting the data, evaluating the data, modeling the data, implementing a plan and objectively evaluating that plan. Not very many leaders fully understand how this is done and are often too close to the "problems" to remain completely objective. This is where SALLC can help. We can show you how:

  • EBDM removes much of the fear and animosity around decision making
  • EBDM can be understood by almost everyone
  • EBDM can be implemented using a variety of readily available tools that take care of the "difficult math"
  • EBDM can become a way of doing business that permanently improves your organization's decision-making abilities

For more information contact Ron Stites via email at ron@tek-dev.net.