Everything about goals, resources and thinking traps in decision-making wisdom

This is not a general theory book about decision-making, but a book that focuses on daily practice and some business decisions. The author, an economics professor and the president of a consulting company, can you analyze the form and focus of this book, or look at the neglected English title: "Making Great Decisions-in Business and Life" as always. According to the subtitle of In Business and Life, this book is about life and business: decision-making thinking, resource allocation and implementation. The original book is 15 chapter. I adjusted the structure and introduced it in three parts. Although there are some overlapping contents in structure and logic, it is a little messy, but the contents and examples are very rich, and there are summaries at the end of each chapter for easy review. Generally speaking, it is worth reading and suitable for people who are interested in decision-making and economics. This paper is divided into three parts, and at the end of each part, some wonderful examples in the book are quoted (under the item of thinking training).

From the first second you wake up in the morning, you start making decisions. One is to get up or go to work (don't laugh, many people have this); It is too late. I don't brush my teeth or wash my face. Students can't tell (boys,,,); Today, whether to wear a handsome trench coat or a bright dress, watch the weather forecast (for the better of the world, girls still have to work harder than boys) and so on, is a decision, even what to eat early, whether to say hello when you meet acquaintances. Hundreds of thousands of decisions a day, we are not bored to death and exhausted. In fact, it is because our brains simplify and optimize some daily decisions, and we have habits. Even before you realize it, your body has made a decision. The obvious choice of breakfast, classmate, every day when I go to the canteen, I will turn over all the stalls, and then think back to what I had for dinner last night, and calculate the calories before choosing. The real scene is that you will go directly to buy the one you often eat. Of course, sometimes you will make a reference according to yesterday's diet, which is also very fast. For example, after running 5 kilometers yesterday, you can't help liking a fried dough stick today, which is a kind of Huang Chengcheng food full of heat and fragrance. Although there are many decisions, there are only a few important decisions involving economy (the key to the survival of modern people) in a day, and this book on decision-making is about how to deal with such decisions.

Since we want to make a decision, we must first know what the goal of our decision is. This step is not only very important, but once we make a mistake, we will lose everything. Just like the opposite direction, the direction is wrong. No matter how good the resource allocation and perfect the implementation, the mistake can only be more outrageous (of course, the mistake is very fast, quite fast). To define the goal of decision-making, we must first have a clear understanding of the situation. Being clear about the status quo can evaluate the possibility and impact of things. For example, before deciding the promotion plan of the product, how do we sell it now, whether the customer group meets the original product expectation, what is the single purchase behavior, and whether the products with different packages are designed according to the original scene. All this is based on data collection and analysis. On the other hand, when it comes to personal decisions, such as changing jobs, renting a house in different places, and getting married this year, we should also make a more objective description of the situation before and after (individuals should pay special attention and try to find others to provide some feedback if possible). On this basis, guide the decision-making of related tasks. And repeatedly think about the ultimate goal of decision-making.

Next, reflect on your attitude, where you are in order to achieve the purpose of decision-making, and calm down and ask yourself two questions. The first one is: Is this what I think or what I have to do? Second: Is my obligation regarding this decision fictitious? The question is the first step to get the correct answer, and it is also an excellent tool for introspection, just like a famous saying: Questions create reality. For example, you are busy with a very important task, and the leader temporarily adds a seemingly urgent task, and then the decision comes. Do you want to do the task at hand or switch to a new task? Do I have to be involved in conflicting business? Or was it just a coincidence that I was seen What will happen to my work after finishing this task? Do I want to do this new task or do I have to do it? Can I authorize others to do new tasks and transfer obligations?

When the decision-making objectives and reflections are completed, the remaining decision-making tasks should be taken seriously. Finally, we can close our eyes and remind ourselves that I have defined my goal and confirmed that this is the task we want to accomplish. We have made our goal clear, and we have a general idea of how much thinking and analysis (reminding ourselves of energy distribution) we need to pay for this goal.

When making a decision, we are investing resources, including money, time, energy and so on. On the one hand, it is the output decision. First of all, when investing resources, it should be clear that resources are related to decision-making value. You can refer to the "one percent" rule, that is, the investment in decision-making is one percent of the decision-making value, which means that the resources used in decision-making have a strong correlation with the decision-making value. Looking back on my life, there are often two or more decisions. For example, a while ago, buying a mobile phone film and buying a bicycle, the decision-making time is really similar. Because we often take the task as the unit, buying a mobile phone case and buying a bicycle are both tasks, or it may be because the mobile phone case can protect the mobile phone, which unnaturally improves the value of this decision. In fact, there is no strong correlation between mobile phone case and mobile phone.

This brings us to the second problem of resource allocation, how to accurately measure the value of decision-making. In fact, I want to say that this book illustrates man-made scarcity (have you bought all kinds of stones, gold and diamonds? ) and whether life is priceless. In fact, many things can be measured by value, sometimes in the confusion of standards, and sometimes because of moral embarrassment, so that we can not judge correctly. Therefore, it is impossible to make a rational decision.

After the establishment of the resource value system, we sometimes find that decision-making is like a function, which will have different results under different parameters, that is, there is always a critical point of decision-making. For example, I am wide and fat, and I want to buy a swimming card. There are two in front of my house. Under other similar conditions, one is an annual card of 10000 yuan, and the other is a supplementary card of 3000 yuan for 30 times. Here I will evaluate how many times I can go a week and calculate the boundary value. When I can go to 100 times a year or more, it is more appropriate to choose the annual card. If you can only go to 1 time a week, it is much more cost-effective to get two cards. Here 100 is the critical value. At the same time, we should also pay attention to reflection and don't put all your eggs in one basket, such as gnashing your teeth and stamping your feet. This 1 year, I strengthened my exercise, went swimming twice a week, once a year 104 times, and bought an annual card. In fact, with so many holidays a year, there are always times when I can't go. Coupled with illness and inevitable things, you actually started from a starting point without exercise habits. Don't think that you can change immediately, or expect external factors to force you to change and make extreme decisions.

Finally, don't ignore the opportunity cost in resource allocation, that is to say, if money is spent on fitness cards, there may be no money to travel; You can't have a dance class together if you sign up for a painting class. In order to measure the opportunity cost, we can analyze it from net present value, probability, equilibrium and Pareto. Pareto, for example, is actually used in many places in life. This law says that 20% classification may bring 80% effect. For example, 20% of your work creates 80% value; You spend 20% money, bring 80% experience and so on. The same is true for giving priority to things that can bring more change and value and making decisions.

One Saturday night, I stayed at home with my family and enjoyed a relaxing weekend. I've always enjoyed my time with my family, but I was particularly happy that time. Because someone invited me to a bachelor party that day, I really wanted to go, but on balance, I decided to stay at home. My "opportunity cost" is what I give up because I stay at home, that is, the joy I may get at the party. If the bachelor party is interesting, then I will give up more to spend time with my family.

So, why did I feel particularly happy because I stayed at home that night? Because after I decided to stay at home, I learned that the bachelor party had been postponed. In this way, the cost of staying at home is immediately reduced. Opportunity cost is the cost of giving up something because of doing it.

After the resources and ideas are clear, we can make a series of decisions that meet our requirements. At the same time, we still make many mistakes because of fear of failure or loss and our stubborn prejudice. In the last part of the book, the author puts forward some practical suggestions, which can also be read directly as thinking-related content.

Several depth traps are: (1) Good reason traps: Sometimes, sufficient reasons are not good reasons to take action. For example, the family feud in Hamlet is no longer a just reason, but it is really a bad choice to keep revenge. Perhaps people are like this, and it is even more valuable to reflect on and get rid of similar ideas. (2) Black and white trap: A thing or a person is often not as good or bad as people think. In different dimensions and fields, there are some things you agree with and some don't. Don't label people easily. (3) Change comes from variables: when something changes, generally speaking, finding variables is a scientific and effective way, not the attribution of the supervisor. In order to make ourselves feel more at ease, we often take the unverified reasons of various assumptions as the explanation of the change. In fact, there are many causes and related items of one thing, so you should be extra wary of your own logic and explanation.

To be a leader in thinking, we should pay attention to reducing the influence of prejudice. Prejudice stems from isolation. When we walk into other people's lives and realize that they have the same needs, desires and values as us, we may be more sympathetic to them. Political leaders understand this truth, so they sometimes deliberately distance different groups to reduce their mutual understanding, thus weakening that kind of humanitarian fraternity. That's what Adolf Hitler did, keeping Jews, Gypsies and gay groups out of contact and not understanding each other. Once this sense of humanitarianism is weakened, it is more likely to produce hatred and killing.

Finally, the author's decision-making process is actually a process of collecting and utilizing information. The value of information is visible, which includes the following elements:

David R. Henderson:

Associate Professor of Economics, Naval Graduate School, Monterey, California, USA, and researcher at Hoover Institution, Stanford University. Graduated from UCLA and studied at the famous economist Amen? Archian Harold. Dempsey, Jack? Hector Chourafa, Ben? Klein and Sam. Under the guidance of pirk Mann, he received a doctorate and taught at the University of Rochester and Santa Clara University. Before entering the Naval Graduate School, he served as a senior economist of President Reagan's Council of Economic Advisers and edited the Encyclopedia of Wealth Economics.

Charles L. Hooper:

Visiting researcher at the Hoover Institution of Stanford University, president and founder of the consulting firm "Objective Insights". He received a bachelor's degree in computer science from Santa Clara University and a master's degree in engineering economic system (now renamed management science and engineering) from Stanford University, where he studied under the decision theorist Ronald A. Howard, economists James L. sweeney and David G. lundberg. Before establishing Target Analysis Company, Hooper worked in Syntex Laboratory of NASA, Merck and Ames Research Center.