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Decision-Making and Mental Models
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I sat down to write this article five different times. Not because I didn’t have enough to write about, but instead because I have too much to write about. Counterintuitively, I rarely suffer from the dreaded writer’s block. Instead, I’m often overwhelmed by my interest in too many topics.
Despite the overwhelming number of articles I could write each week, I find it increasingly difficult to narrow down the topics I wish to share. Many writers have a narrow niche through which they can quickly get a binary answer about whether or not the topic follows their selected niche. I’ve committed to being a multi-sport athlete in a world filled with specialization. This creates a particularly challenging problem for me: the paradox of choice.
The Paradox of Choice is as simple as it sounds; the more options you have, the easier it is to feel overwhelmed and unhappy. We often seek more, when we really need less.
In a recent article, I wrote about Work as a Sport (aka WaaS). When we think of work as a sport, we approach the world in a different way. Sports have defined constraints called rules. These rules actually help players and coaches make intelligent choices by narrowing the options in a given situation.
For example, when a football team is 35 yards from the end zone with two minutes left and one down remaining, they have the following choices:
Run the ball
Throw the ball
Kick the field goal
Whether it’s the coach, the quarterback, or the team, they have to make a game-time decision as to which option has the highest probability of meeting their shared goals. In this case, their goal is to score and defeat the other team. Sadly, life doesn’t operate by the same rules and logic, so we have to learn to enforce our own constraints.
If we’re going to learn, let’s learn from decision-making legends.
Learning From Legends
Warren Buffett and Charlie Munger are two of the most famous investors in history.
In Silicon Valley circles, they’ve developed a cultish following, which I suspect stems not just from their overwhelming financial wealth, but also due to their rigorous and consistent decision-making abilities.
In a world filled with uncertainty, we’ve learned to fetishize decision-making because it provides a feeling of control. It gives us a toolset to use when we feel like the world around us isn’t going our way. It protects us from failure, allowing us to build our own logic-moat.
I know all too well. In fact, one of my all-time favorite books is Seeking Wisdom - a book about decision-making and the secrets of Charlie Munger.
Of the many decision-making frameworks these legendary investors used, one, in particular, stands out — the 5/25 rule.
The 5/25 rule is simple: make a list of 25 goals and then narrow it down to the 5 most important.
Here is an example of the 5/25 rule in action:
Goal: Build your business
List of 25: find 10 new customers next month, increase revenue by 25%, hire 3 engineers, build a compelling brand, find new investors, add two new product features, start a new service line, lead in your category, etc.
Top 5: find 10 new customers next month, increase revenue by 25%, build a compelling brand, find new investors, lead in your category.
Sounds too simple, right? That’s the beauty of it.
The best decision frameworks are simple, and the 5/25 rule is about as simple as it gets. Instead of forcing you to think about all the variables of each potential option, the 5/25 rule asks you to only focus on what you actually want.
When you’re the head coach faced with a game-time decision that could completely change the trajectory for your team — and yourself — you need value-adding constraints that build on your gut. And the 5/25 (aka 80/20) is all about gut. You write what you feel and select what you believe in. There is no middle ground.
No matter what your specific goals, the 5/25 rule will help you:
Avoid FOMO. It’s easy to let fear drive us to do things we don’t actually want to. Instead of letting fear make the decision, take control, and own who you are and what you want. The easiest way to erase the fear of missing out is with deep conviction about why you’re choosing to miss out.
Reduce Analysis Paralysis. With many options in front of us, it’s easy to feel like we might be missing out on something really important. The reality is, the missing out happens while we’re deciding. Sometimes we need to jump in to know what matters. Creating a list like this can help you quickly kick yourself into gear and start moving towards achieving your goals.
Increase Your Output. The more distracted you are, the easier it is to be busy without increasing your output. As we narrow in on our goals and increase our focus, our output increases along with it.
How to Use The 5/25 Rule to Defeat the Paradox of Choice
The Paradox of Choice is as simple as it sounds; the more options you have, the easier it is to feel overwhelmed and unhappy. We often seek more, when really what we need is less. This is especially true today; we need to start adding constraints to our world.
Here’s how to get started.
First, use this free tool I set up for you:
Write 25 Goals
Make a list of 25 things that would make you successful in your life. These must be individually defined. Don’t look to others, decide what YOU care about, and write it down. In fact, go with as many as 50.
During this time, just write, don’t think. Thinking is what gets in the way of us actually doing what we love and truly care about. We’re classic overthinkers, to our detriment.
Edit Down to 5
Now that you have your list of 25 items, start prioritizing your top 5. Not sure which to select? Try focusing on goals that build on existing skills or goals. While most people tend to correct weaknesses, many studies show that we’re better off focusing on our strengths.
Regret is a powerful tool that helps guide our priorities. Select ideas for regret minimization. (Ex: Will you regret spending more time at work? Probably. Will you regret spending more time with your kids or your wife? Unlikely.)
Review and Share
Last, review the goals you’ve selected and share them with someone. This can be one friend or your entire Twitter following. The goal is to keep yourself accountable and focused. Sharing your goals and objectives puts you on a pedestal. It signals to other people that you want someone to keep an eye on your work. It’s the good and the bad of social media combined.
The decisions we make teach us who we are. The journey shows us what we like. The results tell us how we did. The goals we have today will almost certainly not be the goals we have in 10 years. We are, by definition, flawed forecasters. This is what’s known as the End of History Illusion.
Get Started with 5/25
I know it’s hard to get started, so I’ve created a spreadsheet that walks you through the expanded 5/25 rule process. Simply create a copy and start using it for each of your goals and priorities.
If you’d like to read more articles on decision-making frameworks and tools, and also get free access to the tools I’ve created, click here to upvote the topic so I know.
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Thanks for reading, and see you next week,
— Kevin K. (@kkirkpatrick)