/By Sean

#215 Annie Duke – Episode Notes

Author. Speaker. Decision Strategist. Annie Duke is one of the world leaders in the decision-making space. As a former professional poker player, Annie won more than $4 million in tournament poker before retiring from the game in 2012.

Her first book Thinking In Bets is one of Sean’s favorite reads and her latest book How to Decide: Simple Tools for Making Better Choices is the new playbook for making better decisions.

Key Takeaways

Annie believes that the decisions we make are based on the information we know, which is what motivates her to continuously explore the information ecosystem to broaden her information foundation.

“At the foundation of every single decision that you ever make, are the things that you know”

She believes that a downfall of the majority of team decision making processes is that people have a tendency to believe that agreement is the goal of working within a team.

“You have to show people that you’re actually interested in getting their opinion, that you’re not just looking for consensus”

The hardest thing for Annie to teach others is that it’s important to recognize all the steps it will take to get to your end goal.

“You have to think about the end goal and not get caught up in what feels really good in the moment emotionally because it’s probably not going to help you get to the place you want to get to”

3:30 Annie’s Everyday Skills Training

Annie makes sure that she lives the principles of the type of decision making that she is trying to spread in the world. One way she does this is through her hobby of playing tennis.

She takes tennis very seriously and so she tries to have the willingness to bare all the mistakes that she makes.

“I try to practice humility, What do I know, what do I think I know, how willing am I to go backwards and undo things?”

Annie takes time everyday to explore the information ecosystem to make sure she is understanding a broad swath of the ‘reasonable views’ of what’s going on in the world.

“Sometimes it’s actually really good to understand the unreasonable views and be challenged by those as well”

These everyday practices are what Annie credits to training her for her own work with clients.

7:38 Annie’s Starting Points for Goals

Annie believes that we can have finite goals, and she prefers to focus on goals that have to do with process.

Example: she would like to ultimately create more spin on her tennis forehand, but it’s not like she feels like she is ever finished because she could always be figuring out more about the skill

“For a lot of the things that we do in life, it’s good to feel like there isn’t a finish point but that you do have solid things that you’re trying to achieve nonetheless”

10:38 Balancing Act of Strengths and Weaknesses

This topic is covered in Chapter 7 of Annie’s new book: How to Decide

In this chapter, Annie is trying to get people to think about the situation they are in, so they can then understand two things.

One: the impact if things don’t work out well

“The lower the impact of having a bad outcome come from the decision that you make, the faster you can go and the more experimental you can get in your choices”

Two: What is the optionality?

“The more optionality there is, I call it quicktuitiveness”

Annie explains that when you’re focusing on your weaknesses, the likelihood that you have poor outcomes that come out of that are higher.

“If you’re in a situation where having a poor outcome doesn’t have really high impact, you should try to get really experimental”

Ultimately, you will improve your strengths from having improved your weaknesses.

Annie touches on the value of time as it relates to decision making.

“Generally, the more time that I take on a decision, the more knowledge I can gather, and that knowledge should be creating more certainty for me about what the possible ways that any option that I choose should unfold”

18:07 Analysis Paralysis

Annie dives into how much time we all really spend making the decisions, especially the ones that don’t have an impact such as what to order at a restaurant, watch on television, and what to wear. Statistics show these minor decisions add up to 7 business weeks!

“They are decisions of such little consequence and yet we’re using up nearly two months of our lives every year on those decisions”

In How to Decide, Annie’s really trying to give people a path to get out of a problem with how they make decisions.

22:19 Important Decision Making Objectives

What Annie is really trying to communicate through How to Decide is that unlike luck, you have some control over what you know and what the quality of your information is.

“At the foundation of every single decision that you ever make, are the things that you know”

Annie compares our information base to a speck of dust that fits on the head of a pin, and the stuff we don’t know is like the size of the universe.

There’s two problems with our information foundation base:

There are cracks in the foundation because we believe things that aren’t 100% true
The foundation is flimsy because there is so much that we don’t know

Solution: get a really good look into that universe of stuff we don’t know so we can find all that information that’s going to help that foundational problem

Annie ultimately hopes that her book is an argument for why and how you should be increasing your knowledge.

27:07 Hardest Decision Making Element to Teach

Annie explains that there are two elements of decision making that she finds particularly difficult for people to wrap their heads around.

1. Takes a lot of work to teach people to think probabilistically

“For any decision that you make, there is a set of possible results of how that decision could turn out and each of those possible ways has a likelihood of occurring”

2. To get people to talk to each other without trying to convince each other of anything

32:28 Working with a Team

Annie believes that a problem within team decision making is that groups tend to think they agree more than they do because getting to consensus is what’s valued.

“You have to show people that you’re actually interested in getting their opinion, that you’re not just looking for consensus”

Her solution for this is to ask everyone independently about their opinion before the group setting because this gets people to understand that you actually care about the differences in opinion and less about the consensus

“You can create a team dynamic that allows this way of thinking to bloom”

39:12 Potential Consequences of Annie’s Team Philosophy

The only downside of Annie’s advice for getting team members to state their opinion before meetings is that you have to do pre-work.

“You have to ask yourself, what’s the feedback that I’m trying to get from the group”

However, Annie says that pre-work is also a positive because it makes meetings more efficient because you don’t linger on what everyone agrees on and you can jump to the disagreements.

Annie explains that we often misremember the information we knew at the time of decision-making and so pre-work can be a useful tool for remembering.

“Pre-work naturally creates a record to look back on which is very helpful”

Although pre-work takes time, the pros outweigh the cons.

“You are a much more informed decision maker if you can access the points of view of all the people on your team”

49:30 How Do You Build in Quicker Feedback Loops?

Annie explains that creating quicker feedback loops goes into the idea of what’s implicit in the decision that you’re making.

“At the time of the decision you should be trying to forecast those to make them explicit which will then turn into much tighter feedback loops”

51:48 Should you constantly be adding new metrics?

The answer is YES!

Investment example: every time you review your investments, you should be looking at it like it’s a brand new decision

“The more forecasts, the more I close the feedback loops quickly, the more my decisions are going to get better”

55:21 Future Forward Thinking

Annie is constantly thinking about what she can control and what she can’t.

She’s always living a little bit more into the future than other people naturally do, thinking about what her decision will accomplish, which she credits to her poker background.

The second lesson that she learned from poker, is that there are so many different ways that the future could turn out.

“Playing poker you feel okay with not knowing for sure what could happen”