Life is full of important decisions. We often have the luxury to think through our decisions ahead of time but that doesn’t equate to making the right or best decisions. After speaking with friends and mentors, one of the best ways to make sound decisions is to use a decision making model. I’ve studied these models before but I figured I’d run through a couple to refresh and provide you with some of the best models for decision making.
Pros Vs. Cons aka Rational Decision Making
Probably made famous by Plato or someone along that line, pros vs cons is as simple as a decision model can be. Nothing really to explain here… What are the pros and the cons of each potential outcome of your decision?
In this decision making process, its easy to assume that pros and cons hold equal weight which is not always true.
“Don’t let the perfect be the enemy of the good.” Sometimes we don’t have access to all the information necessary to make the optimal decision and/or the “okay” decision will do. I find most people never want to “satisfice” when it comes to big decisions but in the long term, sometimes its the best strategy.
In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone, in a situation in which a choice needs to be made between several mutually exclusive alternatives given limited resources.
So, what is the cost of missing out on other outcomes? Can you live with the cost of missing out on that opportunity?
Garbage Can Theory
In the garbage-can theory (Cohen, March, and Olsen 1972) an organization “is a collection of choices looking for problems, issues and feelings looking for decision situations in which they might be aired, solutions looking for issues to which they might be the answer, and decision makers looking for work”. Problems, solutions, participants, and choice opportunities flow in and out of a garbage can, and which problems get attached to solutions is largely due to chance.
This doesn’t make much sense to me but I guess the garbage can theory is more of a meta critique on how organizations make decisions.