Change your mindsetLong-term decisions are nothing like short-term decisions. With a short-term decision, you can usually predict the outcome of your decision with confidence. Results of long-term decisions, like who to hire for a project or where to go to college, cannot be predicted precisely.
Bound the possibilitiesThe first tactical step in making a good long term decision is to estimate the best case, medium case, and worst-case outcomes for a particular decision. Don’t try too hard to estimate the likelihood of any outcome at this stage. Come up with reasonably likely best, so-so, and worst possible results. For example, if you are Goldilocks about to enter the Bears’ house, your cases are:
- (best) a warm welcome, ample food, and shelter
- (so-so) some awkwardness, some food, and shelter
- (worst) injury or death.
Don’t choose something that has even small odds of a catastrophic outcome
Is your worst-case outcome a catastrophe for you? Is it even remotely likely? Then your choice is simple: don’t do it. If there is an upside that you want to reach, then you need to work the situation until your worst-case scenario is not catastrophic. Repeat the bounding exercise until your even slightly possible worst case is tolerable.
Understand that randomness matters a lot
Life is full of things that you cannot foresee. They call it blindsided for a reason. Often, the things you cannot anticipate have a more significant impact on you than the things you can foresee. In 2020, the year of COVID, we all understand this. Be prepared for the unforeseen when making long-term decisions.
Choose the optimum path
Ok, you’ve gotten to the point where you have a decision where you are ok no matter what happens. The best decision isn’t the one where you might get some fantastic outcome. It’s the one where you have the highest chance of upside and the least chance of downside.
Research base rate odds
Research requires hard work. There are 8 billion people in the world. Everything, or a close approximation to it, has been tried before. Even better, it’s probably researched and written up as a Ph.D. thesis. Before you make a decision, find out how people facing similar decisions have fared. How often did they achieve the best case, so-so, or worst case outcome? For example, half of all new businesses fail within four years. However, adding a partner improves those odds significantly.
When choosing between options, select the option that gives you the best odds of a medium to a good outcome. Don’t focus just on the best possible development, especially if that outcome is unlikely.
DiversifyCan you put off your decision or follow multiple paths for a time? Can you plant many seeds and then wait to see which flourish? Then do that. Don’t narrow down your options when you don’t have to.
Ask your team and get second opinionsWe all have blind spots. Having a group of people to act as a sounding board is invaluable. Your team for personal decisions can, and maybe should be different than your team for work decisions.
Making optimal long-term decisions for self-improvement is different than making optimal long-term decisions at workThere are some special considerations when you are making decisions about yourself. All the above methods apply but start with the steps below.
Care about your future self
Caring about your future self is not some philosophical or ‘soft’ suggestion. This idea is critical and supported by vast amounts of research on real outcomes. See this Harvard Business Review article for more details.
In short, you work hard when you care what other people think. Humans are first and foremost social creatures. If you don’t care about your future self, then you might not work hard for them. As we’ll see later, making optimal long term decisions requires work.