Decision-Making in VUCA Environments

As an easy guide to refer to later, here are the questions that you can ask yourself and the mental models to consider to improve your decision-making process.

The quality of the decisions you make dictates the quality of your life. The more good decisions you make, the better the outcomes. Learning how to upgrade your decision-making capability is essential if you want to achieve success.

Create a Weekly Feedback Process that enables you to reflect on your decision-making

• What did you plan to do?
• What did you actually do?
• What did you learn and what mental models did you use?
• What are you going to do differently?

Reflect on your Personality

• Were you a Type A or a Type B personality?
• Where does this approach work well? Where does it not work well?

Consider the Following Mental Models and how they shape your decision-making

• Sunk Cost Fallacy – ‘throwing good resources after bad’. If you’ve finished reading a book despite not enjoying it, chances are you are a determined goal orientated person who was captured by the sunk cost fallacy.
• Loss Aversion – People are averse to losing things. Understand this bias and you’ll be able to notice when it is shaping your decision-making process.
• Circle of Competence – What is the boundary between what you understand and what you don’t? Knowing the difference between the two is essential.
• Hanlon’s Razor – Give people the benefit of the doubt. Do not seek negative intent if you cannot be sure it exists.
• Inversion – Struggling to work out what ‘good looks like’ – ask people what the opposite looks like and reverse the answer to ‘define good’.
• Survivorship Bias – Be sure you have a complete data set before you start making decisions based on it.