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Making Smarter Decisions and Knowing When to Walk Away with Annie Duke

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Oct 5, 2022

Guest

Annie Duke

In this engaging discussion, Annie Duke, a bestselling author and professional decision strategist, shares insights on improving decision-making. She emphasizes the difference between luck and quality of decisions, which can significantly impact your life. Duke dives into the importance of mastering the skill of quitting and introduces the concept of 'kill criteria' to aid in recognizing when to walk away. The conversation also explores the challenges of decision-making in hiring and the value of honest feedback, making it a must-listen for anyone looking to refine their choices.

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INSIGHT

Luck vs. Decision Quality

Decision outcomes are influenced by luck and decision quality.
Focus on forecasting luck's influence and improving decision quality, not controlling luck.

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ADVICE

Using Base Rates

Familiarize yourself with base rates, which represent how often something occurs in similar situations.
Use base rates as a starting point for your forecasts to avoid over-optimism.

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ADVICE

Independent Viewpoints

Gather independent viewpoints on decisions by asking people asynchronously.
Withhold your own opinions to avoid influencing their responses.

Get the Snipd Podcast app to discover more snips from this episode

Navigating Uncertainty in Hiring Decisions

05:42 • 12min

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Navigating Decision-Making with Clarity and Confidence

17:58 • 4min

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Navigating Honest Feedback and Decision-Making

22:14 • 17min

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Investing in Knowledge and Crypto: A Guide to Smart Choices

38:53 • 3min

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Decisions as Bets: Analyzing Beliefs and Choices

41:49 • 23min

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Monkeys and Pedestals: Prioritizing Effectively

01:04:42 • 4min

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Thinking in bets

Making Smarter Decisions When You Don't Have All the Facts

Annie Duke

In this book, Annie Duke teaches readers how to make better decisions by treating them as 'bets' on uncertain outcomes. She emphasizes the importance of distinguishing between the quality of a decision and its outcome, acknowledging the role of luck, and avoiding biases such as 'resulting' and hindsight bias. Duke draws on her experiences as a professional poker player and combines these with insights from cognitive psychology and other fields to provide tools for making more objective and thoughtful decisions. The book encourages readers to get comfortable with uncertainty, seek truth through diverse opinions, and learn from outcomes to improve future decision-making.

Superforecasting

The Art and Science of Prediction

Dan Gardner

Philip E. Tetlock

Santiago Foz (argentino)

In this book, Tetlock and Gardner present the results of the Good Judgment Project, a massive forecasting tournament that identified a small group of 'superforecasters' who are exceptionally good at predicting future events. The authors explain that good forecasting does not require powerful computers or arcane methods but involves gathering evidence from various sources, thinking probabilistically, working in teams, keeping score, and being willing to admit error and change course. The book uses stories of forecasting successes and failures, as well as interviews with high-level decision makers, to illustrate these principles and demonstrate how anyone can improve their forecasting abilities.

Into Thin Air

A Personal Account of the Mt. Everest Disaster

Jon Krakauer

In 'Into Thin Air', Jon Krakauer recounts the true story of a 24-hour period on Mt. Everest when members of three separate expeditions were caught in a devastating storm. The book details the catastrophic events that led to the worst single-season death toll in Everest's history. Krakauer, who was on the mountain as a client of guide Rob Hall, provides a meticulously researched and emotionally charged account of the disaster, reflecting on the risks, judgments, and heroism involved in high-altitude climbing. The narrative explores the commercialization of Everest, the psychological and physical challenges faced by climbers, and the author's own struggles with survivor's guilt and mortality.

Grit: The Power of Passion and Perseverance

Angela Duckworth

In this book, Angela Duckworth presents her research on grit, highlighting it as the key factor in achieving outstanding success. She argues that while talent is important, it is not the sole determinant of success. Instead, identifying one's passions and following through on commitments with persistence and perseverance are crucial. The book includes insights from various fields such as education, sports, and business, and features interviews with high achievers like JP Morgan CEO Jamie Dimon and Seattle Seahawks Coach Pete Carroll. Duckworth also discusses how grit can be developed and cultivated, both from personal efforts and through the support of others.

Quit

The Power of Knowing When to Walk Away

Annie Duke

Thinking, Fast and Slow

Daniel Kahneman

In this book, Daniel Kahneman takes readers on a tour of the mind, explaining how the two systems of thought shape our judgments and decisions. System 1 is fast, automatic, and emotional, while System 2 is slower, effortful, and logical. Kahneman discusses the impact of cognitive biases, the difficulties of predicting future happiness, and the effects of overconfidence on corporate strategies. He offers practical insights into how to guard against mental glitches and how to benefit from slow thinking in both personal and business life. The book also explores the distinction between the 'experiencing self' and the 'remembering self' and their roles in our perception of happiness.

Quit

The Power of Knowing When to Walk Away

Annie Duke

Misbehaving

The Making of Behavioral Economics

Richard H. Thaler

In 'Misbehaving: The Making of Behavioral Economics,' Richard H. Thaler recounts his journey in challenging traditional economic theories that assume humans are rational actors. The book chronicles the evolution of behavioral economics, a field that integrates psychology and economics to understand how people actually make decisions. Thaler discusses various behavioral concepts such as endowment effects, mental accounting, and self-control issues, using anecdotes and empirical studies to illustrate these points. The book also delves into Thaler's personal struggles and successes in establishing behavioral economics as a recognized field, including his work with institutions like the British tax collection agency and his battles with traditional economic thinking.

#81: Professional decision-maker, Annie Duke, joins Chris to talk about making better decisions. They discuss why learning the difference between luck and the quality of decisions is so important and how that can improve your life and your career, ways to improve your quitting skills, and what forces work against good quitting behavior. They also cover why so many people struggle with the decision to walk away, how to use kill criteria to determine when to quit a project, a job, or some other endeavor, and a lot more.

Annie Duke (@AnnieDuke) is a best-selling author and professional decision strategist. Her 2018 bestseller, Thinking in Bets, has helped countless people make better decisions, and her latest book is Quit: The Power of Knowing When to Walk Away.

Full show notes at: https://allthehacks.com/decision-making-annie-duke

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Resources Mentioned

Connect with Annie Duke: Website | Twitter

Annie Duke’s Resources:

Books:
Quit: The Power of Knowing When to Walk Away
Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
How to Decide: Simple Tools for Making Better Choices

All the Hacks Podcast: FOMO, FOBO and How To Make Great Decisions with Patrick McGinnis

Resources Mentioned:

Superforecasting: The Art and Science of Prediction
Into Thin Air: A Personal Account of the Mt. Everest Disaster
Grit: The Power of Passion and Perseverance
Astro Teller on Moonshots for Alphabet's X (Monkeys and pedestals 25:08)
Knowns vs Unknowns — Are you building a successful company or just typing?

Full Show Notes

(1:20) Luck vs. Decision Quality: Learning the Difference

(5:44) Improving Hiring Decisions and Positive Outcomes

(9:11) Understanding and Calculating Base Rate

(13:29) Enhancing Decision Information with Independent Viewpoints

(21:08) Encouraging Honest Opinions and Feedback

(28:00) Shifting Mindset from Sunk Cost Fallacy

(30:12) Advanced Planning, Kill Criteria, Stop-Loss Orders

(32:02) Example of Kill Criteria

(33:24) Finding a Qualified Quitting Coach

(41:49) Viewing Life as Bets and Making Things Explicit

(47:35) Side-Effects of Explicit Decision-Making

(51:41) Handling Emotional Angst in Decisions

(54:41) Menu Decision Strategy

(58:31) The Challenge of Quitting Decisions

(1:04:55) Astro Teller's Mental Model: Monkeys and Pedestals

(1:07:01) Identifying Known Unknowns

(1:07:57) Connect with Annie Duke Online

Connect with All the Hacks

All the Hacks: Newsletter | Website | Membership | Email

Chris Hutchins: Twitter | Instagram | Website | LinkedIn

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