The Knowledge Project with Shane Parrish

#28 Michael Mauboussin: A Decision Making Jedi

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Jan 23, 2018
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INSIGHT

Base Rates for Better Decisions

  • Use base rates to improve decision-making and forecasting by considering what happened in similar situations.
  • Blend base rates with your own experience, weighting them based on the balance of luck and skill involved.
INSIGHT

Luck vs. Skill Continuum

  • Determine the luck-skill continuum in your field by analyzing expert predictability, agreement, and statistical methods.
  • Higher-level organizational roles often involve fewer, but more consequential decisions with increased luck.
ADVICE

Systematic Decision-Making

  • Implement systematic decision-making processes within organizations, considering inputs and evaluation measures.
  • Address "noise" by ensuring adherence to systematic processes and allowing for individual judgment after following algorithms.
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