The Choice | How To Improve Decision Making Skills

Summary

• When facing decisions as an entrepreneur, I've realized the disconnection between making the right decision and achieving the right outcome.
• I advocate for repeating successful actions to build on what works, but outcomes can still be unpredictable.
• Decision-making is essential in life, affecting choices in relationships, business, and personal development.
• An example I consider is choosing not to invest in Bitcoin despite its later value increase, questioning if my decision was wrong or just poorly aligned with the outcome.
• I learned from Ray Dalio that sticking to a consistent decision-making framework prevents erratic outcomes across various investments.
• Separating the outcome from the decision's quality allows for healthier reflection and personal growth.
• Looking back, I stand by decisions I've made even if the outcomes weren't favorable, avoiding the trap of hindsight bias.
• I've learned to analyze decisions based on the information available at the time rather than post-outcome knowledge.
• Baseball serves as an analogy where a perfect swing doesn't guarantee a hit every time, but consistent application can lead to success.
• Applying this analogy to life, it's important to maintain a steady approach to decision-making and not bet everything on one high-stake decision.
• My advice is to focus on the quality of the decision-making process rather than on outcomes that you can't always control.

Video

How To Take Action

I would suggest implementing a decision-making process that works well repeatedly. This means whether you're starting a business or working on personal growth, focus on what decisions have been successful in the past and keep doing them. But remember, the outcome might not always be as expected – that's okay!

Here's a tip: don't mix up the outcome with whether the decision was good or not. Instead, think about why you made that decision. If the reasons were solid based on the information you had at the time, you're doing great. Even if it didn't work out, that doesn't mean it was a bad choice.

If you're worried about a decision you made that didn't go well, take a step back. Analyze the choice based on what you knew then, not what you know now. This way, you won't get trapped in that hindsight bias – thinking you should've known better when you really couldn't have.

Here's how you can stay steady: always consider the risks before you make a decision. Don't put everything you have into one big bet. This is like a baseball player who doesn't change how they swing every time they strike out. Instead, they stick with what they know works most of the time and understand that not every swing will be a home run.

Just remember, we can't control everything. But we can control how we make choices. Focus on making good decisions consistently. This way, even if things don't go as planned, you know you did the best you could with what you had. This approach will help you keep growing and moving forward no matter what comes your way.

Quotes by Alex Hormozi

"The disconnect between the right decision and the right outcome is one of the hardest things about being an entrepreneur"

– Alex Hormozi

"Your decision-making process is ultimately the most valuable thing that you have"

– Alex Hormozi

"You can take the money away from a billionaire and they can recreate it again"

– Alex Hormozi

"If you apply this swing to enough at bats, quite literally, you will get the opportunity to knock it out of the park"

– Alex Hormozi

"Not changing your decision calculus every single time is going to ultimately allow you to judge the quality of your decisions"

– Alex Hormozi

Full Transcript

what's going on everyone uh last night i was speaking uh i was one of the speakers and clubhouse it's a new app uh you can follow me there it's at hormozy um but anyways i i was i was one of the speakers of this app and they were asking questions like if you had to start all over you know what would you do what's the biggest mistakes you've made and things like that and one of the things that came up in my mind is one of the hardest things about being an entrepreneur which is the disconnect between the right decision and the right outcome and so let me explain so you've you if you've listened to my stuff i talk about repeating successful actions right find something that works and keep doing it over and over again right but the thing is is your decision-making process is ultimately the most valuable thing valuable thing that you have right it's what makes you it's your picker right it makes you decide what what way to go who you're going to marry what business opportunity you're going to pursue how you're going to price how you're going to start marketing what you're going to learn first who you're going to you know get mentoring from all of these things so you're going to become friends with like all of these are decisions right and you know you can take the money away from a billionaire and then they can recreate it again elon musk you know lost it and then gained it all back right and so like the thing is is the decision making is what ultimately fuels all these things and the hardest part about entrepreneurship and really i mean i think almost life in general is that you can make the right decision and have the wrong outcome and i think and let me give you a couple examples of this so for example um you may say you know what like i look i listen to warren buffett i think he's a good investor and so he says i wouldn't i wouldn't touch bitcoin right and i hear that i'm like man well he knows a little bit more about it than i do but his argument was simple it is speculative which means i'm buying it not because it has intrinsic value but only because i believe that someone else will buy it for more later right that's all it is he only believes in investing in things that have intrinsic value and also produce right so they actually have production so like a business you buy you still own the business at the end and then it spits out production which would be profit or crops or whatever right so that's the basic difference right and so the thing is is that you can make the right decision so for example i chose not to buy bitcoin two years ago or whatever and now the amount of money that it would have been worth is a lot more was the decision wrong or was it that the outcome did not match the quality of the decision and so let me explain let me like unpack this if you are going to change the way you make decisions because a decision that you made in the past that was probably a good decision ended up bad you have to apply the same decision making context or framework to everything else all right so let me explain so if i say i'm now going to be a speculator right i'm going to be someone who buys things with the hopes of selling them later for more even though the thing itself doesn't have more value right if i choose to start making those types of decisions then i have to think about all the other investments i would have made and lost money on as a result of that decision making framework and the place that i heard this first was ray dalio in principles so he's one of the richest men in the world uh an investor as well he said one of the hardest things is passing up on an opportunity and then seeing it you know do really really well right he's like and but the thing is is i have to think to myself if i were to use the decision-making framework that would have made that deal a winner then i'd have to apply that same framework to all of these other businesses or situations that would have been losers and my net net of having that different decision making framework would ultimately cause me to lose and so this has been one of the most powerful concepts for me as an entrepreneur because what it does is it allows me to separate the outcome from the quality of the decision why was it that i did these things right and i i can't even tell you like so for example you know actually i won't even give that one but like their their decisions that i made when i was younger that ended up being you know poor later but when i thought back about why i made the decision i would make the same decision today so it's not fair for me to say well i wouldn't have made the same call now but you can't use the information that you have today to make the decision that you would have made in the past because then it means that you're a different person because you're not using information that you have access to right and so claiming that the this decision that i did in the past that didn't end up well you know working out in my favor was the wrong call can just be really poisonous and it may not be true now if you make a mistake because you had poor calculations and you repeat the same mistake over and over again then you should consider looking at your decision-making calculus and see if you need to tweak some things right but for me this has been one of the hardest learned lessons and emotionally one of the most trying is looking at decisions i've made looking at the outcome and being able to separate was this a good decision independent of the outcome and i'll wrap this up with just a quick example to show you if you had a perfect baseball swing right you're just an amazing you know batter right if someone gets up there and they're the best batter in the world and you strike out is it because their swing is horrible is it because they they don't have the right decision making about how they swing at pitches or how they pick the pitches probably not he's probably really good batter right because i just said he's the best but it still means he's going to strike out and it still means he's going to he's gonna get out and hit pop flies and all that kind of stuff but he's gonna be an amazing batter with three you know 350 average or whatever and still two out of three times he's gonna strike out or basically you know not get on base get out and so when i think about that like you can be the best at this thing and still only be right a certain percentage of the time right and so rather than that batter striking out once and saying i need to change my swing and then getting back up there and striking out again and be like i need to change my swing and always resetting the baseline instead being like i understand that if i apply this swing to enough at bats quite literally i will get the opportunity to knock it out of the park and me knocking out of the park on one of these right decisions will ultimately outweigh the negatives of the wrongs that i have done right um and so for me obviously with in the context of your own life like i talk about decision making in other videos but you want to make sure that you never bet the farm and you don't put everything on black when you cannot afford to lose right like don't bet everything but i mean sometimes you know things get crazy but for the most part don't bet everything the point being just like a big ball player you're going to have these decisions that you have to make and not changing your decision calculus your decision maker your picker every single time is going to ultimately allow you to judge the quality of your decisions based on these principles and so that is one of the hardest things that i've had to learn and i hope that the illustration with baseball made sense to you if it did drop a comment otherwise keeping awesome i'll catch you guys next vid bye