Your decisions will make or break you. The decisions you make literally determine your destiny. Therefore, it's absolutely critical you apply a methodology to making decisions wisely. In this training, you'll discover my 5 Golden Rules of Decision Making so that you too can be a great decision maker.
5 Golden Rules of Decision Making
Rule #1: No Decision is the Worst Decision
No decision means that you are avoiding a decision and being negligent. You’re being irresponsible because you're not deciding. As you'll learn through the other rules, you need to be a decision maker and that means that not deciding at all is the worst decision.
Rule #2: Exercise Your Decision Making Muscle
Decision making is like a muscle, it must be developed and then maintained. If you work out at all, you discover that over time the more you do the stronger you get. On the other hand, the less you do the more atrophy occurs. As the saying goes, “Use it or you'll lose it”. It's the same with decision making, you need to commit to practicing and developing your ability to make decisions.
This can be a challenge for some people because they have never been in a decision-making role before. For example, maybe their spouse has always made all the financial decisions. Many people have been an employee for a company but never had to make any major decisions that impact other employees or the company. If you haven't developed this muscle, it's difficult at first but as you strengthen this decision-making muscle, you'll get better and better.
Look for Opportunities to be a Decision Maker
The key is to understand that it is a muscle that must be developed and maintained. Therefore, you want to embrace opportunities to be a decision maker. One of the reasons I love being a small business owner is that I always need to make important decisions. The more businesses and assets I own, and the more people I work with, the more decisions I make. It keeps me relevant; it keeps my muscles strong for decision making.
I have a training for those enrolled in my apprentice program called, "You're now the CEO". I'm teaching them that as a small business owner and real estate investor, they're the CEO of their own operation and this requires certain skills that oftentimes are not taught in school. One of those skills is what I call “the buck stops here”. Meaning, they have to make the decision. They cannot shirk their responsibility and send the decision elsewhere. Looking for opportunities to be the decision maker will make a huge impact because the more you practice, the stronger your muscle gets and the better you're going to be.
Rule #3: Powell's 40/70 Decision Making Technique
Obviously if you’re making a ton of decisions, you're going to have a higher probability of making mistakes. Therefore, we need to have a method by which to make those decisions so that you don't have a complete trial and error catastrophe early on in the development of your decision-making muscle. This where Colin Powell's 40/70 technique is a helpful tool.
Former Secretary of State and retired General Colin Powell maintained that you should make a decision once you get somewhere between 40 to 70 on the scale of what he calls the probability of success. If you have a 40-70% chance of success, you need to be able to make that decision at that point. If you go below 40% on that scale with a low probability of success, like perhaps buying a lottery ticket, you need to say no. Saying yes would be irresponsible.
If your probability of success is above 70%, you've waited too long in the decision-making process and missed the opportunity. You think long, you think wrong. If you're a football fan, it's like the quarterback staying in the pocket too long and they’re getting sacked. Now suddenly, you've lost yardage and the clock's still running and the game might be over.
Go With Your Gut
How do you know when you're in between the 40 to 70% probability of success? Colin Powell would say to go with your gut. You've done enough due diligence to have the information to be in this zone, and if you're in that zone you must let your gut do the talking for you.
The key to this is to remember that your gut is not your stomach, it's your brain and your subconscious. Your subconscious is incredibly powerful if you don't completely ruin and tamper it. The way you ruin your subconscious is don't get any sleep. You need to get sleep, that's where your subconscious does a lot of its work. Make sure you're getting plenty of sleep every night so that your brain can take in all those inputs and develop that gut. Now, the gut is also developed by practice, it's part of the muscle.
The goal here is get enough information to put you in that 40 to 70 zone and then go with your gut. If you do that repeatedly, you're going to develop a muscle that will allow you to make great decisions over the long haul. You won't be like the quarterback getting sacked because you didn't get the ball out of your hands and you're not being completely reckless and making decisions that have a low probability of success.
Rule #4: Write Down Why
Write down why you made major decisions so you can refer back and learn from it, developing your decision-making muscle better. Using this analogy of muscle, it's almost like adding supplements to what you're already doing in your current nutrition program, it's just going to give you that much more power.
You are not going to be able to remember why you made every decision you made. You've heard the old saying, a short pencil is far more powerful than a long memory. In fact, I'm such a huge believer in the power of getting information out of your head and putting it in an external system you can access that I have a great training on the subject. I think it can revolutionize your productivity.
Rule #5: Make Quickly, Change Slowly
Make your decisions quickly, but if you change them, change them slowly. If you study high capacity people, you're going to see this trait is common amongst them. They decide quickly but if they ever change their mind it's a slow process.
Deciding quickly gives you the ability to make more decisions. It may seem like the CEO of a company isn’t working hard because they aren’t doing the physical heavy lifting. The truth is they are making decisions all day long. Their ability to make more money is based on how quickly they can make great decisions. The more decisions you can make in the day, the more productive you are. The more productive you are, the more success you can achieve in all aspects of your life. Speed of decision is powerful. It doesn't mean that you break Collin Powell’s 40-70 Rule, however doing that as quickly as possible makes all the difference in your productivity.
We all have the same length of time in a minute, but some of us are being more productive today than others. That's partly due to the speed at which we can make decisions. You're going to get faster at this as you get more and more experienced in decision making.
On the other hand, it also means to change it slowly. You must be very careful about making changes because that means you're going against your gut. In many respects, your gut is there to make that decision and you need to trust it. Another key point is that by changing quickly you end up weakening the muscle of decision making. This is because you know you don't really have to stick to any of your decisions, you can just change anytime you want.
Again, I illustrate this with the muscle analogy. Let's say you're doing curls, always doing it with the same light weight. You're never really developing the muscle because you're not progressing to a weight that is heavier and heavier. You need to avoid the temptation to change these decisions quickly because you need to see them through, not only because you know the reason why you did it but because you're trusting your gut. As a result, you will strengthen that decision-making muscle.
The decisions you make are literally the X factor in your destiny. As someone who got started at economic ground zero, and over the last ten two decades has increased his net worth to well over 10 million, I have made a lot of good financial decisions. Anyone can get lucky once or twice, but over the long haul it's about good and wise decisions made quickly and consistently.