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00:01:16 The Wrap Methodology

00:11:36 The 3 P Technique

00:18:44 The ICE Scoring Model

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• The WRAP method was devised to specifically address blind spots. WRAP stands for widen your options, reality-test, attain distance, and prepare to be wrong. As you can see, these are not typical ways to approach a decision, though they can serve you well because they represent what is likelier to happen in the real world.

• The 3P technique was created by poker player Annie Duke. It consists of preferences, payoffs and probabilities. Preferences refer to your goals and what you’re actually hoping to achieve, payoffs are the potential benefits of different outcomes, and probabilities speaks to the confidence you have in certain predictions of the future. It’s these informed predictions that allow us to make good decisions.

• The ICE scoring model also rests on considering three key components of any decision. The first is impact (the potential for you a choice, idea, action, or decision to serve your main life goals), the second is confidence (how sure you are that this outcome will follow your action, bearing in mind that luck and chance play a role), and ease (how easy it is to make the particular decision). A subjectively good decision is one in which has a high probability of having a high impact on your goals, whilst being easy to achieve. The bad decision is the opposite.

• There is overlap between ICE and 3P, and both have limitations, i.e. they depend on our accurate assessment of the three aspects!

#AnnieDuke #ConfirmationBias #GrowthHackers #SeanEllis #ICEScoringModel #StrategicDecisionMaking #WRAP #RussellNewton #NewtonMG #PeterHollins #TheScienceofSelf #TheArtofStrategicDecisionMaking

The other quick hit for it today. If you're interested in seeing the coronation of King Charles III, you better hurry up and get to London. That's happening this weekend. Today's lunch menu, derived from international and national holidays, is a little sparse. We're having orange juice and candied orange peels.

We need to add a little protein, so we're going to group in today international respect for Chicken's Day. Bona petite. In episodes from Peter Holland's book The Art of Strategic Decision Making, we've been looking at different paradigms and approaches to that concept making decisions. One other methodology that we'll discuss today comes from a pair of brothers, Chip and Dan Heath. One is a professor at Stanford and the other at Duke.

It's known as the Wrap Methodology Wrap, which is an acronym. And just to bug you a little bit, we're not going to define that right away. Here's the episode on strategic decision making paradigms. The purpose of the WRAP approach is to make better decisions by focusing on often overlooked factors that tend to have far bigger implications that what we might traditionally look at. It’s also what we’ve sought to do with the checklists and descriptions of subconscious influencers throughout the book.

WRAP works on the assumption that we are always trying to make decisions and generally think with the least amount of work possible. Unfortunately, this is more due to necessity and circumstance—why do more in-depth thinking and analysis when we don’t have to and have other things to get to? Well, we usually have to, which means we take mental shortcuts that often put us onto the wrong path. What do these shortcuts look like? They are countless.

• Imperfect or incomplete information • Seeing a pattern or causation where there is none • Influence by a strong emotion • Overconfidence • Fatigue • Laziness • Incorrect underlying assumptions or beliefs Even if you’re in a rush, WRAP makes you look past those shortcuts and do the work, so to speak, in four thorough steps. WRAP stands for the following: 1. Widen your options. 2. Reality-test your assumptions. 3. Attain distance. 4. Prepare to be wrong.

This stands in stark contrast to most people’s decision-making methodology, which might consist of the following (at most): 1. Look at most available options. 2. Select an option. 3. Cross your fingers and hope for the best. Widen Your Options. This is the first step because most people only settle for options that are immediately available and right in front of their faces.

They only consider the low-hanging fruit and think in conventional terms, dismissing other approaches for arbitrary reasons. When you widen and expand the set of options you have, you immediately increase the chances of an optimal decision. This is easier said than done, because we usually think in black and white terms: yes or no, X or Y. We don’t consider the possibility that the answer or decision can be maybe or Z. Sometimes just below the surface lies another level of options that you would never have seen if you didn’t dive in, kick up the dust, and take a serious look.

Even adding one alternative choice will benefit you greatly and provide additional insight into your decision. Of course, this comes with the negative effect of prolonging a process and increasing inefficiency, but if you are looking for the absolute best option, it’s imperative to widen your options. For example, what options do you have when you want to increase a company’s revenue? You can look at the hard assets like training better salesmen, reducing overhead, and downsizing. These are the low-hanging fruit—what other options do you have to increase revenue?

What if you looked at how happy your salesmen were, how you could motivate them better, where you are losing money in your vendor contracts, or what sources of needless spending the company engages in? The list is endless. These are the types of options you need to generate before making a decision. You might not find the very best one, but you are likely to find options that will still greatly impact your bottom line, whatever it may be. Reality-Test Your Assumptions.

What does this mean? It means to put your options to the test and go through the motions of what obstacles your options will encounter. Really think through what the future would look like and try to imagine every little detail. Often our options are plagued by confirmation bias and hubris, which means you won’t be able to consider them objectively if you become attached to them. That’s natural, and that’s why it’s necessary to go through this step.

It puts your decision on stage in front of an audience full of skeptics, and the skeptics will be lobbing difficult questions and asking you to answer them. They will force you to go through every step and explain in painstaking detail about what will happen next. When airplane manufacturers make sure their airplanes are ready for flight, they put the planes through a rigorous process known as stress testing, which includes flexing the wings and running the plane through physical and electric hardships to make sure that it holds up. Reality-testing is no different. Allow others to try to find holes in your option, and realize if you are trying to defend yourself based on rationalizations or based on actual facts and evidence.

Of course, you may not have the option of the peanut gallery to ask you questions, so you have to train yourself to ask better questions and mentally visualize each step more consistently. Let’s stay with the example we used earlier of increasing a company’s revenue. How might you reality-test your options here? Focus on one at a time and playing them out to their logical conclusion. Go through each step in the process and don’t gloss over potential problems by saying, “Oh, we’ll take care of that when it comes, no problem."

If you decide to focus on training your salesmen to be more effective and persuasive, you need to look at the costs involved in that and how it will play out in the next year or two, as training is a longer-term process. Then you must act like its biggest critic and ask how much increased revenue you will see, whether it’s worth it, if the salesmen are capable of it, how it compares to the other options, when you can expect revenue to increase, how it can be done less expensively, and so on. Start with the five journalistic questions of who, what, when, where, and why, and move on from there. Remember, you win if you find a flaw. If you don’t find any, you still win.

Attain Distance. Attaining distance from your option means that you must take a moment and remove yourself from the process. Otherwise, you run the risk of letting your sense of triumph and short-term emotional attachment to an option color your decision. Emotion can seep into any phase of the WRAP process and completely overpower your sense of logic and analysis. When you find confirmation and validation for your option, its natural to fall into a spiral of confidence and happiness.

This is dangerous without distance. In other words, take some time to sit on your decision. Sleep on it if necessary. Return after some psychological and mental distance to see if your justifications and reasoning still make sense. They might not.

If you’ve written anything in your life, you might be familiar with this phenomenon. You write something on Monday and it feels like the next Charles Dickens novel. You put it aside and bask in your triumph. When you reread it again the next Monday, you may find that it is barely intelligible. That’s the power of distance.

Prepare to Be Wrong. Preparing to be wrong isn’t assuming that you will be wrong. It’s actually a thought exercise in finding alternate options and evaluating how effective they are. If you succeed with your option, that’s great, but success isn’t really the scenario we need to plan for. Things are easy when we find success.

We need to plan for when things go wrong or not as planned, because that’s when we need to come up with a new approach and discover if your options are as good as you think. In other words, prepare to be wrong by creating a Plan B and possibly Plan C, if possible. No matter how certain you are, unpredictability is still a possibility. Plan so that you can hit the ground running instead of panicking whenever you see a small wrench in your plans. You might even begin your decisions by opting for the best Plan B.

To increase a company’s revenue, you might have decided that training your salespeople better is the unquestioned best choice. You’ve done the reality test and thought through the possibilities. However, what if it doesn’t work on account on something you can’t possibly control or foresee? You would want to know what Plan B and Plan C are and how you can move into those seamlessly. What are the first steps so that you don’t waste any time scrambling if Plan A falls short?

What is going to get you closer to your goal while giving up the smallest cost? Preparing to be wrong is all about how you can adapt to adversity. The WRAP process and the six hats method may seem like a lot of work, but all they are doing is uncovering your blind spots. If you are making decisions flying by the seat of your pants and relying upon your laser-sharp instinct, that’s only going to lead to good decisions out of luck. And that’s not a habit you want to continue.

The 3 P Technique Here’s a decision-making technique I like for its simplicity. The way your life turns out comes down to two quite opposite forces: the first is luck, and the second is the quality of the decisions you make. In real life, it’s usually a mix of both these things working together. Now, I’m no philosopher and to be honest it’s not important what the exact ratio is of luck to choice. The premise is that as long as we make better decisions, we have some scope to improve our lives.

There’s a problem, though. Many of us think of decision making in purely black and white terms. They’re either good decisions or bad ones, right or wrong. And we also have a very over simplified way of determining which side a decision falls on: if our decision works out well, we assume that it was the right decision. If things go badly we conclude that whatever we did immediately before was the wrong thing.

Sounds like a logical way to think about things until you remember that other aspect: luck. Imagine a poker game. The one who wins typically needs both aspects on their side. They need good luck to be dealt good cards, and they also need to play well, i.e. to make god decisions with those cards.

But that doesn’t mean that if someone loses, we can conclude that all their decisions were bad ones, or that if someone wins, all their decisions were good ones. You can make good choices and lose, and bad ones and yet still win. Subtle difference. In this book so far we’ve focused on the conscious decision-making aspect, while forgetting that sometimes, luck steps in and affects the outcome. We should remember this when weighing up outcomes and deciding whether out decisions were good or bad (hint—they’re usually somewhere in between!).

In in poker, we cannot control luck, but we can make predictions and guesses when we make decisions. We can do the same for any decision. Annie Duke is a world-famous poker player who won millions in poker tournaments, and now has a lot to say about this very phenomenon. She claims that decisions are really predictions for future outcomes—this is easy to see in poker, but perhaps less obvious for the rest of life. Annie Duke explains her decision-making process as 3 Ps.

Let’s take a closer look. The first is preferences. As a framework and context for all your decisions, you need to actually understand what you’re hoping to achieve. You need to have affirm grasp of your own values and what you’d actually like as the ideal outcome. General goals are fine (“I want to find a high paying job that I like.”), but it’s worth being as specific as possible (“I want XYZ job in such-and-such industry in this area paying twice my current salary.”).

It’s difficult to truly, objectively say what a good decision really is, but it’s far easier (and more likely to be accurate) for you to identify what you personally want to happen. You can’t just any particular outcome as a bad one or good one—for some it will be good, for others it will be bad. It makes more sense to consider how well that outcome satisfies your particular needs and preferences. Don’t just assume theses will be obvious to you, either—often we have to make a conscious effort to tease out what we want and don’t want! The next P is payoffs.

Once you know what you want, assess the potential benefits, i.e. payoffs. Consider one particular outcomes, and see how it impacts your preferences—does it help or hinder your goals? In real life, decisions usually have both good and bad outcomes. You can often only get clarity when you deliberately weigh up both not just relative to one another, but relative to your values and goals.

For example, let’s say you’re trying to choose between a few new houses to move into. One is cheaper and closer to town but needs a lot of expensive repairs, the other is nicer and bigger, but a bit isolated. These might seem like evenly matched choices, until you factor in your goals and preferences—is being near a city more important to you than being out in nature? Don’t make your decisions merely hypothetical. Literally play out potential outcomes in your mind.

Picture yourself in each home, not just next week, but one, five, ten years into the future. See whether the loneliness in house B gets worse or if you’re likely to not care too much that House A is smaller. Thought about this way, you get to see not just the wisdom of a particular choice, but a particular choice in your world, according to your values. The final P is probabilities. Look at the outcomes you’ve been conjuring up (the different lives in the different potential homes) and then be as honest as you can about the likelihood of each one occurring.

Remember, luck plays a role. And the trick is that you don’t know how much of a role. There are no guarantees in life, and you may be completely caught by surprise, no matter how good your planning and decision making. For example, knowing that you’re single and an extrovert, you predict that moving to an isolated area will drive you crazy within a few years (unless of course you magically meet the love of your life living next door—that’ll be the unpredictable chance element!). Remembering to factor in luck and probabilities does two things: it keeps you on your toes so you never forget that the outcome is not exclusively determined by your actions, and it also frees you to identify and focus on those things where you have the highest chance of making a difference.

Don’t sweat the truly random things; focus instead on those areas where you have strong reason to believe you are in control. Those are the things that will bring the most likely positive outcomes. To make a better decision (not a “good” one, but a better one) comes down to making highly educated guesses with the information you have, allowing plenty of room for luck. Combine preferences, payoffs and probabilities and you make better predictions about how life will play out if you follow path A or path B—and choose accordingly. The 3 P Technique can seem quite obvious on its surface, but if you work through it deliberately, you might be surprised by just how often you fail to factor these considerations in.

Nobody ever said humans were rational, huh? The ICE Scoring Model Let’s finish this chapter with a final technique, the ICE Scoring Model. This approach comes to use from the world of project management and business strategy, but its principles are just as applicable in everyday decision making. The Ice acronym stands for impact, confidence, and ease. Let’s see what each means.

On each of the three parameters, you rate a potential idea, choice, decision, or plan from one to ten, then multiply all these scores together to get a final result. This allows you to rank options, assess different plans of action, or simply get a better idea of the options in front of you. By running this quick calculation, you see immediately where you should be focusing your attention and resources, i.e. which path is worth following. The technique is great for people in startup environments or innovative workplaces, where decisions have to be made quickly, using as much of the information available as possible.

Impact is the potential for you a choice (idea, action, decision, etc.) to serve your main life goals. Confidence is how sure you are that this outcome will actually follow if you make that choice. Ease is, of course, how easy it is to make the decision or take the action. So, you should prioritize or choose those things that are most impactful, that you are very confident in, and which are relatively easy to do, over those things that are difficult, have uncertain outcomes, and which don’t have a massive impact even if they are as effective as possible. Let’s say you’re deciding whether you want to go back to college to get a specialist degree to improve your earning potential in the future.

But you don’t want to waste money and time only to end up earning the same anyway. You look at some choices according to the ICE model as follows: Choice 1: Go to college to do a full three-year degree. Impact – 8/10. Many people with this qualification seem to do very well with it. Confidence – 6/10.

On the other hand, who knows what the job market will be in three years’ time? Ease – 3/10. It’ll be hard work for three solid years. Total score: 17 Choice 2: Do a smaller one-year certificate that you can complete while still working. Impact – 5/10.

Less of a big deal than the degree, but still useful. Confidence – 9/10. You’re pretty sure it would make a difference, even if a smaller one. Ease – 6/10. It will be easier than the three-year degree, and quicker to complete.

Total score: 20 Choice 3: Do nothing and keep working at the same job, gaining experience. Impact – 3/10. The least likely to drastically improve your earning potential on its own, though small promotions are possible. Confidence – 9/10. You’re fairly confident that if you change nothing, you’ll stay on roughly the same path!

Ease – 8/10. Carrying on doing what you are is far easier than learning a new skill set. Total score: 20 Using this system, choice 2 and 3 are best. Maybe there is some extra variable you could consider that tips the scales in one direction, for example you get funding to do the certificate instead of paying for it yourself. As you can see, the ICE technique can sometimes lead to unexpected results—perhaps everyone in your life told you that studying further was a great idea and that you should go for it, but this analysis might at least give you pause.

Another thing to notice is that doing nothing is also a choice—and sometimes it’s not a bad option! The ICE model is not all-or-nothing. It’s about prioritizing. After this analysis, you might decide to seek some in-between solution, like study the big university degree but piecemeal, part time, while continuing to work. This would increase the ease score.

You might decide that university is not a great idea now, but do the exercise again later and see if your goals, values, and priorities have changed. The ICE model was created by GrowthHackers CEO Sean Ellis, so its worth remembering that it was created in a particular context. As you can see, the analysis is only ever as good as the options you present yourself with. It’s an extremely objective process, so if you are mistaken about your own goals, the ease of which a decision can be made, or are over- or under-confident compared to the real probabilities, your decision making will be biased. Each area is weighted equally, which may be a good or bad thing, depending on your own values and preferences.

On the other hand, the technique is great for simplifying difficult decisions fairly quickly. You don’t have to rely on it exclusively, but use it in conjunction with other techniques to quickly give you another insightful perspective on a decision you’re facing. The technique is good for decisions you need to make quickly, but which aren’t life-or-death. The model was designed for fast-paced business environments, but it’s probably not a great way to make truly life changing decisions! Rather, use this in your work life, or when organizing and managing projects.

Use ICE to decide where to focus on when you’re short on time and resources. If you have a full day, ICE can help you zoom in on what’s most important, most impactful, and most doable for you, moment by moment. Of course, it doesn’t hurt to fine-tune your accuracy when it comes to assessing the ease, confidence and impact of certain actions—that is a skill in itself! Thanks for joining us today. Hope you enjoyed that episode, and we'll recap the takeaways from that episode in just a minute.

Not bad. If you're still using your cat's name, followed by an ampersand on your retirement account, you should honor today as World Password Day and get that shored up a little bit. For those of you more on the geek side, such as myself, it's National Weather Observer's Day, which by itself is not much to me. However, this weekend is the EDA Aquarid meteor shower, and you might want to check that out. There's a good article@thrillist.com if you want to read up on that.

That's the EDA Aqua Rid meteor shower. Today is also International Firefighters Day. Let's recap today's episode. The wrap method. Wrap was devised to specifically address blind spots.

Wrap stands for widen your Options reality test attain distance and prepare to be wrong. As you can see, these are not typical ways to approach a decision, though they can serve you well because they represent what is likelier to happen in the real world. The three P technique was created by poker player Annie Duke. It consists of preferences, payoffs, and probabilities you got to love alliteration preferences, refer to your goals and what you're actually hoping to achieve. Payoffs are the potential benefits of different outcomes, and probabilities speaks to the confidence you have in certain predictions of the future.

It's these informed predictions that allow us to make good decisions. The Ice scoring model also rests on considering three key components of any decision. The first is impact the potential for you a choice, idea, action, or decision to serve your main life goals. The second is confidence how sure you are that this outcome will follow your action, bearing in mind that luck and chance also play a role and ease how easy it is to make that particular decision. A subjectively good decision is one which has a high probability of having a high impact on your goals, whilst being easy to achieve if that were only possible all the time.

Byebyes, America's children. One of the greatest live cuts I've ever heard. Perhaps a result of that Kent State incident. Today is National Prayer Day and I found interesting, in response to National Prayer Day, a secular holiday was created, a National Day of Reason. Whatever your leanings, either one could be appropriate.

And from her we learn you can tell more about a person by what he says about others than you can by what others say about him.