Decision making models for PM’s

Photo by on Paula Guerreiro

You make hundreds of decisions every day. 

Some are insignificant, and you won't even recognise that you made it. Daniel Kahneman, psychologist and author of Thinking Fast and Slow, would call these 'System 1' decisions. Your brains automatic, intuitive and practically unconscious thinking model. 

For example, if I ask, what is the capital of France? You didn't even have to see the words, but you unconsciously thought, Paris, before finishing reading this sentence. 

Like magic, right? 

But there is another type of thinking and decision making.  'System 2' thinking. A slower, more analytical, controlled and systematic process that you likely spend more time in as a product manager. 

Improving this type of decision making can have a profound impact on overall outcomes.

Having a mental model for system 2 thinking can help improve your decision making skills.

Here are a few I've found helpful.

1. Identify the quick vs slow decision

If we put as much effort into every decision, we would become exhausted. Luckily, our brains are smart enough to identify at a surface level when we need to invest more time into a decision. Deciding to jump up and get a coffee is not exactly taxing. But deliberating whether to delay a launch for a missing feature requires more thought.

Generally, we are excellent at knowing how much time to invest. System 1 thinking handles most of the day to day events. But the problem is the middle ground where the decisions are likely not insignificant but also not significant.

It's often in these decisions that we might over-invest or underinvest thinking time. 

Making these decisions faster and improving the quality even marginally can have a significant impact. 

So how do you quickly decide whether it should be a quick vs slow decision? 

Impact - The scale of a decision should be one of your first sense checks on how much thought you need to put into this. You will need to consider the number of people it could impact and its scale if made. 

Reversibility - Some decisions are straightforward to reverse. Turning off an A/B test that was negative is easy to undo. Deciding to sunset a product line is not.

Opportunity cost - What is the cost or gain that you will get by making this decision? They are very rarely equal. Due to loss aversion, we will always fear losing something we don't have rather than gaining something we could have. 

Resource investment - Some decisions are closely linked to capital, people and time. These types of decisions need to be considered more carefully. 

Confidence - You will likely never have all the information that you want to make big decisions. But if you hold a compelling insight that gives you lots of confidence, then you should be more prepared to balance this against the risks. You might want to consider investing more time to get that additional confidence, but this should be balanced against the sunk cost of more time invested.

Strategic alignment - Some decisions when viewed in isolation might make total sense. However, if they are not working towards an underlying strategy, it won't work. Product is a team sport, and you need to ensure that you are working with your teammates towards the same goal. To assess decisions against strategic alignment you can create a virtual scorecard against the organisational strategy and see how well it ranks.

2. Expand your options

We will often at first think a decision is a 'yes' or 'no' scenario. When in reality we have many options.

We need to expand our options and try to be more creative in our thinking. For example, a daily question you might consider, is whether to attend a meeting? Surprisingly we likely default more than often to 'yes' or 'no'. When in fact, you could ask questions like: 

Filtering everyday decisions beyond yes or no outcomes will lead to better allocation of time.

What about more complex decisions where there isn't a yes or no answer? 

In these scenarios there might be more people involved and multiple options that you could pursue. It's even more important that you spend more time with your team exploring options. You almost want to argue both sides or views. In doing so, you will open up the middle ground—an area where often the best decisions get made. 

Teams that feel comfortable challenging each other will reach better outcomes. You want to ensure all options are explored. If you have an unbalanced team where people are not willing to challenge, you will always end up on one side of the spectrum, which often isn't the best outcome. Once a decisions has been made and there is an agreement you want to ensure that the whole team is willing to commit.

3. Simplify 

Being able to simplify complex decisions is a superpower. 

Often when faced with a decision, we are burdened with the mountain of information and contextual knowledge. Things get complicated quickly. We can overthink every single implication for a decision that we need to make. 

If you do this enough, you will eventually go down a rabbit hole of abstract ideas and can quickly move away from what was truly important in the beginning. 

Going back and nailing down what the goal or outcome is critical. 

So how do you simplify decisions? 

You focus on what matters and disregard all of the contextual fluff that surrounds it. It's often 'interesting' but not useful information that adds noise that you need to ignore. 

Being very focused on the core outcome you want to achieve and whether this immediate decision will impact that outcome is vital. To achieve this, you need to be willing to remove the second layer that might add additional noise to a decision.

Let's look at an example.

Let's say you have hired someone who was supposed to be a superstar hire. They ticked all the boxes on paper, smashed the interviews, and had all of the credentials. There is just one big problem.

You have discovered that they can't do the job that you need. And you have already invested lots of time and energy trying to make it work.

You have a situation where you know you will have to let them go. There is one clear option.  However, additional noise will come into play.

Questions that might come up will make you hesitate:

Maybe this. Maybe that.

The point is that these second layers of thinking can distract you and sometimes can dissuade you from making the obvious right choice.

This isn't to say that you shouldn't think through multiple options and impacts, but you need to look at the primary goal or outcome you need. In this scenario, you know that this person, deep down, is not a good match for the role, and you need to let them go. 

Final thoughts for decision making 

Most everyday decisions are not permanent.

You can reverse them without too much cost. Being willing to commit and move forward in most instances will be a positive step. You are likely to get new information and feedback that will allow you to make better quality decisions down the road.

So be bold and make that decision.