Customer Reviews

Smart Choices: A Practical Guide to Making Better Decisions

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1 star:		(2)

 

 

I had the pleasure of reading this book last year as assigned material in a graduate business course taught by Ralph Keeney. My degree is in information systems management and, frankly, I took Managerial Decision Analysis only because I needed 3 elective credits to graduate. In retrospect, however, the course was among the most beneficial to me and Smart Choices was certainly the most relevant book I read in graduate school. I say it was the most relevant because it demonstrates how to define problems and make decisions not simply as a business leader, but as an individual. The PROACT approach is a valuable tool for making formal decisions like "Which career path should I choose?" or "Which software package should I recommend to my client?" But the mentality that the approach engenders is pervasive. You will find yourself unwittingly applying elements of it to questions like "How should I spend time with my kids this weekend?" or "What is the best Valentine's Day gift for my wife?" The greatest benefit to me has been the piece of mind that comes with knowing that I don't just make better decisions -- I am now a better decision maker.

I have read many books on decision analysis - however, the 3 authors managed to condense the most relevant points in one book, without academic speak. The famous Kahnmann & Tversky's Heuristics and Biases are nicely summarised in the final chapter. The case studies are easy to relate to. Definitely a professional book written for the layman. No need for a PhD to understand this!

This is an excellent book. The title may make this appear to be one of the too-numerous mass-market books which claim to offer advice on business and personal decision-making but actually offer lots of specific admonitions which are based on values which the reader may not share (example: anything by Steven Covey). This book, however, doesn't try to sell you any of the the authors' values; instead it teaches you an effective process that you can use to analyze any decision-making situation and make the choices which are most effective for achieving your objectives, whatever they may be. The book treats the subject in the same systematic way that it might be treated in an academic decision theory text, only it is written in plain language which can be read quickly and easily comprehended by the general reader. It finishes with a summary outline (they call it a "roadmap") which is a useful quick reference.

I am a corporate strategy consultant and an author of business books and articles. As a young man, I was taught all of the techniques described in this book in their most complex form. I loved the ideas, and have used them with great success for the last 30 years. Professor Raiffa is someone I admire greatly, as a result. I was delighted to find that this book addresses these complex tools in their simplest possible form, and applies the lessons to everyday living (especially the most important decisions that most people have to make). I immediately bought copies for everyone in my family as a way to help coach them in how to have more effective lives. You should do the same. I also suggest that you use the book as a model the next time that an important decision comes up that your whole family should participate in. This will not only help you develop better choices, but it will greatly improve the communications in your family about the decision. I strongly hope that the authors will write a similarly simple version for business people. I know a few hundred people to whom I would like to give such a book.

Many have written extensive reviews on this book that I believe are accurate. Using the relevant decision research, the authors have successfully produced this accessible guide. The book is a practical introduction to decisions for anyone interested in approaching problems in business and life in a structured manner. While footnotes do not appear, related research confirms the validity of the authors' methods. For an introduction into the research, I recommend the Harvard Business Review on Decision Making from the HBS Press that includes a paper by the authors detailing the even swap method.

My only criticism is the compressed feel of the text particularly in the "Uncertainty" and "Linked Decisions" chapters. For most of the book, the authors did an outstanding job of condensing a great deal of information into a flowing, informative book.

The authors of the book "Smart Choices" (Hammond, Keeney and Raiffa) look at decision making as a disciplined informational affair. If you gather information according to their template you will make better decisions about some things. But they give only passing mention to the fact that decision-making is largely a psychological affair. Information handling (the topic of the decision) is opposed by psychological (emotional) determinants of decision-making. In the gap between these two factors, most people are driven more by emotions than by "rational factors" about information.

The motivation in decision-making is about what people want. The choices made are the expressions of motives - and motives are, by definition, psychological machinery. Psychological machinery is emotional. Period. If you consider the logic of TV's CSI show or Lieutenant Columbo, for example, any behavior depends on three things: motive, means and opportunity. The authors of this book have concentrated on the means for making a good decision. Opportunity to make a decision is taken for granted. But they have deleted the systematic emotional bias that disables so many motives of so many people so much of the time.

The downside of this excellent book is that the authors use the outline of their book in a way similar to the way pilots use a preflight checklist - to insure they will operate the machinery of their aircraft properly. Few human and interpersonal situations respond to "checklist logic". People are not normally as well organized as a well-maintained aircraft. People reach closure on decisions with emotional logic independent of the literal facts - in more cases than not. People have strong emotional habits and those emotions dictate the choices, not the information. That is, emotions frame the overall decision-making stage which relegate "rational" checklists to bit players in the story of the decision process. Relatively few individuals are able to shift the balance toward the rational end of the gap and away from emotional dominance. Emotional tune-ups, done by a trained professional, do more to improve decisions than any rational checklist possibly can.

As an executive I am faced with making key decisions almost every day. In many complex decisions there is almost always conflict between logical analysis vs. intuitive processing while there is a shortage of perfect information and time. Smart Decisions lays out a simple, clear and practical framework and process for decision making. Although many of the concepts are not novel, the power is that the book links various tools and technigues as discrete decision making steps. Each step builds on the next. They greatly enhance the concepts through many practical examples for making business and personal decisions. I highly recommend this book!

When I started reading this book, I was bored and disappointed with the examples. The process of decision making -- problem, objectives, alternatives, consequences, and tradeoffs -- seemed obvious. And the examples were silly: Should John and Jane Doe buy a house? I wasn't interested, but when I continued reading, some parts, such as the chapters about risk and uncertainty, grasped me. I also found that just enumerating the decision making process made it a lot easier. The PrOACT solution is very intelligent. Even if you've never heard of decision theory, you use the system. By quantifying it and understanding how you make decisions, you'll naturally become a better decision maker. You'll know that there are alternatives to eating the whole cheesecake, or what the real reason you're putting off that assignment is. I run a website, called the Wall Street Wizard, www.streetwhiz.com, and it's helped me craft a better, more perceptive site because of my decisions on a daily basis. And it can help you. One of the best decisions you'll make is to buy this book.

As valuable as information is, it is surprising that so little thought goes into the application of information. The authors of this book delve into the science of decision making to offer several comprehensive models with helpful explanations and illustrations. It reads very simply, which was a turnoff for some of my friends, but the end result is a valuable education in one of the most important aspects of our lives. The material in here will be original unless you've already studied the art/science of decision making, and it is not material that is intuitive, or 'common sense'. Following the advice in this book, I quit my job with nothing lined up one year ago, and it was one of the better career moves I've made.

When I saw this book advertised I was stuck wrestling with a major career change decision. I had been worrying about making the right decision literally for months, as my whole future seemed to be at stake. I worked right through the book in a few days and came out with a range of options with which I am happy. Most importantly, I have greatly increased my confidence in my decision and am better able to articulate my reasoning. This confidence will help me come across well in interviews and improve my chances of getting the right job. I feel relaxed about moving to the next set of decisions- which company to work for.

I found this book accessible, practical and useful. Most impressive was its holistic approach to decision-making, ranging from solid theory (clearly presented with realistic examples you can relate to), through practical tips (like "remember that your decision cannot be better than your best alternative") to a well-presented chapter on psychological traps to which people often fall victim. You will recognize many of these from your experience at work.

The first five chapters should be readily understandable by anyone. The next four ("Tradeoffs", "Uncertainty", "Risk Tolerance" and "Linked Decisions") are more complex. Although the topics are explained in a prose style (with realistic examples) the material is unquestionably heavier going and requires careful study, particularly for someone who hasn't been exposed to decision trees and probability and statistics. I believe that anyone with some high school math will be OK- just be prepared to put your thinking hat on. It's worth the effort.

After reading this book you will have a toolkit that you can carry around with you to improve my decision-making. In the office, these techniques should help you work with your bosses and colleagues to reach better decisions and avoid some mistakes. In your life as a whole, you should make smarter decisions and be happier as a result.