Thinking in Bets

“Wanna bet?”

Former Poker Pro Annie Duke argues that offering a bet in any situation makes us refine and examine our beliefs, temper our generalizations and get closer to the truth by acknowledging the risk inherent in what we think we believe versus what we actually believe. By attempting to make explicit what is already implicit, we develop exploratory thought patterns that encourage open-mindedness and a more objective consideration of alterative hypotheses. By embracing uncertainty we can uncover biases and make better decisions. Acknowledging uncertainty then becomes an acknowledgment of a complex and uncertain world so that we are less likely to think in binaries, and more likely to think in probabilities.

In Thinking in Bets: Making Smarter Decisions When You Don’t Have All The Facts, Duke provides a framework for decision-making that includes a variety of techniques, ideas and strategies for dealing with bias. Duke argues that organized scepticism needs to encouraged and operationalized. By providing permission and space for dissent, we invite others to play devil’s advocate by presenting the other side of the argument, to argue why a strategy might be ill-advised, why a prediction might be off, or why an idea might be ill-informed. By considering all perspectives the best decision can then be made. In order for this to become part of the fabric of how teams operate, some clear parameters need to be established so that dissent does not become about shooting the message or the messenger, but rather an open exploration of multiple viewpoints and perspectives.

Other good ideas for developing strategy with teams that resonated include;

• • Scenario Planning or Future Reconnaissance – identify possible future outcomes and assign a probability for each occurring. Build a decision tree and determine probabilities of different futures based on the information you have at your disposal.
  • Backcasting – working backwards from a positive future. Imagine you have already achieved a positive outcome, holding up a newspaper with the headline “We achieved our goal!” Then think about how we got there. A team leader asks the group to identify the reasons why they achieved their goal, what events occurred, what decisions were made and what went there way in order for this to happen. This enables identification of strategies, tactics and actions that need to be implemented to get to the goal.
  • Premortem – reveals the negative space. Imagine the headline “We failed to reach our goal.” A team leader then challenges the team to consider things that could go wrong. A premortem is an implementation of the Mertonian norm of organized scepticism. Once we frame the exercise as “Ok, we failed. Why did we fail?” that frees everyone to identify potential points of failure they otherwise might not see or might not bring up for fear of being viewed as a naysayer.

I read many books each year and don’t often take the time to summarize or reflect. It’s something I am working on going into 2019.

Thinking in Bets: Making Smarter Decisions When You Don’t Have All The Facts is a book that gets a little repetitive at times but provides some useful frameworks and excellent anecdotes about decision-making.