The Decision-Making Out-Go Statement

Anyone can make a good decision if they have enough time, enough information, and enough money (and enough courage). The trick, though, is making good decisions even when you don't have enough of all of those things because reality shows that we rarely have enough of any of those things, let alone all of them. But decisions still must be made - even if it's a decision to not decide just yet.

Oh, what to do?

Well I like to look at this using a variation of the Financial Income Statement - something I call the Decision-Making "Out-Go" Statement. As you know, there are three main sections to an Income Statement:

1. the top line - typically thought of in terms of sales, or revenues
2. the middle line - your costs or expenses
3. the bottom line - your profit.

Generally speaking, the financial equation is that the bottom line equals the top line minus the middle line, or

[profit] = [revenues] - [expenses]

In the Decision-Making Out-Go Statement, the top/middle/bottom lines are defined a bit differently:

1. the top line - the possibility of what you hope happens as a result of your decision is actually what ends up happening
2. the middle line - the probability of some unintended consequences happening to undermine what you hope ends up happening instead
3. the bottom line - the "sense" or caliber of your specific decision, given the top line and middle line analysis.

As the bottom line again equals the top line minus the middle line, the Out-Go calculation looks something like this:

[the caliber of your decision] = [the possibility of it being a good decision] - [the probability of it being a bad decision]

So rather than getting stuck in Analysis Paralysis because you don't have as much time, information, money (or courage) you might prefer to have in order to make a particular decision, try thinking in terms of possibilities and probabilities, instead.

If you do, I think you'll find that you'll soon be able to make far better decisions with far less than you previously thought possible.