Thinking in Bets: Making smarter decisions when you don’t have all the facts

On the long flight from Japan to the USA, I read Annie Duke’s Thinking in Bets. Annie is a world champion poker player. The premise of the book is in order to make better decisions, one should “think in bets” which means to consider luck or uncertainty, don’t expect sure things and don’t mix results with decisions. My main reason for reading it was to consider Duke’s ideas when hiring teachers. As the head of school, they are most often the most important decisions I will make. Often when hiring teachers, I do not have all the facts. I think of myself as a professional manager of a professional sports team when evaluating a young player’s talent. What skills do they bring, how do they fit in with the team we already have and how will they develop in the position. Professional sports managers have performance statistics, video analysis, etc. and they still often make mistakes. When hiring teachers, we have much less information. We have 1 to 3 interviews and I try to collect as many references as possible. As I get more experience, the less stock I take in interviews. People can interview well and not be strong teachers and vice-versa. I would like to use Duke’s insight into behavioral psychology and poker to make better decisions. I learned that I could systemize how we make hiring decisions.

Poker is a game of making many decisions quickly and involves a combination of circumstances and luck. It involves multiple people, hidden information and changing conditions. The philosophical father of game theory, John von Neumann modeled his theory after a stripped down version of poker. It is the study of conflict and cooperation between intelligent, rational decision-makers. Here are some of my takeaways from the book to help me make better decisions.

  • Our lives are too short for a good sample size, so there is not often enough data in our own experience to evaluate the quality of a decision.
  • Be comfortable with uncertainty and that outcomes are not always black and white. Instead think in percentages. Expressing confidence as less than 100% is OK, it shows you are trying to get to the truth. By saying I am 80% sure of something, you open the door for others to tell us what they know.
  • The world is structured to give us many opportunities to feel bad about our losses or bad outcomes. Separate the decision from the outcome. Even the world’s best poker players lose 40% of the time. If you did everything right in the decision or action, sometimes it just doesn’t go your way due to luck or other circumstances.
  • “Hiring an employee, like offering a bet, is not a riskless choice. Betting on the wrong person can have a huge cost as well as missing out on the right person. “
  • We have a lot of beliefs that are not true and conventional wisdom is shown to be wrong often. Always question decisions and beliefs and learn. Use experience and information to more objectively update our beliefs to more accurately represent the world.
  • Our capacity for self-deception has few boundaries. Just because someone is confident, that doesn’t mean they are right.
  • Our default mindset is to believe what we hear and see. Humans very easily believe and find it difficult to doubt.
  • The smarter you are, the better you are at constructing a narrative that supports your beliefs. Always consider your biases and blind spots or have someone on the team to play that role.
  • “Being asked if we are willing to bet money on a decision lessens bias.” Do a 1-10 scale, on how confident you believe in an outcome. This also allows us to consider a greater number of alternative causes.
  • Don’t always chalk up good outcomes to skill and bad outcomes to luck. Look for the truth.
  • A senior leadership team can be a “truth-seeking pod” helping us overcome our blind-spot bias. Good groups talk about their decision-making. The discussions are open-minded and exploratory, not confirmatory thought. DIVERSITY & DISSENT – Exposure to diverse viewpoints, improves our decision making.
  • A truth-seeking charter – 1) focus on accuracy (over confirmation) 2) accountability 3) openness to diversity of ideas
  • When a detail makes us uncomfortable or needs more clarification, that could be the most important part of a conversation. When someone leaves out a detail, that might be pushing their narrative.
  • Express dissent “Are you sure about that? – Have you considered thinking this other way? Instead of you’re wrong. An idea is to create a “devil’s advocate” for your group. This term comes from the Catholic Church deliberations of sainthood.
  • Time travel when making a decision, looking at the consequences of the decision in the future.

My main criticism of the book is Duke gives too many examples and repeats herself to give the book more length. She had many strong points, but watered them down a bit by referencing too many case studies, research and anecdotes to make her points. The book could have been shorter and more focused on her experience of poker.

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