Skip to content
Who's in the Video
Shane Parrish is an entrepreneur, the founder of Farnam Street, and host of The Knowledge Project podcast. His work has been featured in the New York Times, The Wall Street Journal, and Forbes. He is the[…]

Shane Parrish: Often we'll make decisions when we're in an emotional state. We'll make decisions at the end of the day when we're rushed. We'll make decisions after we're irritated by a colleague, or pestered all day about something. One of the ways that we can alleviate that sort of burden is just to go for a walk. Does this decision need to be made right now? If I go for a walk, is that going to change things? If I wait till tomorrow morning, the old anecdote or the old advice to sleep on it actually has a meaningful impact on dampening our emotions. Our emotions spike. And that's a signal to us that something's wrong, or something is important to us. We often view sort of intensity as a gauge of how important those emotions are to us. We'll do these things in the moment because we're emotional. And then we sort of regret it. But then we also have to defend our actions, right? So we have this sort of like dueling inside of our head, where it's like, yeah, I shouldn't have done that. But, yeah, I was really mad. And I needed to express myself. And so we sort of like justify our own behavior.

We want reduce the impact of those emotions. We want to reduce sort of what's going on in the current moment. And we want to get a better perspective on the problem. And to get distance from a problem, it helps to go for a walk. It helps to take time away from the problem, to sleep on it, to look at it in the morning. Or what I often do is I mentally decide, here's my decision. Now I'm going to sleep on it. And then I'll wake up in the morning and be like, how do I feel about that decision? Because I'll trick myself into having made it. And if I have regrets, that's a sign that I might want to think about that problem a lot more. And if I'm comfortable with that decision, then that's a sign that I'm probably on the right track. If I made the same decision when I'm emotionally engaged than when I'm not. But often, you don't want to decide. You just want to delay that decision. Why do you have to make it now?

Another way that we make bad decisions, or that we trick ourselves into making bad decisions, is that we just look for information that confirms to what we already believe. If people disagree with us, how can they be right? Because that means that we're not right. So our ego doesn't often let this information in. It doesn't process it. But what we want to do is what Charles Darwin used to do. We want to pull out a journal. And every time that something just disconfirms with what we believe, what we know to ourselves to be true, we want to make a note of it. And we want to start thinking about it. Because what we're really focused on is outcomes. We're not focused on being right. We're focused on being the best-- how do we create the best outcome possible? And every time that something disconfirms with something that we think or we believe, that's an opportunity to learn. Maybe they're right. Maybe they're not. But to dismiss it out of hand without evaluating it is not doing ourselves justice towards outcomes.

And, finally, overconfidence is one of the other ways that we sort of lead ourselves astray. We take outsized risks. We believe that we have information that other people don't have, which causes us to be overconfident, to do things that we otherwise wouldn't do. There's a couple of ways to address being overconfident. One is just to recall all the times you've failed. And if you haven't failed, then that's a problem. But often, we're very confident. If you calibrate your decisions, and I keep a decision journal, for example. And I write down, here's what I think is going to happen. Here's why I think it's going to happen. And often we get the outcomes we want, but not for the reasons that we thought we were going to get. And it's an effective calibration on what you know. It's an effective calibration against your overconfidence. Because you realize that how much we don't actually know or how much we're right-- and it's not for the right reasons. We might get the right outcome. But it's not for the reasons that we predicted that outcome would happen by. And another way to sort of address overconfidence is just to have people check and balance you, right? Which is, no, I disagree with you. And if we keep track of when people disagree with us is the opportunity for learning and exploring. Like, why is it you disagree? Is it you disagree with the variables that I think are relevant in this particular situation? Do you disagree with how I think those variables interact in this situation? Or do you disagree with my conclusion about what's going to happen? And once you start honing in on that, that's an opportunity for learning. And you're often not the expert that you think you are.