“Before I enumerate those actions, let’s start with what you need not do. You needn’t think twice before every decision. Since most decisions will be straightforward, with clear-cut repercussions, the mistakes in this book will not be relevant. We all make lots of decisions every day, and the stakes are generally low. Even when they are not low, the best course is often obvious enough.
Think Twice’s value comes in situations where the stakes are sufficiently high and where your natural decision-making process leads you to a suboptimal choice.
So you must learn about the potential mistakes (prepare), identify them in context (recognize), and sharpen your ultimate decisions when the time comes (apply). Here are some thoughts on what you should do differently tomorrow.”
—Michael Mauboussin, Think Twice
Mauboussin on Creating a Checklist
Think Twice by Michael Mauboussin is a great book for everyone who wants to gain a deeper understanding and learn more about the different kinds of heuristics, i.e., mental shortcuts that allows people to solve problems and make judgments quickly and efficiently. These rule-of-thumb strategies shorten decision-making time and allow people to function without constantly stopping to think about their next course of action. Heuristics are helpful in many situations, but they can also lead to cognitive biases.
Mauboussin wraps up by offering some very concrete actions based on the discussion in the book. The actions are: 1) Get Feedback, 2) Create a Checklist, 3) Perform a Premortem, and 4) Know What You Can’t Know.
Since the subject of checklists has been up for discussion on this blog before, I thought I’d save the part from Mauboussin’s concluding thoughts and discussion about the second action point: Create a Checklist.
Below is an excerpt from Think Twice: Harnessing the Power of Counterintuition, written by Michael Mauboussin. I encourage you all to read it. Every page is full of insights and advice that you will benefit from in your day-to-day operations and decision-making.
Create a Checklist. When you face a tough decision, you want to be able to think clearly about what you might inadvertently overlook. That’s where a decision checklist can be beneficial.
For example, in 2009 the New England Journal of Medicine published the results of a study tracking the rate of complications from surgery before and after the introduction of a checklist. The study was based on data from more than seventy-six hundred operations in eight cities around the world. The researchers found that rate of death dropped almost by half when the doctors used the checklist, and that other complications fell by one-third. [7] Pilots, of course, also find great value in checklists to ensure safety. But the question is whether you can develop a checklist for all activities.
People underutilize checklists. But a checklist’s applicability is largely a function of a domain’s stability. In stable environments, where cause and effect is pretty clear and things don’t change much, checklists are great. But in rapidly changing environments that are heavily circumstantial, creating a checklist is a lot more difficult. In those environments, checklists can help with certain aspects of the decision. For instance, an investor evaluating a stock may use a checklist to make sure that she builds her financial model properly.
A good checklist balances two opposing objectives. It should be general enough to allow for varying conditions, yet specific enough to guide action. Finding this balance means a checklist should not be too long; ideally, you should be able to fit it on one or two pages.
If you have yet to create a checklist, try it and see which issues surface. Concentrate on steps or procedures, and ask where decisions have gone off track before. And recognize that errors are often the result of neglecting a step, not from executing the other steps poorly.
[7] Atul A. Gawande, MD, et al., “A Surgical Checklist to Reduce Morbidity and Mortality in a Global Population,” New England Journal of medicine 360, no. 5 (20009): 491-499. See also Peter Bevelin, Seeking Wisdom: From Darwin to Munger, 3rd ed. (Malmö. Sweden: Post Scriptum AB, 2007), 287-296.
Checklists come with pros and cons. Handle with care, and hopefully, your checklist will help you in your attempt to make smarter and more insightful decisions.
See here for earlier blog posts in the category: Checklists. Here you’ll find more to read about Atul Gawande, among other things.
Further Reading: Mauboussin
Check out the official homepage of Michael Mauboussin here. Below are a list of other great books from Mauboussin worth reading.
Further Reading: Atul Gawande
Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company or individual mentioned in this article. I have no positions in any stocks mentioned.
Hurricane Capital 