Whether it is having to make a call on a particular business case; set a budget for a business unit or even resolve whether to take that promotion in another organization finance professionals have to advise on and make a lot of decisions in a very uncertain and complex environment. (It probably only gets more pressurized the more-experienced you are)
In this bite-sized episode we share with you some of the pointers from the Back to the Future movie franchise and the book “Thinking in Bets” by Annie Duke that make help you improve your chances of better decision outcomes.
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Full Transcript
[00:00:00] Hi everyone. And welcome to this week’s Monday memo. Hope you had a fantastic weekend. Looking forward to the week ahead. It was great to see so many of you in London last week, and we did a few events virtually as well. So. Really appreciate the great turnout. Fantastic questions, engagement. Learned loads.
[00:00:17] And it was great to meet up with some old faces as well from the past and learn how strengthening numbers have been making an impact, but also where we could do better as well in the future.
[00:00:26] And. Over the weekend. I was just channel surfing and up came the back to the future movie. And some of you might actually remember the back to the future series. Where you had the main character, Marty McFly paid by Michael J. Fox and doc brown. Paid by Christopher Lloyd in their time. Traveling DeLorean.
[00:00:45] And some cases, they went all the way back to the wall, a Western to the future. Or even back into the. The sixties.
[00:00:53] But the main message was whatever you do, don’t meet, operate yourself because such an encounter could create a time paradox. The results of which would, Perhaps cause a chain reaction and destroy the universe.
[00:01:05] And then all that intern triggered in my head, something I’d read in a book by. a lady called Annie duke. Who’s a poker player and it’s called thinking in bets. Cause she describes the movie in it and actually what we can learn to make better decisions. Because if you think about it, whether it’s fine as professionals, we’re having to make a call on a particular business cases, set a budget for a business unit.
[00:01:28] Even resolved. An issue on whether to take a promotion, another organization. Because it will push us outside our comfort zone. I’d help us grow and get to where we want to in our careers. And so on. We have to make a lot of decisions are analyzed at oughta decisions in a very uncertain and complex environment every single day.
[00:01:48] And I feel as you stay longer, longer and finance, it only gets harder. Not easier.
[00:01:52] But what sort of things could we be doing to improve our decision outcomes? And that’s really why I referenced a book by Annie Duke and thinking in bets.
[00:02:00] ‘ cause she questions that conventional wisdom of don’t meet up, but you’re a future or your past self? Mentally speaking anyway. Who knows what happens in the physical or the real world, but in the mental world? We should be meeting up for ourselves more often. If we want to be doing those things more often, that will drive better decision outcomes. And she’s very clear. It’s impossible to guarantee. A perfect outcome when it comes to decision. She’s a poker player. She has complete understanding of. Off the immediacy of her decision. She sees it in real time, but not all decisions. I guess most of our decisions aren’t necessarily.
[00:02:37] Clear from a consequence perspective in the short term, pretend to take longer terms before the consequences become apparent.
[00:02:43] That’s just real life.
[00:02:45] So what she’s really saying and real life decision making, when we bring our past or future self into the equation.
[00:02:51] Thinking maybe like in three. Four or five years time, where do I want to be in my career? What sort of things am I doing outside of my career? What sort of hobbies do I have? How am I contributing back to my community? Does that decision now? Positively impact my chances of that happening.
[00:03:06] Or taking a learning from the past and saying actually that’s what happened last time and filtering that into the decision-making or in the past, I made that type of a rash decision. When it came to maybe say buying a house, I might have. A bit too much money. And actually next time we go buy a house, we’re setting a budget and we’re sticking to it and we’re not going to get caught up in a bidding war.
[00:03:27] So actually in decision-making you, once your past and future selves collide with the present self to help you make better decisions. And it doesn’t destroy the universe.
[00:03:37] If anything, to present us needs the help of the past or some future. Us to be able to make the best decisions right now. Think of those past and future cells is decision buddies. That’s a term she uses.
[00:03:49] And she also introduced us some interesting concepts controlled around. I highly recommend check out the book or the audible version is really good, too. But but at strategy data, I really like. And we probably see it a lot in our work as well, but we never maybe had a term or terminology for it.
[00:04:05] It’s a Ulysses contract. And Ulysses is, the Roman name for the Greek traveled at a Homer created called Odysseus. And there’s on one part of a Ulysses traveled square. He’s got to go pass a certain set of rocks where the sirens and in the past for our, from past knowledge, he’s aware of loads of ships ending up on those rocks because the sirens are calling to the sailors to go damage to the ships and they can’t hold themselves back in.
[00:04:29] And there’s disaster, bad decisions. So what Ulysses advisors is that all the sailors on the boat to put a beeswax in their ears. So it dulls the calls of the sirens on the rocks and also to tie Ulysses up to the mast. So did he can hear the sirens, but actually not do anything that might damage the boat.
[00:04:51] So that’s an example of past knowledge in far into decision, but also future knowledge, putting in place a set of conditions. That prevents from further damage to the ship or to the people on that. Dot boat as well.
[00:05:04] And we see examples of Ulysses contracts in terms of setting conditions. Where there might be a maximum case of liquidated damages or insurer shoring, certain conditions have to happen before the things happen, or even like how some people have. Contributions going out of their paychecks to fund things like pensions or schemes for our college funds that our kids are or whatever.
[00:05:27] So they can’t use that, the present self to dip in and take that money easily. It’s not impossible, but take that one easily.
[00:05:34] Just say, buy a fancy new car, for example. And have it diverted from where they see themselves in the future or so they won’t get reprimanded from there. The future selves.
[00:05:44] But as with any decision. Yeah, we must recognize that this is only a potential strategy. To help us be a bit more rational and less emotional when it comes to making decisions. Or there’s a scenario where we can make these great decisions, the best possible ones that you could at the time.
[00:06:01] And they may not give us the results we want. Sometimes that’s good. Sometimes that’s bad. But the fact of the matter is to ask strategies by involve in our past and future offices to improve the chances of good outcomes doesn’t necessarily mean we guarantee them, but every effort we make. To try and.
[00:06:19] And make better decisions makes a small difference, more rational thinking. Less in the way of emotion. It just all translate. Into the probability of better outcomes that can have a significant impact on how our careers and our decisions in our careers turnout as well as outside of our careers. And good results can compound. They can become habits.
[00:06:41] They can help us calibrate better for future areas of improvement. And all we ask is that we are open to maybe time-traveling mentally. And that’s why we invite mentors on to strengthen the numbers and share their interviews with you because they help us understand. How did their past decisions turn out? How are they looking towards a future?
[00:07:02] And influencing the decisions they’re making now. What went well, what could have perhaps gone better? How have they maybe changed your minds over the path? What do their paths look like?
[00:07:12] And Monterey doing so it helps maybe flatten or maybe speed up some of the inputs that go into decisions that you feel like you need to be making. A in your career non-career activities and all the while increasing the possibility, although not guaranteeing it have better outcomes and whatever endeavors you’re deciding to choose. So look, hope you enjoyed this week’s episode. If you did. Please remember the sheriff, your friends and colleagues were available on all the major platforms, iTunes, Stitcher, SoundCloud, YouTube, Spotify, and Amazon music.
[00:07:40] And thanks again for tuning in today. So look, have a great rest of the week and until next time,. Take care of ourselves And let’s keep on building our strength in the numbers.
