Higher Order Decisions
What is it:
Higher-order decisions are those that eliminate future choices, set guiding principles, or create leverage over time.
Instead of solving the same problem repeatedly, make one strategic decision that prevents a hundred smaller ones.
The idea here is life becomes easier when you make one big decision that can be replicated over and over again.
We rarely face truly unique one-off-decisions and there is an overhead cost to any good decision; it requires argument and debate, time for reflection and concentration and you need to expend energy to execute. So given this overhead cost, it’s far better to zoom out and make a few big generic decisions that can apply to a large number of specific situations - Jim Collins
Are there specific situations in your life that you can create a blanket policy that helps you make quick decisions?
Here are a few examples:
1. Define the things that you won’t invest in
There are infinite investment choices available and we will always be tempted to change our portfolio, strategy or asset allocation. Investors are constantly inundated with new funds, market opinions and recommendations. It is virtually impossible to sift through all this noise to make an information decision. At the same time, we risk FOMO and hard to control emotions that make us go against our own personal interest. It’s best to stop trying to figure out if every investment option you hear about is right for you and instead just define what you will not invest in (e.g. specific investment vehicles, types of companies/industries etc).
2. Figure out the types of people you won’t be friends with
The people we spend our time with have a huge impact on our behavior, attitude and overall outlook of life. At a certain point, you will start having less patience for the negative people in your life. You know exactly who these people are and you should make it your goal to purge them from your life as much as possible.
3. No coffee meetings / no meetings without a clear agenda
This one is slightly contentious (and may not be possible for everyone) but some productivity folks have sworn by it. We all know pointless meetings are a huge time suck and so one way to manage this is to have a blanket rule to not do any coffee meetings or attend meetings without a clear agenda.
4. Always sleep by [Time]
Research studies have shown that a regular sleep schedule has huge health and performance benefits. By setting a time you will always sleep by, you make it a point to say no to everything unimportant that could keep you up after your bedtime. Want to watch an additional episode on Netflix? Nope, it’s time to go to sleep.
“Don’t make a hundred decisions when one will do”
Prompts for application:
What decision, if made once, will remove dozens of future decisions?
How can I set a rule, habit, or system to avoid this decision again?
What one action will make everything else easier or unnecessary?
Sources:
The Power of Making One Decision That Removes Hundreds Of Small Decisions.
17 questions that changed my life
