Translator: Lúcia Sánta
Reviewer: Csaba Lóki MK: Okay, so I'm Mikael, I'm from Finland,
and this is Roman. RT: I'm from Switzerland. MK: And this is
the end of PowerPoint for tonight. RT: We'd like to start with a little test,
it's a one-question decision test. MK: Imagining the following situation:
It's Sunday night, you're home alone, and you've ordered a pizza,
you've opened up a good bottle of wine, and you decide
that you'd like to watch a movie. So you switch on to Netflix,
or whatever you're using, and you start browsing
the different movies. Now, how difficult is it for you
to choose a movie? RT: You have to rate yourself
on a scale from one to ten. One meaning 'I have no problem at all', ten meaning 'It takes me
until the morning to choose a movie'. I give you three seconds to pick a number. Three, two, one, stop. Okay! Everybody with a number from one to five,
please stand up! MK: Okay. I'd say that's 80 percent...
RT: Maybe, yeah. MK: Please remain standing! For those of you who stand up, this is a typical 'good news,
bad news' situation. (Laughter) Bad news is you're not quite as good
a decision-maker as the other group. (Laughter) Good news, however, you're quite happy
with your not so good decision. (Laughter) (Applause) RT: Okay, you can sit down now. Now everybody else, from six to ten,
please stand up and receive your verdict. (Laughter) MK: So, again, it's 'good news, bad news'. Good news, you're better
at decision-making, than the other ones, bad news, however,
even with your best decisions, you're not really happy,
because you ask yourself: maybe there could've been
an even better option. (Applause) Roman and I, by the way,
we both struggle with decision-making. He's an extreme, a one or a two,
(RT: Yes) and I'm not even on the chart. And we asked ourselves, why? Why is it that we find it
so difficult to choose? Not only we, many, in this room also. And why is it that we find it difficult
to take decisions? And we looked into the research
behind decision-making, we wrote some books about it,
and tonight, in the next minutes, we're going to show you
the three problems of decision-making. RT: Problem number one: it's preparing.
So it's the question of how do you prepare your decision,
or what is your information strategy? [Preparing, timing, regretting.] We'd like to illustrate it on two axes:
you have the x axis, which is the amount of information you need
in order to come up with a decision, comapred to the degree
of confusion in your head, that this information provokes. So what's the relation of
confusion and information? It's an inverted bell curve. And that's what we call the TMI paradox,
the Too Much Information paradox. MK: It looks like this:
if you have very little information, you feel confused, and if we are confused,
our brain tells us: go get some information for me;
so we start to research. And the more we know
about any given topic, the more confident we feel
to make a decision about it. But there's a tipping point,
you can actually know too much. I think we all have
experienced that situation. It's the moment when you start questioning
your own knowledge, you get confused until you don't know
who you are, and where you come from, and you feel unable to make a decision. And if you'd look at brain scans from
people who have too little information and those who have to much information,
those scans look pretty much the same. This Too Much Information paradox
can also be applied to other situations. The American scientist
Sheena Iyengar did that when she looked at our behaviour
in supermarkets. She realised, if we have too few choices,
we don't like to buy anything, because we ask ourselves, maybe
there's another shop with more stuff. If we, however, have too many choices,
we like to look at things, but we feel overwhelmed. We experience, what she called, the choice overload problem. According to her theory, there is,
obviously, a right amount of items the human mind likes to choose between. I think that's approximately
somewhere between three and six. So that's the amount
we like to choose between. RT: But life is not a supermarket. (Laughter) MK: If it comes to the really big,
life changing decisions, so the things, that really matter to you,
when do you know that you know enough? RT: That brings us to the second problem
of decision-making: it's the timing. It's also referred to as
the OMG TIU problem, and all the TED talkers know that one,
having this countdown clock in your face, it's the Oh My God, Time Is Up problem. And again, we'd like to illustrate it
on two axes. [Knowledge] MK: Now, the older we get,
the more we know. So maybe we can say,
at the end of our lives, we can really tell,
[Old man] (Laughter) At the end of our lives,
we can actually tell what was a good decision, and what was
not such a good decision in our lives. We might tell at the end of our lives,
it was a good choice to pick that job and it was maybe not such a good choice
to marry that person. But the problem with life,
as the Danish philosopher, Soren Kierkegaard said:
it can only be understood backwards, but unfortunately,
we have to live it forwards. So we can't take all the big decisions
at the end of our lives, we have to take them early on, at a stage,
where we know very little about the outcome of these decisions.
[Consequences of decisions] The problem with early decisions is
that the consequences are very huge. Let me explain that to you
with a little metaphor. It's a little bit like archery. If you shoot and you aim at a goal,
and you just move a little to your right, that arrow will fly
many meters to the right. But if you stand
directly in front of a goal, or, so to speak,
if you are at the end of your life or at the end of a project,
and you make the same movement, this hardly changes the goal. You'll hit exactly the same spot. So the decisions that are taken early on
have way bigger consequences. RT: This chart of two Danish
organisational theorists, brings us probably to the core of
decision-making, and that's uncertainty. If we have to take decisions early,
we don't know what their outcome will be, that's in the future. And just think it through, if you'd be 100 percent
sure of something, then we wouldn't talk about the decision
any longer, then it's just a fact, an imperative,
so there's nothing to decide, you just have to act. And that brings us to the third stage
of a decision: it's regretting it. It's the point of view, the retrospective,
you've decided and now it's the question of how you live
with your decision, and we like to call it the PDF,
the Post-Decision Feeling. (Laughter) MK: Post-decision - you can measure that
with two parameters. One is, how happy you are
with your decisions, compared to how much you expected
from a decision. This is a fairly simple concept. One can say: the more you expect of a decision,
the happier you get if this decision turns out to be good. But again there's a tipping point, you can
often expect too much of your decisions. That's when you try to aim
for the perfect decision. And perfection is something that,
I think, we all strive for. We all would like to have a perfect job,
or the perfect partner. Roman and I'd like to do the perfect
TED talk tonight, but the longer I'm up here on stage,
the more I feel, [Satisfaction, Perfection, Expectation] maybe perfection is a little bit like
Nessie, the monster from Loch Ness. It's rumoured to exist,
but no one has ever seen it. (Laughter) RT: Now, remember the test we just did
five minutes ago. What was your number? MK: Those of you who scored under five,
you'd be on the left side here, it's called pragmatic
decision-making style, or as a scientist put it:
you're a "satisficer". Satisficer is a word combination
out of two words, you can say you're satisfied
with your decision but it also comes from the word
suffice, so enough. You realise it wasn't maybe
the perfect decision, but the decision was good enough. Those of you who have scored over five
are what scientists call "maximizers". You try to maximize your decision
and make the absolute perfect choice, so you aim for little Nessie up there. RT: Preparing, timing, regretting,
it's like kind of three phases, or three stages
in the decision-making process, and now we try to sum them up
in one drawing. (Laughter) That's why he does the talking
and I'm drawing. MK: I'm a pragmatist. If we look at these three problems, and we try to translate them
into questions, you could ask yourself: do I know enough? Secondly: is this the right moment
for decision? Then we have the third difficult question: what if Nessie exists? (Laughter) So this is the retrospective,
regretting question, could there have been a better option? All of these three questions
deal with the uncertain. Because the answer to the questions
only lies in the future. And the future, as we heard
today all day, is invisible. We'll never know what will happen. So when it comes to decision-making,
how do you deal with the unknown? There's a guy who thought
he knew the answer to that. He himself took some poor choices in life, but he had a very interesting approach
to decision-making. I'm talking about former
US Secretary of Defense, Donald Rumsfeld. During a press conference he once said
that unknown question the future has two parameters. We only have the known and the unknowns. And Roman and I translated this now
into a little matrix. [Unknown, Known; Unknowns, Knowns] What we have is the known knowns.
The things we know we know. It's very simple to make those decisions,
you know what to do. If you're afraid of burglars,
lock the door. But there are also the known unknowns.
The things we know we don't know. These are things we know will happen but, for example, we don't know
when they will happen or how. The perfect example for this is maybe
the stock market. Everyone knows they'll go down
once in a while, but no one knows when this will happen
or how hard it will crash. RT: Then we have the unkown knowns. MK: The things we don't know we know. Most researchers agree that there's a thing in us that knows more
than we actually think we know. And you can call that intuition,
or inner voice or gut feeling, or blink - as Malcolm Gladwell put it. It's the thing that gives you
a good feeling when you decide. And when it comes to decision-making,
and intuition, you could say that we all make bad decisions. But those bad decisions that we make
intuitively, we regret less, than those we made rationally. So human beings tend to forgive
their gut more than their head. RT: The unkown unknowns. MK: So the things we don't know
we don't know. Donald Rumsfeld explained this
with Pearl Harbour. The Americans weren't prepared, because
they didn't know that they didn't know that the Japanese could attack
with kamikaze pilots. A more recent example for this
could maybe be 9/11, and 9/11 and Pearl Harbour are
just examples for this, what we call "black swans". So the concept that
we didn't expect something. Before the first black swan was discovered,
no one had ever thought about it. But once it was there,
it seems quite logical. [Swan (black)] (Laughter) RT: My limited drawing skills.
That's a swan. So what's the takeaway? MK: Now, I would not recommend
that you should hire Donald Rumsfeld as your chief decision-maker. However, I think it's interesting
to think about the question he raises. When do you take the time
to think about the unthinkable? RT: And with this little brain-teaser,
we would like to send you home, and thank you very much TEDxDanubia
for the invitation! Have a great evening! MK: Thank you! (Applause)
