At the height of the dot-com bubble in the late 90s, Warren Buffett stayed out of the craze and looked like an idiot for a few years until the bubble burst and he was the one sitting on a piggy bank.
We would all love to be sure of ourselves like Buffett and not have to care about what the rest of the world thinks. But if we’re doing the same things as the crowd, we’ll get the same results as everyone else. That is why until you have what you need to make a big decision, you would want to position yourself for a variety of futures instead of simply going with consensus.
Here are three techniques to keep options open while you make the best choice.
Avoid the worst outcome first: During a particularly busy time in my life, I was desperate for a break. I squeezed into one rainy weekend a road trip with a 12-hour drive each way. Three hours in, I had totaled my new car and was stranded on the highway. To get to smart, you’ve to cross stupid first. Ask yourself: What’s the worst outcome here? Then take steps to avoid it.
First bullets then cannonballs: This is a strategy made famous by Jim Collins. He advises running low-cost low-risk experiments that inform you about the best use for your limited resources (men, money, market). Chip and Dan Heath call it multitracking–considering multiple options at once. Multitracking has built-in fallback options (if not this, then that).
Most decision-makers are aware of this principle. Where they miss out is the ‘at once’ bit. They run one test at a time and grow impatient, or they worry about cost. Sometimes, though, it may just be hard to generate good options to test–that’s when you need to find someone who has solved your problem.
Attain distance before committing: Fear and worry often drive urgency. You may encounter it acutely with ‘people’ decisions. That’s when it helps to sleep over your decision, even for just a day. Because once you’ve decided, you start seeing things through the filter of your decision. Waiting before announcing allows you time to see the world through that filter.
There’s a time during the process of making a consequential-irreversible decision that tests your resolve. If you feel a certain fear waiting at the crossroads when others have chosen their paths, remember that there’s a certain solace in failing if others are failing too. In the end, you may not be all that upset about missing the mark if most others around you have missed too. That’s just a low base rate. Think of that tough physics paper that baffled everyone in class.
But that’s not all you want. You want to beat the odds. On important things, you want to be right when the world is wrong. For that you’ve to be willing to be short-term wrong and long-term right.