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#37 Annie Duke: Getting Better by Being Wrong

Jul 25, 2018 1h 58m 18 insights
I have wanted to do this interview for a long time. On this episode, I am thrilled to have Annie Duke, former professional poker player and author of the new book, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts. Annie has a very interesting background that makes her uniquely qualified to speak about high-level decision making. As an author, speaker, world-class poker player, and academic in the fields of psychology and cognitive theory, Annie understands the intersection of luck, skill, and making decisions in uncertain, chaotic environments better than most people on the planet. This is a whirlwind of an episode, and we cover all kinds of fascinating topics, including: The strange circumstances that shifted Annie’s path from finishing a Ph.D. in linguistics to becoming a professional poker player What it was like to be a female poker player in a predominantly male sport (especially before poker had become socially acceptable) What drew Annie into such a high stakes, time-pressured environment and why she felt like poker was the perfect fit for her How her graduate work in psychology informed the way she approached the game of poker — and helped her rack up wins How she finds the signal in a very noisy stream of feedback The big mistakes Annie noticed other players making that were stalling their progress in the game but allowed her to make giant leaps forward The role that mental models played in her learning process (and which models Annie liked to lean on the most in a high stakes game) The power of surrounding yourself with people that can help you expand your circle of competence — and how that made all the difference in Annie’s development as a player Confirmatory and exploratory thought, and how one helps us to be “accurate” and one helps us to be “right.” The secret pact you should be making with the people who are closest to you And so much more. This episode is just under two hours long, but there’s no fat in it. Annie delivers a masterclass in making the smartest decisions we can, even when our hubris insists otherwise. Do some finger stretches before hitting play, because you’re going to be taking some serious notes. Please enjoy the interview! *** Go Premium: Members get early access, ad-free episodes, hand-edited transcripts, searchable transcripts, member-only episodes, and more. Sign up at: https://fs.blog/membership/   Every Sunday our newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/   Follow Shane on Twitter at: https://twitter.com/ShaneAParrish
Actionable Insights

1. Embrace Uncertainty & Probabilities

Acknowledge ‘I’m not sure’ more often and assign probabilities to beliefs, as this naturally views beliefs as under construction, fostering open-mindedness and a hunger for information. This approach makes you a more believable communicator and a better decision-maker.

2. Cultivate a Learning Group

Actively find or create a group of like-minded individuals who commit to an ’exploratory style of thought’ to overcome individual biases. This group should agree to hold each other accountable, focusing on accuracy over being right, and be willing to disagree constructively.

3. Prioritize Long-Term Learning

Engage your ‘future self’ in present decisions, understanding that short-term discomfort from admitting mistakes or exploring bad outcomes is crucial for long-term growth and better decision-making. This means being willing to take the hit in the present to learn.

4. Reason for Accuracy, Not Rightness

Adopt a mindset where your goal is to construct a more accurate mental model of the world, rather than confirming existing beliefs or protecting your identity. This involves approaching situations with the question, ‘Why might I be wrong?’

5. Memorialize Decision Process & Scenarios

Work through decisions by identifying possible scenarios, assigning probabilities to them, and documenting this process. This makes it harder to ‘result’ (judge based on outcome) later and allows for examination of the process, not just the result.

6. Conduct Premortems for Risk Anticipation

Before executing a plan, imagine it has failed in the future and have everyone write down reasons why. This shifts the definition of a ’team player’ to those who creatively identify potential failures, helping anticipate and mitigate risks.

7. Force Dissenting Voices to Argue Opposite Sides

When there’s significant disagreement on probabilities or outcomes within a group, have individuals argue the opposing viewpoint. This deepens understanding, moderates views, and ensures all perspectives are thoroughly explored.

8. Quarantine Advice from Outcomes

When seeking advice on a past decision, explicitly ask the advisor not to be told the outcome. Knowing the outcome distorts the analysis of the decision process, making it harder to get high-fidelity advice.

9. Create a Decision Swear Jar

Establish a personal or group ‘swear jar’ for phrases that signal biased processing, such as ‘I should have known’ or ‘what a stupid decision.’ This helps self-monitor and identify cognitive biases, especially when winning.

10. Separate Tools from Value

In high-stakes situations, view the resources (e.g., chips in poker, money in investing) as tools for achieving a goal, rather than their inherent monetary value. This helps prevent emotional decisions driven by fear of loss or desire for quick gains.

11. Play Within Your Bankroll

Ensure that the stakes of your decisions are at a level where a loss does not significantly impact your overall financial or personal situation. This helps prevent risk aversion or excessive risk-seeking driven by emotional attachment to the money.

12. Avoid Constant Outcome Monitoring

For long-term goals, like investing, resist the urge to constantly check short-term fluctuations. Frequent monitoring of outcomes can lead to emotional distress and poor decisions, even if the long-term trend is positive.

13. Lead by Modeling Uncertainty

As a leader, openly express uncertainty and the ‘under construction’ nature of your beliefs to your team. This fosters respect, encourages team members to share their own uncertain opinions, and improves collective learning and decision-making.

14. Foster Innovation by Protecting Process

Leaders should communicate and act in a way that assures employees it’s okay if a single innovative attempt doesn’t work out. This prevents a culture of ‘resulting’ that stifles unconventional choices and innovation.

15. Gather Comprehensive Contextual Details

When analyzing decisions or problems, ensure you have all necessary specific details and historical context. Lacking crucial information can lead to vague advice and ineffective solutions.

16. Practice Internalized Group Journaling

Even when alone, imagine discussing decisions and ideas with your trusted learning group or different versions of yourself (past, future, advice-giving self). This internal dialogue helps refine thoughts and hold yourself accountable.

17. Initiate Cultural Change Bottom-Up

If you want to introduce new decision-making protocols in an organization, start by finding like-minded individuals and proposing small, actionable changes (e.g., trying a red team/blue team exercise) to leadership.

18. Avoid Sycophants in Leadership

Never follow a sycophant or a ‘yes-man’ who has been in their job for a long time if the boss also hasn’t changed. This suggests a lack of critical feedback and potential for stagnation.