Decision Making Mental Model

Philosophy and Principles

Decision Making Mental Model

Mental model: an explanation of someone’s thought process about how something works in the real world

Decision: a conclusion or resolution reached after consideration; a choice made between alternative courses of action in a situation of uncertainty.

Risk: something you can put a price on.

Uncertainty: risks that are hard to measure.


This second describes a high level model for how I think about decision making. Before using it, identify the following:

What is the goal?

Identify the primary goal that will be used to measure the outcome of the decision.

What is the measurement?

Identify the correct measurement of the goal, ensure this measurement is/can be built.

This measurement will be used to assess the largest risk/reward payoff, and will also be used to continually monitor the decisions progress towards the desired outcome.


Philosophy of measurement

How to Measure Anything: (

What are all the possible decision options?

List out all the possible decision making options. For each of these options, be sure to calculate the things to the right.

How much does it positively impact the dominant goal?

What are all the ways this option can go wrong?

What is the probability of success and failure?

You are assessing and sizing risk and reward here.

What are all the ways I can hedge failure?

Does this change the probability distribution?

When does this option need to be executed?

What are my assumptions, and how certain am I about them?

All options, and their assigned probabilities of success and risk will be influenced by the assumptions we make. How certain am I about these assumptions, and how can I reduce that uncertainty?

How am I being fooled?

Ways you’re being fooled:

Can I generate extra options by changing parameters?

Try changing the goal and seeing what affect that might have on the options available to you. It’s also a good opportunity to clarify why you’re pursuing the goal.

Ask others (peers, people you trust) to help you generate extra options.

Go back to ‘What are all the possible decision options’, reassess.

Weigh up the bet and select the best option

Choose the option with maximum reward for minimum risk. This calculation should be done with most of the focus on the dominant goal (and should integrate any other goals you care about too).

Decide when I need to execute this decision. Move to next card.

Decide who to include in the weighing and selecting process:

Execute the decision

Checkpoint decision

Postmortem decision

After the decision has played out, do the following:

Test Cases

[Removed for example]