Decisions

Smart Choices: 8 key ideas

by John Hammond, Ralph Keeney & Howard Raiffa

The core ideas of Smart Choices, each in under a minute, written in our own words. Want the full depth? Get the book.

1. IDEA 1 OF 8

   Good decisions follow a clear process

   Hammond, Keeney and Raiffa argue that decision-making is a skill that can be learned.

   They offer a simple framework called PrOACT, which breaks any choice into manageable steps so that people do not get lost in confusion or emotion.

2. IDEA 2 OF 8

   Define the real problem

   The first step is to state the problem carefully, because the way a problem is framed shapes the options people see.

   A badly defined problem leads to a poor solution.

3. IDEA 3 OF 8

   Know your objectives

   The authors suggest listing what you really want to achieve, including less obvious goals.

   Clear objectives make it easier to judge options. Without clear goals, you may pick an option that looks good but misses what you truly want.

4. IDEA 4 OF 8

   Create better alternatives

   The authors argue that decisions are only as good as the alternatives considered.

   They encourage generating many creative options. If you only consider two choices, you may miss a much better third one that nobody thought of.

5. IDEA 5 OF 8

   Think through consequences

   For each option, the authors suggest describing likely consequences in relation to your objectives.

   A simple table can help compare them. This way you can see how each choice affects the things you care about, instead of relying on gut feeling.

6. IDEA 6 OF 8

   Make trade-offs consciously

   Most decisions require giving up something to gain something else.

   The authors offer methods to make trade-offs clear and deliberate. For example, a higher-paying job may mean less free time, and being honest about this helps you decide.

7. IDEA 7 OF 8

   Handle uncertainty and risk

   The authors explain how to think about uncertain outcomes and how much risk you are willing to accept.

   Risk tolerance differs between people. Facing uncertainty openly is better than ignoring it, since most important decisions involve things we cannot know.

8. IDEA 8 OF 8

   Some decisions are linked

   The authors note that some decisions affect future choices.

   Thinking ahead about linked decisions helps keep options open. For example, choosing a course today may decide which jobs are open to you later, so it is wise to think ahead.