Over the entirety of my career, I have repeatedly witnessed very smart CEOs and individuals stumble when making one kind of decision...
The Impossible Decision
In general, most people can decide between two options: An option that is good, and an option that is better.
This is often an easy decision to make.
Sometimes people freeze temporarily in deciding between TWO great options.
For example, if you get an offer from McKinsey and BCG, that’s a tough choice. But in reality, it’s not a tough choice because both choices are really great. You really can’t go wrong with either decision.
Where very smart people often completely lose their ability to think clearly is when it comes to choosing between two terrible choices.
This is where otherwise super rational, highly analytical people completely lose it. That’s because it's in this specific scenario that emotions and psychology come into play.
This specific example I’ve seen comes from when a business is failing and the CEO must decide whether to admit failure and lay off employees, or in some cases admit failure and shut down the business entirely.
I want to show you what this specific pattern looks like so you can recognize it, learn which human psychology biases will cause you to freeze, and learn how to avoid a major mistake in these kinds of decisions.
Given the choice between a great choice and a good choice, everybody generally picks the great choice.
Given the choice between two really great choices, most people will debate the choice somewhat but they ultimately pick one since they are both great choices.
Here’s where people run into problems:
When given TWO equally terrible choices, most people can’t decide. They freeze.
Now logically, Scenario #2 and Scenario #3 are logical equivalents. When you are faced with two options that are equal in their value, debate all you want but ultimately any arbitrary choice is equal.
But for some reason when the equal choices are both great, it’s easier to decide than when both choices are equally terrible.
From a purely logical standpoint, this doesn’t make any sense.
And if you struggle to understand why this is the case, you’re forgetting one incredibly important and insightful thing...
We’re dealing with people, and people are NOT rational 100% of the time.
I don’t care how many PhDs you have, how perfect your standardized test scores are in math, logic, science or engineering. All human beings lose their ability to think logically, especially when they are under emotional stress.
And if you happen to feel that you don’t get thrown easily by emotional stress, I will argue quite strongly that you are wrong, wrong, wrong.
All human beings face emotional distress from time to time. The only difference is whether or not you are aware of how this stress is impacting you, and the decision-making biases these stressors tend to have on logical decision making.
In short, all people, myself included, are capable of making bad and illogical decisions under certain emotional stressors.
The key is to be aware of this tendency.
That is the purpose of this article -- to help you be AWARE of tendencies that most people have so that you can look out for, and protect yourself, from making a stupid decision that under any other set of circumstances you probably would never make.
Here’s the missing X factor.
In Scenario 2 when you’re deciding between two great options, it’s a given that you will pick one of them.
If you win the lottery and have your choice of winning $10 million in U.S. Dollars or gold bars, who really cares? Take either one and enjoy it.
Because both options are substantially better than the status quo, taking either one is an easy decision.
However, in Scenario #3 where you choose between two terrible options, both options are worse than the status quo.
This turns out to be profoundly important to realize, recognize, and appreciate.
What’s different about Scenario #3 is there is often the illusion of having the option of choosing neither option.
So if you get a major infection, and you are offered the choice of amputating one of your legs or to take an experimental drug that will cure the infection but will cause moderate brain damage, which do you choose?
Do you choose to lose a leg or lose your mind?
In this example, there are clearly no good options. So what do many people do?
They procrastinate and refuse to choose either option.
In other words, they are in DENIAL.
Here’s the thing to realize. We have a logical reasoning center of our brain. We also have an emotional center of our brain.
Highly logical people tend to think the logical center rules the emotional center of the brain. And for highly logical, less emotional people that may be the case some (if not most) of the time.
But, that is not true 100% of the time.
A less emotional person is not a person with no emotions, but rather one that is less aware of the impact and magnitude emotions have on him or herself.
Most people consider me to be a pretty analytical and logical person. I will be the first to tell you that I have been in denial at multiple points in my life.
The hard part about denial, especially for a logical person, is that there’s a tendency to (mistakenly) believe such illogical behavior is not possible from me.
I think that’s incorrect.
I’m probably logical a greater percentage of my day than the average person, but this comes with a downside. It means that it will take a more extreme set of circumstances for me to be in denial about a difficult decision.
The implication of this is that when the stakes are greatest, the likelihood of my being in denial is at its highest.
In addition, because I am so logical so much of the time, I have had very little practice and experience in dealing with this part of myself.
It is the recipe for a perfect storm.
For some reason I don’t quite grasp, Scenario #3 decisions where you’re choosing between two terrible choices tend to have a deadline.
You’ve received a diagnosis of a life-threatening illness. You need to choose between two terrible treatment options. If you wait too long, you die.
Your business has hit the wall financially. You are in a financially unsustainable position. You need to choose between two terrible financial options. If you wait too long, you run out of cash and are forced into bankruptcy.
You didn’t do well recruiting and are faced with two terrible job offers. If you wait too long, both terrible job offers will go away and you will have no job offers.
So what should you do in such a situation?
I will tell you the solution.
However, I am extremely hesitant to do so.
The solution will seem so simple and obvious that I fear it will be insulting to you.
That’s because you’re not currently in a crisis situation facing two terrible choices.
When you are in such a situation, I am hoping you will remember my simple guideline. The key to operating under extreme stress is SIMPLICITY.
SIMPLE = Easy to Remember, Easy to Do.
When you are faced with two terrible choices, what you should do is:
Pick the LEAST WORST choice.
Here’s why this is so difficult to do (and also why the suggestion is profoundly useful).
Most people, especially very successful people, are accustomed to picking the “best” option.
In a situation when you’re facing two terrible choices and a status quo situation that’s even worse than the two terrible choices, NO BEST CHOICE EXISTS.
A successful person who has been successful most of his or her life is accustomed to picking the better of two choices. A successful life is comprised mainly of good situations similar to Scenario 1 (good vs. better choices).
When such a person hits adversity, their decision-making model of looking for the best choice breaks down. When no best choice exists, the person accustomed to looking for the best choice keeps scanning and analyzing and re-evaluating the situation, looking for the best choice.
When none exist, the person doesn’t know what to do. He or she keeps looking in an endless cycle looking for the best choice.
The problem is NONE EXIST!
This is where denial kicks in. They are looking for something that does not exist because that is what they’ve done their entire lives. And for the entirety of their lives, that approach has worked... until NOW.
So when you’re faced between two terrible choices, and a status quo that’s even worse; the optimal course of action is to ACCEPT that no good choices exist and pick the LEAST WORST one.
And generally, picking the least worst choice FAST has a better outcome than either 1) not making any choices at all so the far worse status quo situation deteriorates, or 2) picking the least worst choice late.
For some reason in crisis situations, speed is your friend.
A terrible choice chosen and acted upon ferociously has a better chance of turning around your situation.
If you have cancer and are given the choice of two terrible treatment options... better to flip a coin, take one option now, than to wait 2 years hoping for a better option to come along.
If you are facing financial crisis and have two possible (but terrible) options for turnaround, in general taking either one NOW works out better than doing nothing for 12 months.
You may read this entire article and it may seem terribly obvious to you and thus not applicable.
Or you may have worked in consulting and seen clients make seemingly irrational decisions to the point where you think the clients are stupid.
If either of these are true, then you may be severely under appreciating something profoundly important in consulting, in your career, and in your life.