The power of negative thinking.

The power of negative thinking.

“Negative thinking helps you identify things that might get in your way so you can identify ways to reach your destination more efficiently.” (p. 212)
“Gabriele Oettingen, a professor of psychology at New York University, has conducted over two decades of research showing that anticipating the ways things might go wrong on the path to achieving your goals helps you more successfully reach your destination.

For example, among people in a program trying to lose at least fifty pounds, those who imagined the ways in which they might fail lost twenty-six pounds more on average than those who engaged in positive visualization alone. She found that mental contrasting provided a similar boost across a variety of domains, including getting better grades, finishing school projects on time, finding a job, recovering from surgery, or even following through with asking a crush out on a date.” (p. 186)
“Imagining how you might fail doesn’t make failure materialize. In fact, there’s a lot of value in picturing the obstacles that might slow you down or get you lost, preventing you from reaching your destination.” (p. 185)
“Just like when you’re using Waze instead of an old-fashioned map, you want to see where your decision-making might go wrong and bad luck might intervene. Then you won’t be surprised when those things happen and you’ll have a plan to manage your reaction when they do.” (p. 186)

Here are the negative thinking tools that can help you make better decisions:

Try mental time travel: You can see more from the summit than the base.

“Put simply, mental time travel is the ability to imagine yourself at some time in the past or future. Human beings naturally time travel all the time. You daydream about when you were a child or you imagine what the world will be like in ten or twenty years, or even beyond your lifetime. (Estate planning is an exercise in mental time travel.)” (p. 187)
“Imagining yourself at some time in the future, having succeeded or failed at a goal, and looking back at how you arrived at that destination.” (p. 187)
“If you want to climb a mountain to the summit, you have to start at the base. What’s directly in front of you takes up most of your visual field and blocks a clear view of the possible routes to the summit and obstacles you’re likely to encounter along the way.

Once you reach the summit, you can look back to where you started and see the entire landscape, including the fallen trees or impassable boulders that were invisible from the base. You can clearly see the alternate routes that might have been safer or more efficient than the one you traversed. That’s why it’s helpful to get guidance from someone who has already been at the summit before you start your climb.” (P. 187)

Conduct a premortem: (p. 190)

Premortem- “Imagining yourself at some time in the future, having failed to achieve a goal, and looking back at how you arrived at that destination.”

Six steps to conduct a premortem:

“Identify the goal you’re trying to achieve or a specific decision you’re considering.”
“Figure out a reasonable time period for achieving the goal or for the decision to play out.”
“Imagine it’s the day after that period of time and you didn’t achieve the goal, or the decision worked out poorly.
“Looking back from that imagined point in the future, list up to five reasons why you failed due to your own decisions and actions or those of your team.”
“List up to five reasons why you failed due to things outside your control.”
“If you’re doing this as a team exercise, have each member do steps (3) and (4) independently, prior to a group discussion of reasons.”

Example 1:

“You need to get to work on time tomorrow for an early meeting. Imagine you’re late and miss part of the meeting. Why did that happen?

Reasons having to do with your own decision making:

You overslept because you hit the snooze button too many times.
You forgot to set your alarm.
You left too thin a margin for traffic.
You were texting and driving and got into an accident.

Reasons outside of your control:

The power went out and your phone died so your alarm didn’t go off.
There was a sudden blizzard.
Even though there are normally clear rounds, there was an accident on the road on your way to work.
Someone else was texting while driving and hit your car.” (p. 191)

Example 2:

“You devote yourself to your start-up, Kingdom Comb. Imagine it’s a year from now and you’ve failed. Why did that happen?” (p. 190)

Reasons having to do with your own decision-making:

You were an abrasive boss and couldn’t retain valuable employees.
When you went out to raise seed capital, you had a greedy valuation and refused to compromise, failing to raise money beyond the friends-and-family round.
You insisted on cutting your own hair, which looked awful and left a lingering negative impression on potential investors.

Reasons outside of your control:

A recession hit just as you went out to raise a seed round, so start-up capital dried up.
A leading ride-sharing company branched out into the same space, killing your business.

Why are premortems better than just thinking about how things could go wrong?

“If you’re like most people, doing the premortem helped you identify some reasons for failure that you wouldn’t have thought of otherwise. Research suggests that when you combine mental time travel and mental contrasting, you can produce 30% more reasons for why something might fail.” (p. 192).
“Premortems help teams solve the groupthink problem by exposing and encouraging different points of view. When you do a premortem as a group, being a good team player means coming up the most creative ways the decision might fail, coming up with reasons that the consensus opinion is wrong.” (p. 193)

Use a Decision Exploration Table:

“It’s helpful to see the output of both a premortem and a backcast in one place. You can do this by using a Decision Exploration Table” (p. 195)

“Together, they show you an integrated picture of the future. The premortem reduces the natural tendency toward overconfidence, the illusion of control, and other cognitive biases that cause you to overestimate the chances that things will work out. The backcast evens out the view if you are pessimistic in nature or underconfident.

Most important, you’re doing more than just imagining success and failure. You’re identifying the paths that lead to both results, and multiple ways to access the path to success, as well as the obstacles you have to avoid or manage.” (p. 195)
“The relationship between premortems and backcasting is similar to the relationship between the outside view and the inside view. A good decision process starts by considering the outside view and anchors there, because you naturally live in the inside view. The outside view acts to discipline the cognitive biases that reside in the inside view. Likewise, a good decision process starts with a premortem and anchors there because you naturally live in a backcast.” (p. 195)
“You’ll see that the Decision Exploration Table on the next page also includes a column for estimating the likelihood that any of the reasons for failure or success will occur. Because all these things (whether within or outside your control) are not equally likely, it’s useful to include probabilities as part of the forecast. Combined with an estimate of the impact of these unfavorable or favorable events, you will be better able to prioritize your attention to each.” (p. 196)

Here is the Decision Exploration Table from the workbook (p. 195)

“Use the Decision Exploration Table below to record the output of the premortem and the backcast you just performed. Add an estimate of likelihood of each item occurring.” (p. 197)

Once you filled out the Decision Exploration Table, what should you do next?

“The first thing you should always consider after doing these exercises is whether you want to modify your goal or change your decision, given what you’ve just learned.” (p. 198)
As an example, let’s say you’re with a medical device company that is planning to sell one of its devices in a new market overseas. Your team’s premortem identifies that the country is considering new regulations that would ban the device. You forecast that the probability of the regulations going into effect is high. You might decide against selling the device in that market until the uncertainty resolves.” (p. 198)
“When you decide that you still have good reasons to proceed even after you go through these exercises, in advance of the decision you can use the output of the premortem and backcast to consider the following actions:

1. Modifying your decision to increase the chances of the good stuff happening and decrease the chances of the bad stuff happening.

2. Planning how you’ll react to future outcomes, so they don’t take you by surprise.

3. Looking for ways to mitigate the impact of bad outcomes if they occur.” (p. 198)

Create a precommitment contract.

Precommitment Contract (also known as Ulysses contract)- “An agreement that commits you in advance to take or refrain from certain actions, or raising or lowering barriers to those actions.

Such agreements can be with others (for group decisions or to create accountability to another person) or with yourself.”(p. 199)
“Like Ulysses, you can physically prevent yourself from making poor decisions.” (p. 199)
“You can raise barriers, making it harder to execute on actions that will defeat your goals. When you raise barriers, you’re not physically preventing yourself from acting, like when you tether yourself to a mast. But you are increasing friction to make it more difficult to tamper with your plans. Raised barriers also provide you with a moment to stop and think before acting.” (p. 199)
“You can lower barriers, reducing the friction to execute on actions that advance you toward success.” (p. 199)

Examples of precommitment contracts.

“Ulysses contracts that raise barriers can range from putting a lock on the refrigerator and keeping the key in a time-release safe to simply declaring your intentions to a friend. The lock physically keeps you from getting into the refrigerator.” (p. 200)
“Telling a friend about your intentions makes you accountable to another person, a barrier that compels you to stay true to your word.” (p. 200)
“You avoid driving under the influence by using a ride-sharing service when going out on New Year’s Eve, which physically prevents you from getting behind the wheel at the end of the night.” (p. 200)
“You want to get to work on time so you keep your alarm across the room, which raises a barrier to hitting the snooze button and falling back to sleep.” (p. 200)
“You decide to eat healthier and you know that late-night snacking is where you’ll go wrong. You can throw out all the junk food in your house. You can also stock your house with healthy food or pack a lunch to bring to work with you. That reduces friction and makes it easier to stick to good choices.” (p. 200)
“Your goal is to save for retirement and you’ve identified that impulse purchases cause you to overspend.You can set up automatic transfers from your paycheck into a retirement account. That makes it harder for you to bust your budget.” (p. 200)
“Like other precommitments, you can set advance criteria for how you’ll react. If you think you could fall for the sunk cost fallacy, refusing to quit when quitting is the appropriate response, come up in advance with the conditions under which you would quit. Write those down and commit to changing course when those conditions arise. That’s particularly effective in a team setting.” (p. 208)
“For example, if you’ve identified that you make bad decisions following sudden drops in the stock market, get someone else to execute trades for you in order to prevent making impulsive trades yourself.” (p. 208)

Beware of tilt!

Tilt- “When a bad outcome causes you to be in an emotionally hot state that compromises the quality of your decision-making.” (p. 206)

Examples of tilt:

“Right after a bad outcome, especially one due to something outside your control, you can become emotionally compromised. The emotional centers of your brain get aroused, increasing the likelihood that you’ll make poor decisions. When activated, the emotional parts of your brain inhibit the parts of your brain responsible for rational thinking. Shutting down those parts of your brain compromises the quality of any decision you make in that state. This hot emotional state is called tilt. When on tilt, you’re more likely to make decisions that make a bad situation worse.” (p. 206)
“let’s say you commit to making healthy eating choices. A week later, you eat a couple of donuts in the breakroom. A lot of people respond to that bad decision by saying, “Yeah, I guess today is shot.” Then they load up on junk food, thinking they’ll start again the next day . . . or next week . . . or maybe next year’s New Year’s resolution. That’s the what-the-hell effect.” (p. 206)
“Or let’s say things aren’t going your way on some project in which you’ve already invested a bunch of resources. You’re unlikely to quit in those situations, even when an objective observer would see that quitting is appropriate. In the wake of a bad outcome, it’s difficult to see the situation rationally. If you could get to the outside view you would quit, but you don’t because you’re stuck in the inside view. That’s the sunk cost fallacy, another example of tilt.” (p. 206)

How to reduce tilt:

“When you consider how you might respond to negative outcomes in advance of those things happening, you’re likely to think more rationally. It’s easier to come up with the appropriate course of action to take when things don’t go your way before those things go wrong than it is after they go wrong.” (p. 207)
“Identifying how things can go wrong helps reduce tilt in three ways:

“First, identifying bad outcomes in advance can reduce the emotional impact those outcomes will have on your decision-making when they do occur. It changes your frame from “I can’t believe this happened to me” to “This happened but I knew it was a possibility.” (p. 207)
“Second, you can learn to recognize the signs that you’re on tilt so you can identify and address it more quickly. This involves taking a tilt inventory of conditions you recognize from past instances when you’ve been emotionally impaired: Is your face flushed? Do you have trouble keeping your thoughts straight? Do you engage in self-talk about how bad things always happen to you or (like hindsight bias) you should have seen it coming? Do you take things personally, or become confrontational, or use particular language, or engage in some other thought patterns when you’re being guided by emotion?”
Third, you can precommit to certain actions that you’ll take (or refrain from taking) in the wake of bad outcomes. This is tantamount to tying your hands to the mast to prevent emotional decisions. For example, if you’ve identified that you make bad decisions following sudden drops in the stock market, get someone else to execute trades for you in order to prevent making impulsive trades yourself.
“Or you might plan how you’ll deal with the what-the-hell effect. If you’re committing to eat healthier, it’s easy to recognize that you won’t always make perfect decisions. When you imagine faltering and succumbing to the breakroom donut, you can commit in advance that you won’t let one bad decision derail or postpone your goal. This works especially well if you create accountability by declaring your intentions to other people.” (p. 208)

Play Dr. Evil on Yourself:

Imagine you are Dr. Evil. Think of all the things that would get you to fail, but it’s done in a way where you would avoid detection.

“One thing you should recognize from the Dr. Evil game is that the evil genius is you. The reasons that “Dr. Evil” comes up with are precisely the ways that you subtly sabotage yourself. Dr. Evil doesn’t get you with a guillotine blade chopping off your head. Instead, it’s a death by a thousand cuts.” (p. 205)

Here are the steps for playing Dr. Evil: (p. 203)

(1) Imagine a positive goal.

(2) Imagine that Dr. Evil has control of your brain, causing you to make decisions that will guarantee failure.

(3) Any given instance of that type of decision must have a good enough rationale that it won’t be noticed by you or others examining that decision.

(4) Write down those decisions.
“That’s how Dr. Evil makes you fail. He gets you to make small, poor choices that hide in the shadows, keeping you from seeing how repeatedly making those decisions guarantees failure. You see each instance as unique and justifiable and don’t see how they fit into a larger scheme.” (p. 202)

Examples:

Eating a donut. “how big could the downside be? Eating a single sweet treat doesn’t feel like it will cause you to lose much ground in your goal to eat healthier, and it is a pretty easy exception to justify. It is only over time that you can see how those small losses accumulate.” (p. 202)
“Ask yourself questions such as “How often have I been making exceptions recently?” or “Will I feel these exceptions were worth it in a week or a month?” This added deliberation provides you with a moment to stop and think, as well as a chance to do a bit of time travel to get in touch with your future self.” (p. 203)

Create a hedge:

“One of the things that comes out of a premortem is that you identify places where bad luck might intervene. You should actively evaluate opportunities to hedge against that bad luck.” (p. 210)
“When you identify the possibility of bad luck, there are things you can do in advance to soften the impact of that bad luck. These things are called hedges.” (p. 210)
“Insurance is a classic example of a hedge. When you buy homeowner’s insurance, there’s obviously a cost to that insurance. But if a fire destroys your house, the insurance will pay most of the financial cost.” (p. 210)
“If your heart’s desire is an outdoor wedding, a premortem will remind you that a rainstorm can ruin the day. Since your dream wedding is outdoors, you can hedge by renting and setting up a tent in case it rains.” (p. 210)
“Leaving early for the airport to give yourself extra time to make a flight is a hedge.” (p. 210)
“When Ivan Boesky was supposedly ordering every item on the menu at Tavern on the Green, he was hedging against the chance that the one dish he might order would be bad. It obviously costs a lot of money to order the whole menu just to offset the risk of ordering one item you don’t like. For most people, the cost of such a hedge would be unreasonable.” (p. 211)
“Anytime you exercise options in parallel, you’re hedging. Each additional option has a cost, but it mitigates the effect of the other things you’re doing not working out.” (p. 211)
“Using your premortem from the Decision Exploration Table, pick one of the ways you identified that luck can interfere with your plans. Explain how you might mitigate the effect of that bad luck with a hedge.” (p. 211)

Other Good Quotes:

“Status Quo Bias– “Our tendency to believe that the way things are today will remain the same in the future.” (p. 187)

“Of course, nearly everything changes over time. This includes your emotional state, how much money you make, or the political climate. Paradigms shift, challenges change, market conditions evolve, and technology provides additional solutions as well as creating new problems. When you look forward from the present, status quo bias distorts your view.” (p. 187)

“But the mental contrasting research tells us that the temporary discomfort from imagining failure is worth it, because embracing that discomfort makes it more likely that you’ll actually experience success. Mental pain leads to real-world gains.” (p. 186)

The power of negative thinking.

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