The regret minimization framework: How to make tough choices
Making tough decisions well is a pivotal force multiplier for any executive
This week, I’m diverting from marketing a bit to share a framework for making big decisions, and a personal story on how I came to discover and use it.
If you were to boil down what separates good leaders from exceptional or transformational leaders, a pivotal trait they share is the ability to make tough decisions well and with a high degree of confidence, even in the absence of a lot of information.
How do people like Jobs and Bezos see a long-term market opportunity, a new innovation, or a divergent path and make a decision to head there, even when it’s inconvenient or seemingly crazy? And how can you similarly make decisions that transform the trajectory of your business or your life, when you don’t have much data to draw from?
While I’ve researched and used a lot of decision-making frameworks as an executive, there is one I discovered years ago that has completely transformed how I think and work for the better, and perhaps it might be helpful to you.
It’s an incredible force multiplier for business and for life.
I discovered and began using this framework the hard way, during a point in my life when things were pretty tough.
Over five years ago, while lying in bed one night, I had a grand mal seizure that almost took my life. The next day, I woke up in a hospital to a team of doctor’s hovering over me - a bit like an episode of “House.”
The lead doctor (who I still imagine as Dr. House) smiled at me and said “I’ve never seen this before.” He was referring to someone living through what I experienced. It took me months to physically recover and regain normal cognitive function.
While this seizure was a complete accident – a rare side effect from an otherwise normal medication – some thought I would have taken this as a wake up call on how to live my life differently. A chance for “another chance” to spend my time even more intentionally, especially beyond my workaholic tendencies.
Yet within 2 hours of regaining consciousness, I was on customer calls from my hospital bed trying to wrap up a deal. I’m not proud of this, but I can look back on it now and poke fun at myself, while also recognizing how much I needed to learn and grow to become the person I wanted to be.
After that experience, I knew I wanted to change my life, but I didn’t know how to make the decisions required for real change.
And then my husband shared this video with me.
It’s a video of Jeff Bezos sharing how he decided to leave his big, safe corporate job to start Amazon. (It’s under 3 minutes, and I highly recommend watching it.)
In it, he describes a framework he invented to help himself make this decision, which he calls the “Regret Minimization Framework.” Nerdy perhaps, but exceptionally powerful.
Essentially, when faced with a big decision, you project yourself to the end of your life and look back. Between your options, which path would your 80-year old self regret not taking more? In how you're living your life, is there anything you are doing/not doing now that you might regret?
It’s incredibly simple on the surface, and yet most of us struggle to think long-term when making decisions. It’s easy to overly-fixate on the short-term pain or the challenges that will arise from a big decision. Usually, we have to face the challenges immediately, whereas the benefits may only come much later in life.
Humans also have a habit of taking the current state as a “given,” when keeping up the status quo is actually a daily decision we make, whether it’s conscious or not.
Decisions are things we do - including things we continue to do.
For example, we often think about things like “getting married” as the decision. But “staying married” is also a decision, if you are being conscious about your life choices.
The same is true in business - aiming to be the best in your category or industry is a choice, and so is staying in the category you’ve always been in. Innovation is hard, and it’s also terribly inconvenient.
In the subsequent years after the seizure, my husband and I used the framework to change our lives in both big and subtle ways. We used it to decide on a cross-country move to be near family, to institute weekly date nights, to make decisions about how we wanted to raise our son, to make major career moves, business decisions, and more.
I've now used this for decision-making and prioritization for several years and it has been transformative for my life. Each year I evaluate my major life decisions, and think about whether they are ones that I still want to make, to minimize my regrets at the end of my life.
I also apply this to my business and professional roles, taking time each year to step back and reflect on what our business may regret not investing in, what I may regret continuing to do (or not do) within our marketing strategy or team, and more.
It's very simple on the surface, but there is a lot of depth to the thinking process as you delve deeper into it.
If you’re faced with a tough decision, ask yourself “Will I regret not acting on this in X years or at the end of my life?”
For long-range thinking, you can take some time each year or quarter to ask yourself:
Is there anything I am doing in my life or business that I might regret in X years?
In our business, is there any new market opportunity or category disruption that we might regret not acting on in X years? What would that regret look like, and what is the risk vs reward of acting now?
This framework also doesn’t mean you shouldn’t use data, intuition, expert perspective, and more to inform your decisions and make a plan. You absolutely should. But sometimes, the toughest choices are the ones where there is no one clear answer and the choice is entirely yours alone.
Being a C-suite leader of any company is a hard and lonely job, especially in today’s economic climate. Doubly so if you’re the CEO. You have to make tough decisions regularly, often without much data or council from those who have been in your shoes before.
But at its heart, this is what great innovators and leaders do. They see where something is headed, and they have the ability to make a decision with confidence that others don’t always understand.
If you’re lucky, you will have a long life and so will your business. Which means you’ll have the opportunity to make many big decisions that can pay big dividends over the medium and long-term.
Some of them will work out, and some won’t. The best we can do as leaders is to make them consciously and courageously, and strive for a life with as few regrets as possible.
That’s what I’m working towards every day, and I wish the same for you.