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Decision Frameworks

Common frameworks used to assist the decision making process.

Context

NABC

Use Need Approach Benefit Competition to decide whether to start a journey.

  • Need: Frame the problem.
  • Approach: Engineer a plan.
  • Benefit: Quantify risk versus reward.
  • Competition: How sustainable are benefits?

SOTAP

SOTAP Medical

  • Subjective
  • Objective
  • Treatment
  • Analysis
  • Plan

Six Hats

The Six Thinking Hats is a decision-making tool created by Edward de Bono that helps individuals and groups consider a problem or decision from multiple perspectives. Each "hat" represents a different style of thinking:

  • Yellow Hat: Focuses on positivity and the benefits of the decision.
  • Green Hat: Encourages creativity and the generation of new ideas.
  • Red Hat: Represents emotions and feelings.
  • Black Hat: Looks at potential problems and risks.
  • White Hat: Focuses on facts and information.
  • Blue Hat: Manages the thinking process and ensures that the Six Thinking Hats method is followed.

By "wearing" these different hats, either individually or as a group, you can ensure that all aspects of a decision are considered, leading to a more balanced and resilient outcomes.

Definition | Archetypes

Second Order Thinking

  • What is the range of likely future outcomes?
  • What outcome do I think will occur?
  • What's the probability I'm right?
  • What does the consensus think?
  • How does my expectation differ from the consensus?
  • How does the current price for the asset comport with the consensus view of the future, and with mine?
  • Is the consensus psychology that's incorporated in the price too bullish or bearish?
  • What will happen to the asset's price if the consensus turns out to be right, and what if I'm right?

Definition

Confidence vs Speed and Quality

In product development, speed and quality are two important variables. Prioritizing one is typically at the expense of the other. This tool will help you make that trade-off.

Definition

Eisenhower Matrix

A prioritisation framework will help you organize your tasks and activities by importance and urgency.

Definition

Payoff Matrix

Choose the best option by considering multiple factors. A payoff matrix is a way to express the result of players' choices in a game. A payoff matrix does not express the structure of a game, such as if players take turns taking actions or a player has to make a choice without knowing what choice the other will make.

Definition | Payoff Matrices

Hard Choice Model

The hard choice model can help you see the kind of a decision you're making – whether it's a no-brainer, a hard choice or something in between. It will enable you to move forward with your decision.

Definition

Ladder of Inference

We act and make decisions based on the conclusions we make. But we tend to jump to these conclusions and skip important parts of the reasoning process.

Definition

Markov Tree

Markov Decision Process (MDP) is a foundational element of reinforcement learning (RL). MDP allows formalization of sequential decision making where actions from a state not just influences the immediate reward but also the subsequent state. It is a very useful framework to model problems that maximizes longer term return by taking sequence of actions.

Definition