Using Constraints to Make Better Decisions (Like Walking Away From $2 Million)

Could you walk away from $2 million? How hard of a decision do you think that would be?

If you’re Biz Stone, co-founder of Twitter, the decision is apparently easy. “Of course!” you might say. Stone now has more than a few million in the bank thanks to his role in the social sharing company. However, Stone turned down millions of dollars when he was still poor before Twitter even came into existence.

It was October of 2005, and Stone was working at Google¹. He joined the team two years prior to work on Blogger, a blogging software built by Ev Williams.

Stone would need to put in two more years before his stock options fully vested. At that time, Google was skyrocketing in popularity meaning Stone’s options were worth about $2 million.

Yet, on that day in 2005, Stone was quitting his job ready to walk away with nothing in order to join Ev on his new venture, a company called Odeo, which would later become Twitter.

To Stone, the decision was actually quite simple. He had joined Google with one goal in mind: work with Ev Williams. Since Ev had left to pursue other projects, it was time for Stone to move on as well. As Stone put it to his wife, “We didn’t move out to California so I could work at Google. We moved out here so I could work with Ev.”

To make a hard decision, Stone asked a simple question: Is staying at Google accomplishing what I set out to do in California. The answer was obviously “No.”

Stone’s simple question is a type of constraint that helped to guide his decision making.

We typically think of constraints as a negative thing. In the land of plentiful options, constraints represent a step in the wrong direction. But, when used consistently and correctly, constraints can actually help simplify many aspects of your life from what to have for dinner to whether or not you want to walk away from $2 million.

Decisions Are Hard

How many decisions do you think you make on a daily basis? 100? 200? The number is probably much higher than you would think. What are you going to wear for the day? What are you going to listen to on the way to work? Are you going to work out? What’s for dinner? Are you going to have one or two sugars in your coffee?

That’s a lot of deciding to do daily.

Our brain has a finite amount of energy to divert to decision making on a daily basis. As we make more and more decisions, we get tired and start opting for the easy way out or just make poor decisions overall. This is now referred to as decision fatigue.

Decision fatigue has far reaching effects. It’s part of the reason you’re more likely to skip the gym if you put it off until after work or why you’re more inclined to stop for takeout on your way home than cook the food you bought at the grocery store. Even our legal system can’t escape the effects. Judges more often award parole early in the morning and immediately after taking breaks explains Belle Beth Cooper.

So, how do you combat decision fatigue? Employ constraints. For example, you can setup consistent habits that help reduce the amount of decisions you need to make on a daily basis. If you wear the same clothes as a uniform, exercise at the same time, and follow a bed time ritual, you’re freeing your mental energy up for other decisions down the road. There are other types of constraints as well, each with their own particular benefit.

The Benefits of Constraints

Setting constraints properly has a few main benefits. They all factor in to helping you make better decisions even in the face of decision fatigue when you would rather take the easy way out.

Create a clear positive and a negative.

Let’s play a game. You have to choose one of the following:

A) I give you $10,000 dollars

B) I take $10,000 dollars from you

Which one would you choose? I’m going to take a wild guess you’re going to go with “A” unless you already have an overwhelming amount of money and some deep desire to help me out. But, why is that decision so easy?

For one, the pros and cons are laid out nice and clear. Gaining $10,000 is obviously a pro and losing $10,000 would be considered a con. You also already have a guiding theme or goal that helps you to decide getting the money would be a hell of a lot better than losing it.

Unless you have more money than you know what to do with, you’re probably interested in growing your bank account. You could pad your retirement account or help pay for your kids to go to college. Hell, you could even blow the $10,000 on that vacation to Europe you’ve always wanted to go on.

You have a goal of accumulating more money, not losing it.

Other decisions we make throughout the day aren’t as clearly laid out. The positive and negatives of eating takeout aren’t as crystal clear or as tangible as gaining or losing $10,000. Setting constraints is a way of creating a litmus test for decisions. Suddenly, the pros and cons begin to stand out a bit more.

Consistency across decisions.

Success is a few simple disciplines, practiced every day; while failure is simply a few errors in judgment, repeated every day.

Jim Rohn

You probably know someone that’s tried to lose weight. They tell you all about their workout and how healthy they’re eating at home. Yet, when the office goes out to lunch, you watch them scarf down a cheeseburger and fries with the excuse of “Oh, just this once!”

Consistency over time trumps huge, one-time accomplishments. It’s the basis for success.

Forming an internal set of guiding policies helps ensure they you’re making cohesive decisions over time.

Decision making becomes faster and easier.

Let’s imagine for a moment that you’re the owner of a multi-million dollar company.

You’re seated in your plush leather chair in your office. Hundreds of papers come across your desk every day. It’s your job to filter out which deals to sign, what direction to head, and what opportunities to say “yes” to.

How do you do it all?

That’s exactly the kind of situation that Herb Kelleher, co-founder and former CEO of Southwest Airlines, found himself in on a daily basis.

Kelleher has a simple strategy². He passes every decision through the following lens:

Are we the lowest cost airline?

If the decision will help Southwest Airlines move closer to that goal, he’ll move forward/say yes. If not, he’s passing. Having a clear litmus test in place removes the mental grind of weighing the pros and cons. Decisions become effortless.

How to Set Constraints

You might not find yourself turning down $2 million, but you’ll be faced with thousands of other decisions that may be equally as hard. Here are some constraints to put in place to make decision-making as effortless as possible.

Set the “objective” early and often.

In the $10,000 example above, the decision was easy because “success” in that sense was easily defined. In other areas of our lives, the metrics for what we want to accomplish are less cut and dry muddling the waters when it’s time to make an important decision. Without a clear view of what the finish line looks like, it’s hard to find our way there.

For Herb Kelleher, the objective was simple – be the lowest cost airline. You can set the same kind of definitive objective in your own life as a litmus test of sorts when making decisions.

Define career and personal goals clearly. When faced with a tough decision, immediately ask yourself if this brings you closer to your ultimate goal. If the answer is no, decline politely.

Set choice limits.

A plethora of choices are often the enemy of quick and accurate decision-making. When making a decision, narrow your focus to the fewest amount of options possible and avoid adding more to the mix. For example, if you’re looking to take a trip out of the country, pick two possible destinations to research rather than five. When you’re going out to dinner, pick between two restaurants versus the endless options available.

By presenting yourself with a limited amount of options, decisions become less overwhelming.

Favor routine over variety.

One of the biggest hurdles to overcome when someone is looking to improve their health is nutrition. They get home at the end of a long, hard day, and the thought of cooking dinner is overwhelming.

To make this more manageable, create a list of five possible dinners that you could make yourself and limit your dinners to those five for an entire six months. Always keep the ingredients on hand and make sure the dinners take 20 minutes or less to prepare. By limiting the amount of decisions, you’re decreasing the amount of choices you have to make. This is the same reason that I eat one of two breakfast choices every day (and have been for over a year).

Instead of making minor decisions regularly, enable a routine that becomes automatic.

Decide quickly and don’t look back.

Regret is past-tense decision making.

Tim Ferriss, Choice-Minimal Lifestyle

When faced with a hard decision, it’s tempting to sit and deliberate the pros and cons for hours on end. Instead of wasting time second-guessing yourself, ask yourself a few simple questions, making a decision and move on. More often than not, taking extra time to make a decision doesn’t make you any more confident.

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I’ve been using this approach to help remove roadblocks from publishing articles here. Here’s how I put it into practice:

1. I set a clear objective:

Publish two articles a week on the topics of health, productivity, or creativity.

2. I ask two questions to help me decide when to click “Publish”:

1. Would I want to read the article if someone else published it?

2. Would I share this piece of information with others?

3. I write at the same time every day (early morning).

As a result, something that seemed very labor intensive (deciding what to write and writing it) has become almost automatic.