Decision Making Principle #1: Model Success • Dan Fries

Decision Making Principle #1: Model Success

What do you value? 

Do you have values? Do you know what values are?

These questions floated around the periphery of my consciousness for some 15-odd years, from young adulthood into my mid twenties.

Then, knowing my values became an essentialism for success in every area of life, be it business, health, or relationships. Knowing what I valued allowed me to make decisions with confidence, rather than live in reaction to circumstance.

For the sake of clarity, it’s worth answering each question here:

What are values?

Your values are what you consider important, literally what you “value.” – Dalio

As cliche as it sounds, to be happy we have to live balanced lives. If life stagnates and we feel unhappy, it’s a good sign that something is out of balance.

When asking “what are my values?”, I often wonder how much my “value assessment” is biased by my current goals, vision, and emotional state (re: mood). Surely, it is. But re-evaluating my values every month or so, I’ve seen patterns in my behavior that point to my deeper values. Here’s what I’ve found so far:

Health is a big one. So is family. Here are my most important values in life:

  1. Fitness
  2. Family
  3. Freedom (of my time and location)
  4. Future – this means I value growing as a person, in the
  5. Friends
  6. Fun
  7. Philosophy – reading, and putting myself in situations that force me to think differently, rather than situations that reinforce my beliefs
  8. Emotional honesty

These 8 values are essential to my success and to my happiness. But it’s not always easy; these values conflict, and they conflict quite often.

Here’s why: knowing your values is only half of the equation. The other half is living in alignment with those values.

I value my family, but also friends and fun. With whom, then, do I spend my time? I value fitness but also philosophy and reading – how then do I prioritize my daily activities?

Values conflicts weigh heavily on our psyche, taking precious mental resources.

How To Resolve Internal Values Conflicts

Take, for example, my friend Oscar. Oscar is a healthy, driven entrepreneur in his 20s. He works hard, has fun, and values many of the same things I do. Like me, Oscar moved to Saigon to take advantage of the low cost of living, high quality of life, and connect with other entrepreneurs.

When Oscar arrived, he moved into a nice apartment, complete with basic amenities like a pool and gym. There was one catch, though – the gym was not included in the price. In fact, they charge about $60/month for regular use, no small fee for someone in bootstrapping mode (especially considering the abundance of dirt cheap options for staying fit).

Oscar was faced with a choice. Surely, he values fitness and regularly works out. But he’s here in Saigon to save money, and already spending a fair amount on rent at his cushy apartment. Rather than quickly make a decision: sign up for the gym, sign up for a reduced “day time rate”, or pass in lieu of a cheaper alternative, the Oscar withheld his decision, thinking about all the pros-cons, what ifs, and scenarios involved in each, no doubt questioning his values along the way.

How could Oscar have made this decision easier? The obvious choice – and the right one – is to get the gym, which he eventually did. But not before wasting days thinking about it. Fitness and financial freedom created a values conflict, and that values conflict muddled up Oscar’s prefrontal cortex for days, time which could’ve been spent (ironically) making more money.

Looking at Oscar’s gym dilemma, it’s easy to see values conflicts waste time. They also take up mental resources, pulling us out of the present and sucking up creative energy like a dry sponge.

Hence, it’s crucial that we have a system in place for resolving values conflicts quickly and effortlessly.

How do we do that?

The answer is: by having principles.

What are principles?

Principles are what allow you to live a life consistent with [your] values. Principles connect your values to your actions; they are beacons that guide your actions, and help you successfully deal with the laws of reality. It is to your principles that you turn when you face hard choices. – Dalio

Principles are like shortcuts for prioritizing values and acting on them, without worrying about or regretting the decision later.

Principles save time and energy, especially in difficult situations where we’re forced to make decisions under pressure.

Why are principles important?

Without principles, you would be forced to react to circumstances that come at you without considering what you value most and how to make choices to get what you want.

If Oscar had been clear about his principles, chances are he would quickly have seen the value of the apartment gym and happily paid the extra $30-40 (not to mention time saved commuting).

What principle would have helped Oscar quickly make a decision, then move on?

There are plenty of options, but here’s one:

I take a long-term perspective. When making decisions, I consider second and third order effects. I realize that it’s compound interest over the long term that leads to results. I play long ball. (credit)

Thinking long term, the apartment gym is the obvious winner: Oscar saves a few hours a week, avoids a smoggy commute, and is unlikely to miss a workout, the gym being so close.

Where do principles come from?

One option is to consciously create your own principles, based on personal experience. After some reflecting on his experience, Oscar committed to developing principles that accelerate future decisions.

Another option: identify principles being used by other people that you trust and respect, and use those principles in your own life. Note that, the above principle is copied from Taylor Pearson’s blog. Most of the quotes in this blog post are taken from Ray Dalio’s Principles. 

As such, I draw from others’ principles to create my own. Taylor and Ray each have a wealth of experience that’s helped them forge these principles: alternately painful and pleasurable reference experiences. I skip the time- and resource-intensive steps of first hand experience, and just get the principle itself.

There’s an obvious drawback here: without the emotional anchors, I’m less likely to recall and apply copied principles.

In Dalio’s words:

Sometimes we forge our own principles and sometimes we accept others’ principles, or holistic packages of principles, such as religion and legal systems. While it isn’t necessarily a bad thing to use others’ principles—it’s difficult to come up with your own, and often much wisdom has gone into those already created—adopting pre-packaged principles without much thought exposes you to the risk of inconsistency with your true values. Holding incompatible principles can lead to conflict between values and actions—like the hypocrite who has claims to be of a religion yet behaves counter to its teachings. Your principles need to reflect values you really believe in. [emphasis added]

The warning is most welcome. I wouldn’t dare to simply copy Taylor’s Principles verbatim, nor Dalio’s. However, when working through the process to identify my own principles, I got stuck at #1.

How tragic – an exercise to reduce decision-making time begins with total indecision! It’s here that I recognized the opportunity for my First Principle, the one to resolve this conflict.

The First Principle of Decision Making

The First Principle of Decision Making:

If at first you don’t succeed, model others who have gone before you.

Using this principle, I’m able to live in alignment with my value of Emotional Honesty (true to my own experience), but not waste time and energy trying to “do it myself”.

Reflecting on my difficulty in creating Principles, it’s easy to see how silly it was. Many entrepreneurs, from Steve Jobs to Tony Robbins, use modeling (re: copying) to achieve success in business. Why shouldn’t I do the same?

The notion that “I don’t have the experience to back it up” is indeed true, but it’s not a valid fear; it stems from a lack of commitment to continuously applying the principles.

Sure, it my goal was to have a principle that worked 100% of the time and didn’t require any thought, then I would need a lifetime of experience to back that up. But if I want something that helps me make difficult decisions, but may err occasionally, modeling principles is a sufficient solution.

When to Model Principles

By modeling someone else’s principles, we save time and energy, both in applying the principle and in the effort needed to create our own.

However, the availability of so many principles to copy can be a hindrance. Firstly, causing decision anxiety. Secondly, it would take too much time to test and apply all the principles without the experience to back them up.

Therefore, it’s important to choose the right principles – those that, when faced with decisions, we’re more likely to recall and apply in the moment.

The right principles are those that resonate deeply with us. Here’s an exercise, go read the following essays:

Quickly skim read through their lists of principles, and make a note of any that immediately resonate with you. Waste no time frittering away in thought, asking yourself why something resonates (that will come later). Just note it and move on.

Let your subconscious mind signal which of these principles immediately resonates, ie makes sense. For those that do, there’s a good chance you’ve already had some experience to back them up. If that’s the case, you’re more likely to apply them to deal with the laws of reality.

Then, go back to the list and write 2-3 sentences each which attempt to answer the question: “Why does this principle resonate with me?” Think about tough decisions you’ve made – or failed to make – where application of the principle would’ve helped.

With a short list in hand, go out and start testing the principle in different situations. Observe the results

  • Did the principle help?
  • How would you have reacted without out it?
  • How can you make it uniquely your own?

Observing and reflecting on its effectiveness (or lack thereof) will help cement the new neural pathways, making it more likely that you will use the principle again in the future.

It’s okay to copy

Copying has a negative connotation. In my mind, it sounds tantamount to theft.

And yet, our brains are wired to mirror each other’s’ behavior. We are constantly copying all sorts of behaviors, consciously and unconsciously.

Adopting someone else’s principles is no different – it simply requires a bit of additional application, observation, and reflection to become a principle that we can use to improve our lives.