High-Stakes Decisions

🔄 Quick Recall: In the last lesson, you analyzed risk and uncertainty — scenario planning, expected value, and knowing when you have enough information to decide. Now let’s apply these tools to the decisions where getting it wrong matters most.

The High-Stakes Decision Process

High-stakes decisions deserve a more rigorous process than everyday choices. Here’s the complete framework:

I'm facing a high-stakes decision and want to be thorough:

Decision: [what you're deciding]
Why it's high-stakes: [what makes this consequential — irreversibility, cost, impact]
Timeline: [when must I decide?]
Options: [list your options, including "do nothing"]

Walk me through a complete high-stakes analysis:

1. CRITERIA LOCK: Help me define 5-7 decision criteria and weights BEFORE we evaluate options
2. INFORMATION AUDIT: What do I know, what don't I know, and what do I need to find out?
3. OPTIONS ANALYSIS: Score each option against the locked criteria
4. BIAS CHECK: What biases might be affecting my thinking?
5. RISK ASSESSMENT: Best/likely/worst case for each option with probabilities
6. PRE-MORTEM: If I choose each option and it fails, why did it fail?
7. REVERSIBILITY: If I'm wrong, how hard is it to course-correct?
8. RECOMMENDATION: Based on all of the above, what does the analysis point to?

At the end, let me know if there's anything the analysis couldn't capture that I should still consider.

Career Decisions

Job Offers and Career Pivots

Help me evaluate a career decision:

Current situation: [role, salary, satisfaction level, growth trajectory]
Opportunity: [new role, company, salary, what attracted you]
What I'd gain: [specific benefits of the change]
What I'd lose: [specific costs of leaving]

Analyze:
1. Financial comparison (not just salary — total compensation over 3 years including growth potential, equity, benefits)
2. Career trajectory comparison (where does each path lead in 5 years?)
3. Risk assessment (what if the new role doesn't work out?)
4. Skill development (which path builds more valuable skills?)
5. Life factors (commute, flexibility, culture fit, stress level)
6. The regret test: In 5 years, which choice am I more likely to regret NOT making?

Financial Decisions

Major Investments and Purchases

Help me analyze this financial decision:

Decision: [what you're considering — investment, purchase, business expense]
Amount: [how much]
Context: [your financial situation, goals, timeline]

Analyze:
1. Opportunity cost (what else could this money do?)
2. ROI scenario analysis (best/likely/worst returns over [time period])
3. Cash flow impact (how does this affect my monthly finances?)
4. Risk of total loss (what's the probability of losing everything?)
5. Liquidity (can I get the money back if I need it?)
6. Emotional vs. rational assessment (am I excited or is this objectively sound?)
7. "Sleep test" — would I lose sleep if this went to zero?

✅ Quick Check: Why include a “sleep test” in financial analysis?

Because financial models can make any investment look reasonable with the right assumptions. The sleep test cuts through the math: if you’d genuinely lose sleep knowing this money could disappear, the investment is too risky FOR YOU regardless of what the expected value calculation says. Risk tolerance isn’t just mathematical — it’s psychological. An investment that’s optimal on paper but keeps you awake at 3am will eventually lead to panic-selling at the worst possible moment.

Hiring Decisions

Help me make a hiring decision:

Role: [position and level]
Candidates: [brief profiles — anonymized if needed]
Must-have criteria: [non-negotiable requirements]
Nice-to-have criteria: [preferred but not required]

Before evaluating candidates, help me:
1. Define exactly what "success in this role" looks like at 90 days, 6 months, and 1 year
2. Weight my criteria (which qualities actually predict success vs. which feel important?)
3. Identify my potential biases (similarity bias, halo effect, recency bias from interviews)

Then evaluate each candidate against the locked criteria. Flag where my stated criteria and my gut feeling disagree — that disagreement is worth exploring.

Documenting Your Decision

High-stakes decisions should be documented — not to justify yourself to others, but to learn from the outcome:

Help me create a decision document for:

Decision: [what I'm deciding]
Date: [today's date]
Decision deadline: [when I must decide]

Document:
1. The options I considered (and why I ruled out any early)
2. The criteria and weights I used
3. The analysis results (framework scores, scenarios, risk assessment)
4. The biases I identified and how I addressed them
5. My final choice and reasoning
6. What would need to happen for me to reconsider (trigger conditions)
7. How and when I'll evaluate whether this was the right choice

This document is for me — written clearly enough that I can review it in a year and understand my reasoning.

✅ Quick Check: Why document “trigger conditions” for reconsidering?

Because situations change, and good decisions can become bad ones. Defining triggers in advance (“if revenue drops below X for three months, I’ll reconsider”) means you don’t need to constantly second-guess yourself. You made a thorough decision — now you can commit to it confidently while knowing exactly what would prompt a reassessment. Without triggers, you either never reconsider (stubbornness) or constantly reconsider (anxiety).

Exercise: Apply the Full Process

Take your highest-stakes current decision:

Run the complete high-stakes analysis prompt
Apply the career, financial, or hiring template (whichever fits)
Create a decision document
Define your trigger conditions for reconsidering

Key Takeaways

High-stakes decisions are defined by irreversibility and consequence magnitude — invest proportional effort in the process
Lock criteria and weights BEFORE evaluating options to prevent unconsciously bending standards toward your preference
Expert intuition (from deep domain experience) deserves exploration when it conflicts with analysis — ask “what specifically feels wrong?”
The “sleep test” for financial decisions catches risks that mathematical models miss — if you’d lose sleep over a total loss, the risk is too high for you
Document high-stakes decisions with reasoning, criteria, and trigger conditions — so you can learn from outcomes and know when to reconsider
Include “do nothing” as an explicit option — it’s a choice with consequences, not a default

Up Next: In the next lesson, you’ll navigate group decisions — avoiding groupthink, building stakeholder alignment, and making team decisions that stick.