India’s first Home Minister post-independence and the man who unified India after the British left, Sardar Vallabh Bhai Patel, mused amongst all the chaos and decision-making demand that- “What we do today will have implications for the fate of this nation over decades”.
Every single decision that you take has this framing-isn’t it?
You decide you will exercise; it will have a short-term impact on your schedule, on how motivated/frustrated you are about your physical condition both in terms of how you look physically as well as stamina.
It could frustrate you, make you feel dispirited, or it could make you feel more energized.
How you feel will decide whether you continue or not.
However, over-time, if you continue, you will see the difference in stamina, motivation, and a greater push to yourself.
It will change your physical appearance and your ability to work-out.
And maybe over a few years, it will change the internals of your health, how your heart is, body mass index, immunity etc.,
So, there is a very short-term, a medium-term and a long-term for every decision.
Decision Making can’t be random
Suzy Welch, a best-selling author, and inventor of the 10-10-10 method said this, and I quote:
“A lot of people think that life is actually series of events that happens to us. Those people have a reactive mindset. Those with an ownership mindset think that life is a series of decisions we make and the events happen because of the decisions we have made.”
After having struggled with decision-making and wanting to have it all at the same time, Welch came up with this 10-10-10 technique. “Now I consider with every decision, what are the consequences in 10 minutes, in 10 months, and in 10 years. I put every decision in this frame.”
So, she considers every decision that she is making, what are the options and then puts it through the 10-10-10 lens and imagine outcomes and implications over time.
Every decision has consequences. The former Reserve Bank of India Governor, Mr Subbarao said this in a post policy press conference- “there are always unintended consequences of our decisions that we need to be mindful of”
Imagining outcomes and consequences of your decisions over time help frame your thought process and prepares you to face these consequences.
Come to think of it, this is exactly you need to think about investing.
First, you think about why you are taking that particular decision in the first place which is a bit of art and science in itself.
Numbers will tell you a story, but it will not be complete, narrative will tell you but it would also not be complete.
Marriage of the 2 would also not be complete.
Ultimately it would be about-how convinced and committed you are and how much do you understand about the consequences and outcome of that decision.
This is true about a business investment or even a personal investment decision.
Applying the 10-10-10 rule:
- How would you think about the investment decision in the shirt-term if it doesn’t work out?
- What could the decision outcome be to keep you moving over the medium-term?
- What possible outcomes, risk/reward are you staring at over the long-term?
No picture is complete, however imaging these scenarios and re-visiting them periodically will help you face and plan for the eventualities.
Ultimately, you don’t know and can’t plan for every eventual unintended consequence, however you can prepare yourself for facing them by putting a framework.
Remember not everything can be framed, clearly, we don’t always take decisions rationally, however the closer you get to a framework, the better prepared you will be eventually.
So make an effort.