Ask a Decision Engineer

S5E05 | Real Application to Big Life Decisions


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“Risk has two components: magnitude—how big is the badness—and likelihood. A balanced view helps us make better decisions.” - Michelle Florendo

Michelle reflects on the value of tools like decision trees and introduces the Relief-Regret Matrix, a framework she developed to evaluate future scenarios. Through this candid conversation, Michelle illustrates how thoughtful processes and clear priorities can guide us through life’s most difficult decisions.

S5E5 | Real Application to Big Life Decisions

This episode offers actionable insights for balancing risk, agency, and values in decision-making, providing listeners with tools to approach their own challenges with clarity and confidence.

Table of Contents
  1. Introduction [00:00:00]
  2. Setting the Stage: A Major Family Decision [00:01:00]
  3. Decision-Making Frameworks in Practice [00:04:00]
  4. Mapping Scenarios with a Decision Tree [00:08:00]
  5. Introducing the Relief-Regret Matrix [00:13:00]
  6. Risk, Agency, and Confidence in Decisions [00:18:00]
  7. Reflecting on Outcomes and Process [00:22:00]
Introduction [00:00:00]

The episode opens with Michelle and Shanice discussing the intricacies of making significant decisions, especially those involving health and family. Shanice shares how listening to Michelle’s past episodes inspired her to think critically about her own decision-making processes.

Shanice reflects, “I really am struggling with some big decisions and your podcast has been really helpful.” This sets the stage for a deep dive into how decision-making frameworks can guide individuals through complex and high-stakes situations.

Michelle emphasizes that decision-making is as much about clarifying objectives as it is about navigating uncertainty. Tools and frameworks, she notes, are there to guide us—not dictate answers.

Setting the Stage: A Major Family Decision [00:01:00]

Michelle shares the context of a pivotal decision involving her chronic health condition and her family’s wish to have another child. Diagnosed with a condition requiring treatment incompatible with pregnancy, Michelle faced the challenge of balancing health risks with her family’s aspirations.

She explains how she and her husband had open, honest conversations about their shared goals and non-negotiables. While they both wanted to expand their family, her husband made it clear that it could not come at the cost of her safety. This collaborative approach laid the foundation for navigating such a complex choice.

“We wanted to have another child,” Michelle recounts, “but my husband made it very clear: trying to have another child would not be worth it if it put my life at risk.” The stakes of the decision pushed them to rely on structured frameworks and clear communication.

Decision-Making Frameworks in Practice [00:04:00]

Michelle introduces the core components of decision-making: objectives, options, and information. While she often refers to these as “wants, ways, and wisdom” in her teaching, she acknowledges this phrasing as a work in progress. This framework allowed her to break down a complex situation into manageable parts.

She emphasizes that her doctor’s role was to provide information, not dictate the decision. “The doctor wasn’t there to tell us what to do but to help us understand our options,” Michelle explains. This distinction highlights the importance of using experts as sources of wisdom while maintaining ownership of the decision.

By focusing on the decision-making process rather than rushing to an outcome, Michelle was able to align her choices with her family’s values and health priorities. She stresses that frameworks are not prescriptive but rather tools to guide clarity and dialogue.

Mapping Scenarios with a Decision Tree [00:08:00]

Michelle shares how she used a decision tree to map out potential outcomes and decisions over time. This tool allowed her to visualize how choices, uncertainties, and new decisions could unfold.

Steps for creating a decision tree:

  1. Identify Decisions: Outline key choices, such as when to begin treatment or attempt pregnancy.
  2. Map Outcomes: Visualize possible results, like treatment success or pregnancy viability.
  3. Anticipate Follow-Up Decisions: Plan for new decisions that might emerge based on different outcomes.
  4. Weigh Risks and Benefits: Assess each pathway by balancing safety and family goals.

Michelle explains, “A decision tree lets you play out potential scenarios and consider what new decisions might emerge from each path.” This approach helped her evaluate the timing of treatments and pregnancy attempts while managing risks to her health.

Introducing the Relief-Regret Matrix [00:13:00]

To complement the decision tree, Michelle developed the Relief-Regret Matrix, a tool for evaluating future scenarios by considering potential feelings of relief or regret. This framework was particularly helpful in weighing emotional responses to different choices.

How to use the Relief-Regret Matrix:

  • Step 1: Identify possible future scenarios and consider where relief or regret might arise.
  • Step 2: Assess the likelihood of each scenario occurring.
  • Step 3: Plan how you would respond to regretful situations.
  • Step 4: Take proactive steps to increase the likelihood of relief-inducing outcomes.

Michelle notes, “Risk has two components: magnitude—how big is the badness—and likelihood. A balanced view helps us make better decisions.” The matrix provided a structured way to evaluate not only risks but also emotional outcomes, enabling her and her husband to feel more confident in their choice.

Risk, Agency, and Confidence in Decisions [00:18:00]

Michelle and Shanice discuss the role of agency in navigating uncertainty. For Michelle, this meant focusing on what she and her family could control while acknowledging external risks.

She emphasizes the importance of clearly defining objectives. “Risk is all about the possibility of not meeting your objectives,” Michelle explains. By clarifying these objectives, she and her husband could weigh the potential downsides alongside their shared family aspirations.

“Identifying where we still have agency helps build confidence to move forward,” Michelle says. This empowered perspective allowed them to mitigate risks and approach their decision with resilience.

Reflecting on Outcomes and Process [00:22:00]

Michelle reflects on the eventual outcome: they successfully expanded their family, welcoming a healthy second child. While there were unrelated medical complications during the birth, her chronic condition did not interfere with the pregnancy.

However, Michelle cautions against equating a good outcome with a good decision. “At the point that we made the decision, we felt good about it because of the process we went through—and that’s what matters,” she says. This distinction underscores the importance of focusing on decision quality rather than outcome quality.

By sharing her experience, Michelle demonstrates how thoughtful processes can guide us through uncertainty and allow us to adapt, regardless of how things turn out.

Key Takeaways
  • Break complex decisions into components like objectives, options, and information.
  • Tools like decision trees and the Relief-Regret Matrix provide clarity and structure.
  • Risk includes magnitude (severity) and likelihood (probability), both of which guide choices.
  • Focus on the process rather than the outcome for better confidence in decisions.
  • Understand your agency and prepare for uncertainties to build resilience.
Mentioned in the Podcast
  • Decision Tree Framework
  • Relief-Regret Matrix
  • Alexis Gonzales-Black on Group Decision-Making
For More Decision-Making Resources
  • Michelle’s Stanford Continuing Studies course
  • Check out Michelle’s self-paced course Decision Toolkit for Personal Decisions
  • Her Decision Toolkit Coaches and Counselors virtual workshop on Maven

About Michelle Florendo

Michelle Florendo is a Stanford-trained decision engineer and executive coach who is on a mission to teach people how to make decisions with less stress and more clarity. Over the past decade, she has coached and taught hundreds of leaders across tech, healthcare, and financial services, in organizations ranging from pre-IPO startups to major tech companies like Amazon, Google, and Salesforce. 

 

She's been an adjunct lecturer at Stanford, helps train coaches as a faculty coach for Berkeley Executive Coaching Institute, and hosts the podcast, Ask A Decision Engineer. She earned her engineering degree from Stanford and her MBA from UC Berkeley.

For those interested in exploring Michelle's coaching and speaking services further, additional information can be found on her professional website at poweredbydecisions.com.

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