Why speed matters in decision making (compounding & open loops)
The faster you make decisions, the faster you compound.
Happy Monday (or Sunday depending on where you are in the world)!
Hope you had a great weekend.
I ran my first mountain marathon on Saturday, supposedly “The Toughest Marathon in New Zealand” (but anyone can claim that, right?). It was a blast. 42km and 3,500m of elevation.
me on the third and final summit climb. Still smiling for some reason.
I’m still sore. But I can type. So here we are.
In today’s newsletter, I want to talk about speed. Particularly, why it matters far more than people think when it comes to decision-making and action.
Before we dive in, a quick mention that I’ve switched newsletter platforms to Beehiiv.
I wanted to simplify the Work Notes newsletter/brand. So if anything looks different, it’s because I’m sending it through there.
This also means you can find all previous issues easily on the homepage at readworknotes.com
If you want to start your own newsletter, I highly recommend it. I’m loving it so far. The editor is amazing. It makes me want to write more.
Here’s a referral link if you do end up going with Beehiiv (I get a commission, at no extra cost to you): https://www.beehiiv.com/?via=sam-matla
Anyway, let’s dive in.
Why speed matters in decision-making
Not all decisions should be made quickly.
Some decisions require contemplation. A deliberate thought process. Mentally journeying through the first and second-order consequences of each choice. Weighing up opportunity costs.
And if you’re anything like me, you don’t have to look back far to find a decision you’ve made too rapidly or impulsively only to regret it soon after.
But most of us, most of the time, with most decisions—we need to speed up. Because indecision is the default setting for us. And there’s this inertia of indecision that permeates our mentality, which is hard to break through.
But putting aside the big decisions that require deliberation—”Wild Problems” as Russ Roberts would call them—why should we speed up our decision-making?
1. Speed = faster compounding, feedback loops, learning.
Compounding effects are inescapable.
The person who’s obese, lazy, sits on their couch for hours every night consuming junk food and watching brainless TV shows did not end up in that state overnight.
It was because of compounding. Habits (bad ones) repeated over time that led to a bad situation.
Conversely, the person who’s healthy, enjoys their work, has self-discipline, has some semblance of order in their life and is generally happy and fulfilled—that’s also a result of compounding.
(Note: if we want to get technical, because of the law of averages most people just hug the x-axis and don’t compound in either direction. But this newsletter isn’t for those people. And if you’re one of those people and you’re reading it then I hope you want to compound in the upwards direction.)
Let’s bring this back to the world of decision-making.
The faster you make decisions, the faster you compound.
If every time you have a decision to make in your business you deliberate on it for an average of two weeks, then that’s two weeks that you could have been taking action on something.
26 decisions per year.
Compare that to the entrepreneur who takes an average of three days to make a decision (~4.7x faster).
121 decisions per year.
That’s 95 more data points than the indecisive entrepreneur.
95 more lessons.
At the end of the year, the decisive entrepreneur will have:
Learned more because the feedback loops have been shorter. They’ve developed their intuition and instinct (more on that soon)
Failed more, resulting in more learning.
Likely succeeded more too.
Obviously this is an oversimplification, but it’s good enough to illustrate the point. The decisive entrepreneur is far more likely to succeed than the indecisive entrepreneur.
But Sam, what about [insert entrepreneur or successful person] who spent 3 years making one decision?
I too have used this type of example to rationalize my indecision and stay in the comfort zone.
The better way to phrase the question is: Are people who spend three years making a single decision on average more or less successful than people who spend 1/10th of that time making the same decision?
2. Speed = refined intuition and instinct.
In his book Endurance, Alex Hutchinson talks about how every runner is making decisions with each stride and split second.
Should I speed up or slow down? Can I push harder? Do I need to pull back knowing that I’m not even halfway yet?
This is obviously not a conscious process. It might be over the course of the race, but not with each individual stride.
It’s intuition. Instinct.
And the more you’ve run, the more you’ve had to make these decisions, and the better you are at it. Your instinct and intuition is highly refined.
When it comes to work, entrepreneurship, and personal development—the same applies.
The faster you make decisions, the faster you develop your intuition and instinct.
When you’re indecisive, it’s damn hard to develop instinct and intuition because it’s not something you can easily acquire from reading books or just sitting there thinking.
You need to actually make decisions and take action so you can experience—both consciously and subconsciously—the consequences that help guide your intuition and decision-making in the future.
Another way to think about this: faster decision-making begets faster (and better) decision making, because of intuition.
3. Speed = less open loops, less anxiety
Open loops are either projects or tasks that haven’t been clearly defined (you don’t know what the next action is) or decisions that haven’t been made.
I believe that a lot of (not all) anxiety comes from these open loops. And when you’re indecisive: they stack up, they increase mental load, and they cause stress. The times in my life where I’ve been most anxious/stressed are when I have a lot of unfinished projects and unmade decisions.
When you’re decisive, even if you make the wrong decisions from time to time (which you will) you at least close the loops, so there’s less mental load. It doesn’t mean you don’t experience any stress at all. It’s just different. It’s the more acute stress of having to make a decision fast. But it doesn’t linger. I’ll take that type of stress any day over the low-level, pervasive anxiety that numbs life.
Decisiveness & action are inextricably linked
You can’t be both decisive and a non-action-taker.
Decision implies commitment. Commitment implies action.
You can’t make a decision without making a commitment. And you can’t make a commitment without taking action (otherwise it’s not a commitment. It’s just a statement with no weight behind it).
Perhaps that’s why decision-making is so hard. It’s not some theoretical thing that just requires us to think better. It’s something that demands effort from us, because whatever decision we make, we have to put in some work.
To wrap up this week’s newsletter, a helpful heuristic from Naval:
“If you’re evenly split on a difficult decision, take the path more painful in the short term. Most of the gains in life come from suffering in the short term so you can get paid in the long term.”
Thanks for reading! If you enjoyed this week’s newsletter, you might also like:
Article: Informed Execution is the Answer
Video: The Next Action Mindset
Article: Speed Matters by James Somers