A Tool to Execute Second-Order Analysis

A great decision begins with inquiry. In many ways, the results of our decisions are determined by how many questions you ask yourself throughout the process.

The act of deciding is a mapping investigation that uses present details to predict the future. Great decision-makers are not superheroes, they’re just top-notch scenario predictors.

For example, great chess players can’t actually see the future, but with an unparalleled ability to quickly explore all future possibilities, they’re able to rapidly decipher the best move under the circumstances.

I've made less than ideal — and sometimes, downright terrible — decisions in my past. And I suspect you may have as well.

My decision-making process looks like this:

Write down my options
Make a pros and cons list
Over-analyze endlessly
Optional: Finally, make a choice and move on

Seems logical, right? Well, here is where it falls apart.

Each one of the options I wrote down had a number of subsequent consequences. And each of those consequences had a series of additional possible consequences. And so on, and so forth. Every decision has many, unforeseen ripple effects.

These are known as second-order effects, and it’s what causes us to make subpar decisions.

Our lives are made up of millions (billions?) of little decisions. One bad or good decision can alter the trajectory of our lives forever. It’s the main principle of chaos theory, which effectively states that we should expect the unexpected. We are the butterfly that flaps its wings and causes a hurricane on the other side of the world.

In a world that is increasingly complex, it’s worth investing the time required to think through how our decisions impact those around us, including our future selves.

We can't know or fully predict every outcome, but like chess masters, we can look a few moves ahead and try to see how our decisions may impact the future. The goal is to make decisions that take into account past, present, and future states.

How can you start to transform the world into a series of possible outcomes? How can you use second-order thinking to make better decisions and see the future?

I’ve created a tool to help myself, and others like me, consistently make better, more deliberate decisions. I call it the Second-Order Decision Analysis Tool.

How to Use the Second-Order Analysis Tool

Let's build some intuition for the scientific method by applying its steps to a practical problem from everyday life. To illustrate the value of the tool, let’s imagine you’re facing a pivotal life decision where you’re facing the following issue:

Should I find a new career?

Let’s walk through an example to build up your intuition and learn to use the tool together.

Step 1: Capture the problem.

Time to complete: <2 minutes

As noted above, we know that you’re trying to decide if you should find a new career. But underneath that inquiry, there’s a problem, which could be that you’re unhappy with your current career. Let’s roll with that for now.

Step 2: Look for patterns.

Time to complete: <3 minutes

Alright, now that you have the problem identified, it’s time to start imagining the future scenarios and solutions that might address this problem. These should just be the solutions that come immediately to mind, so don’t overthink anything at this stage.

In our case, the solutions might look like the following:

Note: they’re intentionally limited to 5 initial solutions to keep you from overanalyzing or creating endless possibilities that lead to analysis paralysis.

Step 3: Analyze and assess your options.

Time to complete: 10-20 minutes

Now the fun begins. Once we have the initial options laid out, we can start to explore the future consequences and outcomes that could happen if we pursue each option. The tool automatically generates some basic second-order thinking prompts to encourage the process. For example:

What are the biggest risks if I find a new job at a similar company?

As we do this, we should quickly note whether the outcome is positive or negative. This helps us reduce confirmation bias by forcing us to confront disparities in our problem analysis.

For our purposes, the results of this process could look like:

Step 4: Weigh it out.

Time to complete: <3 minutes

Once you’ve captured all of your inputs, move to the next tab and get a full readout of your decision analysis, including a recommended option. This recommendation is calculated by analyzing the ratio of positive to negative consequences.

Step 5: Act.

Time to complete: <1 minute

It’s one thing to arrive at the decision. But if we want to practice better decision-making over time, we need to have a way to reflect on our decisions. With this tool, you can click a button and download your decision report. This allows you to:

Share your decision process with collaborators (team, spouse, etc.)
Allow others to participate and provide feedback
Save your decision artifacts for future reference

In addition to showing you the options analysis, the tool also provides a recommended review date, designed to encourage thoughtful reexamination of the decision. Feel free to select the cadence of the decision and the date will automatically update. Consider adding a calendar event on this date and adding the PDF to the calendar so you can see if the decision played out as expected.

Note: the ability to automatically add a calendar event is forthcoming. Stay tuned.

When to Use Second-Order Thinking

Not every decision requires this level of rigor. In fact, this can actually be counter-productive for low-impact decisions. For me, the easiest way to decide is to ask myself:

Is this decision not easily reversible?

Will this impact anyone except me?

If yes to either: use the tool. If no to either: go with your gut.

Whether you’re looking to decide to move to a new city, create a new product, have another child, or change careers, this tool can help you way out the options and make an accurate judgment of the future outcomes.

Start Making Better Decision, Today

We want our decisions to have the greatest positive impact on our lives and the lives of those around us. If we want to be better at work and at home, it’s imperative to use the tools available for future analysis.

Make a copy and give it a try → Second-Order Decision Analysis Tool

My goal is to help everyone make better decisions, together. This tool is completely free and will remain free forever. If you like it and want to support more tools for thought, the best thing you can do is share it.

The Secret to Better Decisions