Make decisions through frameworks

While I was fresh working in construction, you are bombarded by various inputs. Subcontractors say one thing, their managers say another. The inspectors says one thing, then my boss says another. Because you want to be helpful person, you try to listen to everyone, and eventually, you get confused yourself, and you can’t get things done.

I started to appreciate the power of frameworks when I was studying in real estate. When choosing a deal or market to invest, seasoned real estate investors will ask themselves the same questions repeatedly:

• Is the ballpark IRR more than 15%?
• Are there XXX units in this leasehold residential project
• Is the land cost less than 40% of the total value of the development?

Different investors have their own criteria, and when you ask them the rationale behind those criteria, they can clearly articulate them and how this reflects their overall strategy. This is what the industry calls “discipline”. It is a systematic, scientific way of only filtering the inputs and opportunities that really matter to your well-define goal, based on first-principles thinking that counters the cyclical, emotional nature of the industry. When you don’t have a framework to rely on, you can be easily swayed by a lot of people that don’t have your true interest in mind.

The easiest person to fool you is yourself. We have bad memory, we have blindspots, ego and insecurities. Therefore, we cannot solely rely on our instinct in making decisions and judgements. Therefore, it is critical for us to take a longer time to think through the past events. Use data, records and evidence if possible to supplant our felt, subjective experience.

In construction, all these things are created via trail and error, and no one truly bother to understand the reason behind those frameworks because the created didn’t really deliberate it through first principle. Plus the culture of face saving and “working as a team”, people attribute success not to find truth, but to please and lubricate. Therefore, the junior don’t absorb those principles too.

Outside of work, you also develop frameworks in other parts of your life. Keep questioning them, refining them and practicing in thinking through them. This is a mini-software you are building for your self. It may take some time write the script, but the result will provide shortcuts in making decisions and judgements in my busy life.