I’ve written a lot about judgment and decision making, but one thing that is often overlooked is how to recognize decision points. What good is sound judgment if we forget to exercise it?

Consider two scenarios:

• Jane loses her job; Jane needs a job; Jane looks for new job.
• Jane hates her job; Jane considers a new job; Jane persists; Jane hates her job; Jane turns 65; Jane retires.

In the second case, did Jane decide to stay in her job to the bitter end? Maybe, but maybe it was just inertia that kept her there.

Many of you probably remember the dominance Eastman Kodak once had in the world of film. Many of you probably also think of them as a dinosaur of a company which refused to adapt to changing times. It’s hard to argue this isn’t true now, but it certainly wasn’t always the case.

George Eastman’s invention of a dry image capture process greatly widened photography’s appeal, but it was still fiddly and the glass plates were breakable. While still in a position of market dominance (i.e. before innovation was required), Kodak developed a process of printing on paper. A similar transition occurred from black-and-white to color photography.

In both of these cases, the new technology was initially of a lower quality than its predecessor, but the long term benefits were huge. So what happened during the shift to digital photography? There are plenty of parallels, right? As Chip and Dan Heath describe in their book Decisive, they did investigate digital:

In 1981, a team inside Kodak assessed the threat that would be posed by digital technology during the decade to follow. The report concluded that during the 1980s:¹

• The quality of prints from electronic images will not be generally acceptable to consumers as replacement for prints based on the science of photography [i.e., film].
• The consumer’s desire to handle, display, and distribute prints cannot be replaced by electronic display devices.
• Electronic systems (camera and viewing input device for TV) will not be low enough in price to have widespread appeal.²

There’s a whiff of confirmation bias in these conclusions. They seem to say, “We’re doing just fine, aren’t we?” To be fair, though, the report’s predictions were dead-on accurate; all of them proved correct during the 1980s and, in fact, well into the 1990s.³

During that period, though, the groundwork was being laid for a permanent transformation of the industry. Once the public embraced cell phones and the Internet—crucial enabling technologies—the move to digital technology was irreversible. By 2002, sales of digital cameras had eclipsed those of traditional cameras. By 2011, a generation of students was enrolling in college who had likely never developed a roll of film.⁴

In 1981, they were fine, and they were fine until they weren’t. What Kodak needed was what the Heaths call a tripwire. A tripwire sets conditions that when met, initiate a review of circumstances, and perhaps a change. The easiest example of a tripwire is a deadline⁵, but sometimes we don’t know when we need to make a decision, we just know why we might.

In Kodak’s case, they could have used the comforting facts in the internal report as conditions under which they would reevaluate. For example, “When 10% of our customers consider captured digital images generally acceptable, we will increase our investment in digital by 50%.” A tripwire by itself doesn’t guarantee success–sound judgment and good decision making are still vital–but it does break our inertia.

Sometimes we need more of a boundary than a breakpoint, but tripwires serve here too. The Heaths continue:

Boundaries are necessary because of people’s tendency to escalate their commitment to their choices. For a simple example, think of a kid playing an arcade game. She’s been on a zombie-killing mission, but she made a mistake and her character died, and now she must burn a few more credits to keep playing. It feels so hard to walk away at that point. She might have invested several dollars and 20 minutes to get where she was. If she walks away, she “loses” everything. Isn’t it worth a few more credits to keep going?⁶

This is a conscious decision, not an “autopilot” choice. But there’s still a trap involved, because if she doesn’t interrupt the cycle at some point, she’ll burn through all her arcade money having never played another game. (And that is not a recipe for happiness.)⁷

Imagine, instead, if that same girl had walked into the arcade with three different swipe cards (or piles of quarters, if you have an old-school arcade), and she mentally allocated one swipe card to the zombie game. That’s a tripwire. Its role is to disrupt the cycle of steady escalation. Once she burns through the first swipe card, she’ll feel some self-generated pressure to quit. And if she decides to break into the second card, it will “hurt” a bit, because she’ll know that she’s blowing through her mental budget.⁸

These little partitions we put in place around resources make sure any exceedance is purposeful. Other examples include serving-size bags of chips and putting spending money into envelopes for an intended use. Nothing prohibits taking more than was planned, but it must be consciously done.

What about when something is hard to measure or assess? Consider our notional Jane from earlier. She could have set a tripwire so that if she was passed over again for promotion she would look for a new job, but that alone might not be sufficient. Our final tripwire is a more intangible one.

By coaching people to recognize patterns of threat or opportunity, you can take advantage of a phenomenon we’ve all experienced, the “seeing it everywhere” effect: You learn a new concept or word and suddenly you start to notice it everywhere.⁹

There are essentially the same number of Subaru Outbacks on the road the day before we buy one as the day after, but it never seems that way. In like manner, if Jane consciously says, “if it gets any worse here, I am going to look for a new job,” she is more likely to recognize “worse.” She’ll know to call her friend at the company across town when her office switches to an open layout, her boss mandates daily stand-ups, and Hawaiian shirt Fridays begin. She will recognize the pattern is worsening.

I hope these tripwires and the rest of the tools from this series will be useful in the future. I intend to return to this topic periodically, but Monday we’ll return to our regular unscheduled programming.