Greg McKeown:
Welcome, everybody. I’m your host, Greg McKeown, and I am here with you on this journey to learn so that we can design a life that really matters.
Have you ever had a decision of consequence to making your life something that really made a difference? If you go left versus going right? Should I marry this person? Should I take this job? Should I move to this place?
Today I have invited Abby Davisson here. She’s the co-author of Money and Love: An Intelligent Roadmap for Life’s Biggest Decisions. By the end of today’s episode, you will understand the five Cs method. It’s a step-by-step way of thinking about the decisions that really matter. Let’s get to it.
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Abby, welcome to the podcast.
Abby Davisson:
Thanks so much for having me, Greg.
Greg McKeown:
Give us an overview of Money and Love.
Abby Davisson:
So the origin and the inspiration for the book came from a class that was called Work and Family, and I took the class when I was in graduate school 15 years ago now, and…
Greg McKeown:
First of all, that’s just a little rude right there because we were in business school together, and so just were to be reminded that it’s 15 years. How did this happen?
Abby Davisson:
This is very well; we were teenagers. We were the youngest students that had ever been there. Right?
Greg McKeown:
It’s an amazing thing. And so, so you took this class carry on.
Abby Davisson:
So I took this class, and I had met someone in business school. We had been dating for a little less than a year at the time. And we, with graduation looming, were trying to make big life decisions about whether we would accept jobs in the same city, whether we would live together if we ended up in that city. And our professor, who is my co-author, Myra Strober, shared a surprising statistic, which is that couples that live together before they get married have higher divorce rates. And that seemed very counterintuitive to us. And we certainly didn’t want that to happen to us. And so, because we were pragmatists and a bit nerdy, we dug into the data for our final paper and wrote all about why this is true and how you could avoid it. And that paper turned out to be the blueprint for how we would combine our lives.
It turns out that there is one way to counteract the negative outcomes, which are called the cohabitation effect, and that is through intentionality. And so our paper was all about how we were going to be intentional about combining our finances, our career aspirations, and the family we wanted to have one day. And over the last 15 years, we’ve been following that blueprint through many of life’s twists and turns.
We’ve had two kids, we’ve made lots of job and career changes. We’ve cared for aging relatives. And we were guest speakers in my co-author’s class. And so when she stopped teaching the class in 2018, she told me she wanted to write a book about the class, which I thought was fabulous. I mean, it was life-changing wisdom and certainly shouldn’t be the best-kept secret of only the people who got to attend Stanford. Graduate school business with her.
So, after about a year, we had lunch, and I asked her how the book was going, and she said, I haven’t written a word. And I said, oh, well, maybe you need an accountability partner. I was working at Gap Inc at the time. I had just helped to start the company’s first employee resource group for working parents. And I did that with a co-founder, with a working dad in the legal team. I couldn’t have done it alone. And so I suggested that to her just as a way to be helpful, not thinking that I would end up being the accountability partner and the co-author. But she said, actually, I need more than that. I do need someone to write this book with me. And you have been in the trenches living the lessons of the course for over a decade now, and you’re the perfect person to write this with me. And so right then and there, we violated the first principle of our book, which is to not make big life decisions in an instant, and decided to write the book together.
Greg McKeown:
Well, that’s a dream come true moment because you’ve spent a decade thinking about that book, even if you weren’t thinking about it in exactly those terms. So yes, it was the natural extension of having lived out all of these principles. I mean, one thing that strikes me is that you and Ross are like the ultimate business school product or something like that, that you literally met there. Then used all the principles from strategy and from a class specifically about how you would apply business school models to life strategic choices. And now have written the book about it. I mean, like that’s, there’s something meta going on there. Any thoughts about that?
Abby Davisson:
Well, I’m waiting for my honorary doctorate for being such a, you know, poster child of Stanford. But no, I mean, I think it’s true. And I think we got to take the class at this perfect time where we had already done some things in our lives, already had some relationships that maybe went sideways, but we still had a lot of our life ahead of us and a lot of decisions to make.
And so one of the reasons that I wanted to write this book with Myra is that it really did change my life. It really was such a light bulb moment for me because when I was in my early and mid-twenties, like so many people at that time, I really struggled with how to approach these big life decisions. And so I often thought about whether a decision was a good one based on the outcome.
And that’s what Annie Duke talks about as exactly what you’re not supposed to do. That’s resulting, right? That’s kind of over-indexing on whether a decision turns out, you know, to be a smart one as opposed to focusing on the process. And so what we really wanna do is break the conventional wisdom, which is that we should separate decisions about love from decisions about money because they are so inextricably tied. And when you look at big life decisions holistically, because they all have a component of money and a component of love to them, you are more able to make better decisions. You don’t regret decisions that you feel confident about.
Greg McKeown:
So help us with just a simple overview. You know, this is a roadmap for life’s biggest decisions. So just give us an overview of that model that you are presenting in Money and Love.
Abby Davisson:
So we have a framework for how to approach big life decisions because the tendency is when we are in moments of stress or high emotion or anxiety, we tend to want to rush to the other side of a decision, right? We don’t like, as humans, to sit in the discomfort. And we also have a tendency to look very closely at the short-term impacts and less closely at the long-term impacts. So we over-index on the either positive or negative effects in the short term. And so by offering our framework, we want to help people slow down their decision-making, give them some guideposts they can use along the way to make sure that they’re looking at the decision on different time horizons to make sure they’re not rushing through it just to be rid of some negative emotions.
And so our framework is called the five Cs, and it can apply to any big life decision. So it’s flexible, but it’s sturdy, meaning you can rely on it over and over as you go through life, regardless of what that decision is. Whether it’s, is this the person for me, or do I want children? Or how do I know where to live and when to move? And so it applies to all of those.
Greg McKeown:
You, the objective here is to try and help people go from being, let’s say, short-term reactive to long-term strategic. What did I get wrong?
Abby Davisson:
No, that’s true. That’s exactly right. And so Nobel prize-winning economist Daniel Kahneman talks about system one thinking, which is short-term reactive, emotional, and system two thinking, which is more logical, deliberate strategic, and it’s much harder to access system two. So we are exactly doing what you suggest, which is trying to give people a way to access system two when they are in the throes of a gut-wrenching decision.
Greg McKeown:
Yeah. And I think anybody listening to this can feel what that’s like. I mean, anytime you are triggered by anything, anytime someone is feeling emotional, irritated, frustrated, somebody cuts you off in traffic, right? That’s sort of a classic example. Or somebody just speaks to you in a way that you don’t appreciate, or maybe it’s your partner that does something that is even small on the surface; it triggers all of that. Like this is all system-one thinking by definition. It’s not conscious thinking and conscious choices. It just is right there. And so everything you are doing in this book is to try and help people access the other. So why don’t you take us through, well first of all really, I want to emphasize this first of the five Cs framework. Talk to us about the first C in your model.
Abby Davisson:
Yes. And I love the first C I mean, you and I share a love of strategy, right? So the first is to clarify what is most important to you. And it sounds so simple, but it is so difficult because what we want is powerfully influenced by what others want and what others might want for us.
So there’s a French philosopher, Renee Gerard, who coined the term mimetic desire and mimetic desire. A perfect example is if you are happy renting an apartment and all of your friends start buying their own places, you might think, oh, maybe I should look for a place to buy. Maybe I want to buy a place too, even if that’s not a goal of yours, just because you see everyone doing it. And in this age of social media, we see everyone doing everything all the time. So really untangling what you want from what others are doing.
And then from the influences you see in your lives, our parents are the way we grew up, our powerful role models. And so we often are influenced by what their choices were, what society wants for us, and what society shows us to do. So it’s about tapping into your core values and getting very clear on what is most important to you. And then, once you do that, the other Cs flow very easily, but it’s not linear. So you actually might re-clarify down the road. And I can give an example of how that could work.
Greg McKeown:
Well, let’s just double-click on this specific idea of memetic desire for a second. So, listeners can go back and listen to episode 60 with Luke Burgess, who wrote a book called Wanting: The Power of Memetic Desire in Everyday Life. And I remember, even though it’s not a term that people use often, memetic desire, as soon as you understand it, it does leave a trace in you. Because I remember him saying that we want things, not even because other people want things. We want things because we think other people want things. So our relationship to what we want can be very distant from actually what deep down we want. And this is what I mean, there’s a lot of wants in that sentence, but you know, this is one of the problems that you are identifying for why it is hard to just know what matters to us. Am I getting that right?
Abby Davisson:
Absolutely. And I think for ambitious people who have had some degree of success in their lives, it’s even harder because you have gone through life checking off accomplishments from a list. You’ve gone to university, you’ve potentially gotten a graduate degree, you’ve had top-tier jobs, and you’ve accomplished a lot of things. And then all of a sudden, you look at your list, and you’re like, okay, I’ve checked a lot of things off, but is that it? What do I want now? And that is certainly something that many of us tend to face in midlife, however, you define that. And it’s often because we’ve been letting other guideposts steer us up until that point.
Greg McKeown:
Well, this, remember, there was a bit of a movement in Silicon Valley under the banner of the race to Nowhere. And this risk that if you overemphasize jumping through hoops with your children, right? You need to get A’s in each of your classes you need so that you can get even potentially into the right middle school and high school so that you can get into the right university, so that you can get into the right branded job, and so on. And so suddenly somebody wakes up the 30, or even older, and they really actually have no idea what they want because all they’ve been doing is jumping through a game that is not of their own making. So help us tangibly to know how to break that memetic habit and actually get clearer about what we really want, what’s really important to us.
Abby Davisson:
Well, I do recommend reading Luke’s book because Wanting is an excellent book, and he has some suggestions there. What I have found helpful is really to focus on core values. So there are a lot of premises. You can Google core values and find any number of ways on the internet to help identify your core values. But something that has worked well for me is to pay attention to what I get very worked up about when I am reading the news or watching something; if there is something that I have an emotional reaction to, like, that’s not fair, or ugh, how awful. It’s often because it is touching a core value and it’s violating a core value of mine. And that can give you an indication.
And I can, I’ll give you an example. When I was in my risk class, she shared a study that had talked about people who work part-time and how they often earn lower salaries; even if they’re not making an hourly rate on a salary basis, they earn less, they have fewer benefits, they have lower rates of promotion.
And I had always thought that I would work part-time once I had kids; I had seen my mother do that and many of my peers, mothers. And I figured, well, that’s how you combine a job and a family. But when I saw this study that Myra shared, I realized that is deeply unfair. I don’t want that to happen to me. I don’t want my employer to be getting the better end of that deal because I will probably work more hours than I am being paid for. And it’s because I have a core value of equity, and that is very deeply ingrained in me. And so I vowed then and there to find a way to work full-time once I had kids. And that was informed by the data, but also because of that core value of equity. And that has shown up in my life in many different ways. But it’s, I really remember having an emotional reaction when I saw that study that was, you know, really just about numbers, but it touched on a core value of mine.
Greg McKeown:
Yeah. So one of the best ways to know our values is in their violation that as something violates something deep within us, that’s one way to recognize it. Is there any formal process that you would describe for identifying values in their violation beyond, you know, most of the values exercises that I’ve been exposed to here are your a hundred values, prioritize them, eliminate them until you get down to five and then it’s down to three, and you prioritize those. So, and I think there’s a lot of value in that kind of process, but have you found any process in your research for this book that would be an alternative to that, a different way of identifying values in a formal process?
Abby Davisson:
Well, I think a lot of coaches have different approaches, and I have worked with different coaches who have had different approaches. I mean, there’s the peak experience, size where you reflect on what are those experiences in your life that you have felt fulfilled, that you felt like you were kind of at the top of your game, that you remember as being outsized in your mind many years later.
And so you reflect on those, and you think about, okay, well, what are common themes that happen between those? And for me, it’s often being in community. So I have done bike trips, I have done Habitat for Humanity builds, I have done other group experiences, some of them at Stanford, where I felt like I was really just humming on all cylinders. And that is because community is a core value of mine as well. And so, you know, thinking about it in the positive of when did I feel very fulfilled because my core values were being met is an alternative to the, when are they being violated? And so I don’t think there’s one perfect exercise. You’re almost connecting dots between a number of different ways to reflect on what makes you the most you, and that can help you distill those three to five core values.
Greg McKeown:
So let’s say somebody has identified this. They have three to five core values. Is that, in your mind, sufficient for this first C? Is that enough clarifying of what’s important to you? Or do you need to go beyond this list of values?
Abby Davisson:
Well, you’re applying this to a decision, so I think it really depends on what the decision is. So if the decision is about where to live, then it’s a good place to start of, you know, is the place that I’m considering one that would help me live those values. But the process is not linear.
So you start with the first C, but then you get very quickly into the second C, which is to communicate. So people are not in vacuums. We likely have others that are important to us that we want to involve in the decision of where to move, for example. So if you are partnered, if you have loved ones that you, that are important to you in your life, this is an opportunity to talk to them. And if the first C, if clarify is about your own values and what’s important to you, communicating is an opportunity to hear what’s important to those other people that are involved in the decision. And it’s actually as much about listening as it is about talking.
Greg McKeown:
Okay. So just for clarity, so, the first step is not the five Cs. The very first step is, what’s a high-stakes decision that you are facing? What is something important that you need to figure out right now? Am I right in understanding that?
Abby Davisson:
Yes. So in our first chapter, for example, we have an exercise, there’s exercises at the end of every chapter because this is definitely not an academic book. It’s meant to be applied to your life. And so the very first question and that exercise is what money and love question is top of mind for you. So that’s the frame with which you then move through the rest of the framework.
Greg McKeown:
Abby, can you walk us through something that you think is relevant for a lot of people when they’re trying to make a big decision?
Abby Davisson:
So we did a big survey as part of the research for this book, and we asked people, what is a big life decision that you have faced recently or that you’re facing? And how are you thinking about that? And the number one topic that people wanted to talk about over and over again was where to move and whether to move. And so I did face that decision myself during the process of writing this book. And I’m happy to share how I approached it and how Ross and I used this framework to work through that moving decision. And actually, incidentally, Myra, my co-author, faced a similar moving decision, used the five Cs as well, and came up with a completely different answer. So it certainly doesn’t, we don’t tell you what to do with the five Cs, but I have applied it to my life and it was very helpful.
Greg McKeown:
You’re not trying to teach people what to think, but how to think exactly so that they can make better decisions.
Please walk us through that. I can see why this would be a big important decision when you’re deciding whether to move, where to move, it affects everything else. It affects all your relationships, it affects your career, your business, if you have a business, you know, everything is disrupted by that, that you know, by those two decisions. So walk us through that.
Abby Davisson:
So we started writing this book in the fall of 2020. That’s when we got our publishing deal. And if you can bring yourself back to that time, it was still Covid lockdown days. Ross and I had two kids at that point we’re zooming into kindergarten and second grade, not grades.
Greg McKeown:
That should be natural, ideal.
Abby Davisson:
No, we were both doing our jobs remotely from our small footprint San Francisco home. We had a rotating cast of college students who were coming in to help our kids get on Zoom and stay on task.
Greg McKeown:
And were you out of your minds?
Abby Davisson:
A hundred percent. I also had, you know, my mother had entered hospice and was in the process of dying. So it was a really dark time. And frankly, this question of should we stay in the city or should we move to the suburbs, had been one that had been simmering on the back burner of our lives for a very long time. Mm-hmm. And COVID turned it up to a boil.
Greg McKeown:
Well, you’re not gonna be alone in this. Right? I mean, this is from San Francisco. A quarter of a million people left San Francisco through this, you know, through the last couple of years, carry on.
Abby Davisson:
Well, and no matter where you were during that time, it wasn’t ideal. It was small, it was not near the people you wanted to be. And so, you know, regardless of geography, I think many people felt that way.
So when we clarified what was important to us, we said more space because we were in a place that was never meant to be a one-room schoolhouse, an office building, a short-order kitchen, a movie theater, a gym, all the things, and schools that were open because my children were attending public school at the time. And there was no sense that they would ever go back in person anytime soon. And in fact, San Francisco was the largest urban school district that was remote the longest during the pandemic.
Greg McKeown:
No doubt. And just as an aside to that, I took a tour of one of the major tech companies, not in the midst of it, but what felt like towards the end of the lockdowns everywhere. And the person giving me a tour said, just look, around 20 to 30,000 people used to come into this single business every day. And all these restaurants here by the headquarters were feeding all of those people this mini army. And now no one comes in, and they’ve all shut down. And she just said, this is, I don’t even know whether this is the beginning of a new Detroit, and you know, she’s a resident there as well.
So, you know, this disruption was massive. Right. For, you know, and everybody remembers some version of that. So go ahead. So, you said more space, schools, these were the things that mattered.
Abby Davisson:
Exactly. And so we had communicated about it for a long time. I would say not in the most productive way. It would be, you know like we’d bring it up, well it would bring it up when we were cooking dinner of like, should we be staying in San Francisco or we’d, you know, bring it up when we were running out the door to get the kids, you know, outta the house. And so one of the things that we did, and the research for our book, was really helpful is start to have these conversations on hikes. That was something that we were doing a lot of at the time. Right. Because hiking was one of the few activities,
Greg McKeown:
One of the things you were allowed to do still.
Abby Davisson:
Yes. And so we would let the kids run up ahead. We would be walking side by side, so not facing each other. So there was something actually easier about being vulnerable at the time when you’re walking, and you’re in an expansive place. You’re not looking at the piles of laundry or the dishes that have piled up in your kitchen. You’re kind of out of the everyday chaos. And so we found it actually very productive to, to talk about this conversation on hikes.
We started talking to other people, and we haven’t gone through the rest of the Cs, but I’ll go through them here to talk about how we use the framework.
So yes, the third C is choices, as in generate a broad range of choices. And so we started talking about, well, where could we go? We talked about moving back to the east coast, where I grew up.
We talked about the Midwest, where my parents grew up, and my father and my parents were living in the East Bay at the time. And I remember asking my dad, would you ever consider moving back to Milwaukee? And he said absolutely not. It’s too cold. So, you know, so we crossed that off the list because it’s important to us to live near family, and Ross’s parents are in southern California. So we said, okay, we’re not gonna move that far. But then we quickly got to the list of suburbs around the Bay area that we could consider.
And then the fourth C is to check in with friends, family, and trusted resources. And so we did, we talked to a lot of people who had moved from the city to different suburbs. We started meeting with a realtor, we started touring spaces, and we got to our last C, which is consequences.
And so at this point, we had a good sense of what it would cost to move to a bigger place in the suburbs. We started actually doing the math. And what we realized is that in the process of getting what we thought we wanted, which was more space and open schools, it would cost us a lot. I mean, the mortgage rates were still low then, but the housing prices were astronomical because everyone had this idea of getting more space right. And so we realized that we would be taking on a much bigger mortgage. It would tie us that much more tightly to our corporate jobs that we were working for at the time. And actually, we both had entrepreneurial aspirations. We had written our business school essays about the fact that in the longer term, we wanted to do something entrepreneurial, and we realized we would be losing career optionality that would push off the dream of being entrepreneurs many more years.
And so we reclarified what we thought we wanted. It was actually not about more space and open schools, it was about having the flexibility to pursue the work that we wanted to do.
And so we decided after all that to not submit an offer to stay put. But then we went back to the choices part of the framework, and we said, well, how can we get what we wanted without dramatically moving? Is there a way to not just see this in two extremes? Should we stay or should we move? But how can we adjust things in our lives that would help us get those things we wanted initially?
And so we actually went through the process of applying to different schools. We did end up moving our older son to a new school, and our younger son will join him there next year. And then, I found an office to rent that was a few blocks from my home. So, at that point, I had decided to leave my job, and Ross had decided to start his own investment firm. And so we had embraced the career flexibility that staying in our current place provided while still then making the other changes that would help us get to what we wanted.
Greg McKeown:
What, what do you see as unique in this model compared to just a traditional problem-solving decision-making approach?
Abby Davisson:
So, a couple of things. I mean, it gives you different rocks to turn over that helps you feel more confident in your approach. So I said that this conversation had been swirling for many years. Once we went through this process and had followed the five Cs and got to a place of making an active decision not to move it, put it to peace for us, we no longer brought it up as, oh, maybe we should do this. And I don’t think a simple list of pros and cons or what we would gain and lose if we moved would have done that. Because this was over a number of months. So it was a long enough time that we felt like we had been thorough, but not so long that we drew it out till it felt interminable. So it was a focused amount of time. It gave us the guideposts to use, but it then produced a feeling of we have done the best we could by turning over these rocks, as I mentioned, and have been as comprehensive as we could be. And we feel really good about it. So there’s a confidence and an empowerment that came from following this process.
Greg McKeown:
I can easily see that when we are trying to make big important life decisions in the same way as we decide what we’re going to eat for dinner in piecemeal moment-to-moment conversations that this doesn’t work, the hand does not fit the glove, that decision-making process is not fit for purpose. And so what we need instead is a more thorough framework to help us really think through the bigger decisions that we’re not even getting to in our normal lives.
If you were now coaching somebody to go through this and they said, okay, I’m going to take a weekend to follow this model, what guidance would you give them, you know, concretely to operationalize this model within, let’s say, something like a personal quarterly offsite?
Abby Davisson:
I think you could set it up in a weekend, but I think it will take longer than that to work through. And that is because when you are not just thinking about something in your own head as an intellectual exercise when you’re actually involving other people, which is what is so different about this framework.
The communicate step is really about listening to what other people find important, and clarifying and communicating are a bit of a dance. So you might clarify what’s in your own mind, say you do that on the weekend, and you think you know what you want, but then you have to start having the conversation. You have to communicate with the other person or people who are important. And you have to give that this proper space and time and really listen to what that other person is telling you.
And that might actually make you change your mind. And then you re-clarify. And so it is actually, you need to give it a bit more time to unfold so that everyone feels like they’ve been heard and that they’ve gotten to say what they want to say. And then you can move forward with generating the choices, being creative, and talking to other people.
So the check-in step and the choices step go hand in hand nicely because when you are in a high-stakes decision, you tend to see the extremes. You tend to get tunnel vision. And so the choices is really about generating additional creative options that you didn’t see in the first place. But that someone who is a neutral third party, for example, a friend, an expert therapist, clergy member, might be able to suggest. And by checking in, that then generates more choices.
So those two are paired. And so then the consequences step is really thinking about the short-term, medium, and long-term counteracting that bias we have to the short-term. And so it does take a bit more time to thoroughly exhaust all of these steps. So I think it’s a great idea to set it up in a weekend. But if you have a really high-stakes decision to make, you likely have a bit more time to make it. It’s, you know, even in accepting a job, they can wait a few more days for you to turn over those other important elements of your decision-making framework.
Greg McKeown:
That’s part one of this two-part conversation with Abby Davisson. What is one idea that has stood out to you? What is one immediate thing that you can do? It might be tiny, but you can do it immediately. And what team could you share this with so that you can make more intelligent decisions about the things that matter most?
Be sure to be part of the entire ecosystem. This podcast episode is just part of an entire system that I’ve put together to help you design a life that really matters. The 1 Minute Wednesday is part of it. Subscribing to this podcast is a part of it. Reading or rereading Essentialism reading or rereading Effortless, signing up to be a part of the Essentialism Academy is part of the support system that I have designed to be able to help you design a life that really matters. I’ll see you next time.
