We tend to judge decisions or strategies by their outcome. If a decision leads to a poor result, say it was a bad choice. But we make this judgment with the benefit of knowing the outcome, information that wasn't available when the decision itself was made. And even the best decisions can yield a poor outcome, due to circumstances that are beyond or control or that we could never have predicted.
Think of a manager in a baseball game: his ace pitcher gives up a hit, and he has to make a difficult decision. If he leaves the pitcher in and he blows the game, the manager will be criticized for having a long hook. But if he pulls the pitcher out and the bullpen blows the game, he'll be criticized for not trusting his ace. The manager sticks to the percentages and pulls the pitcher. The reliever gives up a home run, and the manager is pilloried in the press the next day.
The truth is that even the best decision can result in a bad outcome. In conditions of uncertainty, we simply don't know how things will play out. Therefore, the decision shouldn't be judged by the outcome, but if it was the result of a strong process. Did the manager make the right decision given the information that he had?
In other words, we must focus, as Ozan Varol advises us, on the variables within our control, and build good processes for decision-making and strategy. And blaming the decision for the outcome—called "resulting" by poker player Annie Duke—may cause us to miss out on opportunities to improve those processes.
- Base strategy on leading, not lagging, indicators
- De-risk innovation by making smaller bets
- Intuition is not innate and may be cultivated
- What is going on here is the fundamental question for evaluating uncertain situations
Duke, Annie. Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts. New York: Portfolio, 2019.