It's human to judge the quality of a decision by its outcome. But outcomes are shaped by variables that have nothing to do with the actual decision. Things come up, and sometimes stuff happens that you couldn't foresee. Judge the quality of your decisions by the process you use as you make them, not what happens afterwards. This will ensure a more positive mindset and a healthier workplace culture.
I’ve made more bad decisions than I care to think about. I bought the wrong car. I married the wrong guy. I ate those funky enchiladas the other night. I’m never going back to that restaurant again.
I’m the first to say to myself, "How could I be so stupid!?"
Don't get me wrong: I'm not being hard on myself. I know I’m not stupid. I don’t feel stupid. But I go there because it forces me to pay attention. It centers me on the decision and hones me in on what I can learn from it, how I can grow, and what I can do better next time. It helps me stave off overconfidence bias.
And I’m not alone. We’ve all stopped in our tracks at least once in our lives and thought, “Now that was a dumb move.” We’ve all been in conversations where someone’s confessed to us, “I just did something pretty stupid.” We don’t necessarily perseverate. We acknowledge. We take note. We move on.
But what if our decisions weren’t as bad as we think?
Human beings have a very human tendency to evaluate the quality of a decision by its outcome. This is called outcome bias. Why did I buy the wrong car? Because after I bought it, it became too big for my needs. Why was getting married the wrong choice? Because a few years later, I got a divorce. And why was eating those enchiladas a bad move? Well… you don’t want to know.
But how could I have known, when I bought that car, that the life I bought my car for would soon change? When I bought it, I was preparing to share my future with the guy I was with, adopt some kids, and maybe get a second dog. Then the relationship tanked, no kids were adopted, and my dog passed away. Now it’s just me in a dumb, oversized car. When I made the decision, it was a decision that made sense. If I had to do it again, I’d make the same choice. Because I didn’t know what I know now.
Same with my marriage; I didn’t have a crystal ball when I said “I do.” And those enchiladas… they were really cheesy. I mean… really cheesy. I love cheese. Why wouldn’t I have eaten them?
In business, we risk judging our decisions by their outcomes too – and this doesn’t do us any favors. Our company might hire someone who turns out to be a disaster. We might decide to allocate a huge chunk of budget to marketing that doesn’t end up working. We might introduce a product feature that no one buys. And in each case, we might go to the person who made those decisions (sometimes ourselves) and point the finger.
But maybe those decisions weren’t so bad. Maybe circumstances changed. Maybe there are so many variables in life that you can’t predict how things will turn out.
In the workplace, judging the quality of a decision by its result can lead to unnecessary, misplaced, and damaging blame. Telling someone – even yourself – that they’ve made a horrible mistake solely based on outcome can ruin morale and erode trust. We don’t have control over outcomes. We can’t predict the future. We shouldn’t be held accountable for things we can’t control.
Outcome bias can also misdirect attention away from the decision-making processes that could be improved. It can create an environment where employees are so concerned about avoiding blame that they aren’t transparent about what they’re doing. They might deflect by pointing fingers. They may stall to avoid being associated with any decision at all. It can create a toxic environment that encourages cover-your-ass behavior at the expense of truly improving processes that can make your company stronger. Entire business cultures – and businesses – fail because of outcome bias.
So what can you do about it? The solution is straightforward, though not always easy. It involves analyzing decision-making processes engaged in back then, before having the benefit of post-decision knowledge. By focusing on the decision-making process, rather than the outcome, you’ll be better equipped to identify decision-related problems (if there are any) and ensure more confident decisions in the future.
For example, if you hired the wrong person, you could ask yourself: “What did I know then (not what do I know now)? What biases did I employ, and how did they lead me astray? Was I too overconfident in my decision-making? Did I fall victim to availability or some other heuristic that could have led me to make the wrong decision? What processes can I commit to next time, to minimize getting blindsided?”
Process. Not outcome. Pretty straightforward.
But not easy – because human beings are naturally not inclined to do this. We have to work at it. We have to be aware, even vigilant, against behaviors that come naturally but that can lead us down the wrong path. When it comes to outcome bias, if all we do is remember to ask, “What did I know back then?” and “How did I think back then?” we are on the right track.
Also, keep learning about the science of decision-making. The more you know about how human decisions can generally go off the rails, the better-equipped you are to be aware and keep bad decisions from happening. #officeculture #culture #toxicworkplace #humanresources #businessdecisions #decisionscience