Avoid Outcome-Focused Decision Making
November 5, 2020
For a long time, I had this wrong assumption that a Good Decision is one where the course of action I pick results in an outcome I desire.
Thanks to some painful lessons learned over the years, I understand now that there are no good or bad decisions. There are only good or bad outcomes.
A decision does not become good or bad because of the result or consequence of the decision. Many times our decision may be correct, but the outcome could be bad. Conversely, we may make some wrong decisions, but we may be lucky enough not to get stuck with a bad outcome.
Unfortunately, we don’t evaluate our decisions this way.
If the result is good and to our liking, we think we made the right decision even though it may not be the case. If the result is bad, we conclude that the decision we took is Wrong. When we fail, we think it’s because of some bad decisions we may have taken.
The fact is this. We don’t control the outcomes; we control only our actions. There are always many other external factors that we don’t have control over, influencing the results.
Therefore, any decisions we take obsessing on some specific outcomes are likely to be flawed and can lead to a lot of pain.
“Wow, the real estate market is great. Banks are funding 80% of the value, and property valuations are going up 20% YOY. I can make a 100% return on my investment if I buy a property taking a home loan, and sell it after a year.”
This is outcome-focused decision-making driven by greed, and we all know how this is likely to end.
Decision making is a process and not a punt. We should always have a process leading up to the decision we take.
We should understand the context. Get the right facts. Be mindful of our biases. Evaluate our options in terms of what will get us the best outcome, and then pull the trigger.
We should not be trigger happy in our decision making based on some outcome we are expecting.
Think of Decision Making to be like playing a game of chess. You win only by following a disciplined process of dynamically responding to the moves of the opponent. Winning(outcome) happens as a consequence of decisions you and your opponent make. The same moves that win you a game can lose you the game if the opponent makes a different set of moves.