Separate Your Results, From Your Decisions
Good decision makers are able to separate the outcomes of a decision, from the actual decision-making process. Think in terms of bets to objectively asses your beliefs to learn.
You may also enjoy these articles:
Introduction
In business, we’re often required to make decisions when having incomplete information, or no information. These decisions involve a high degree of uncertainty.
Delaying business decisions is often not an option. The cost of delaying a decision to continue the search for more complete information frequently results in lost opportunities.
Poor decision makers tend to focus on the outcomes of their decisions. This is called resulting.
Resulting can make learning difficult. If you look at things in a negative light when they go poorly, you’re going to crush innovation and spirits in your team.
A better approach is to separate the outcomes of your decisions from the actual decision-making process. These two variables should be independent.
This way you can understand if predictable, good quality decisions are driving your outcomes, or luck.
Our brains are not rationale
Every day, we’re required to make thousands of decisions.
“Most of the time, the decisions that we’re making are happening at a subconscious level. Many of these decisions are happening almost automatically”
Nobel laureate and psychology professor Daniel Kahneman in his best-selling book, Thinking Fast and Slow, identified two distinctly different thinking systems, System 1 and System 2.
System 1 thinking - encompasses reflex, instinct, intuition, impulse and automatic thinking.
System 2 thinking - is slow thinking, how we choose, concentrate and expend mental energy.
Psychologist Gary Marcus also has a similar label, describing the two thinking systems as “reflexive mind” and “deliberative mind”.
Both of these thinking systems are necessary for survival and advancement. The thinking systems are interdependent and can conflict one another.
If you were out on the plains of the savannah and saw a predator approaching, the automatic thinking system quickly kicks in, telling you to run. It overrides slow thinking.
However, if you were to stop and deliberate (System 2 thinking) if the predator was male or female, contemplate the age, estimate the weight or wonder if the animal looked hungry, you would likely die.
Given the opportunity, everyone would love to make better quality decisions, all the time.
However, we can’t use System 2 thinking all day long to conduct deep and thoughtful inquiry. It’s just too exhausting and tiring for the brain.
Consequently, most of the decisions that we’re making on day-to-day basis are conducted by System 1 thinking.
This comes at a cost.
“Making automatic decisions, based on our beliefs, past experiences and habits can often lead to us omitting or overlooking important pieces of information”
This can lead to decision-making blind spots.
We can’t change the way that our brain is hardwired, but we can understand how to operate better within these constraints.
The hazards of resulting
In her book, Thinking in Bets: Making Smarter Decisions When You Don’t Have All The Facts, legendary poker player and psychologist Annie Duke discusses the impacts of resulting on learning and decision-making.
She poses the interesting question …
“If I asked you what your best and worst decisions were over the past year, how would you answer?”
Resulting is when we equate the quality of a decision with the quality of its outcome.
Resulting is common in poker, where a player may change their strategy because a few hands didn’t turn out favourably in the short-term.
In poker, it’s still possible to lose a hand, even with really strong cards.
If you’re a highly skilled professional poker player who typically wins 75% of the time, your competition is still going to win 25% of the time.
Example: Driving a car
Scenario #1
You could be out driving in your car and make the decision to run a red light. This time around, there’s no consequence. You avoided an accident and didn’t get a fine for running the red light.
Bad decision, good outcome.
Scenario #2
On a different day, you could be at the exact same set of lights. You’re stopped at the red light, following the road rules. As the light turns green, you proceed through the intersection, only to be hit by a driver running the red light in the opposite direction.
Good decision, bad outcome.
“We are very bad at being able to distinguish the difference between skill and luck. We don’t like to acknowledge that outcomes are often beyond our control”
Resulting is difficult to escape. It is a thinking pattern that is deeply embedded in our psyche.
Resulting affects our decisions every day.
The worst decision in Super Bowl history?
One of the most controversial decisions in Super Bowl history took place in the closing seconds of Super Bowl XLIX in 2015.
The Seattle Seahawks, with twenty-six seconds remaining and trailing by four points, had the ball on the New England Patriots one yard line.
Everybody expected Seahawks coach Pete Carroll to call for a handoff to running back Marshawn Lynch.
“That was the percentage play after all. It was a short yardage situation and Lynch was one of the best running backs in the NFL”
Instead, Carroll called for quarterback Russell Wilson to pass.
New England intercepted the ball, winning the Super Bowl moments later.
Coach Pete Carroll was savaged in the media. Many outlets called the decision the worst in the history of the Super Bowl.
Fans and commentators were resulting.
Twitter was alight with criticism immediately afterwards …
However, irrespective of the outcome, Carroll’s decision was a good one and totally defensible.
To look at the situation more objectively, interception was an extremely unlikely outcome.
“Out of 66 passes that were attempted from an opponent’s one yard line during the season, zero had been intercepted. In the previous fifteen seasons, the interception rate in that situation was about 2%”
The reason why the critics came so hard for Carroll … the play didn’t work.
Had the play been successful, and the Seahawks completed a game winning touchdown, Pete Carroll would have been heralded a tactical mastermind, a genius.
Carroll got unlucky, being caught out by a statistical outlier. A rare event that happens only every so often.
When things go well, we’re more likely to attribute the favourable outcome to skill, not luck.
However, with an unfavourable result, we’re more likely to think that the outcome was attributed to bad luck.
Pete Carroll made a good decision, that produced a bad outcome.
“Equating the quality of a decision with the quality of its outcome can be dangerous”
Malcolm Butler's interception to seal the Patriots' Super Bowl XLIX win over the Seahawks
How to guard against resulting
Think like a poker player
To ensure that you’re thinking more rationally and evaluating options objectively, think in terms of bets.
Approach decision-making like a poker player.
By doing this, you are evaluating your confidence in a particular belief that will form the foundation of a decision that you will make.
When we start thinking in terms of bets, rather than binary outcomes, we start thinking in terms of probabilities.
Thinking in terms of probabilities employs probabilistic thinking.
When using probabilistic thinking, we think about the probability of an outcome occurring.
Qualify your beliefs
When expressing your beliefs about an outcome, try to qualify the level of confidence.
A good way to do this is to rate your level of confidence on a level of 0-10. The 0-10 scale translates to percentages.
Zero would mean that you have a low level of confidence in the belief. A 10 would indicate that you are certain the belief is true.
If you look outside in the morning and believe that there’s an 8 out of 10 chance that it will rain, you’re 80% confident that it will rain.
The Super Bowl pariah
Let’s go back to our previous example of Seattle Seahawks coach, Pete Carroll.
Prior to executing that ill-fated play, Carroll would have conducted a reasoned assessment of the situation.
He had existing data and information at his disposal. He knew that out of 66 passes attempted from an opponent’s one yard line during the season, none had been intercepted.
Additionally, he also had data on how New England Patriots coach Bill Belichick would setup for the play.
Carroll would have backed his quarterback Russell Wilson to make the play 9 times out of 10.
Based on this information, Carroll would have had a very high level of confidence that the play would succeed, maybe a 90% level of certainty.
If the passing play from the quarterback was unsuccessful, the Seattle Seahawks still had another two opportunities to score a touchdown.
Through an objective assessment, it was a high-percentage play.
Comparatively, the rushing play to running back Marshawn Lynch potentially had a lower level of confidence of scoring a touchdown, with maybe only 50% certainty. Bill Belichick was expecting this play and brought in the team to protect the goal line.
Malcolm Butler made a once in a lifetime play to intercept the pass.
Peter Carroll’s Super Bowl XLIX post-match debrief …
Conclusion
Uncertainty is omnipresent, whether in our work, personal or family life.
We’re constantly being challenged to make decisions in the absence of little or no information.
Resulting is when we equate the quality of a decision with the quality of its outcome. Resulting affects our decisions every day and is a deeply embedded behavioural trait.
We tend to completely ignore the role that luck plays in the outcomes in our life.
Good decision makers are able to separate the outcomes of a decision, from the actual decision-making process.
Resulting can make continuous learning difficult. Bad outcomes can still happen, even with a disciplined and objective decision-making process.
To approach decision-making more objectively, think more like a poker player, placing bets to test your beliefs to learn.
Need help with your next experiment?
Whether you’ve never run an experiment before, or you’ve run hundreds, I’m passionate about coaching people to run more effective experiments.
Are you struggling with experimentation in any way?
Let’s talk, and I’ll help you.
References:
Before you finish...
Did you find this article helpful? Before you go, it would be great if you could help us by completing the actions below.
By joining the First Principles community, you’ll never miss an article.
Help make our longform articles stronger. It only takes a minute to complete the NPS survey for this article. Your feedback helps me make each article better.
Or share this article by simply copy and pasting the URL from your browser.