I have often heard people refer to a need for better decision making.
One popular book addressing this need is Decisive (how to make better decisions) by Chip and Dan Heath. For a time one of my former employers promoted the book internally and arranged for Chip to attend one of our off-site meetings. The book is full of great stories and insights and is arranged around a memorable acronym of WRAP: Widen your options, Reality-test your assumptions, Attain distance before deciding and Prepare to be wrong.
But there is one aspect I consider to be missing: what constitutes a “better” decision? At the offsite meetings I tried to engage Chip in debate on this but without success – something along the lines of “we all intuitively know what better is so no need to define it”. But as it is the focus of so much of management attention (including more recently “data-driven” and AI approaches) I suggest that what makes one decision “better” than another is worth some formal attention.
“Happiness with outcome” is an unsatisfactory metric
For many, the intuitive notion of a “better” decision is one that leads to the “right” outcome, to the outcome I am happiest with. I find this unsatisfactory in several aspects:
- We have to make the decision (and evaluate if it is “better” than alternatives) before the outcomes can be known.
- Even when outcomes are known, there is rarely a credible “audit trail” linking outcomes back the specific decisions. Life is usually a bit more complex than that.
- Being “right” is just kicking the same problem down the street a little way – what makes one outcome more “right” than another?
So – what else might be a useful guide in assessing if one decision is “better” than another? (or even harder – that we have identified the best one). I suggest the following:
Indifference to outcome
Rather than the best decision being the one that gets the “right” answer, we can consider the best decision to be the one we remain happy that we made regardless of what outcome it leads to.
We still do not know what the outcome will be but we can reasonably consider the various forms the outcome could take and we can consider how we might react in each case.
Note that we still care about the outcome itself – sometimes things go well for us and sometimes they don’t. The thing we are indifferent to is how the outcomes makes us feel about the decision we made.
A “better” decision is one that we are more happy to have made, even if the outcome does not go well for us.
This helps define betterness but still doesn’t help us to achieve betterness.
Confidence in the process
If we adopt a formal process (such as the WRAP process above) this may help us to become indifferent to outcome. It gives a rational basis for concluding that we made the best decision we could under the circumstances[1].
Following chapters have guidelines for creating options and much of the pages about Value and Measurement are about the basis and method of comparison
Informed consent of the stakeholders (justifiable before the fact)
Maybe the decision is not (officially) yours to make. You may be making a recommendation for others to approve. In this case a good decision is one that can secure the informed consent of the stakeholders (and this informed consent is secured before the outcomes of the decision are manifested).
The process of having to secure informed consent of others guarantees some following of process and hence a “good” decision. A better decision is one that more convincingly gains informed consent.
Defensible (Justifiable after the fact).
A good decision is one that you can explain and show was reasonable afterwards (even if it doesn’t work out as expected). This is another form of “following a process” but with the addition of being able to show afterwards what the process had been (and that it was a good one). This generally requires that the process indeed had been a good one and also that there is sufficient record of it to make a convincing defence.
Each of these factors has some merit (with exception of “happy with outcome”). But when you are looking to make the best decision, it’s worth more than half a thought about what your axes of goodness are for assessing potential outcomes.
[1] Note that for some decisions, we also have a duty of care to ourselves and others to challenge and even try to change the circumstances, not just to accept them.