Decision Quality
Here's a pop quiz. Two sellers spent the majority of their time on one account over the last 12 months. One seller had an epic year, far surpassing his number, while the other finished well below his revenue target. Which of them made the right decision?
The answer is that it's impossible to know based on the information provided. "Come again?" you might ask. Isn't it obvious considering these results?
No, it isn't. We need to distinguish decision quality from decision outcome. Life is not like a game of chess, with outputs being reliably correlated with inputs. It's not as if everyone who texts while driving can be expected to crash the car. Yet we know perfectly well it's a stupid and reckless decision to be scrolling through WhatsApp at 120 mph on the freeway, regardless of whether this ends in tears. Likewise, we can't necessarily infer Tommy is a genius just because he made $10M on a crypto trade.
Across so many realms it's common for undeserving people to win and deserving people to lose. In Thinking In Bets, Annie Duke shares her most important lesson from years as a professional poker player. She saw that every outcome was a combination of luck and skill, and she became disciplined about separating decisions from their consequences.
When we limit our analysis to decision quality alone, we confront predictable reasoning flaws. "Resulting," for example, is when a player regrets a well-calculated bet because she loses the hand, when in fact this was a perfectly defensible move considering her knowledge at the time. She erroneously assumes what should have been known all along, cherry-picking the data to support the narrative in her head.
Strong decisions come from strong processes, and the best decision-making framework I've come across can be found in Chip and Dan Heath's Decisive. They recommend the W-R-A-P approach:
Widen Your Lens: One of the best ways to improve decision quality is to force yourself to add more options. Even just one. Increasing optionality relieves pressure and stimulates creativity.
Reality-Test Your Assumptions. It's critical to keep the tendency to confirmation bias in check. The best antidote is to actively seek out disconfirming evidence. Continue to press for data that might prove you wrong.
Attain Distance Before Deciding. Too often we act on short-term emotion, falsely assuming the need for urgency. Decisions improve when we recognize our susceptibility to spikes in emotional temperature, and as we incorporate cool-down periods before coming to a resolution.
Prepare to Be Wrong. Finally, good decisions include an off-ramp. Even when we’re highly informed, there are often things we simply can't know. Prudent decision-making builds reversibility into the plan. We're honest about what might go wrong, and we anticipate how to adjust if it does.
None of the above seems possible without a clear mind. Good judgment, and therefore good outcomes, require mental space, mental calm, and mental clarity. Of all the life skills to continuously refine, decision-making might be the most important one.