Poor Decision Making: How Do You Spot It? And How Can You Avoid It?
Decision quality, uncertainty, and why bad outcomes don't mean bad decisions
Burnt Out? Stuck? You're Not Broken
–
Find Your Discernment
–
Click Here To Work With Me
–
Burnt Out? Stuck? You're Not Broken – Find Your Discernment – Click Here To Work With Me –
This month, I’m answering some reader-submitted questions I’ve gotten over the course of the year.
Today’s question was submitted by Farhad. He asked:
How do you know if you’ve made a good decision or a bad one? Does poor decision-making have a “look” to it?
(Side note: Want your question answered? Ask it in the comments! I send free signed copies of Solving for Why to people who ask my favorite questions)
To answer Farhad’s question, let me tell you about Margaret.
PS. You don’t have to navigate your big decisions alone. Click the button to book a free call ↓
Bad Outcomes and Poor Decision Making
Last year, Margaret landed her dream job. It was The One, the job she felt like she’d been working toward her entire life. It felt as if everything in her life so far—all her training, all her previous jobs, and even some past relationships—had been setting her up for this opportunity. She went so far as to say that she felt called, by something higher than herself, to the work, and to this job itself.
Two years in, the charity she worked for restructured, and—all of a sudden, at the whim of her boss—her role evaporated. “Efficiency” she was told. “Donor monies” and “stewardship.”
Her boss didn’t even give her the 90-day notice her contract guaranteed, because bosses like hers saw contracts as mere suggestions.
For months after, Margaret would lie awake at 2am, running and rerunning the highlight reel. Sometimes she’d re-run conversations with her boss, wondering if she could have handled his capriciousness better.
But more often, the reruns focused on what happened before she started that dream job. The excitement she’d felt when the offer letter was signed. The other opportunities she’d turned down to take this one. The colleague who warned her that leadership was unstable, but the (misplaced) confidence she had that she could weather any instability for a job that good.
And every time, the replays landed on one obvious verdict: She had made a bad decision. For months, she chastised herself for her poor decision-making.
But is that true? Did she actually make a bad decision? Was this dream job, and its dissolution, the result of her poor decision-making?
To answer that question, let’s talk about what constitutes a good decision, what makes a bad decision, and how to tell the difference.
Because, as we’ll talk about at the end of today’s post, confusing the two can be very costly.
Before we go on… Are you stuck on some big decisions? Let’s talk ↓
The Decision is not the Outcome
Let me start with what seems like a painfully obvious statement: Every decision is made under uncertainty.
You’ve heard me say it before, and you’ll certainly hear me say it again. We are physiologically allergic to uncertainty—and yet, uncertainty is the hallmark of any decision.
Uncertainty is what makes a decision a decision in the first place. In other words, if there were no uncertainty, there would be no decision!
If the universe had opened up a cleft in the heavens and said, “Margaret, take this job!” she would never have had a decision to make. If outcomes were guaranteed, she wouldn’t be making a decision; she’d simply be following instructions.
Every decision you make is made under uncertainty. Every single one.
Sometimes, of course, the uncertainty is inconsequential. Will the truffle fries you just ordered taste as good as you hope? Will it rain today? Will the person next to you on tonight’s flight have showered in the last month?
But then sometimes, that uncertainty is huge. It’s consequential: You don’t know if the new job will work out, if the new relationship will last, if the next investment will pay off, if the new city will make you happy.
No matter what, you’re always choosing between uncertain outcomes, between two probability distributions—and, well, probability sometimes delivers unwanted results.
That’s what uncertainty means.
And it has a really important corollary. Just because the outcome was bad, doesn’t mean a bad decision was made.
In other words, just because Margaret’s job turned out to be nothing like she’d hoped, doesn’t mean Margaret chose poorly. Margaret could have made the perfect decision—and she might still have lost her job two years later.
Decision Quality. Photo by Zac Gribble on Unsplash
Decision Quality
This distinction has a formal name. The late Stanford engineering professor, Ronald A Howard, and his colleagues proposed a framework for judging the quality of decisions. (Spetzler, et al, published a book about this in 2016, titled, appropriately, Decision Quality).
The Decision Quality framework suggests that the strength of a decision can only be evaluated based on the moment it is made, and not on its outcomes. Because outcomes are out of our hands, we can only gauge how good a decision was based on the information, alternatives, values, and reasoning the decider had access to at that time.
Outcomes belong to a separate axis entirely. A high-quality decision can produce a terrible result. A reckless decision can produce a windfall.
The fact that something worked out, in other words, tells you remarkably little about whether the decision behind it was itself sound.
We tend to conflate the two—the decision and the outcome—through what former professional poker player and author Annie Duke calls resulting.
Resulting—judging a decision by how it turned out, rather than by how it was made—is the cognitive default. It feels natural, so natural that we have to actively fight it and look at decision quality instead.
What good decision making actually looks like
OK, so if a good outcome doesn’t mean a good decision was made, then what does? How can we assess the quality of a decision? That’s what Howard and his colleagues set out to do.
And the Decision Quality framework they proposed says that a good decision has six things:
The right frame
Creative options
Relevant and reliable information
Clear values and tradeoffs
Sound reasoning, and
A commitment to action.
Here’s what each of them means:
The Frame
First things first, we have to articulate clearly what it is we’re deciding, in the first place. And, maybe more importantly, what we are not deciding.
One of the easiest ways to get stuck in a decision is to view that decision as the solution to all our problems, as the only decision to be made.
For example, if you’re making a career decision, it’s true that it’ll have an impact on your relationship. But fixing your relationship issues—as important as that may be—isn’t actually the job of the career decision.
Set the frame right, and then:
Creative Options
Want to guarantee a bad decision? Assume, from the outset, that only one or two “real” options exist.
I call this the crisis of imagination in decision-making, and I see it all the time in my clients. The surgeon who’s burnt out only looks for other surgical jobs. The startup founder who lost their marriage to insane work hours is certain she’ll only be happy in another startup.
Cast a broad net. What options should be in your choice set—what decision scientists call the list of alternatives you could choose from—and which ones haven’t you thought of yet?
Are you an executive looking to change your burnout? Executive-level jobs aren’t the only things available to you. What else is?
Relevant and Reliable Information
Once you’ve created your choice set, it’s time to gather information. What do you know about your alternatives, what do you not, and how could you fill that information gap.
A really important caveat here, though. Spending too much time in this section leads to decision paralysis, because you can spiral into the what ifs.
Pay attention to when you’re information gathering for information’s sake—and when you’re info gathering just to stave off the inevitable uncertainty.
Uncertainty is uncomfortable. And at the same time, minimizing it as much as possible leads to decision paralysis.
The best decisions are made with 70-80% information, not 95%.
Values and Tradeoffs
What are you hoping to achieve with this decision? A career choice could, for example, hinge on salary, work hours, team dynamics and collegiality, a supportive boss, living in the city of your dreams, having enough vacation time, stock and stock options, bonus structure, the size of the company, whether the work is remote or in-person, and so on.
And no one decision is going to meet every criterion you have. So instead, pick your top three to five goals and rank those from least to most important.
I wrote an entire blog post last month on how to do that! Check it out here.
Sound Reasoning
Now that you’ve evaluated your options, your values, and your tradeoffs, it’s time to make a decision.
Articulate, write out, on paper, how each option will meet your objectives. Think of it like speed dating.
Your choice set has options: Job A, Job B, and Job C.
Your goals are written out: Salary. Work Hours. City.
How does Job A perform across those three goals? Not how does it feel like it’ll perform—but solidly, given all the information you have, how does it perform.
Job B? Job C?
Actually articulate how likely each option is to meet your objectives.
This is the hardest step, in my opinion, because it’s so tempting to use intuition and gut instinct here. And, while those two are super helpful adjuncts in decision-making, they don’t always produce the soundest reasoning.
A Commitment to Action
Finally, do the thing.
A decision is only as good as the action that comes after it. It’s all well and good to decide to leave the job that’s burning you out and destroying your relationships. It’s all well and good to decide to pursue your dream relationship.
But if you don’t actually do it, all you’ve done is sacrifice your future on the altar of today’s uncertainties.
And unfortunately, one last hard fact about consequential decisions: there’s no perfect time to take action.
There’s no perfect time, but there is a way to know when the best time is.
Or like this:
I’ll admit that, although this method makes happiness point assignment easy, it’s also a bit haphazard and subjective. In my work with clients, we take a much more rigorous approach to figuring out what makes them happy.
Don’t stay stuck in decision paralysis. When you’re ready to work together, let’s get on a call. Book here ↓
Why getting poor decision making wrong is so costly
Those are the six steps of a high quality decision. And most importantly, they separate the decision itself from the outcomes it produces.
Because when we judge our past decisions by their outcomes, two distortions happen, and both compound exponentially over time, like a bad virus.
The first distortion is that we stop taking reasonable risks. If a thoughtful career change ends badly and we tell ourselves that this was the result of our poor decision-making, then we encode a lesson that has nothing to do with how we actually decided. The lesson becomes, instead, don’t do the risky thing. Don’t change careers. The devil you know, bird in the hand, etc etc.
But the real lesson—that uncertainty is a thing, and that sometimes the unlikely happens—that gets missed. Over a lifetime, this fear of “bad” decisions steers us toward the choices with the narrowest of outcomes, the least risk, the smallest downside…and the smallest chance of ever achieving our goals.
The second distortion is that we stop learning anything useful from our wins. A poor quality decision that turned into a good outcome gets calcified into savvy strategy. The relationship that lasted despite obvious red flags gets remembered as trusting your gut. We praise our luck and call it skill, then try to repeat processes that never worked in the first place.
So, the next time something goes wrong and you feel the pull to label your choice a bad decision, try a different question: Given only what I knew at the time, would I make the same choice again?
If the answer is yes, then you made a good decision. If you can go through the Decision Quality framework and validate the frame, the options, the values, the tradeoffs, the reasoning, and the commitment to act—then chalk it up to a good decision. The universe just dealt you a bad hand.
On the other hand, if the answer is no—if you skipped the due diligence, ignored an option you could have included, or chose against your own values for a reason that doesn’t survive the scrutiny of daylight—then learn that lesson. Learn to decide better, based on the information you have at the time.
The future is uncertain by definition. The only way to navigate it is to keep making good decisions, accept that some will produce outcomes you’d never have chosen, and refuse to let those outcomes scare you out of the next reasonable risk.
Facing a consequential decision?
You don’t have to navigate it alone. Work with a decision coach who knows how to guide you to a life you’re madly in love with again.
→ Check out my packages here. They range from 4 weeks to a year, and they take you from “what the heck do I do next?” all the way to clarity and a step-by-step plan that honors both your calling and your right to thrive. Click here to apply!
→ Want more FREE weekly content about making consequential life choices with confidence and clarity? Join my mailing list!
FAQs About Poor Decision Making
-
Start by separating the two. A bad outcome doesn’t prove a bad decision. Ask yourself what you knew at the time and whether your reasoning was sound then, not in hindsight. Remember the concept of “resulting”—and that resulting is a logical fallacy!
-
Because your brain is trying to rewrite history with information you didn’t have at the time.
Hindsight is 20/20, sure. But hindsight isn’t what you made your decision with. This hindsight bias doesn’t actually improve future decisions. It teaches you the wrong lesson about what makes a poor decision!
-
Yes! Uncertainty guarantees that even thoughtful, well-reasoned decisions can produce unintended (and even bad) results. Bad results don’t necessarily indicate a flaw in your process. It’s the nature of reality, not all of which is in your control.
-
They judge the decision by the outcome. It’s tempting to do that, because outcomes are visible and immediate. But remember—you can’t see the future. Judging a decision by the outcome teaches you wrong lessons—and it paralyzes you for future choices.
-
Be aware of the crisis of imagination. We’re all susceptible to it. If your decision felt like choosing between one or two “obvious” paths, you probably didn’t look widely enough. Good decisions almost always come from a broader, more creative set of alternatives.
-
Less than you think. Waiting for near certainty leads to paralysis. Most strong decisions are made with incomplete information, often around 70 to 80 percent of what you wish you had.
-
Focus on your process, not your outcomes. Get clear on the decision, expand your options, gather relevant information, define your priorities, and commit to action. Then let the outcome be what it will.