What a Terrible Decision
When our bad choices go well, and our good choices go bad, what should we learn?
I was leaving Home Depot one day and wanted to get back on the highway. There happened to be three different ways to get back to the road from this particular shopping center. I took the middle exit, which always seemed to be the least busy. Based on the information I had available at that point, it seemed like the best decision.
I pulled up to this exit and out of nowhere, the entire town of Spanish Fort, Alabama descended upon this 20-square-yard piece of asphalt. Four cars were waiting to turn in and traffic in either direction kept them—and, by extension, me—from moving.
I immediately thought to myself, "Wow, what a terrible decision! I can't believe I thought I was going to get home in the next hour if I took this route."
This happens all the time with decisions. It may not matter much in low-impact situations like a traffic jam. But in high-stakes situations compounded over the course of a lifetime, it can dramatically impact whether you reach the goals you lay out for yourself.
You make a decision you think is reasonable given what you know at the time. Then, the situation plays out according to chance, and sometimes things don't go well. It's natural to think that the result determines the quality of our decisions. We assume we made a bad decision and swear off that way of operating. Usually, however, that is wrong.
It turns out, results are not a useful gauge of our decision quality.
You can only judge the quality of a decision by the information you knew at the time you originally made it. When you fast forward in time, your view of the decision can change dramatically. And hindsight bias is the culprit.
Hindsight bias is a natural mental shortcut that swaps the information we know now for the information we knew at the time of the decision. The decision outcome is part of this new information that clouds our thinking about our original decision. If the outcome is good, hindsight naturally steers us toward thinking the decision was good. If the outcome is bad, hindsight steers us toward thinking it was bad.
To draw useful conclusions, we have to contextualize our decisions. We need to look at the broader class of similar decisions in order to judge the quality of our decision.
To improve our judgment, therefore, we can focus on deepening our understanding of similar situations. If you learn how things normally turn out in a scenario with a certain set of inputs, you can increase your chances of making a good decision in that class of scenarios. That's why the best decision makers in any field either have tons of direct experience or they've learned indirectly from mentors or books about how those situations normally turn out.
Lawyers review case studies, precedents and persuasive rhetorical technique to improve their ability to argue cases. Engineers study scientific first principles to understand how the systems they engage with react most of the time (skyscraper foundations, chemical plants, microprocessors). This study coupled with experience equips them with an internal probability distribution they can leverage to make better decisions in their fields. And they can add color to and sharpen the topography of this mental map over time as they learn more.
Lots of the feedback we get from decision outcomes just isn't helpful. It doesn't provide clear insight to improve our future decisions. And there's no perfect guide to tell you when it's good or bad. It's up to you to hack through the feedback thicket with your cognitive machete.
What you shouldn't regret
“Good judgment is the result of experience and experience is the result of bad judgment.” -- Mark Twain
If you have relevant foundational knowledge and carefully apply it to your decision, you shouldn't regret the decision after a bad outcome.
We regret a decision because we think we could've made a better one. We play out in anguish alternative histories in our head. This is hindsight bias at play. Hindsight keeps us from showing ourselves compassion after a bad outcome. We treat ourselves more harshly—scolding ourselves like we should have known—even though we couldn't have known at the time.
Based on your experience, you made the best decision you could. The subsequent outcome was out of your control. You can regret careless decisions, but not considered ones.
After realizing the part in your control—the decision—was executed to the best of your ability, there's no reason to feel angry or to feel bad for yourself. You simply tell yourself, "Alright, I was careful in my decision and this is how it shook out this time. I accept that. Let’s see what I can learn to do better next time."
And that's the only game we can ever effectively play. The game where we look for the highest probability decisions and make them.
What if we don't learn to do this?
What happens if we don't learn to judge the quality of our decisions by only our knowledge at the time of the decision?
We prime ourselves for a life of inefficient learning. A life where we have to be slapped with the same feedback ten times before we learn the right thing and get better.
It’s like you’re navigating a ship. You have a far off destination, and want to arrive there as fast as possible. With only a map and the stars, you course correct every so often as you reorient yourself. However, the exhilaration of sailing quickly with the ocean current and wind blinds you to the fact that you’re headed far off course. You get caught up in the result of getting there quickly, and forget to learn and adjust course.
If we don’t learn how to adjust our heading based on what our guideposts—the stars and map—tell us, we have little hope of reaching our destination. We have to sense and properly interpret what feedback we’re getting so we can change directions and reach the destination we’ve set for ourselves.
It's up to you to track what you know at the time of your decisions and base a judgment of quality on that. You’ll sidestep unnecessary inefficiency and reach your destination faster. Your future self will thank you.
When I pulled up to that middle parking lot exit, I immediately thought I had made a terrible mistake. A few years ago, I would have stewed in my annoyance while I waited for the traffic to clear. But this time I caught myself. I realized that I made my decision—which exit to use—based on data I had at the time. I could not have known that this would be the busiest exit now. I couldn't have made a better decision.
So instead of sitting there upset, I leaned back in my chair and sat there peacefully. No regrets. I even noticed the freshly planted pink flowers on the median beside me and smiled, considering what else I miss when I regret things I shouldn't. When it was my turn, I pulled onto the road and made my way home, my blood pressure a little lower than it would have been a few years before.
Thanks to Compound Writing members Ryan Williams, Halle Kaplan-Allen and Chris Angelis for reading drafts of this.
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Annie Duke discusses this in her fantastic book “How to Decide,” in chapter 2: Hindsight is not 20/20. Her books “Thinking in Bets” and “How to Decide” are world-class resources if you want to be a better decision-maker.
Funny, I was just reading THINKING IN BETS. The term Annie uses for hindsight bias is "resulting." Be well, Grant et al. ~Mark M.