Professionals don’t experience uncertainty in decision making — as an amateur, I “knew” this. Before I worked in a medical center, I thought medicine was an exact science: Doctors were trained to evaluate data and come up with precise diagnoses and treatments to benefit their patients. Before I went to business school, I thought all business leaders were quantitative experts: Executives were trained to crunch numbers and come up with clear-cut decisions to benefit their businesses.
Of course, neither proved to be true. Science is certainly the foundation of medicine, but much of what medical practitioners do is art, based on their intelligence, experience, and listening and communication skills. Similarly, much of what business leaders do is educated guesswork, based on their intelligence, experience, and listening and communication skills. Even my fellow student Hazim, the “quant” on our team, would usually start his guidance to us with the phrase, “We assume … ”
I came to understand that all decisions are made in a context of uncertainty. We never have all the data we need to be 100% sure of our choices. That’s true when we’re operating in a context of stability and familiarity. It’s all the more true right now, when we’re dealing with massive change and uncertainty.
Making quality decisions, despite the uncertainty
So how do you make good decisions at a crazy time like this?? I like the advice of Annie Duke, a former professional poker player and author of Thinking in Bets and How to Decide. The most important thing, says Duke, is to differentiate our decision-making process from the outcome of our decisions. She uses the term “resulting” for making the mistake of thinking that if you got a positive result, that means you made a good decision.
Think about it — sometimes we do really stupid things and it turns out fine. That’s because the outcome is probabilistic. Here’s an example. Let’s say you’re a senior executive. One of your direct reports is very good at his job, but sometimes he really irritates you. One day the two of you get into a sharp disagreement, and you impulsively fire him. It feels very satisfying in the moment, but the next day you have some doubts. He was providing unique value to the company and he will be hard to replace. But it’s too late, the deed is done. By coincidence, that afternoon you’re having lunch with a colleague who tells you about someone who is looking for a job with exactly the specifications you need for the now-empty role. You interview the applicant and she’s spectacular. So you end up with a better leader in the role. Did you make a good decision to fire the guy?
Duke would say no. Your decision worked out well because of luck, not because you used a good decision-making process. As she put it, “There are only two things that determine how your life turns out: luck and the quality of your decisions. You have control over only one of those two things.”
On the other side, sometimes you can use a really thoughtful, reasoned decision-making process and the outcome is disastrous. Again, the outcome is probabilistic, not certain. Does that mean that you shouldn’t have used your thoughtful process? Maybe you made a mistake and failed to consider an important aspect of the problem, or you failed to weigh the probabilities accurately. But you may have made exactly the right choice, based on the data available at the time. Luck wasn’t with you. But your decision was well-made.
A decision-making process to protect against uncertainty
Good decision-making requires clarifying the problem, generating options, gathering data to weigh the probable costs and benefits of each option, and moving forward on the one that looks best. Sometimes it works out the way you hope and sometimes it doesn’t. To quote Duke again, “When you make a decision, you can rarely guarantee a good outcome … Instead, the goal is to try to choose the option that will lead to the most favorable range of outcomes.”
Don’t let yourself confuse the quality of your decision-making process with the desirability of the outcomes. Hold fast to the decision-making tools that work the best over the long term. If 2020 has proven anything, it’s that this is truly the only thing you can control.