Bad decisions and bad outcomes

Photo by jeffwesse

I was reading this post today in the Nudge Blog about something that happened in the NFL league this week (a decision made by Bill Belichick). Honestly, I don’t really understand the NFL lingo, but one quote in the post caught my eyes:

“Well, he went for it and it didn’t work. Then his team lost a game it was winning by six points with two minutes left.  We don’t need any more proof then that to know it was a dumb decision, no matter what any stat geeks claim. This isn’t calculus calls. This is the NFL.”

In my blog I wrote a number of times about the idea of outcome management. Instead of telling your employees how to do the job you need them to do, just explain to them what the final needed outcome is and let them do it their way. Then judge them according to the results.

But judging results does not mean that we should ignore efforts or processes. In a football game, just like in real life, people have to make many decisions under pressure. Sometimes the outcomes of those decisions are positive and sometime they are not. But even if the outcome is negative it does not necessarily mean that decision was wrong. It just means it led to an unwanted outcome. And vice versa. Good decisions could lead to bad outcomes.

Failure is an important part of growing, learning and improving (also see here). As long as we learn from it. If we only look at the outcome, we might miss the real lesson for next time. The problem is, only decisions are under our control, while outcomes are always subject to chance. So while determining the process for our employees is not the best of ideas, helping them learn to improve their process, by assessing it together, is the right way to go.

So, before you decide that your employees made a “dumb decision” look for more evidence than the mere fact that team lost the game.

Elad

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2 Responses to “Bad decisions and bad outcomes”

  1. Randy Zwitch Says:

    While I agree with your sentiment that a bad outcome doesn’t necessarily equal a bad decision, and that there is danger with looking back in hindsight, I take another lesson away from this football example.

    The blog post you linked goes through the probabilities of why the team should’ve made the choice that they did. However, just as there is a danger in second-guessing in hindsight, there’s also danger in blindly believing the math. Those NFL probabilities don’t take into account anything about the actual decision at hand (teams, recent performance, location of game, weather, etc.), nor do they account for how important a win/loss/overtime outcome is for the decision making team.

    In the absense of perfect information, or a robust prediction model, risk aversion probably shifts those probabilities below the 60% favorable outcome predicted. Or, put another way, 60% wouldn’t be the level of comfort at which to make the decision they did, knowing the risk due to imperfect information is higher than in hindsight.

  2. sherfelad Says:

    Thanks Randy,
    While I have not gone into that part of the post, I do agree with you that it is very interesting indeed. I want to thank you for giving me (and my readers!) this prescriptive on this issue.
    Risk aversion (and other decision biases) play a big role in our daily decision making that we don’t always take into account, many times because we don’t know or don’t believe it will happen to us.

    Elad


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