How to improve the quality of a decision?

Before we come to this question, let me ask you a question — How would you describe a good decision? Please take a moment and think about it. The majority of people choose one of the below answers:

• A good decision is one that leads to the desired outcome
• A good decision has the highest probability of attaining the outcome
• A good decision has the least risk associated

While the above answers may sound correct and pragmatic.

A good decision-maker understands that there is a difference between the quality of a decision and the quality of the outcome.

Let’s take a closer look; I’m reminded of a movie where a teenager is encouraged to perform surgery by his doctor father, and that surgery turns out to be successful. Which of the following option would you go with to describe this?

1. Good Decision — Bad Outcome
2. Good Decision — Good Outcome
3. Bad Decision — Bad Outcome
4. Bad Decision — Good Outcome

I’m guessing you will choose option 4. A wrong decision could lead to a good outcome and vice-versa. If you were to extend this example and assume that the trained father would have conducted the surgery. Would it had been successful? Difficult to say, but the probability we would have considered for success would be higher. This example emphasizes the point that good decisions and good outcomes are not correlated or casual.

Many times a bad outcome would prevent you from making the same decision again. This is a thinking trap and warrants a closer evaluation to assess if it was a wrong decision, a bad outcome, or both. The converse is equally true; good results often lead to the repetition of the same decisions.

Reflect, knowing there is a distinction between outcome and decision.

Now let’s look at factors that influence the quality of the decision:

Quality of decision = f ( quality of options, the number of options, context, constraints)

1. Quality & Quantity of Options: Your decision can be only as right as the best option in your options set. If you do not generate enough high-quality, diverse opportunities, you will likely make a sub-par decision.
2. Context: Your context and its understanding will heavily weigh in the decision you make. Evaluating the context would mean understanding — why the decision needs to be made and what will be a good outcome. Getting the context wrong is one of the most significant factors that lead to bad decisions.
3. Constraints: You all always have some constraints under which the decision needs to be made. The most common limitations are time and money in a professional context. Although there is limited flexibility when it comes to deciding within constraints, the following set of questions can help provide better clarity on the quantum of control:

• Is the scale of undertaking realistic?
• Are the probabilities of risks fairly well studied?
• Which constraints can be flexed, should there be a need?
• Can interim hypothesis guide the resourcing and course of actions?

Finally, to improve your decision’s quality, especially critical decisions, view them as a series of turns you take. Each turn needs to be made with due consideration, and course correction is possible to some extent.

Reference & Suggested Reading: Foundation of Decision Analysis — Ronald A Howard and Ali E Abbas

Photo: Unsplash — Steve Johnson