How to make good decisions?

A good way to answer the question in the title is to flip it around: Why do some decisions have bad outcomes?

A decision didn’t work as it should have or maybe even made things worse: surely everyone has been there? We then start to rationalize away the bad Quality of Outcome to lack of competencies, cultural barriers, adverse business environment (recently Apple), or maybe even just bad luck. Unfortunately, one of the key reasons we tend to miss is assessing the Quality of Decision Making Process. I read this excellent piece by Tomasz Tunguz, a VC at Redpoint where he quotes Annie Duke about this distinction. As soon I read it and reflected upon some of my past decisions, I realized how true this was.

The bottom line is that decisions can go wrong- it could be any of the above reasons including bad luck. But what affects the Quality of Outcome most frequently is the Quality of the Decision Making. Were the right people involved in decision making? Was there really a key problem or were you just extrapolating from exceptions? Were all impacts assessed appropriately? Did you or others put on your Systems Thinking caps? Was the decision data driven or gut driven? And so on. Now, some of your outcomes may be bad with a good process and some outcomes may be good with a bad process – but in the long term, the best way to ensure good outcomes is great decision making processes.

Looking back, I can easily think of a some re-organizations, promotions and even application deployment decisions which would have had far better outcomes if there was a better decision making process.

See the nice 2 x 2 (of course!) at the beginning of this post that illustrates this concept and here is a link to the post. 

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