Important Things: Decisions and Outcomes

By Jarrett Retz -August 13th, 2018

The hindsight bias, seeing events as inevitable after they occur but being very unpredictable before (Clinton getting acquitted).

Timothy Wilson, Strangers to Ourselves

I think about the hindsight bias all the time. It's very easy to be upset, after the fact, for failing to make the right decision. Questions start to loop, why didn't I think of that; if only we would have remembered that one thing; if I knew that early I would have done that differently.

The hindsight bias is closely related to advice that is given in the book Thinking, Fast and Slow by Daniel Kahneman.

In that book, Kahneman suggests that decisions should be judged on how they are made. Not whether they turned out the way you wanted.

The difference in reactions is, "Why didn't we do _________?" and, "Is there a way for us to account for ________ in the future?"

A simple way, and arguably most effective, is to make a checklist. By simply remembering to check one, or two, common pieces of data before an event ('event' being a general term for any number of actions) many 'surprises' could be eliminated.

For example, golf tournaments usually provide 'tee prizes' for participants. It's some sort of merchandise that every participant gets that allows everyone participating, even if they didn't win, to walk away with something. During one of those tournaments, our shop thought that we didn't order enough of those tee prizes as we were handing them out. Slight panic ensued, because some people weren't going to get a prize.

Personally, I had helped prepare the tee prizes the night before. After setting them aside, thinking we were good-to-go for the night, we didn't do one simple thing that could have prevented the whole situation. We didn't count them. A pre tournament checklist could have prevented this, or just a merchandise receiving checklist.

It wasn't that we didn't order enough, the other were just in a box that looked different, so it wasn't even considered because we were on a bit of autopilot thinking, We only have one box to do. The ignorant response would be to think that Well, you need to pay better attention, or, It's so-and-so's fault. My issue with the first response (about paying attention) is that our minds deal with many different variables and operate between focused and autopilot modes frequently. It'd be silly to blame someone for the limitations of their own minds, when our minds operate similarly. My problem with the second response (blame) is that here the process could be better to activate an alarm system, possibly with a checklist, to ensure certain things are not overlooked. However, let's get real, sometimes it's the person. Especially if they overlook or shortcut the process in place.

Earlier I said, 'arguably the most effective' because the book The Checklist Manifesto by Atul Gawande makes a strong case for using checklists. I'm sure that there can be more creative ways to solve this issue, but a checklist is great place to start.

In Thinking, Fast and Slow, Kahneman also talks about how statistics can be utilized and how they are underutilized most of the time. Are the decisions being made in favor of the most likely outcome? How bad are peoplle really at projecting time-tables, budgets, and outcomes?

Kahneman has many more fascinating topics in the book regarding decisions and risk, so these references only barely scratche the surface.

I think acknowledging just how common the two phenomenon (hindsight bias, preparation-evaluation decision making) in personal life, and in business, can save a lot of blame, panic, and confusion.


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