I recently listened to the book titled Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by poker champion Annie Duke.
Being a poker player, I was naturally compelled to read this book. And being an entrepreneur, I totally understand the difficulty of making decisions with little information. And Thinking in Bets crystallized this concept really well.
The premise of the story is that in poker (and life) you have to make decisions with imperfect or very little information, and due to luck, the right decision may result in a negative outcome.
For instance, before the flop comes, pocket Aces is the best hand in poker. So it’s always the right decision to raise pre-flop. But against another pocket pair, there is an 18% chance you will lose. So if your Aces get beat by another pocket pair, were you wrong for playing your Aces the way you did?
On the flip side, you can make a terrible decision and play your hand like crap, and still win.
Here’s another example. In Super Bowl XLIX, the Seattle Seahawks had a 2nd down at the New England Patriots’ 1-yard line with 26 seconds left on the clock and a chance to win the game. They had one of the best goal-line running backs in Marshawn Lynch. But head coach Pete Carroll decided to call a pass play, and Seattle QB Russell Wilson threw an interception to end the game
Many have called this the worst decision in football history.
But what if Russell Wilson threw a touchdown? What would people have thought about Carroll’s decision? They would have likely said that it was “gutsy”, “brave”, and “fearless”.
In reality, the decision actually made sense, primarily due to clock management and the defensive formation the Patriots ran. I won’t get into it here, but you can check out this Slate article and this SBNation article for more info.
We all make decisions with imperfect information.
Maybe it’s a decision to hire someone for your team at work, and that person doesn’t perform as expected.
Maybe you decide to buy a new house in a great neighborhood, but a black swan event happens and the house’s value goes under water.
In both cases, you could have done all of your research correctly, checked off all of the boxes, dotted your T’s and crossed your I’s. But sometimes things happen that you have no control over.
If this happens, do you doubt your decision-making abilities? Do you not trust your process anymore?
Certainly, you should try to find the holes in your thought process. Did you not see something you should have seen? Did you not do enough research?
But if you’re confident you did all you can do, you shouldn’t doubt yourself just because the outcome wasn’t positive.
If the outcome turned out the way you expected, I’d bet that you would think you’re a genius, right? Right.
So the point of this all is to separate the outcome from the process. Whether you were right or wrong, you can’t let the result of your decision cast doubt on the work you did to get there.
I think this is a really important mindset to have. Process over results!
Have you been in any situations where you thought you made a correct decision that turned out negatively? I’d love to hear your thoughts!