A weak decision can produce a good outcome. Assumptions were not tested, risks were underestimated, and alternatives were only superficially considered. But the timing worked out well. The market grew. A competitor made a mistake. Since the outcome was good, the process is not questioned.
No.
This distinction may seem simple, but it is one of the most commonly confused issues among management teams. That’s because outcomes are visible. The numbers come in. The market reacts. The project appears to be a success or a failure. Then it becomes easy to look back and judge the quality of the decision based on that outcome.
But a good decision made under uncertainty does not guarantee a good outcome.
The analysis may have been sound. Alternatives may have been thoroughly evaluated. Risks may have been openly discussed. The decision may have been rational based on the information available at the time. Yet the outcome may still be poor. Because the market has shifted, a competitor has made an unexpected move, technology has been delayed, or luck has turned against us.
The opposite is also true.
A weak decision can produce a good outcome. Assumptions were not tested, risks were underestimated, and alternatives were only superficially considered. But the timing worked out well. The market grew. A competitor made a mistake. Since the outcome was good, the process is not questioned.
This is dangerous for organizations. Because if a poor process is rewarded with a good outcome, the same mistake will be repeated. If a good process is punished with a bad outcome, people begin to make more defensive, more political, and more short-term decisions.
More effective management teams evaluate decisions not just based on the outcome, but on the quality of information available at the time of the decision.
They distinguish between these four questions:
What did we know at the time?
What assumptions were we relying on?
Which alternatives did we seriously evaluate?
Regardless of the outcome, what was the quality of the process?
The outcome is, of course, important. But the outcome is not the sole proof of decision quality.
Mature leadership under uncertainty does not confuse luck with skill; a good outcome with a good process; or a bad outcome with a bad decision.
Today’s question is:
Does your organization truly evaluate decisions, or does it merely judge the outcomes?