In my last post Good Decisions, Not Good Outcomes I made the argument that a good decision doesn't necessarily result in a good outcome. Further, I argued that a bad outcome does not mean a decision was bad. I'm not sure how effective my argument was, but fortunately I can today share a much better take on the same argument.
Thanks go to Susan Weiner (@susanweiner) for tweeting to me the article linked below from the Farnam Street blog. The blog post speaks to the issue of decisions versus outcome in a very effective way. I found the Decision/Outcome matrix to be particularly compelling.
What Happens When Decisions Go Wrong
If we can agree that the quality of decision and quality of outcome are not directly tied to one another, we have a new issue to deal with. Why bother with trying to make good decisions at all if the outcome is still a result of chance?
As stated in my previous post, I believe that good decisions and a good decision-making process should result in a higher frequency of good outcomes on the aggregate. Any individual decision may still turn out poorly, but the likelihood of bad outcome is lower than for decisions made with a bad decision-making process.
Good decisions and good decision-making remains important even though chance plays a large role in final outcome.
The linked article explores another topic I want to dive into more, the Decision Journal. I've long been interested in the benefits of journaling and often speculated that a client/planner journal could be beneficial in the financial planning relationship. A decision journal sounds particularly compelling. I will be exploring that more in the near future.
For now, I'm glad to have had a well laid out agreement with my position shared with me. I think breaking the decision/outcome link is an important starting point for this blog.