Process vs outcome decision-making

How to free yourself up to make better decisions.

Process vs outcome decision-making

Jacob leaped out of bed a full 7 minutes before his alarm rang. Ever since he got the job offer from the local library, he couldn't wait to start working. Not only was he finally going to put his master's degree to good use, but he could also walk to the office – a goal that seemed increasingly unlikely in our modern transportation age.

He breezed through his structured morning routine, wrapped a solid prat knot with his tie, laced his captoe dress boots, and headed towards the start of something new.

But Jacob never made it to the library.

About 4 minutes into his walk, 2 blocks away from the library, an SUV ran a red light then swung wide around a corner it was going much to fast to take. The swing caught Jacob and hurled him into a flyer-studded street pole.

Ron is about as ambitious as he is responsible. Today was also supposed to be his first day at work. He landed a job as a cashier at a Shell gas station down the street for 3 reasons.

  1. He needs to start paying rent, or else his friend is going to kick him out like his girlfriend did 3 months ago, and like his parents did 3 months before that.
  2. Having no money to his name left him limited options for employment – basically only what was within walking distance.
  3. He’s pretty sure he’s going to get free cigarettes out of the job (Disclaimer: he won’t).

But on this day, like most days, Ron got high and lost track of time. His graveyard shift was supposed to begin at 10 pm. But by the time he was lucid enough to realize what day it was, it was already 1:32 am.

He jerked up off the couch, rolling and falling hard onto the thinly carpeted basement floor. He jumped into the first clean(-ish) pair of jeans within reach, threw on his work shirt, popped a Mentos, and jogged out the door.

As he walked up the sidewalk, he saw that the parking lot ablaze with red and blue lights. The yellow caution tape kept him from clocking in. At 11:47 pm a robbery occurred, a robbery that turned violent. Ron saw a blanketed stretcher rolled into an ambulance, without urgency. There was nothing left to revive.

Good versus bad decisions

My question for you is: who made the better decision?

Was it Jacob, the responsible one who got hit by a car because of his decision to walk to work?

Or was it Ron who, due to his irresponsibility, survived what could have been a fatal robbery?

In Daniel Kahneman’s book, Thinking Fast and Slow, he tackles a host of issues related to our decision-making processes.

  • We’re usually overconfident
  • We make huge decisions based on minimal amounts of data
  • We neglect the outside world and downplay instructional examples
  • We pretend as though randomness doesn’t exist.

All of these impact our decisions to varying degrees, but none so much as the one we're going to address in this article. This "bias" is deceptive because it seems legitimate. It feels right. And on paper, it makes sense.

This is the exact process people use to evaluate who to marry or where to move or any number of other life-changing (and also not so life-changing) decisions.

The scariest part is that the bias is becoming more prevalent. As the effects of every decision we make become more visible, trackable, and comparable – the foundation for this bias strengthened.

Outcome-based decision making

Outcome bias (aka Hindsight bias) is a deceptive little bugger. Let me first give you Kahneman’s definition before we circle back around to our two characters.

Kahneman says Outcome bias “leads observers to assess the quality of a decision not by whether the process was sound but by whether its outcome was good or bad.” (emphasis added)

In both stories, Jacob and Ron made decisions in line with their values. Jacob is organized. He follows a daily routine and schedule and on that day he left the house at a precise time so that he could walk to work (a good choice in terms of his health, the environment, finances, etc.). But, his decision to do so ended badly.

Was his decision to walk to work a good one? Or to leave at the time he did? Or to take the route he chose?

Ron chose to get high that day, knowing he had to work that night. But he didn’t care. Or, he didn’t care enough to make a different choice.

Yet because of this choice, he’s still alive.

Was his decision to go into work late a good one? To get high that day? To persist in irresponsibility?

If we look at these two cases with an Outcome bias, the answers we get our pretty clear. Jacob made a bad choice because it ended badly, while Ron made a good one.

But when you take a step back and look at all of the elements of their individual stories, that conclusion just doesn’t feel right. We don’t want more people missing work to get high – our society would crumble. But we would benefit from more people walking to work.

We would benefit from more people being organized and scheduling their day. We would not benefit from increased irresponsibility.

These examples are pretty extreme, I know. I wrote them that way to make a point. I wanted to highlight how drastically a good decision could end badly, and how a bad decision could wind up good.


Every decision has two parts

Every decision we make has two distinct parts: the process we used to reach it, and the outcome we experienced because of it.

How we make decisions (i.e., what our process looks like) is a huge topic and if you want to dive more into this then I suggest you start by reading this article on values by Mark Manson or this book by the Heath brothers.

The purpose of this article is to draw your attention back to your process and to stop putting all of your weight (emotional, psychological) on the outcome.

The outcomes of our decisions say less about who we are and what we value than how we reached them. The process is the important part. The process is what we control and what we can improve going forward.

A lot of the regret and depression I’ve struggled with over the last year has been directly caused by misunderstanding this principle. I confused the fact that some of my decisions ended up badly with the idea that I was bad at decision-making.

When I left my job to become a full-time writer, I had a plan for how I was going to fully replace my income within 18 months. About 5 months in, I realized my plan was never going to work. There were elements I didn't know enough about, and in retrospect, I simply couldn't have known without being fully self-employed.

As I spent the next 2 months scrambling, I was haunted by one repeating thought: it was a bad decision to leave my job. I thought maybe I left too soon, or maybe if I had done x y or z I could have solved the problems I was facing ahead of time.

The weight of that regret, coupled with the exhaustion I felt hustling to remedy it, eventually crippled my workflow. I couldn’t concentrate. My output flatlined, and I felt utterly defeated.

How did I get myself into such a mess?

How did I manage to make such "bad" decisions?

Process > outcome

Over the last few weeks, I've spent hours dissecting my thought process from the previous year. I reread notebooks, Evernote files, and journals. I looked over my business plans and emails with fellow freelancers and writers. I wanted to uncover exactly what I did, how I did it, and why.

What I found surprised me.

Everything was genuinely encouraging. All of the notes and messages and scribbles were coherent. I had made a good plan, a solid plan, with a realistic timeline, and I had remedied many of the faults that caused previous projects to stall out and crash.

From everything I could see, by all objective standards of measurement, my decision had been good. So then, why did it end up so bad?

Before reading Thinking Fast and Slow, I saw decisions as seeds. If it was a good seed, then that decision would sprout up into something good and beneficial. If it was a bad seed, then the opposite would occur. It would never sprout. Or if it did, it would quickly look like it was bad and we would root it out. But this whole idea over-simplifies the process of decision-making.

The process a farmer uses to plant a seed does impact the outcome, but it is far from the only factor to do so. The weather, insects, competing plants, and a dozen other factors influence how that seed sprouts and what it produces.

If a farmer has a bad season of potatoes and decides never to plant potatoes again – everyone would think he was rash. But how many of us swear never to try something again after having one bad outcome?

The process I used to decide to become a full-time writer was sound. The decision was a good one, even if the outcome hasn't worked out as I hoped.

I can’t stress how important this conclusion is for what I want to do going forward – and how understanding this about yourself might very well set you free in a direction you never even considered. Because I can see the validity of my past decisions, even if I am not thrilled with their current outcomes, I know I can trust my decision-making abilities.

And because I trust my decisions, I can move forward. I can change my circumstances. I can create new outcomes.

Going forward

When good decisions go wrong, outcome bias drives us towards “an extreme reluctance to take risks.” And when bad decisions go unpunished, the irresponsible are driven towards more dangerous risks, more reckless behavior, and an increasing level of confidence that bears no merit.

The outcomes of your choices are, by and large, poor judges of your decision-making ability. You deserve better. The next time you find yourself in an unwanted situation of your choosing, resist the urge to jump to conclusions. Don’t automatically knock yourself for screwing yourself over.

Stop. Think. Remember.

Rewind, before the outcome, and look at your process because that is what you can control and change going forward (if needed).

Good decisions don't require good outcomes to be valuable.