What is a good decision?

A young man inherits a hillside. The whole valley already knows what he should plant on it, the sweet early apple the markets fight over. Instead he keeps his father's trees, an old and a bit more sour kind which has less demand. A waste of good ground, the town tells him. Maybe, he says.

Season after season the sweet orchards down the slope make their growers rich while his fruit sells for a lower price. You could have had all of that, the town tells him. Maybe, he says.

Then a blight comes up the valley. It takes the sweet trees and rots them to the root, orchard after orchard, while his father's stubborn old kind stands through it untouched. By autumn his are the only trees still bearing for thirty miles and the whole valley buys from him. A wise man after all, the town tells him. Maybe, he says.

We do the same thing the town does, only to ourselves. We call a choice wise or stupid and good or bad the moment the first result lands, only then to call it the reverse some time later, after some circumstances changed. Leading to the questions underneath it. Against what should we measure our decisions?

Four Measures

There are at least four different things we can measure it against.

Four counter weights

The simplest measure is outcomes. Did the choice get you what you wanted? This can only be done after the data is in and we can look at the results. But it is a bad measure for the decision itself, because good decisions sometimes lose and bad ones sometimes win. A reckless bet that happens to pay off was still a bad decision. Psychologists gave this mistake a name. Baron and Hershey (1988) put medical decisions in front of people and changed only one thing, whether the patient lived or died. The same surgical call, the same information on the chart, was rated wise when the patient survived and foolish when the patient did not. It's called outcome bias.

A better measure is the decision against what you knew at the time. Given the information you had, the options in front of you and the odds as they actually looked, was this a sound choice? This separation of quality of thinking and outcome is the founding distinction of decision analysis (Howard, 1966).

Then there is the measure against your goals. A decision is then only good or bad relative to what you are trying to achieve. So a choice can feel wrong after it was made, not because the thinking was poor but because it served a goal you did not actually hold. When that happens the decision is not the thing on trial. Its alignment toward your real goal is.

Underneath the goals sit values and this is where the deepest measure lives. You can hit every target and still feel you chose badly, because the targets were not worth wanting. Does the decision fit the kind of person you are trying to be or not. The beauty of measuring your decision against your values is that you have control over them - always. If one of your virtues is courage and you spoke up and raised an uncomfortable truth but failed to convince your listeners of the urgency underpinning your message, you still succeeded. Not when you measure your decision to do so against the outcome, but if you weigh it against your virtues.

Know Thy Measure

A decision is neither good nor bad on its own. Outcome, thinking, goal, values - the same choice can win against one and lose against the next. Therefore the real question is: Against what are you measuring your decision?