1. Close your eyes 👀 and remember one good decision you made last year. Say you invested in something that gave you beautiful returns, played a Poker hand and won, or made a decision to marry someone you love. It could be almost anything. Done?
2. Now comes the trick - when you think about your best and worst decisions - like most people, you will associate them with the best and worst Results. Not the best Decision-making process (DMP).
3. Another example - imagine a person goes to a surgeon for a procedure, which is successful in 60% of cases and fails in 40%. They decide to go for it, but it ends up falling. Was that a good decision or a bad one?
4. Outcome Bias is when you associate the “Goodness” of the decision with the Result you received. Which does not necessarily sound wrong, but it is. Utterly wrong, in fact. And it is the reason for so much self-deception and impaired decision-making. Why, you ask? Where do I start…
   1. When you are in an uncertain situation, like in … well, pretty much any condition in real life - every outcome has a probability, it is not certain. This, in turn, means that all of these outcomes can happen. This also means that whatever outcome happened - to a large extent, this is a result of a chance (or unpredictable system dynamic). 🎲
   2. You begin to learn from the lucky ones, not the smart ones. You will feel jelly to people winning a lottery (or investing in new crypto - sorry, I did not mean that 🤣) even though those can be just lucky guesses rather than results based on the decision-making discipline and experience.
   3. You may run into situations where you have made a decision the right way, yet the expected outcome did not materialize. And unless you know about Resulting, you will feel bad about yourself for making a poor decision. Cut yourself some slack. ❤️
   4. If a company management suffers from this bias - they might create an Outcome culture and start hiring and firing people not based on the quality of DMP, but on the outcomes they received. They may end up with a bunch of lucky idiots 🤹🏼, rather than professionals.

Summary:

• Outcome Bias is when you decide the “goodness” of the decision based on the Outcome, rather than the quality of the decision-making process (DMP).
• It is harmful in many ways, but mainly because it prevents you from learning and improving your DMP.
• Remember that any prediction with a probability over 0% can’t be wrong just because the most likely future does not unfold.
• Don’t fall into this Bias. Focus on the Decision-Making Process and don’t feel bad even if the decision you have made to the best of your ability did not bring the expected results.
• All of the above only applies to situations with high levels of uncertainty (most of real-life). But when everything is predictable - judging decisions by the outcome is the right call. 👆