Right Decision, the illusion continues ….

The title of this blog does not represent the broad nature of what has been written here. Primarily it’s a diatribe which many other people have already done, numerous times earlier. The article is basically about demonstrating the talent of human beings in displaying wisdom in hindsight. Therefore when we say it was a good decision or it was a bad decision we do not realize that there is nothing called good or bad decision. It’s just that the given situation and circumstances of a person makes him feel that if he had taken some other decision earlier, he would have been possibly in a different state. Therefore it’s more of a speculation rather than certainty about the present condition if some other decision was taken in the past. Hence if someone is happy he would think “if I had taken some other decision I might have been unhappy now and hence would have repented that decision”. At the same time if someone is unhappy about the current state of affairs he would have thought “if I had taken other decision I would have been better off”. However whether these persons would have been better off or worse off in current situation if they had taken a different decision in past is a matter of speculation. The good thing about history is we can write anything about it as it cannot come back to defend itself. Therefore we may go on saying anything about any decision as it would never come telling us “had you done this you would have been better”. It’s all delusion which inebriates us and we assume that we would have had different current situation than what is actually present.

However extending this logic may be dangerous as people may take this explanation as an excuse of not doing any due diligence or ignoring some hard facts available to them while making a decision. At the same time it does not mean that current negative hard facts about something definitely imply bad future for it or current good facts necessarily imply good future. Hence things become unexplainable and to a large degree random and imprecise. However we should not abuse this argument and start doing things which are seen as absurd from current perspective under the premise that as future is unknown no one can foretell the future outcome of whatever actions/decisions we are taking right now. Therefore it may become good excuse for incompetence and complacency. It could also derail and put in danger the “planning” and “strategy” development.

However thinking from a broad perspective if we take this argument of “unknowability” of future before hand then the predominant work of top management in an organization (which is primarily fuzzy strategy based) would appear to be of no consequence and hence the top management would lose the importance it generally has in an organization. Therefore the larger question is can this argument be inflated to make top management irrelevant? I think it may not. This is due to the reason that the final success or failure of a decision is different than the actual decision. The success or failure depends on execution, external factors and lots of unknown and random factors. For example a financial product distribution house may decide to open a branch in Gujarat, but whether that branch does well or not is a different issue. At the same time for that branch to do well or not, it has to exist and hence the decision of opening has to be taken. Therefore that decision of opening the branch is actually different than its success or failure which is determined by various factors. Though this explanation can also be abused as any decision can be taken (either by taking current facts into account or just going by plane hunch) and then when the intended outcome is not achieved, “execution” could always be blamed (though most of time execution is the real culprit but separating execution with the decision which has to be executed is almost impossible. On hindsight execution can always be blamed). We confuse the decision with the outcome and that is where the problem begins. However as I have said earlier it may be improper to extend this argument to a level where people can use that for hiding their incompetence or making stupid decisions (decisions which appear stupid from current perspective, as future perspective is unknown). Therefore perhaps what Keynes had said “When I see facts I change my opinion, what do you do Sir?” makes a lot of sense in these scenarios where the management may have some hard facts in front of it which it cannot simply ignore. Though in the future when the decision of the management would be analyzed about whether the actions/decisions taken were “good” or “bad” (which I have earlier argued is indeed misplaced), the analyzer would at least give benefit of doubt to the management that it actually took care of the hard facts presented at that point of time. That does not anyway means that these hard facts are relevant to the future state of the company (which cannot be seen as of now). However they are important from the perspective of not ignoring hard facts and hence not doing things in unplanned and casual way.

This again brings us back to the same argument that how could we right now tell that if we do something casually, without planning or we do something with lots of planning and care, taking all facts into account, which route to the future would be better. Perhaps it’s just the human psychology to please itself that it took care of the hard facts and took a decision based on “serious deliberations, discussions and analysis”. Our mind does not pardon us for doing things in haphazard manner without any planning, though the outcome of these haphazard actions could be better as compared to the planned actions (better when we evaluate the future in hindsight as currently the future condition is unknown). May be taking a planned, fact based, analysis based decision prevents us from getting scathed by attacks if something go wrong in future due to our decision (again this is impossible to know whether what so called wrong had happened is actually due to our actions or due to a complex maze of interconnected events which may have been irrelevant or vague while we were making that decision).

Therefore like many arguments this also falls under the realms of human psyche. Its our inherent and natural appetite to please ourselves of our “decision taking abilities” using tons of data (which may be irrelevant), analysis etc which has ingrained so much over the years that it comes naturally to us and we have started believing that these analysis actually matter (they may or may not).

However sometimes from the current situation and hard facts some forecasting may be done for future which may actually come true. Now it would depend on which camp you are to believe whether the future which turned out to be the way it was forecasted was actually due to the planning and decisions taken earlier or you believe that many uncorrelated, undefined and nebulous factors interacted with each other to create a future which somehow matched the one which was forecasted. Therefore there is never one camp which would win in the scenario where future events or data actually turns out to be similar to what had been forecasted. However human tendency would generally rate higher that camp which would claim that it had forecasted the future and it actually turned out to be what they had projected.