Have you ever wondered what the link is between a decision and the result of a decision?
It might be surprising but the link is actually significantly weak, very weak. It has to do with the time in between. We make decisions now. We implement our decisions later in the future and we see results even later in the future.
There are no facts about the future. The future is uncertain. In between the decision and its execution there can be all sorts of things that can happen outside of control of managers and organisations that can turn good decisions into bad results, bad outcomes.
The key consequence of the insight that a decision is different from a result is about evaluation. It’s about how do you work with people.
People can have good results but they can have made a bad decision. Are those good people? People can have made a good decision and have a bad result, are you going to blame the decision maker then? Quite on the contrary, the decision maker should be rewarded for having made a good decision. Unfortunately the person had a bad result. It links to creating a culture of tolerating failure, accepting failure.
The key consequence of understanding the difference between a decision and a result is essentially about innovation.
It’s about experimentation which is ultimately value creation. It is better to make many decisions and fail many times, by small amounts, than to fail once, big time. By making multiple decisions and naturally failing you will win also quite a few times. This is understanding the difference between a decision and its result, thereby creating a culture of innovation, of experimentation, of exploration.
So for innovation and value creation to occur, companies and leaders should value and judge the decisions, decision quality, rather than the results.
Zeger also teaches on a brand new 2-day programme at London Business School – Strategic Decision Making.