There’s no doubt that our lives are constantly filled with decisions. Whether it’s figuring out what to have for breakfast, which route to take to work, or what to watch on Netflix for the evening, we always need to make choices with the hopes that it turns out well. However, in a world that’s filled with random chance, how are we supposed to make the right decisions? Fortunately, popular games like poker can shed some light on how we should approach the idea of making effective decisions.
The Two Approaches
In order to make good decisions, you need to know how to effectively evaluate decisions. After all, how can you make a good decision if you don’t know what a good decision means in the first place? When reviewing the quality of a decision, you can take one of two approaches: you can either be results-oriented or process-oriented. If you’re results-oriented, a decision is considered correct if it led to a desired outcome. On the other hand, if you’re process-oriented, the effectiveness of your decision-making process is what actually matters, regardless of what the outcome actually is. To help illustrate what these two approaches mean, we’ll use an imaginary poker game as an example.
Imagine two players in a game of poker: Roger the Rookie, and Peter the Professional. Roger just started playing poker a few days prior to this game, and Peter has been playing professional poker for years. Now let’s imagine that Roger was just dealt a 2 of Hearts and a 7 of Spades. For anyone who’s not familiar with the rules of poker, this hand is considered as extremely weak. However, before the game started, Roger had found a quarter on the ground during his morning commute, and he thought that it meant he was having a lucky day! As a result, he decides to bet $5000, despite his odds.
On the other hand (pun intended), Peter the Professional is holding two aces, which is considered one of the best starting hands in poker, so he decides to bet $5000 for this round as well. After all, in this scenario, the odds are extremely in Peter’s favour, as he approximately has an 88% chance of winning.
After these bets are made, the remaining cards are then dealt, and surprisingly, Roger is able to get the perfect hand that wins him the game! The rookie celebrates, saying that he obviously made the right decision because he just won a ton of money, and he’ll continue to bet lots of money if he ever receives a 2 and a 7 in his starting hand again. “Betting on a 2 and a 7 worked for me the first time, so of course I’ll keep betting a lot of money on this kind of hand!” In this case, the rookie is utilizing results-oriented thinking to evaluate his decision.
But Peter takes a completely different approach. He may have lost with his two aces, but he will continue betting a lot of money if he ever gets this kind of hand again, even though he had just lost. After all, based on all of the information he had available when placing his bet, he had an 88% chance of winning that game. “I was unlucky with this round, but my math and logic made sense, so I’ll still keep placing large bets for a hand of two aces!” In this case, the professional is utilizing process-oriented thinking to evaluate his decision. Even though the rookie had won that round, Peter knows that Roger’s bet as based on flawed logic and superstition, rather than definitive data and statistics. Therefore, Peter knows that he’ll eventually win more money against Roger in the long-run, even if he faces the occasional loss due to random chance.
Obviously, this poker game is an extreme example to differentiate results-oriented thinking from process-oriented thinking. However, the key takeaway can be applied to almost any situation: when evaluating a decision, the process that’s used to come to a decision is often more valuable than the outcome itself.
Why is the Process More Important?
To be a good decision maker, you should be process-oriented when evaluating your decisions. But why exactly is process-oriented thinking better anyway? In short, it’s because our decisions are influenced by two additional factors that are out of our control: hidden information and chance. Almost every decision we make contains at least one of these two elements. Just like the randomized cards in a poker deck, our decisions are often impacted by variables that are hidden from us and out of our control. Therefore, a key step to becoming a good decision-maker is being able to accept that, and focus on what you do have control over: the decision-making process.
If you follow a logical decision-making process that incorporates all of your available information in an effective way, you should be able to consistently make decisions that maximize your chances of success. However, results sometimes won’t work in your favour, and that’s a reality of decision-making that needs to be accepted. The truth is that even the best decisions can lead to poor results. Even so, as long as you utilized a strong decision-making process, you should still continue to use that process in the future, to eventually reap the benefits in the long-run. If it turns out that you had a crucial flaw in your decision-making process though, then that process should be updated accordingly. In other words, if you realize that your decision-making process didn’t incorporate vital information that was available to you at the time of making your decision, that may lead to poor results in the long-term, and that’s a sign to update your strategy. But again, that’s not always the case. In the wise words of Dwight from the Office: “Not everything’s a lesson. Sometimes you just fail.”
By focusing on the aspects of your decisions you can control, you can ensure that your decisions remain effective in the long-run, rather than adopting poor strategies based on one or two incidents of poor luck. As long as you keep your mindset focused on process-oriented decision-making, rather than focusing solely on the results, your decisions are sure to pay off.
About the author
Patrick Juan is an experienced business analyst with a background in Management Information Systems, Operations Management, Business Analytics, and Decision-Making Theory. He currently works at Apex Motion Control, a Canadian automation company where he provides support for integrating new business management systems within the organization. Previously, he volunteered for Enactus SFU, an organization that’s dedicated to using entrepreneurial action as a catalyst for progress. At Enactus, he was a Project Manager for a workshop program that helped immigrants and newcomers develop their financial literacy and employability skills. Patrick was also one of the Founders of Emerge GX, an online education platform that’s dedicated to providing affordable and accessible education to students around the world, so they can get the experience and skills they need to succeed in their future careers. Now, he spends his free time supporting ACIT Global as the Head of Marketing and Operations.