2005-06-27

Good decisions vs. good outcomes

Good decisions and good outcomes are not necessarily correlated. What appeared to be a good decision at one point, need not result in a good outcome. Good outcomes, apart from depending heavily on good execution, result also from various factors not considered at the time of making decision and from factors, which emerge after the decisions are made. Despite improvements in simulation and various other models/techniques, it is very difficult to predict outcomes. Any decision making, for instance, in the corporate place, without considering what competitors may do, may not be a good decision. Of course, there may be exceptions in terms of some path breaking innovation or a very large scale launch, where competition will be very weak, at least in the short-run. Anticipating competitive response is nonetheless difficult.

If the outcome cannot be good, how can we call it a good decision at all? The reason is that, at a point where one has to make a decision, given the variables, given the assumption, numbers and expectations, if there was another decision, which gave better indication of future, then the decision made cannot be called a good decision. A good decision is, by definition, one which was the "optimal" decision given all the factors leaving aside the error factor (?).

Coming to ISB was a good decision for all of us. Otherwise, we would not have come here. Whether the outcome would be good or not depends on what we learn, where we would get placed. It is hoped that for many students, it will turn out to be a good outcome. Not necessarily for all. Some of us may fail to leverage the resources available at ISB. Some others may have made improbable assumptions.

It is important that one consider all the variables, consult people who can proffer good advice, think about the worst possible scenarios, etc before leaving a job and going to a b-school. But there is no point getting into analysis paralysis, which many people keep doing. “Seek advice, but keep your own counsel”, is the golden mantra. There is a higher probability of a good decision turning out to be a good outcome.

I will report at the end of the course, if my good decision does result in a good outcome.

2005-06-27

Good decisions vs. good outcomes

Good decisions and good outcomes are not necessarily correlated. What appeared to be a good decision at one point, need not result in a good outcome. Good outcomes, apart from depending heavily on good execution, result also from various factors not considered at the time of making decision and from factors, which emerge after the decisions are made. Despite improvements in simulation and various other models/techniques, it is very difficult to predict outcomes. Any decision making, for instance, in the corporate place, without considering what competitors may do, may not be a good decision. Of course, there may be exceptions in terms of some path breaking innovation or a very large scale launch, where competition will be very weak, at least in the short-run. Anticipating competitive response is nonetheless difficult.

If the outcome cannot be good, how can we call it a good decision at all? The reason is that, at a point where one has to make a decision, given the variables, given the assumption, numbers and expectations, if there was another decision, which gave better indication of future, then the decision made cannot be called a good decision. A good decision is, by definition, one which was the "optimal" decision given all the factors leaving aside the error factor (?).

Coming to ISB was a good decision for all of us. Otherwise, we would not have come here. Whether the outcome would be good or not depends on what we learn, where we would get placed. It is hoped that for many students, it will turn out to be a good outcome. Not necessarily for all. Some of us may fail to leverage the resources available at ISB. Some others may have made improbable assumptions.

It is important that one consider all the variables, consult people who can proffer good advice, think about the worst possible scenarios, etc before leaving a job and going to a b-school. But there is no point getting into analysis paralysis, which many people keep doing. “Seek advice, but keep your own counsel”, is the golden mantra. There is a higher probability of a good decision turning out to be a good outcome.

I will report at the end of the course, if my good decision does result in a good outcome.