When Michael Mauboussin met Nobel Laureate Daniel Kahneman, he asked how we can improve our performance.
Kahneman, the author of Thinking: Fast and Slow, replied, almost without hesitation, that you should go down to the local drugstore and buy a very cheap notebook and start keeping track of your decisions.
Whenever you’re making a decision of consequence, take a moment to think; Write down the relevant variables that will govern the outcome, what you expect to happen, and why you expect it to happen. (Optionally you can add how you feel about the decision and your confidence level in the outcome you expect.)
A journal of this nature will reduce hindsight bias and give you accurate and honest feedback.
It’ll also help you distinguish between when you’re right for the wrong reasons and when you’re wrong for the right reasons.
If you’re anything like me, one thing that you’ll discover is that, on the few occasions when you’re right, it’s often for the wrong reasons.
A Decision Journal
Somewhat surprisingly, few organizations keep track of what’s decided and why.
This seems idiotic when you consider that often thousands of dollars are spent making a decision. Of the few that do keep track of decisions, fewer will be honest about what’s actually discussed.
While accurate, for example, few people will write down that the highest paid person in the room, usually the boss, said to do X, and that’s why you’re doing it.
But that’s kinda the point isn’t it?
If you can’t write down what was discussed, the relevant variables that govern the decision, and why you think something will play out, than you should seriously think about why you’re making the decision in the first place. It could be that you don’t understand what’s going on at all. If that’s the case it’s important to know.
I get that we have to make decisions under uncertainty. But we’re not going to learn from those decisions if we don’t keep track of, and review, what’s decided and why.
While people come and go, organizations often seem to make the same mistakes over and over. Improving our ability to make decisions is simple, but not easy.
A decision journal will not only allow you to reduce your hindsight bias, but it will force to you make your rationale explicit upfront. This habit will often surface bad thinking that might have otherwise slipped by.