One question I’m often asked is what should a decision journal look like?
You should care enormously whether you’re making good ones or bad ones. After all, in most knowledge organizations, your product is decisions.
A good decision process matters more than analysis by a factor of six. A process or framework for making decisions, however, is only one part of an overall approach to making better decisions.
The way to test the quality of your decisions, whether individually or organizationally, is by testing the process by which they are made. And one way to do that is to use a decision journal.
You can think of a decision journal as quality control — something like we’d find in a manufacturing plant.
Conceptually this is pretty easy but it requires some discipline and humility to implement and maintain. In consulting with various organizations on how to make better decisions I’ve seen everything from people who take great strides to improve their decision making to people who doctor decision journals for optics over substance.
“The idea,” says Michael Mauboussin, “is whenever you are making a consequential decision, write down what you decided, why you decided as you did, what you expect to happen, and if you’re so inclined, how you feel mentally and physically.”
Whenever you’re making a consequential decision either individually or as part of a group you take a moment and write down:
- The situation or context;
- The problem statement or frame;
- The variables that govern the situation;
- The complications or complexity as you see it;
- Alternatives that were seriously considered and why they were not chosen; (think: the work required to have an opinion).
- A paragraph explaining the range of outcomes
- A paragraph explaining what you expect to happen and, importantly, the reasoning and actual probabilities you assign to each. (The degree of confidence matters, a lot.)
- Time of day the decision was made and how you feel physically and mentally (if you’re tired, for example, write it down.)
Of course, this can be tailored to the situation and context. Specific decisions might include tradeoffs, weighting criteria, or other relevant factors.
One point, worth noting, is not to spend too much time on the brief and obvious insight. Often these first thoughts are system one, not system two. Any decision you’re journaling is inherently complex (and may involve non-linear systems). In such a world small effects can cause disproportionate responses whereas bigger ones can have no impact. Remember that causality is complex, especially in complex domains.
One tip I’ve learned from helping organizations implement this is that there are two common ways people wiggle out of their own decision: hindsight bias and jargon.
I know we live in an age of computers but you simply must do this by hand because that will help reduce the odds of hindsight bias. It’s easy to look at a print-out and say, I didn’t see it that way. It’s a lot harder to look at your own writing and say the same thing.
Another thing to avoid is vague and ambiguous wording. If you’re talking in abstractions and fog, you’re not ready to make a decision, and you’ll find it easy to change the definitions to suit new information. This is where writing down the probabilities as you see them comes into play.
These journals should be reviewed on a regular basis—every six months or so. The review is an important part of the process. This is where you can get better. Realizing where you make mistakes, how you make them, what types of decisions you’re bad at, etc. will help you make better decisions if you’re rational enough. This is also where a coach can help. If you share your journal with someone, they can review it with you and help identify areas for improvement.
And keep in mind it’s not all about outcome. You might have made the right decision (which, in our sense means a good process) and had a bad outcome. We call that a bad break.
Odds are you’re going to discover two things right away. First, you’re right a lot of the time. Second, it’s often for the wrong reasons.
This can be somewhat humbling.
Let’s say you buy a stock and it goes up, but it goes up for reasons that are not the same as the ones you thought. You’re probably thinking high-fives all around right? But in a very real sense you were wrong. This feedback is incredibly important.
If you let it, the information provided by this journal will help identify cases where you think you know more than you do but in fact you’re operating outside your circle of competence.
It will also show you how your views change over time, when you tend to make better decisions, and how serious the deliberations were.