What’s luck got to do with it?

We all seek certainty in our daily lives. We expect if we make a decision, the outcome will be just as we planned: a direct correlation between the decision and result.

You, as a business leader, seek the same certainty from the decisions you make. And sometimes, the result is what was expected. Sometimes, it isn’t.

The big question is: why is it so difficult to achieve the business results you expect when you carefully craft your plans and seemingly make good decisions?

The truth is we cannot predict the future. This means we almost never know precisely how customers will respond to a sales quote, what competitors are planning, and a myriad of other external variables at play.

If we slow down the decision-making process and better understand the factors affecting our likelihood of success, we can accept the eventual results with less emotional what-if baggage.

Sometimes, our best decisions and planning fail to deliver the desired results. Other times, the plan and process are not our best effort and yet the results achieved are much better.

In football, this is equivalent to running the wrong pass pattern and still catching the ball for a touchdown. Sometimes, we just get lucky. And this situation reinforces a good decision and a good outcome are not always the same thing.

Yes, I know the equation is luck is where preparation meets opportunity. But that does not really explain how we can improve the quality of our decisions when so many factors remain outside our control. The danger for leaders is learning the wrong lesson from the result.

For example, Annie Duke was a highly successful World Series of Poker champion who also studied psychology at the post-graduate level before committing to poker as a full-time career.

Duke now blends her poker career with her studies to help people understand life is a series of bets made in the face of unknown factors that can impact the results of our decisions. Her book, Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts, guides readers to understand how to make smarter decisions and build on that learning on an ongoing basis.

We should judge the quality of a decision by the quality of thought behind it and not simply by the outcome that followed. In my work helping organizations to achieve greater success by developing and implementing plans, I see three main elements to improving the quality of decisions in your organization that will increase the likelihood your plan will achieve its intended results.

First, you need to clearly state what you want to achieve and why. Define what success means. Clarifying your expectations helps you know what you really believe you can change and what you might not be prepared to change. There is also a value question: if the decision works, how will the organization, its customers or its employees be better off? A successful decision should create enough value to justify the resources, risk and disruption required to implement it.

Second, leaders must know what they know and what they don’t. Good decisions require leaders to separate facts from assumptions and determine whether they have enough reliable information to act. You must also be clear about how you will measure success. Does a successful outcome mean achieving 100 per cent of your objective or are there degrees of success that are still worthwhile?

Third, know what you won’t change. Any improvement requires changing something you are doing today, but changing one part of a business can create unintended consequences elsewhere. Protect what is working while changing what needs to change.

You cannot eliminate luck from the outcome, but you can reduce how much you depend on it. The goal is to learn from each decision and apply that learning to the next one. That starts with improving your problem definition before taking action.

A receiver catching the ball after running the wrong route doesn’t suddenly make it the right play. And a well-executed play that fails doesn’t automatically make it a bad decision. Successful decision-makers know the difference and work to improve their odds with each successive decision they make.

Business also plays out over a much longer period than a football game. One good result can disguise a poor decision, just as one disappointing result can cause leaders to abandon a sound approach too quickly.

The longer game requires leaders to become comfortable making good decisions without the certainty of knowing exactly how they will turn out.

Tim’s bits: A good outcome doesn’t always mean you made a good decision. A bad outcome doesn’t always mean you made a bad one. Improve the thinking, make the decision, learn from the result and don’t confuse luck with judgment. One decision will never define a business, but the quality of the decisions made over time just might. And that is another cornerstone of your winning game plan.

Tim Kist is a certified management consultant, authorized by law, and a Fellow of the Institute of Certified Management Consultants of Manitoba

tim@tk3consulting.ca