"I Knew That Was Going To Happen"

Have you ever heard this from someone? Perhaps they actually did predict something before it happened, but this was most likely after the fact.

I’ll admit that I’ve done this after “predicting” a March Madness upset, taking a faster driving route, and probably thousands of other times to make me look smart. But we all know that the future is simply unpredictable. To mitigate this, our mind tells us stories about every outcome in our lives to convince us that we did the right thing. But this gives us a false sense of comfort, and even when something surprises us and we didn’t prepare for it, we’ll change the narrative to bring back the comfort.

When we do this, the focus becomes on the outcome – not the decision making process. Was what happened good or bad? We feel based on the result, which is often driven by our emotions. Instead, we need to focus on how we evaluated the information, and how the decision was made.

So often, we judge ourselves and others based on outcomes, when in fact the decisions could have been made poorly. Positive outcomes could have just as easily been bad, and good results aren’t necessarily an indicator of the process. Frequently, this builds up a false sense of confidence in the next decision, maybe giving even less thought each time.

Why is this?

One explanation that Daniel Kahneman describes in his book Thinking Fast and Thinking Slow, is “Hindsight Bias”. He says that we can’t handle dissonance in our mind, so we construct the best possible stories to ease the conflict. By losing focus on the process and critical thinking, we also create an “Outcome Bias”, a poor marker for the future.

We all know people who made lucky gambles that paid off, or took too much risk, though the outcome was positive. We might think their foresight was something special, though their decision making could be flawed. But our lives are full of surprises. Healthy people are diagnosed with cancer. First time lottery participants win millions. Your “no-brainer” stock pick plummets. A trusted friend cheats on their spouse. Your very first college freshman class leads you to a future wife and family. Unpredictable events surround us.

It’s impossible to predict how our kids will peform, the next stock market move, the success of a business, or even our drive home. We should accept the uncertainty, emphasize our decision making process and incorporate wise people into the mix. We (I) don’t know what the future holds, so whatever the case – it’s the process that matters.

Two very smart authors on this topic:

https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555

https://www.amazon.com/Black-Swan-Improbable-Nicholas-Hardcover/dp/B00BR9W8GM/ref=asap_bc?ie=UTF8