1. Why Football Commentary Often Annoys Me
I am not a huge football fan. I mostly watch the European Championships and the World Cup and even then, only for as long as Germany is still in the competition.
One thing regularly bothers me: how strongly everything is judged in hindsight based on the outcome. A player takes a shot from long range. If the ball goes in, it was brave and brilliant. If it misses, it was an unnecessary act of desperation and he should have “gone down the right,” where a teammate was available for a pass. The player’s decision can be almost identical in both cases. The assessment is not.
2. We Do the Same Thing in Business
I see the same phenomenon in management all the time. A risky and poorly thought-out decision leads to success and is suddenly considered brilliant. Another decision was carefully prepared, all relevant information was considered, and different scenarios were explored. Yet it still fails and is retrospectively judged as mismanagement. Some simply shrug and say: “You can’t be a good leader without a bit of luck.”
I think we should look at this differently. Too often, we confuse the quality of a decision with the quality of its outcome. Of course, over time, good decisions should lead to good outcomes more often. But that relationship does not hold true in every individual case. Decisions are always made under uncertainty and can turn out badly even when they were made well.
A company might, for example, decide to enter a new market after careful analysis. A year later, a geopolitical event fundamentally changes the conditions and the project fails. Was the original decision therefore wrong? No. What matters is whether it was reasonable and well-founded based on the information available at the time. Conversely, luck does not turn a bad decision into a good one.
3. What Management Can Learn from Lawyers
As a lawyer, I learned a useful discipline for precisely this kind of thinking. Before a judgment is reached, the facts must first be established. Evidence is assessed, the factual and legal situation is analyzed, and different arguments are weighed against each other. Only at the end of this process does the decision follow.
That is why, during law school and my legal traineeship, the final conclusion of a legal analysis or judgment was never the only thing being assessed. Far more important was whether you had fully understood the facts, identified the relevant legal issues, and considered the different arguments. Particularly on contentious issues, two people could reach different conclusions and still produce excellent work - as long as the reasoning was thorough and sound.
Management can learn a lot from this approach. Before important decisions are made, the relevant information should be gathered, the right people involved, opposing arguments heard, and different scenarios considered. A good decision-making process does not guarantee a good outcome. But it increases the probability of one. Many people consider such a process too time-consuming. Yet even under time pressure, it can be followed in a condensed form. After all, courts also have expedited proceedings when decisions need to be made quickly.
4. The Outcome Changes How We See the Past
Once we know the outcome, the past suddenly seems much more obvious than it really was. After a success, we find reasons why it should have been foreseeable. After a failure, we discover warning signs that surely should have been obvious. What we forget is that the people making the decision at the time did not have the knowledge we have today.
Of course, leaders also have to be judged by results. Anyone who consistently produces poor results over many years cannot simply point to excellent decision-making processes. But when assessing individual decisions, we should look more closely. Otherwise, we confuse luck with skill and bad luck with incompetence.
The question we should ask more often is: Was it a good decision based on what we knew at the time?
5. My Impuls
Can you recognize a decision that resulted in a major loss as good management if the process behind it was careful and well reasoned?
And conversely: When did you last experience a major success and ask yourself whether it really resulted from a good decision or perhaps also from a considerable amount of luck?
Because good leadership is not about every decision producing the desired outcome. It is about creating decision-making processes that consistently increase the probability of good outcomes.
