Bad Decisions vs. Bad Outcomes

I was listening to The Knowledge Project podcast this morning and the guest on the show was Howard Marks, the billionaire investor and co-founder of Oaktree Capital. He was describing the culture at his company and the mindset that they have cultivated, to which Mr. Marks attributes much of their success. Speaking about his relationship with his business partner of 20+ years, he said, “We are unusually supportive of each other. . . Neither of us has ever said to the other one,  ‘Boy that worked out badly. You did a stupid thing.’ This is not an activity where you can bat a thousand. . . If you have an organization which second-guesses your mistakes, you create an organization that is mistake averse. . .[Instead,] we have cultivated the ability to distinguish between bad decisions and bad outcomes.”  He explained that you cannot really blueprint a step-by-step recipe for this sort of supportive relationship, but you can cultivate a mindset that recognizes the inherent uncertainty in the world (or financial markets) and doesn’t confuse bad outcomes with bad decisions: “Improbable things happen all the time and probable things fail to happen all the time, because the world is an uncertain place. We are going to make decisions that don’t work. . . In the short run, a good decision that didn’t work can look a lot like a bad decision. But we have a mentality that recognizes that and doesn’t criticize people when good decisions don’t work out.”

My hope is that we are cultivating a similar mindset here – that people aren’t afraid to make mistakes (provided that we are learning from them), and that we as coaches and athletes can learn to distinguish between bad outcomes and bad decisions – and that our enjoyment of the training experience isn’t overly connected to the outcomes (given the uncertainty of the world) but is strongly connected to the good decisions made in the process.