Advancing the Art and Science of Decision-Making: A Guide (2026)
Chapter: What Makes a Good Decision?
What Makes a Good Decision?
Good Outcome or Good Process?
It is natural to want to assess a decisionʼs quality based on its outcome. For example, a company might judge hiring decisions not on the basis of whether the decision was made thoughtfully or fairly, but on the basis of whether the new employee performs well. A decision is deemed to have been a “good” decision if it resulted in positive outcomes and a “poor” decision if things did not turn out well. This tendency can be viewed as a form of cognitive bias: outcome bias. Experts in the business management field warn against succumbing to this bias of prioritizing outcome over process, some going so far as to deem outcomes “irrelevant as a measure of decision quality” and warn that using it as such is a path to organizational crisis (De Reyck and Degraeve 2010). Instead, how decisions are reached is considered a much more important aspect of decision quality.
Sometimes you have to accept the fact that a good decision does not guarantee a good outcome.
—Marc Williams
Executive Director, Texas DOT
This is the view supported by the long-term decision-making approaches applied by successful poker players, in which the correct decision is the one that has the highest probability of winning, even if that is only 51%. Experienced players know that for each individual play, the “right” decision will often result in unfavorable results. Over many plays, however, the player will be better off by sticking to this approach. Thus, declaring a decision that lost a single hand “bad” would be considered short-sighted and misguided. The poker world even has a term for this—“resulting”—and it is not a term used positively.
Experienced transportation leaders also emphasize the importance of having a good decision-making process over focusing on the results. This is critical not only to provide the best opportunity to make a good decision, but also to make sure the decision would hold up to public, legislative, media, or employee scrutiny later.
Universal Characteristics of “Good” Decisions
The specifics around what is “good” will vary significantly by decision-maker and by situation, but there are four broad categories that can apply universally to any situation (Figure 1):
- Factual competence: This means that a decision aligns with the facts. The decision-maker has understood and integrated relevant data, information, and logic, and their assessment of the situation accurately reflects how the world works. The assessment of facts creates a set of beliefs for the decision-maker, which they will use to base their decision on. Ensuring factual competence means examining your beliefs and gathering the information and tools necessary to make them as accurate a reflection of reality as possible.
Long Description.
The flowchart shows the components of a good decision: Factually competent, Values competent, and Practical. These three components all connect to the fourth component that is labeled Adaptive.
- Value competence: A good decision is in alignment with the decision-makerʼs values or those of the organization on behalf of which decisions are being made. Modern decision science has elevated the importance of nonfactual considerations such as values in identifying optimal decisions, as compared with the traditional rational models of the past century.
- Practicality: Leaders know that even a decision that is “perfect” by the metrics outlined above—responsive to every relevant data point and in complete alignment with the organizationʼs values—could be a disaster if it is not delivered at the right time or if it is not acceptable to political leaders, employees, the public, or other key stakeholders. Practicality considers all these real-world considerations that can trip up even objectively “good” decisions.
- Adaptivity: The decision-making process acknowledges innate uncertainty and allows for a shift in strategy when new information becomes known, values evolve, or new practical considerations crop up. Essentially, adaptivity keeps the previous three elements of a “good” decision current. It is important to stay informed of the most up-to-date facts, values, and practicalities that are relevant to the decision situation.
