You Made a Bad Decision. Now What?

We’ve all been there. We made a decision. We thought it was a good one, but subsequent events proved us wrong, and now we have a mess on our hands. What to do?

Handling a bad decision is one of the most important things for a manager to learn how to do, because everyone will eventually face this situation. In fact, this is more than just management advice: it is really life advice. We make bad decisions in all aspects of our life! Too many people never learn how to recover from a bad decision, and that causes a lot of unnecessary suffering.

Luckily, all it takes to get better at handling a bad decision is a willingness to do some introspection and a little effort. Of course, the introspection is the hard part. Here’s a guide for undertaking it, broken down by mastery level.

Beginner: Contain the Damage

You might think that the most basic skill for handling a bad decision is being able to admit you’ve made one, but in fact, I think a lot of people never get to that level. The most basic skill for handling a bad decision is just recognizing there is a problem, not that your choices had anything to do with the problem. Sadly, some people struggle with even this skill, perhaps because acknowledging the problem feels to them like accepting blame for it.

That doesn’t have to be the case. In fact, sometimes it might not be the case. Sometimes, you really are faced with a difficult decision, with risks associated with all of the choices in front of you. You pick what you think is best, but that doesn’t make the risks go away. When those risks become reality, you have a problem to handle, even if your initial decision was still the “right” one.

So, if someone you know is refusing to acknowledge a mistake, consider a strategy of just ignoring the mistake and focusing on the problem at hand. “Yes, we might be facing problems if we had gone with the other supplier, too. Nevermind, let’s just fix the problems we have now.” Pro-tip: you can say this even if you don’t agree that you’d be facing problems if you’d gone with the other supplier. It is a counterfactual that you can never test. At this beginning level of handling a bad decision, you aren’t trying to do anything but contain the damage, so just focus on that, and not what unleashed the damage in the first place.

Intermediate: Acknowledge the Mistake to Yourself

In most cases, you can’t help someone else get past the beginner level in handling a bad decision unless they really trust you and are actively trying to grow their leadership skills. So I rarely try to guide other people to even the intermediate level unless I am giving performance feedback to a direct report or someone else I am mentoring. But there is one person I can always push to reach higher levels: myself. This intermediate level is the minimum level of bad decision handling I expect myself to achieve for each and every mistake I make. I aim for the higher levels, but realistically, sometimes that is beyond my immediate capabilities. There are some bad decisions I’ve made that I was only able to learn from years later. I should always be able to acknowledge a mistake to myself, though. Nothing good ever comes from lying to myself, so I do not tolerate it.

Usually, I recognize the mistake right away. Sometimes, though, I can’t see the mistake until I’m in the midst of doing the work of cleaning it up. This is another reason I consider containing the damage to be the beginning level of handling a bad mistake. Sometimes, you have to move through it to even see the mistake.

Pro: Acknowledge the Mistake to Others

It is great if you can acknowledge the mistake to yourself, but the real magic starts to happen when you are able to acknowledge it to others. Bonus points if you can avoid endlessly justifying your choice. “In retrospect, choosing to go with the new supplier was a mistake, but their prices were great and I was so tired of the snooty customer service at the old supplier” is good, but “In retrospect, choosing to go with the new supplier was a mistake, I shouldn’t have prioritized price over reliability for such a key purchase” is better. If you can’t manage that, just stop at “In retrospect, choosing to go with the new supplier was a mistake.”

Magic happens here because when other people hear you admit your mistake, they will feel more comfortable admitting their mistakes to you, and that opens up great coaching opportunities with your team. Also, this creates an environment in which people are more willing to give you feedback, and while feedback can sometimes be difficult to hear, it almost always helps you get better at your job.

Master: Analyze the Mistake to Learn How to Avoid Making a Similar One

It would be easier to get better at decision making if all new decisions you faced looked exactly like ones you’d made (and learned from!) in the past. Of course, it is not that easy. However, you can still learn from every mistake you make. You just need to dig a little deeper to get to more fundamental lessons. I like to apply a five whys style approach: I ask myself why I made the choice I made, then I take that answer and ask why I thought that particular thing was important, and so on, until I get at what seems to be the underlying failure. Let’s do this with the supplier example:

  • Why did I choose a bad supplier? Because they had lower prices and nicer customer service, and I didn’t properly consider the importance of reliability.
  • Why did I care about the customer service? Because the rude sales rep for the other supplier makes me angry.
  • Why didn’t I consider the importance of reliability? I took it for granted and was fooled by superficial statements from the supplier.

I didn’t get to five questions here, but I think it demonstrates the idea. There are three fundamental lessons I could take here: (1) Don’t allow personal feelings to be part of the initial decision making, (2) Make sure to consider all aspects of a decision, and (3) Make sure to get independent information about important decision criteria.

In general, bad decisions happen because of two main causes: faulty information or faulty decision-making processes. We are all imperfect people, operating under competing constraints. Bad decisions are unavoidable. But we can work to minimize them by letting each bad decision we make teach us about the flaws in our information-gathering and decision-making processes. You won’t always be able to get to the master level of handling a bad decision, but it is worth it to always try.


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