Improve your decision making. The “power of regret”.
Updated: Feb 13
I knew it was going to happen, I knew it since I started reading Thinking fast and slow by D. Kahneman.
I knew that reading this book would have triggered so many thoughts and reflections that was impossible not to write something about it.
I knew it was going to be difficult. What to pick among the thousands of learnings condensed in this book? How to add something on top of what is already there?
These questions kept nagging me until I found the right subject. Something very fascinating from a scientific perspective and, at the same time, very actual in the day-to-day professional and personal life.
The subject I’m going to write about is the “power of regret” in decision making.
Consider the following situation:
Some people are discussing in a meeting room. An important decision is to be made and a few alternatives are available. The team has been in similar situations before, the case is not completely new.
John seems to have a strong opinion about how to move forward:
Scenario 1. John knows what worked well in the past in similar situations. He believes that the same approach is also applicable to this case and leads the team in this direction. Unfortunately, John’s idea turns out to be a failure
Scenario 2. John knows what worked well in the past in similar situations. He believes, though, that this case requires a completely different approach and leads the team in this direction. Unfortunately, John’s idea turns out to be a failure
Question: In which scenario do you think John experiences greater regret?
If you picked Scenario 2, you are in good company. In a very similar experiment, most of the people gave the same answer!
If you are curious to know more, the following facts will shed some light on regret and how it affects our judgment and decision-making.
Fact 1. Definition of Regret.
From Wikipedia: Regret is the emotion of wishing one had made a different decision in the past because the consequences of the decision were unfavorable.
Regret is a counterfactual emotion. It is related to possible alternatives to the current reality that would have happened had we made a different choice.
In simple words, regret is what we feel when we realise we should have done something differently.
The availability of more options at the time of decision is the necessary condition for regret to exist.
There is no regret where there is no choice.
Fact. 2. Regret and blame
Regret and blame are not the same. Both the feelings are evoked by comparison to a norm but the relevant norms are different.
Regret originates from behaving differently from our internal norm, which is what we usually do and consider the right behavior.
Blame originates from behaving differently from the conventional norm, which is what in general is considered the right behavior.
Fact 3. Regret Intensity
Several experiments have shown that people perceive a stronger emotional reaction, hence a stronger regret, to an outcome that is produced by action than to the same outcome that is produced by inaction.
In other words, we experience more regret when we deliberately and actively put ourselves in a bad situation!
Picking an unconventional alternative (as in Scenario 2) is somehow like taking a deliberate action while going for the default option is more like a non-action (as in Scenario 1).
The farther we move from the norm (default option), the higher the regret intensity.
Fact 4. Fear of regret
The fear of possible future regret influences our behaviors and decisions and makes us more risk-averse (leading us toward regret-avoidant choices).
Decision-makers know that they are prone to regret and the anticipation of that painful emotion plays a big role in many decisions.
The fear of regret is a very strong force that drives big or small decisions in the day-to-day life:
A restaurant customer who would like to try a new dish on the menu but is afraid to regret it if she doesn’t like it
A physician who believes that an unconventional treatment would be better for the patient but goes for the standard one because is afraid to regret it if it doesn’t work
A portfolio manager who cleans up the portfolio from unconventional stocks as the end of the year approaches because is afraid to regret if she will keep them
While reading about regret, I remember me thinking: “This makes so much sense. It is so straightforward. Of course we all know about it and can control it”. Then, I started reflecting on the (personal) decisions I recently made.
Needless to say that I found that more than a few were driven or at least influenced by regret.
The real power of regret lies in the fact that it is so much ingrained in our “system” that it operates without our direct control. It is similar to pain avoidance. Once we experience pain, we instinctively act in a way to avoid it.
In the professional environment, instead, we generally tend to be more rational and never let emotions (like regret) take control, right?
Well, this is not always the case. I can definitely recall more than a few instances where important decisions were made not to maximize the chances of success but rather to minimize the chances of regret.
It is not only about decision making, our “regretful self” is constantly active. It can influence behaviors in a way that the cumulative effect at the company/organization level can be pretty significant:
How many opinions are never shared because of fear of regret?
How many opportunities are never explored because of fear of regret?
How much potential is never exploited because of fear of regret?
Of course, regret is not the only force at play here, but it is definitely something worth analyzing and taking into proper consideration.
Luckily there is something we can do about it.
Dr. D. Kahneman offers two main “tools” against regret:
Be explicit and transparent about the fear of regret and remind yourself about it when making decisions. Transparency is crucial in the professional context as well. An environment where people feel comfortable with openly sharing and discussing the fear of regret is key to framing it in the right way and then limiting its influence.
Be conscious that we tend to overestimate the amount of regret we will experience. It will not hurt as much as we think. A proper “weighting” is crucial in the professional context as well. Fear of regret should be considered and properly seized together with all other decision-making criteria.
Lastly, it is worth mentioning that an “adequate dose” of fear of regret is not always bad.
Fear of regret makes us more vigilant and careful when making decisions. It evokes our past experiences and learnings which can guide us and help us not incur the same mistakes over and over again.
Each of us is lucky enough to be exposed to many learning opportunities every day. Sometimes we catch them, sometimes not.
I started this blog to slow down, focus, reflect on these learnings and make them available to myself and whoever is interested.
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