Rajeev runs a product company. He recently had to fire his CMO. He feels this is his worst decision in the last couple of years. This has hurt his company the most.

“Since we fired him, the search for a replacement has been awful. We haven’t had anybody come in who actually turns out to be as good as he was. Sales are falling. Employee motivation is record low,” he laments.

That clearly sounds like a disastrous result, but it would be good to understand how he went about making the decision. Other than that it didn’t work out, what else was wrong with it?

“We looked at our direct competitors and comparable companies, and concluded we weren’t performing up to their level. We thought it was probably a leadership issue. We could definitely perform and grow at that level if we had better leadership.”

“We started working with our CMO to identify his skill gaps. We even hired an executive coach to work with him on improving his leadership skills, and get his major weaknesses identified.”

“But it still failed to produce improved performance. We debated splitting his responsibilities and have him focus on his strengths, and moving other responsibilities to a different executive.”

“But this idea was rejected, concluding that the CMO’s morale would suffer, employees would likely perceive it as a vote of no confidence, and it would put extra financial pressure on the company to split a position we believe one person could fill.”

It sounded like Rajeev had a reasonable basis for believing they would find someone better. The company had gone through a thoughtful process and made a decision that was reasonable given what they knew at the time.

It sounded like a bad result, not a bad decision. The imperfect relationship between results and decision quality devastated Rajeev and adversely affected his subsequent decisions regarding the company.

Rajeev had identified the decision as a mistake solely because it didn’t work out. He obviously felt a lot of anguish and regret because of the decision. He stated very clearly that he thought he should have known that the decision to fire the president would turn out badly.

He was not only resulting but also succumbing to its companion — Hindsight Bias. Hindsight bias is the tendency — after an outcome is known — to see the outcome as having been inevitable. When you say, “I should have known that this would happen,” or, “I should have seen it coming,” you are succumbing to hindsight bias.

I’m yet to come across a founder who acknowledges a bad decision where she got lucky with the result, or identifies a well-reasoned decision that didn’t pan out. You generally link results with decisions even though it is easy to point out indisputable examples where the relationship between decisions and results isn’t so perfectly correlated.