Ideas

The Tension Between Optimising Outcomes vs Minimising Regret

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I was reminded recently that there's a natural tension between optimising for outcomes and minimising regret.

I assume the vast majority of people who read this blog optimise for outcomes: like me, you probably have career goals, you have an idea of the future you want to inhabit, and so you make plans to go after that future. Why else would you read a blog about career moats, after all?

But it's also worth remembering another framework that's applicable is ‘regret minimisation’ — a framework that was originally made popular in the media by Amazon founder Jeff Bezos. (Long story short, Bezos wanted to quit his plush finance job to start Amazon, and after outlining his plan to his boss, eventually decided to do it on the basis of “I’ll regret it if I don't give it a shot” — he called this his regret minimisation framework.)

Regret minimisation also applies to things outside of one's career, naturally. And when you have multiple frameworks with which to evaluate decisions, the interesting test cases occur when the two lead you to contradicting conclusions.

Earlier this year, I burnt two weeks of work in startup incubator program Entrepreneur First by going back to my hometown in Kuching to visit my grandparents. This was important to me; I wasn’t planning on flying back for the rest of the year in order to save money and extend my runway. This decision cost me the opportunity to build a go-big-or-go-home startup in EF; my advisor wasn't at all pleased with my team’s progress after I returned. But I don’t regret it one bit.

I don't want to shy away from the difficulty of real-life decision-making here: my not regretting it could well be post-hoc rationalisation after I'd made the decision. But I made the decision fully aware of the consequences, and I made sure I wasn't lying to myself.

If you’re grappling with optimising your time for impact, remember that regret minimisation is the other framework that’s important to consider. And understand that both frameworks are sometimes in direct conflict with each other.

If we reduce this to a platitude, however, we get something way more mundane: that going after excellence precludes balance. But that's insufficiently nuanced to be useful; optimising for outcomes vs minimising regret better captures the tension that occurs when career-oriented people choose between opposing options in their day-to-day lives.

The wisdom of picking which framework to use is something I wish for all of us.