I wish I had known then what I know now. How many times have you heard someone say this or said it yourself? Recently I made the decision to leave my CEO position to pursue full time coaching. I’m an entrepreneur at heart, so owning my own business again is very appealing to me. Also, I’m very passionate about helping people, especially budding entrepreneurs. This is going to allow me a more flexible schedule so that I can spend more time with my daughter. It’s a complete win-win for me. In my heart, I know this is the right decision but I can’t help but wonder if a few years from now I’ll look back and feel the same way. As those thoughts pop into my head, they create fear and self-doubt. I’m sure you can all think of a time when you’ve faced a decision that has left you feeling afraid and second guessing yourself or of decisions you’ve made in the past that you wish you could do over. I’m excited about my decision, so I don’t want to let negative thoughts and feelings take over.
I’ve been fortunate in my career with many great opportunities in both the public and private sectors. As I look back on my time as an entrepreneur, professor, consultant, and CEO I can see times that if I had known then what I know now I would’ve made different decisions. I can see that there are things I could’ve done to be more successful and to help those around me more. Hindsight is always 20/20, right?! Instead of looking back on things with regret, I look back and analyze why I made certain decisions so that I can better ones in the future.
In graduate school, I learned about a concept that changed me forever. It is called Bounded Rationality. In 1947, Herbert Simon introduced this idea to explain decision making. Simon believed that individuals face limitations when making decisions in terms of information, cognitive capacity, and time. I think about it like this: get a piece of paper and draw a stick person in the middle. Then draw a big circle around the stick figure.
The stick figure is faced with a decision. Maybe it’s a managerial decision, job change decision, an entrepreneurial decision, or something as simple as what to have for dinner. The circle around the stick figure represents everything this individual knows based upon several things such as education level, life experiences, and known resources available. Every person’s circle, or bounded rationality, is a different size and contains different information. We all make decisions based upon what is contained within our bounded rationality. Hopefully as we age, continue to learn, and have more life experiences our circle grows larger. We can try to increase the size of our circle by diving into educational tools, seeking out mentors, and getting involved in more activities. There is a component of time associated with the size of our bounded rationality as well. It makes sense that the older we get the more time we have to increase our bounded rationality. This helps to explain why we hopefully get wiser as we get older or why we say I wish I had known then what I know now. It also explains why hindsight is 20/20. I like the idea of bounded rationality because it helps to alleviate regret in past decisions. We all make decisions based upon the amount of information we have at the time the decision is made. Some of those decisions were good ones and some were bad ones, but there’s no reason to beat ourselves up over the bad ones. We all do the best we can in the moment. After I was exposed to this idea, it helped me to understand myself and others better.
Five years from now, will I look back and think I wish I had known then what I know now? I certainly hope so because this will mean that I’ve learned something. But will I regret my decision? HECK NO! If I am aware of my bounded rationality, emotions and personality and use that information to make a decision, I can never make a mistake. Wow, that’s a powerful statement, isn’t it?! You don’t have to make any more mistakes either.
In my next several blogs, I’m going to dive head first into this with you. I’ll start with discussing bounded rationality. The power associated with this concept is one of the key factors of success – in everything! Stay tuned!