Analysis, Decision-Making, and Commitment

Analyzing a situation, say your finances, and choosing where to invest your money is a smart move. However, decision-making itself can also be different from the analysis itself. The analysis tells you what makes sense by the numbers, but then you still have to “feel” it. Without that feel, often we fail to commit.

When the analysis and the feeling don’t jive, you end up with no commitment.

Moneyball is an excellent movie because it showcases the gap that exists between analysis and commitment to the decisions we make from it. Billy Beane is facing criticism from everyone for the choices made from Peter Brand’s analysis. He could easily cave, go back to the old ways, and try to recover, but every chance when he finds an opportunity to break the commitment, he finds a way to take away his own ability to do so, even trading his best players away.

Analysis is a powerful tool, but often it requires commitment and rigor to actually follow it. In cases such as applying analysis to engineering, it’s easy to stick to the commitment because physics doesn’t change much. The optimal design for the conditions is going to stay so.

However, what about an economic analysis to determine the right stock pick. Economics aren’t physics, they shift, morph and change. When that stock you pick initially goes in the wrong direction, it’s going to quickly call into question all the faith you put into your analysis. The data is threatening your commitment.

Analyzing the situation is a powerful tool for figuring out the choices to make in the world, but it’s just that a tool. The decisions still have to be executed and committed to, that part is typically much harder than the analysis itself.