How an Agency Can Define Culpability for a Client’s Poor Decisions
I recently discussed a common industry problem with a friend who owns a digital agency: the feeling of guilt and responsibility for a client’s strategic decisions that led to negative consequences. The initial impulse is to distance oneself by stating that the final decision always rests with the client. However, a deeper analysis shows that the boundaries of responsibility require a clear definition.
This situation prompts an examination of two fundamental aspects of business decision-making.
1. Decision Quality vs. Outcome Quality
A common mistake in the business world is to judge the quality of a decision solely by its final outcome. If the result is positive, the decision is deemed “right”; if negative, it is “wrong.” This approach, known as “resulting,” ignores a key factor: uncertainty.
“What makes a decision great is not that it has a great outcome. A great decision is the result of a good process, and that process must include an attempt to accurately represent our own state of knowledge. That state of knowledge, in turn, is some variation of ‘I’m not sure.’”
Annie Duke, a professional poker player and decision strategist, argues that we must stop judging decisions by their results (“resulting”). She demonstrates that in a world of uncertainty, even the best decisions can lead to bad outcomes, and vice versa. Her book “Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts” teaches how to separate the quality of the decision-making process from the influence of luck.
I find the poker analogy is particularly fitting. In poker, as in business, achieving mid-term growth often requires embracing counter-intuitive decisions. After all, you don’t have to win every hand to improve your game, but you must improve your game to win in the long run.
The quality of a decision should be assessed at the moment it is made, based on the completeness and reliability of the available information. An optimal decision is the most considered choice made after a thorough analysis of the data, forecasts, and risks that were known at that time.
The outcome, however, depends not only on the quality of the decision but also on a multitude of external, often unpredictable variables: market conditions, competitors’ actions, technological shifts, and random events.
The role of an agency or consultant is to maximize the quality of the client’s decision-making process. This includes:
- Providing comprehensive data and analytics.
- Modeling various potential scenarios.
- Objectively assessing the potential risks and benefits of each option.
Thus, the professional responsibility of the agency lies in the realm of informational support and the quality of its recommendations, not in guaranteeing a positive outcome. The ultimate responsibility for the choice and its consequences remains with the decision-maker – the client.
2. Resilience to Failure as a Fundamental Success Factor
A common misconception is that a successful business is the result of a flawless strategy executed by brilliant visionaries. Experience shows the opposite. The history of legendary companies is more often a story of survival, adaptation, and timely course corrections after a series of failures.
Modern business theory emphasizes concepts like “antifragility” and “adaptability.” Long-term success is determined not so much by the ability to avoid mistakes, but by having a system that allows one to endure failures with minimal damage, extract valuable lessons from them and quickly adapt strategy to new realities.
Nassim Nicholas Taleb in his “Antifragile: Things That Gain from Disorder” introduces the concept of “antifragility” – a property of systems that not only withstand stress and chaos but actually improve because of them. He argues that the best business systems are not those that try to avoid failure at all costs (fragile), but those built to benefit from mistakes and unpredictable events.
Strategic “pivots,” or fundamental changes in a business model, are the norm for many tech giants. Their success is a consequence not of being right from the start, but of a well-developed system for testing hypotheses and evolving.
On the other hand, we should not fall into romanticizing failure. Not all failures are equally useful. There are ‘bad’ failures caused by negligence, insufficient analysis, or procedural violations. The only valuable failures are ‘good’ ones that occur at the frontiers of knowledge as a result of bold experiments. This perspective calls not just for tolerating failure but for creating a culture where mistakes are carefully analyzed and classified.
Returning to the agency’s dilemma: its value is demonstrated not only in developing the initial strategy but also in supporting the client after a decision has been made and the outcome (possibly negative) is known. The goal is to help the client analyze the results, adjust tactics, and move forward, having become more resilient to future challenges.
Final Perspective: Responsibility for a client’s decisions is a two-way street. The agency is fully responsible for the quality and completeness of the information upon which a decision is based. The client is responsible for the choice itself. Instead of cultivating guilt over an unfavorable outcome, it is more productive to focus on building a partnership where mistakes are viewed not as failures, but as an inevitable part of the process of growth and adaptation.