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The High Cost of Being Right: Prediction Markets, Process Debt, and the "Pyromaniac" Manager



We live in a world where you can now place a financial stake on almost anything. From interest rate hikes to the color of a celebrity's dress at the Oscars, prediction markets have moved from the fringes of Vegas sports betting into the mainstream of business and culture.


But as these markets become more visible, they raise a haunting question for leadership: In the absence of a betting line, how do we actually measure the quality of our decisions?


In the latest episode of the Process Debt podcast, we sat down to discuss why organizations struggle to evaluate risk, the dangers of "vibe-based" leadership, and why the most dangerous person in your office might be the one always putting out fires.


The "Safety" Gap in Decision Making

Most leaders agree that we should go back and evaluate our past decisions. It sounds like a smart, disciplined thing to do. Yet, it rarely happens.


Why?


It’s rarely about a lack of time; it’s about a lack of safety.


In many corporate cultures, there is plenty of room to celebrate a win, but zero room to dissect a loss. If there is no psychological safety to perform a "Monday morning quarterback" review on a failed project, the organization never learns. Instead, it just keeps taking "bad risks"—risks with massive downsides and absolutely no upside.


Beware the Corporate Pyromaniac

We’ve all seen this person: the high-energy manager who is always the first on the scene when a crisis hits. They are promoted for their "heroism" and their ability to put out fires.


But if you look closer, you might find a stack of matches in their pocket.

This is a classic symptom of Process Debt. When success isn't defined by concrete outcomes, it’s defined by "vibes" and proximity to the CEO's biases. If a manager knows that "saving the day" gets more rewards than "preventing the fire through boring, disciplined process," they will choose the fire every time.

"The profit margin is often hiding a bunch of process debt underneath it. We don't realize the guy getting promoted is a pyromaniac because he's writing the coattails of the CEO's bias."

Building a Culture of Prediction

How do you fix a culture that rewards activity over outcomes? You have to make the team own the prediction.


Chris shared a story about an early Amazon employee who ran a purchasing department. Instead of building reports for executives (the #1 creator of process debt), she spent nine months teaching her team Mean Absolute Percentage Error (MAPE).


She forced her team to look at their own biases:

  • Are you consistently overly optimistic?

  • Are you consistently pessimistic?

  • Were you actually right, or just lucky?


By the time she showed the metrics to the executives, her team was so confident in their data that they could defend their decisions with mathematical certainty. They weren't managing to a report; they were managing to a process.


The "Poor Man's" Guide to Better Decisions

You don't need a massive IT department or a statistical degree to start fixing your decision-making process today. You just need a calendar.

  1. Stake Your Claim: When you make a big decision, write down the expected outcome.

  2. Set a Future Event: Place a calendar invite for 6 or 12 months out.

  3. The Reckoning: When the notification pops up, look at the result. Were you right? Were you wrong?

This simple exercise creates humility. It forces you to realize that much of what we call "productivity" is actually just "wasted activity."


Final Thought: The AI Middleman

As we move toward a future where AI handles more of the "middle management" layer, the stakes for human decision-making get even higher. If we turn over our authority to an execution model that has no skin in the game, we risk a "shucks, I lost the farm" response to catastrophic failures.


The goal isn't to be right every time—it's to be disciplined enough to know why you were wrong.


Would you like me to help you draft a set of "Retro Questions" you can use to evaluate your team's project outcomes from the last quarter?

 
 
 

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