S5E6 | The Relief-Regret Framework: Making Decisions Under Uncertainty
In this episode of Ask a Decision Engineer, Michelle Florendo responds to David's question about making decisions in the face of risk and uncertainty. She introduces the Relief-Regret framework, a practical tool she developed to help decision-makers navigate uncertain outcomes when perfect information isn't available.
“So remember, there are three components to every single decision. There are your objectives. What is it that you want? There are the options. What are the different ways that you can achieve those things that you want? And then there’s information like how do those different options deliver against the objectives you have?”
S5E6 | The Relief-Regret Framework: Making Decisions Under Uncertainty
Through a personal example of managing multiple commitments during a busy period while fighting illness, Michelle demonstrates how to apply the Relief-Regret framework to real-world decisions. She walks listeners through the process of using this tool to evaluate options and make choices with greater confidence, even in the face of uncertainty.
Table of Contents
Evolution of the Name [00:01:00]
When to Use Relief-Regret [00:02:00]
About Decision Trees [00:04:00]
Understanding Risk Components [00:06:00]
Origins of Relief-Regret [00:09:00]
A Real-World Example [00:11:00]
Framework Implementation [00:14:00]
Framework Evolution and Feedback [00:29:00]
Evolution of the Name [00:01:00]
Michelle begins by explaining how her framework has evolved through different iterations and names. What began as the "seven question shortcut analysis" became known informally as the "Happy Face, Sad Face Analysis" by her Stanford Continuing Studies students before its current iteration as the Relief-Regret framework.
"I'll admit, I'm still playing with what to call this thing. I've called it a number of different things over the years, and I'll admit that this framework is still evolving," Michelle explains, noting how the framework continues to develop through practical application.
The evolution of names reflects how different audiences have engaged with and understood the tool, from decision analysis students to coaching clients facing real-world decisions.
When to Use Relief-Regret [00:02:00]
The framework is specifically designed for decisions involving radical uncertainties - situations where outcomes cannot be known until they occur. Michelle emphasizes that this tool is particularly valuable when people express concerns about potential regret.
"And when they say something like, I don't want to make a decision that I'm going to regret. Because there's something there around, you are facing the type of decision where there are some what-ifs," Michelle explains.
She outlines the three core components present in every decision: objectives (what you want), options (ways to achieve what you want), and information (how options deliver against objectives). The Relief-Regret framework is most useful when dealing with radical uncertainties - situations where information won't be available until after decisions are made.
About Decision Trees [00:04:00]
Michelle introduces decision trees as the foundational concept that informed the Relief-Regret framework. She describes how decision trees help visualize choices and their potential outcomes through a branching format.
"Decision trees are really useful tools for visualizing. Remember, a lot of the work that I do is all about capturing often in a visual nature what is happening in our decisions or decision processes," Michelle explains.
Using her own example of deciding whether to try for pregnancy with health risks, she demonstrates how decision trees map out initial choices, uncertain outcomes, and subsequent decisions that might arise. However, she notes that teaching proper decision tree construction requires more time than is typically available in coaching sessions or workshops.
Understanding Risk Components [00:06:00]
When analyzing risk, Michelle emphasizes examining both what's at stake and the likelihood of various outcomes. She explains that risk assessment involves identifying the objectives that might not be achieved and understanding both the magnitude and probability of potential outcomes.
Risk has multiple components:
What is at risk (objectives that might not be achieved)
Magnitude (how significant the impact would be)
Likelihood (probability of different outcomes)
"Whenever you're thinking about risk, there are a few things going on. So one, it's useful to think about what is at risk, and it's usually, oh, I'm not going to achieve my objective," Michelle details.
Origins of Relief-Regret [00:09:00]
Michelle explains how she developed the Relief-Regret framework while collaborating with Stanford's Life Design Lab. She recognized that traditional decision-making tools like decision matrices weren't sufficient for decisions involving radical uncertainties.
The framework emerged from listening to common concerns in coaching sessions and workshops. Michelle notes how people frequently expressed worry about making decisions they might regret, signaling a need for a tool specifically designed to address uncertainty.
"One of the things that I kept hearing over and over and over again was, I don't want to make a decision that I'm going to regret," Michelle shares, explaining how this recurring concern shaped the framework's development.
A Real-World Example [00:11:00]
Michelle demonstrates the framework's application through a personal example involving multiple commitments at the end of October: a 20-year college reunion, completing Halloween costumes, attending a nephew's birthday party, and teaching responsibilities, all while feeling the onset of illness.
She describes her decision-making process: "I had to make a decision around how do I move through all of these things that are on my calendar throughout the end of this month... and then I was thinking like I don't want to risk getting really sick for the events that matter."
The example illustrates how phrases like "I don't want to risk" or concerns about regret can signal when to use the Relief-Regret framework.
Framework Implementation [00:14:00]
The Relief-Regret matrix consists of three columns and four rows, designed to make complex decision analysis more accessible.
Matrix Structure:
First Column: Row labels
Relief
Regret
Response
Reduce Risk
Second/Third Columns: Options being considered
Steps for Implementation:
Draw the matrix (3 columns, 4 rows)
Label rows (Relief, Regret, Response, Reduce Risk)
List options in column headers
Fill in relief scenarios for each option
Document potential regret scenarios
Plan responses to negative outcomes
Identify risk reduction strategies
"The way that this works is you draw a matrix on your piece of paper. So grab a piece of paper if you have a decision, and you're going to first start out by drawing three columns and four rows," Michelle instructs.
Framework Evolution and Feedback [00:29:00]
Michelle discusses how the framework continues to evolve through feedback from colleagues at the Life Design Lab. She shares how her colleagues have suggested expanding the emotional range of the framework beyond just relief and regret.
"Usually I work with people who do place a lot of focus on risk mitigation. They're trying to minimize the downside versus people who are looking to maximize the upside," Michelle explains, acknowledging potential areas for framework expansion.
She notes colleagues' suggestions about including broader emotional ranges: "Maybe there's ‘Rejoice’ on the upside as opposed to just ‘Relief.’ And then on the downside, not just ‘Regret,’ but ‘Remorse’ or what if, what if there's even ‘Reject.’"
Key Takeaways
The Relief-Regret framework helps navigate decisions involving uncertainty
Look for signals like "I don't want to risk" or concerns about regret to know when to use the framework
Consider both magnitude and likelihood when assessing risks
Map out relief scenarios, regret scenarios, responses, and risk reduction strategies
The framework is flexible and continues to evolve based on user feedback
Mentioned in the Podcast
Decision Trees
Relief-Regret Matrix
Decision Making Components
For More Decision-Making Resources
Michelle’s Stanford Continuing Studies course
Check out Michelle’s self-paced course Decision Toolkit for Personal Decisions
Her Decision Toolkit Coaches and Counselors virtual workshop on Maven
