Once something happens, we feel it was predictable from the start.
"I knew this was going to happen," we say after the fact, even though before it happened we couldn't have predicted it with that same certainty. Hindsight bias happens when, after learning an outcome, we feel it was more predictable than it actually was.
In a now-classic study, physicians were asked to estimate the probability of different diagnoses before learning a patient's actual outcome. Once they were told the correct diagnosis and asked to recall their original estimate, they remembered it as closer to the real outcome than it had actually been.
Once we know an outcome, our mind reconstructs the memory of what we "knew before" by folding in that new information, which makes the past feel more predictable than it was at the time.
Source: Fischhoff, B. (1975). Hindsight ≠ Foresight. Journal of Experimental Psychology: Human Perception and Performance, 1(3), 288-299.
When reviewing a project that went wrong, hindsight bias makes the warning signs look obvious from the start. Documenting decisions and their reasoning before knowing the outcome is the only real way to judge whether they were good decisions at the time.
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