Winning Decisions: Getting It Right the First Time - Hardcover

Russo, J. Edward; Schoemaker, Paul J.H.

 
9780385502252: Winning Decisions: Getting It Right the First Time
Hardcover
ISBN 10: 0385502257 ISBN 13: 9780385502252
Verlag: Currency, 2001

Inhaltsangabe

Business revolves around making decisions, often risky decisions, usually with incomplete information and too often in less time than we need. Executives at every level, in every industry, are confronted with information overload, less leeway for mistakes, and a business environment that changes rapidly. In light of this increased pressure and volatility, the old-fashioned ways of making decisions–depending on intuition, common sense, and specialized expertise–are simply no longer sufficient. Distilling over thirty years of groundbreaking research, Winning Decisions, written by two seasoned business advisers and world leaders in behavioral decision studies, is a comprehensive, one-of-a-kind guide to the proven methods of making critical business decisions confidently, quickly–and correctly.
Decision-making is a business skill which managers often take for granted in themselves and others–but it's not as easy as some might think. The authors, whose expertise has been sought out by over a hundred companies, including Arthur Andersen, Hewlett-Packard, IBM, and Unilever, contend that decision-making, like any other skill, must be developed and honed if it is to be used effectively. Winning Decisions offers step-by-step analyses of how people typically make decisions, and provides invaluable advice on how to improve your chances of getting your next big decision right the first time. The book is packed with worksheets, tools, questionnaires, case studies, and anecdotes analyzing major decisions made by organizations like British Airways, NASA, Shell Oil, and Pepsi. Some of the proven, straightforward techniques covered in Winning Decisions include how to:

Reframe issues to ensure that the real problem is being addressedImprove the quality and quantity of your options
Convert expert yet conflicting opinions into useful insights
Make diversity of views and conflict work to your advantage
Foster efficient and effective group decision-making
Learn from past decisions--your own and those of others

With Winning Decisions, managers and other professionals now have access to a proven set of skills and strategies they need for making the right decision, right away.

Die Inhaltsangabe kann sich auf eine andere Ausgabe dieses Titels beziehen.

Über die Autorin bzw. den Autor

J. EDWARD RUSSO, PH.D., is a Professor of Marketing and Behavior Science at Cornell University’s Johnson Graduate School of Management. He has served as an adviser to such companies as Boeing, Eli Lilly, General Motors, Harris Bank, and SmithKline Beecham. Russo is also actively involved in the study and application of leading-edge decision technologies to real-world problems and is a frequent speaker in executive decision programs. He is the co-author, with Paul Schoemaker, of Decision Traps. He lives with his family in Ithaca, New York.
PAUL J. H. SCHOEMAKER, PH.D., is the founder and Chairman of Decision Strategies International and Research Director of the Mack Center for Technology and Innovation at the Wharton School. He has consulted with about a hundred organizations, including a two-year sabbatical with Royal Dutch/Shell’s scenario planning group in London. Schoemaker has been a professor at the University of Chicago and the Wharton School, and a frequent speaker in various executive programs, including those at Berkeley and Cedep at Insead. He lives with his family in Villanova, Pennsylvania.

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

CHAPTER 1

Setting the Course

Nothing is as frightening as ignorance in action. -Goethe

Let's begin with a quick experiment. You'll soon find that we, as educators and researchers, have a fondness for experiments. We encourage you to try these simple exercises whenever they appear. You'll learn more quickly the general principles we're trying to convey. More important, you'll learn about yourself and how you make decisions. Armed with that knowledge, you can better choose whether to replace your habitual approach to decision-making with some of the ones we suggest. And whatever the outcome of the tests...we promise: no grades.

Imagine you have in front of you two coins. Both are biased: coin #1 has a 55 percent probability of turning up heads; coin #2, a 45 percent probability of yielding heads. The coin you select will be flipped only once. If the head appears, you get $10,000 tax-free. If the tail turns up, you get nothing.

Coin #1: 55% chance of heads Coin #2: 45% chance of heads

Playing the odds, you choose coin #1. It's flipped... and lands tails up. You get no money. Curious to see what would have happened with the second coin, you flip it. It lands heads up.

Using a scale of 1 to 7 (where 1 is "clearly made a wrong decision" and 7 is "clearly made a right decision"), how good was your decision to choose coin #1? Answer:

Consider a second situation. You are the CEO and sole proprietor of a small company faced with the choice of promoting only one of two new products. Product 1 has a 55 percent chance of success, and a corresponding 45 percent chance of failure. Product 2 has a 45 percent chance of success, with a 55 percent chance of failure. If the product succeeds, you will personally receive an after-tax net profit of $10,000. If it fails, you receive nothing. Note that these probability estimates capture all the information that can be reasonably known at this time. They are based on market research, past experience with similar products, specific marketing plans for each product, a realistic estimate of the quality of the execution of those marketing plans, and a thorough consideration of such external factors as competitors' responses, the chance of an unexpected competitive entry, and so on.

You choose Product #1. It fails. However, Product #2, unexpectedly launched by your closest competitor, succeeds.

Using a scale of 1 to 7 (where 1 is "clearly made a wrong decision" and 7 is "clearly made a right decision", how good was your decision to choose product #1? Answer:

Did you give your decisions a score of 7, indicating that you made the best possible decision given the information you had? (You should have.) Or did the unsatisfactory outcomes sour your assessment? How you answered the questions above tells you an important characteristic of your decision-making. It reveals whether you evaluate the quality of your decisions primarily in terms of the process you used to weigh the alternatives and come to a conclusion or on the basis of the result you obtained.

When we ask this question in our executive education seminars, most people will agree that choosing coin #1 was the right decision, based on mathematical probabilities. But a considerable number refuse to rate the decision as 7 (excellent) or even 6, and some insist it was the totally wrong decision. They can't bring themselves to recognize a good decision process (choosing the coin that puts the odds in their favor) when faced with a poor outcome. When we put the question into a business context like the product launch, people are even more reluctant to rate the decision a 7 (only about half as many do as in the coin toss). The poor outcome weighs even more heavily on their minds.

PROCESS VS. OUTCOME

This outcome-focus among most decision-makers is not surprising. After all, most organizations reward--or penalize--people based on the outcomes of their decisions. Results are what matter. You are given a raise or bonus for being highly productive. You are offered a promotion when the projects you manage consistently turn out well, and passed over for plum assignments when they fail. This organizational preference for outcomes is understandable. It exists in part because outcomes are usually easier to assess and are often more objective than assessments of process. The new service you decided to offer, or the new product you decided to launch, proves profitable or not. The team you lead performs well, completing its task on time and within budget, or it doesn't.

The focus on outcomes goes beyond ease of observation, however. Many people believe that good outcomes necessarily imply that a good process was used. And they assume the converse to be true as well: that a poor outcome necessarily signals a poor or incompetent process. One division president we know captured this view starkly when he rhetorically posed the following question. "I can promote one of three people," he said. "One has a track record of 50 percent mistakes. The second, 25 percent mistakes. And the third, no mistakes. Who do you think I will promote?" He expected us to answer: the person with no mistakes.

Instead we responded with a question of our own: "How does an experienced manager boast of a track record with no mistakes? The only way we know to have a track record of no mistakes is to do nothing." In an organization where one mistake can derail a career and mistakes are judged only on outcomes, people become afraid to make decisions. They become afraid to do anything. Furthermore, if the track record is based on just a few big decisions instead of numerous smaller ones, a focus on outcomes carries the risk of rewarding good luck--or penalizing bad luck. A focus on process would, instead, allow him to truly find the most worthy candidate for promotion. Unfortunately, this executive was not convinced. We hope you, however, will be.

As consultants, researchers, and teachers, we are as pragmatic and results-oriented as anyone. We aim for good outcomes and are pleased when they occur. Throughout this book, however, we will argue that your best hope for a good decision outcome is a good decision process. That is because we believe that decision-makers must focus on what is actually under their control.

To better understand the process vs. outcome dilemma, consider with us where good results come from. Three things influence outcomes, or results:

(1) Deciding (the thinking and decision process),

(2)  Doing (implementation and other factors under your control),

(3  Chance (uncontrollable factors, luck).

By definition, you can't control those factors in the chance category (although you can seek to move more factors under your control and leave as little as possible to chance). And in contrast to the coin toss, the outcome in most real-world decisions depends not only on the quality of the decision process, but also on a mixture of implementation and chance that is difficult to disentangle. A good process, even when tied to excellent implementation, won't guarantee a good outcome 100 percent of the time. Bad luck happens to us all. But clearly, the closest to a guarantee of a good outcome is a good thinking/decision process followed by good implementation.

The Three Factors That Determine Outcomes

Fortunately, the organizational bias toward assessing only outcomes is beginning to wane. Robert Rubin, former treasury secretary of the United States, recently noted that "decisions tend to be judged solely on the results they produce." But he continued, "I believe the right test should focus heavily on the quality of the decision-making itself...It's not that results don't...

„Über diesen Titel“ kann sich auf eine andere Ausgabe dieses Titels beziehen.

Verlag
Currency
Erscheinungsdatum
2001
Sprache
Englisch
ISBN 10 
0385502257
ISBN 13 
9780385502252
Einband
Gebundene Ausgabe
Auflage
1
Anzahl der Seiten
352
Kontakt zum Hersteller
Nicht verfügbar
Verantwortliche Person
Nicht verfügbar

Weitere beliebte Ausgaben desselben Titels

9780749922856: Winning Decisions: Getting it Right First Time

Vorgestellte Ausgabe

ISBN 10:  0749922850 ISBN 13:  9780749922856
Verlag: Piatkus Books, 2002
Softcover