正文
The Secrets of Great Decision- Making,” Anne Fisher
The Secrets of Great Decision-Making
A noted scholar explains why so many managers make disastrous choices, and how their ethical ambivalence can lead to even more problems.
By Anne Fisher, FORTUNE senior writer
June 23, 2005: 2:05 PM EST
Sign up for the Ask Annie e-mail newsletter
Is it possible to learn how to make better decisions -- the kind that improve results, lead to innovations, and (not incidentally) earn raises and promotions? Paul C. Nutt thinks so. In his latest book, Why Decisions Fail: Avoiding the Blunders and Traps that Lead to Debacles (Berrett-Koehler, $22.95), he analyzes 15 disastrous decisions, from Ford\'s notorious defense of its flammable Pintos to Disney\'s insistence on putting a U.S.-style theme park in France. In each case, his research suggests, the people in charge made certain clearly identifiable mistakes -- the kind the rest of us can learn how to avoid. I recently spoke with Nutt, who teaches at the graduate business school at Ohio State University. Here are some excerpts from our conversation:
Q. Why did you decide to study decision-making?
A. I spent a long time in the corporate world before I became an academic, and I noticed that certain characteristics of bad decisions cropped up over and over again. Then my students gave me some useful anecdotes from their companies, as well. I started collecting data in 1978, and in 1984 I wrote a few articles here and there on what my research had shown up to that point. Then I happened to mention in a radio interview that 50% of all decisions companies make are failures, and that was what really got people\'s attention.
Q. If you had to name one common denominator shared by all, or most, of the bad decisions that companies make, what would it be?
A. A very widespread error is the rush to judgment, or committing to a course of action prematurely. In the \'90s, the semiconductor industry promulgated the myth that all decisions have to be fast, and that has permeated other industries. Executives got seduced by it. But the research shows that only 1 in 10 decisions is urgent, and only 1 in 100 is a crisis. You have time to reflect, usually. But decision-makers feel they must hurry, and that is made worse by the media. If you\'re unlucky enough to be scrutinized by the press, there is intense pressure to come up with answers in a really unreasonable period of time. If a problem is identified at 8:03, you\'re supposed to announce a solution by 8:05. Having to do something instantly leads to a lot of bad decisions. And then, of course, you have to focus your energy on justifying what you did.
Q. In your book you note that one common mistake is, failing to consider the points of view of everyone affected by a decision. Doesn\'t this become even more of a problem in a global economy, with so many cultural differences to contend with?
A. Absolutely. Not understanding other cultures is a classic blunder. For instance, in Mexico, before you can do business with someone, you have to establish a social relationship -- go out for a long, leisurely meal, talk about your families, and get to know one another personally. Without that, the business relationship won\'t work. Mexicans must feel that they know you before they can trust you. Americans get very impatient with that and want to talk business right away. The irony is, getting right down to business in order to save time actually costs more time, because you then have to go back and repair the damage before you can move forward. It ends up being a far more time-consuming process than if you had simply relaxed and built that rapport in the first place. But I\'m not suggesting that only Americans make these mistakes. Just take a look at the Mercedes-Benz web site. It\'s full of gripes about customer service. German automakers do not get how to deal with customers. They are often far too autocratic and dismissive of complaints. The ugly American is a stereotype, but the U.S. doesn\'t have a monopoly on cultural arrogance. Far from it.
Q. I was fascinated by the discussion in your book of how unethical decisions in companies are often \'gradual and insidious\' -- so that, to someone making a decision, the choice to go in an unethical direction may feel like a requirement of the job. Is that a widespread problem, do you think?
A. Oh, yes, it\'s pervasive. Part of the difficulty comes from the fact that people develop very different notions of what\'s acceptable, ethically, and what\'s out of bounds. Even among managers with a firm sense of right and wrong, there is a lot of ambivalence about taking a stand, so some shady stuff will get excused with arguments like, Everybody else is doing it or I have to protect my people. Once you embrace the idea that the ends justify the means, you can rationalize almost anything. B-schools traditionally never taught this. In fact, I had to teach ethics on the sly for years. That has changed radically, which might be the only good thing to come out of the whole Enron mess. Now, when I bring up the subject of ethics in my classes, there\'s a lot less eye rolling and snickering than there used to be.
The dangers of hasty decision-making
By Executive Leadership 12/1/2005 - 6:00pm Leadership Skills
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Executive Leadership
By converting proven theories into practical advice, Executive Leadership helps aspiring leaders make sound decisions that raise productivity and fatten the bottom line; negotiate with vendors, competitors, employees and clients; innovate and inspire creativity in their teams; and delegate authority so that they can manage their time and achieve at a higher level. Learn more about Executive Leadership and the three free reports you’ll get when you subscribe...
In his latest book, Why Decisions Fail, scholar Paul C. Nutt analyzes 15 disastrous courses of action, from Ford’s defense of the flammable Pinto to Disney’s ill-advised theme park in France. In every one, leaders made clearly identifiable mistakes that the rest of us can avoid.
While it’s true that any decision is better than no decision, it’s also true that during the 1990s, high-tech entrepreneurs created a myth that all decisions have to be made quickly. That myth, says Nutt, has seduced many leaders, leading to widespread errors across industries.
In fact, Nutt points to research showing that only one in 10 decisions is urgent, and only one in 100 presents itself during a true crisis. Most of the time, you have time to reflect before deciding.
What does Nutt mean by “time to reflect”? Probably more than days and less than months. Decisions that drag on for years usually fail, and that was true decades ago as well as today.
It’s probably worse now, Nutt says, because of the pressures that instant communication—the Internet, television, e-mail—bring.
“If a problem is identified at 8:03, you’re supposed to announce a solution by 8:05,” Nutt says. “Having to do something instantly leads to a lot of bad decisions. And then, of course, you have to focus your energy on justifying what you did.”
Lessons: Unless it’s clear right now what to do, tell anybody who’s pressing you that you’ll study the question and get back to them in a reasonable amount of time. Then, take your time … and decide.
— Adapted from “The Secrets of Great Decision- Making,” Anne Fisher, Fortune.
Can Hasty Decision Making Cost You?
Posted by: Barbara Merola on Nov 01, 2009
Tagged in: Responding to Challenges by Controlling Choices
On a recent trip home to southwest Florida, my family and I stopped by The John and Mable Ringling Museum of Art. I never thought I would leave a cultural complex boasting a circus museum (John Ringling of the Ringling Bros. and Barnum and Bailey Circus), the couple’s Venetian Gothic mansion and an impressive personal art collection with such a valuable life lesson.
One painting that caught my eye is from the permanent collection, The Judgment of Paris. Inspired by a famous Ancient Greek myth of the same name, The Judgment of Paris is claimed to have caused the great Trojan War and ties into one of my philosophies on life very nicely.
The story starts at the wedding of Peleus and Thetis, the hero and the sea-goddess at Mount Pelion. Everyone was invited with the exception of the unpopular Eris, the Goddess of Strife. Angered at the snub, she crashed the wedding and threw a golden apple into the crowd. It landed between the three most powerful goddesses, Hera, Athene and Aphrodite. Picking it up, Zeus found it was inscribed ‘For the Fairest’.
Wisely deciding not to judge between the three deities himself, Zeus passed the buck to a young man, Paris, to serve as arbiter.
First Hera, the great queen, approached him and flaunted her beauty. She promised Paris that if he awarded her the apple, she would grant him wealth and power to rule over the greatest kingdom on earth. Paris was excited about this and desperately wanted her gift.
Shortly thereafter, Athene approached him and promised him victory in all battles, together with glory and wisdom - the three most precious gifts a man could have. This sounded attractive to Paris – who wouldn’t desire wisdom and glory?
Then came Aphrodite. She asked Paris for the apple and in return promised him a great love with the most beautiful woman in the land. Paris, overpowered by her beauty, handed her the apple without pausing to reflect on his decision. He was a young man, after all…
As a result, Paris found two new enemies in Hera and Athene. True to her promise, Aphrodite gave him Helen, the most beautiful woman living on the earth at that time - but, in order to enjoy her, he had to snatch her from her powerful husband, Menelaus. So began the terrible ten-years’ war between the Trojans and the Greeks in which many, including Paris himself, lost their lives.
While I would not argue with Paris for choosing love over power and wisdom, the haste in which he made the decision leaves no surprise that there were grave consequences. While we cannot please everyone, Paris only had one apple after all, we can be thoughtful in our deliberations. Only then can we take whatever unforeseen consequences come as a result of our decision and still be confident that we made the right one. Unless you are Marty or Doc, there is no going back.
The Secrets of Great Decision-Making
A noted scholar explains why so many managers make disastrous choices, and how their ethical ambivalence can lead to even more problems.
By Anne Fisher, FORTUNE senior writer
June 23, 2005: 2:05 PM EST
Sign up for the Ask Annie e-mail newsletter
Is it possible to learn how to make better decisions -- the kind that improve results, lead to innovations, and (not incidentally) earn raises and promotions? Paul C. Nutt thinks so. In his latest book, Why Decisions Fail: Avoiding the Blunders and Traps that Lead to Debacles (Berrett-Koehler, $22.95), he analyzes 15 disastrous decisions, from Ford\'s notorious defense of its flammable Pintos to Disney\'s insistence on putting a U.S.-style theme park in France. In each case, his research suggests, the people in charge made certain clearly identifiable mistakes -- the kind the rest of us can learn how to avoid. I recently spoke with Nutt, who teaches at the graduate business school at Ohio State University. Here are some excerpts from our conversation:
Q. Why did you decide to study decision-making?
A. I spent a long time in the corporate world before I became an academic, and I noticed that certain characteristics of bad decisions cropped up over and over again. Then my students gave me some useful anecdotes from their companies, as well. I started collecting data in 1978, and in 1984 I wrote a few articles here and there on what my research had shown up to that point. Then I happened to mention in a radio interview that 50% of all decisions companies make are failures, and that was what really got people\'s attention.
Q. If you had to name one common denominator shared by all, or most, of the bad decisions that companies make, what would it be?
A. A very widespread error is the rush to judgment, or committing to a course of action prematurely. In the \'90s, the semiconductor industry promulgated the myth that all decisions have to be fast, and that has permeated other industries. Executives got seduced by it. But the research shows that only 1 in 10 decisions is urgent, and only 1 in 100 is a crisis. You have time to reflect, usually. But decision-makers feel they must hurry, and that is made worse by the media. If you\'re unlucky enough to be scrutinized by the press, there is intense pressure to come up with answers in a really unreasonable period of time. If a problem is identified at 8:03, you\'re supposed to announce a solution by 8:05. Having to do something instantly leads to a lot of bad decisions. And then, of course, you have to focus your energy on justifying what you did.
Q. In your book you note that one common mistake is, failing to consider the points of view of everyone affected by a decision. Doesn\'t this become even more of a problem in a global economy, with so many cultural differences to contend with?
A. Absolutely. Not understanding other cultures is a classic blunder. For instance, in Mexico, before you can do business with someone, you have to establish a social relationship -- go out for a long, leisurely meal, talk about your families, and get to know one another personally. Without that, the business relationship won\'t work. Mexicans must feel that they know you before they can trust you. Americans get very impatient with that and want to talk business right away. The irony is, getting right down to business in order to save time actually costs more time, because you then have to go back and repair the damage before you can move forward. It ends up being a far more time-consuming process than if you had simply relaxed and built that rapport in the first place. But I\'m not suggesting that only Americans make these mistakes. Just take a look at the Mercedes-Benz web site. It\'s full of gripes about customer service. German automakers do not get how to deal with customers. They are often far too autocratic and dismissive of complaints. The ugly American is a stereotype, but the U.S. doesn\'t have a monopoly on cultural arrogance. Far from it.
Q. I was fascinated by the discussion in your book of how unethical decisions in companies are often \'gradual and insidious\' -- so that, to someone making a decision, the choice to go in an unethical direction may feel like a requirement of the job. Is that a widespread problem, do you think?
A. Oh, yes, it\'s pervasive. Part of the difficulty comes from the fact that people develop very different notions of what\'s acceptable, ethically, and what\'s out of bounds. Even among managers with a firm sense of right and wrong, there is a lot of ambivalence about taking a stand, so some shady stuff will get excused with arguments like, Everybody else is doing it or I have to protect my people. Once you embrace the idea that the ends justify the means, you can rationalize almost anything. B-schools traditionally never taught this. In fact, I had to teach ethics on the sly for years. That has changed radically, which might be the only good thing to come out of the whole Enron mess. Now, when I bring up the subject of ethics in my classes, there\'s a lot less eye rolling and snickering than there used to be.
The dangers of hasty decision-making
By Executive Leadership 12/1/2005 - 6:00pm Leadership Skills
Add Comment Email to Friend Print Article Bookmark
Executive Leadership
By converting proven theories into practical advice, Executive Leadership helps aspiring leaders make sound decisions that raise productivity and fatten the bottom line; negotiate with vendors, competitors, employees and clients; innovate and inspire creativity in their teams; and delegate authority so that they can manage their time and achieve at a higher level. Learn more about Executive Leadership and the three free reports you’ll get when you subscribe...
In his latest book, Why Decisions Fail, scholar Paul C. Nutt analyzes 15 disastrous courses of action, from Ford’s defense of the flammable Pinto to Disney’s ill-advised theme park in France. In every one, leaders made clearly identifiable mistakes that the rest of us can avoid.
While it’s true that any decision is better than no decision, it’s also true that during the 1990s, high-tech entrepreneurs created a myth that all decisions have to be made quickly. That myth, says Nutt, has seduced many leaders, leading to widespread errors across industries.
In fact, Nutt points to research showing that only one in 10 decisions is urgent, and only one in 100 presents itself during a true crisis. Most of the time, you have time to reflect before deciding.
What does Nutt mean by “time to reflect”? Probably more than days and less than months. Decisions that drag on for years usually fail, and that was true decades ago as well as today.
It’s probably worse now, Nutt says, because of the pressures that instant communication—the Internet, television, e-mail—bring.
“If a problem is identified at 8:03, you’re supposed to announce a solution by 8:05,” Nutt says. “Having to do something instantly leads to a lot of bad decisions. And then, of course, you have to focus your energy on justifying what you did.”
Lessons: Unless it’s clear right now what to do, tell anybody who’s pressing you that you’ll study the question and get back to them in a reasonable amount of time. Then, take your time … and decide.
— Adapted from “The Secrets of Great Decision- Making,” Anne Fisher, Fortune.
Can Hasty Decision Making Cost You?
Posted by: Barbara Merola on Nov 01, 2009
Tagged in: Responding to Challenges by Controlling Choices
On a recent trip home to southwest Florida, my family and I stopped by The John and Mable Ringling Museum of Art. I never thought I would leave a cultural complex boasting a circus museum (John Ringling of the Ringling Bros. and Barnum and Bailey Circus), the couple’s Venetian Gothic mansion and an impressive personal art collection with such a valuable life lesson.
One painting that caught my eye is from the permanent collection, The Judgment of Paris. Inspired by a famous Ancient Greek myth of the same name, The Judgment of Paris is claimed to have caused the great Trojan War and ties into one of my philosophies on life very nicely.
The story starts at the wedding of Peleus and Thetis, the hero and the sea-goddess at Mount Pelion. Everyone was invited with the exception of the unpopular Eris, the Goddess of Strife. Angered at the snub, she crashed the wedding and threw a golden apple into the crowd. It landed between the three most powerful goddesses, Hera, Athene and Aphrodite. Picking it up, Zeus found it was inscribed ‘For the Fairest’.
Wisely deciding not to judge between the three deities himself, Zeus passed the buck to a young man, Paris, to serve as arbiter.
First Hera, the great queen, approached him and flaunted her beauty. She promised Paris that if he awarded her the apple, she would grant him wealth and power to rule over the greatest kingdom on earth. Paris was excited about this and desperately wanted her gift.
Shortly thereafter, Athene approached him and promised him victory in all battles, together with glory and wisdom - the three most precious gifts a man could have. This sounded attractive to Paris – who wouldn’t desire wisdom and glory?
Then came Aphrodite. She asked Paris for the apple and in return promised him a great love with the most beautiful woman in the land. Paris, overpowered by her beauty, handed her the apple without pausing to reflect on his decision. He was a young man, after all…
As a result, Paris found two new enemies in Hera and Athene. True to her promise, Aphrodite gave him Helen, the most beautiful woman living on the earth at that time - but, in order to enjoy her, he had to snatch her from her powerful husband, Menelaus. So began the terrible ten-years’ war between the Trojans and the Greeks in which many, including Paris himself, lost their lives.
While I would not argue with Paris for choosing love over power and wisdom, the haste in which he made the decision leaves no surprise that there were grave consequences. While we cannot please everyone, Paris only had one apple after all, we can be thoughtful in our deliberations. Only then can we take whatever unforeseen consequences come as a result of our decision and still be confident that we made the right one. Unless you are Marty or Doc, there is no going back.
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