The Essence of Great Decision Making

The Essence of Great Decision Making

Every few years, two very bright brothers – Stanford University professor Chip Heath and Dan, a senior fellow at Duke University’s Centre for the Advancement of Social Entrepreneurship (CASE), distil decades of academic research into a tool kit for the rest of us.   As reported by McKinsey (April 2013), their new book, Decisive, looks at how to make consistently great decisions.

For those of us who are time-poor, I have included the abridged version of how we can become great decision makers ourselves:

Widen Your Options:   For example – consider at least two robust options for every decision.  Important because:  Adding just one alternative makes very good strategic decision making more likely—six times more likely, according to one research study.

Reality-Test Your Assumptions:   For example – enforce vigorous debate on both sides of an issue and resolve debates with data by running small experiments to test assumptions.  Important because: We are two times more likely to consider information that tends to confirm our assumptions than information that tends to disconfirm them.

Attain Some Distance:  Consider “firing” yourself and ask what your successor would do. That’s how Andy Grove broke through Intel’s indecision in the mid-1980s about whether to divert resources from the company’s long-standing core business in memory chips and go full force into microprocessors.  Important because: The status quo is powerful.  Research shows that over time, even arbitrary choices are regarded as valuable and right.

Prepare to be Wrong: You could set a clear tripwire now: “If we don’t achieve a market share greater than 20 percent in the first year, we’ll revisit our idea of entering the Southern market.”  Important because:  Our predictions are often incorrect, even when made with high confidence.  In one study, doctors who expressed complete certainty in a diagnosis were wrong 40 percent of the time.

For those who would like to read the full McKinsey article, click here.