Preface
This book reflects many of my own recollections as well as T.J.s; the journey began back in the mid 70s when I began to sense a troubling tendency for management to ignore, or consciously disregard relevant factsrealityin making key decisions.
However, it was the events of the past decade that have provided the true impetus for my brother, T.J., and me to complete this volume. While the 90s saw the gulf between the business world and the real world widen, the events of the new millennium cascading from Enron through such names as Adelphia, AIG, AOL Time Warner, Aon, Arthur Andersen, Boeing, Citigroup, Dynegy, Freddie Mac, Global Crossing, HealthSouth, JPMorgan Chase, Krispy Kreme, Lucent, Marsh & McLennan, Qwest Communications, Tyco, and WorldCom would have to be viewed as a very real and visible manifestation of a trend that I had sensed for most of my career.
In the 70s and 80s, a complaint frequently heard was that the market research intended to support new products was skewed by the questions asked in surveys and focus groups. But by the end of the 90s in the irrational exuberance of the Internet bubble, management decided it didnt need to manipulate the market research; it knew what people wanted or needed. Many of the New Economy proponents felt it was appropriate, and perhaps even important, to tell the market what it needed, before the market even knew that the need existed. And when confronted by true reality many executives and analysts like the minister in Robert Frosts poem questioned why abandon a belief. Merely because it ceases to be true. Cling to it long enough, and not a doubt. It will turn true again.
Introduction
The search for truth is a struggle: part of a war against chaos, a strenuous ritual to wrest reality from doubt by naming its parts, or a spell to save it from being engulfed in nothingness.
-- Felipe Fernandez-Armestoi
Decisions Matter?and They Can Get Better
In studying successful companies, Alfred Chandler of the Harvard Business School discovered that one of their most important investments is hiring and retaining people who can make good decisions.ii
If you or your colleagues lack that skill, can people get better at decision making? We believe the answer is an unequivocal yes. The underlying premise of this book is that by understanding the flaws, forces, and facets of decisions, you will become more proficient at making them. Experience counts. Awareness of self and of patterns counts. Understanding what goes on in a decision counts. So do tools. And you will find all of these discussed in this book.
Many organizations and organizational theorists act as if the whole area of decision making were subjective and that there were no principles upon which one could rely. To illustrate my point, one Dow component required all senior management to complete a course in the Principles of Decision making. The main take aways dealt with inclusion, team dynamics and administrative proceduresbut there was literally nothing on the decision-making process itself!
Decision making is a process worthy of scientific contemplation in order to derive its facts and principles. Organizations like the U.S. Army, GE, and 3M have documented enhanced gains in their desired results by studying how they make decisions. Decision making is also an art, but ignoring the advantage of systematically trying to get better at what you do is folly. There will be no repeal of the law of cause and effect.
Are you aware of your Decision DNAthat confluence of biases and experiences that shapes your decision-making processes the same way your genes predispose you to certain diseases? Are you satisfied with the degree of discipline in the way decisions are made in your business? Do you sometimes complain to friends and family of the almost hallucinatory versions of reality that people use as the foundations for their choices? Do you bemoan the sloppy way in which those choices are calculated? Then this book holds value for you. It will allow you to discover decision making as a clear process rooted in reality and at the same time help you understand your own reality and that of your company.
Of course, this book alone will not make you a more competent decision maker. Decision making takes practice. This book is a tool to help you identify what goes on when you make a decision and perhaps make some new choices about that process. Eventually, you have to practice what you learn in real time in a real work environment.
State of the Art/Science
Since we have the ability to get better at decision making, how are businesses doing in general these days? A 2000 study by management consultants Kepner-Tregoe found that decision making in the Digital Age gained in speed and quantity while stumbling in quality and adeptness. Despite almost unimaginable advances in information technology, nearly half of all respondents in the study said that poor information sharing was the culprit in these faulty decisions. However, the most striking finding from the study was that more than 90 % of those business people interviewed said that their organizations did not keep and share information on how past decisions?good and bad?were made. Its pretty tough to get better at decision making if you start out every morning with a blank slate and must discover anew the principles for success.iii People in organizations seem to have either forgotten or never heard George Santayanas famous dictum that when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it.iv
The personal?and bitter?testimony of many executives also does not betray any hopefulness about decision making. One Senior VP summed up the opinions of many others: You go onto an executive team with good intentions. Then you discover that many of the decisions will be irrational. But what is worse, you cant even participate in them. People want to do them in the dark. After a while, you get this feeling that there is this black box that randomly spews out decisions. Youre always looking over your shoulder to see whats coming next. This book takes aim at that reality and gives people a framework to consider and improve their decisions.
i Fernandez-Armesto, F. (2000) Truth: A Guide for the Perplexed. New York: St. Martin's Press ii Chandler, A.D. (1990) The Enduring Logic Of Industrial Success. Harvard Business Review, 68(2), p. 130 iii Kepner-Tregoe Consulting. (2000) Decision Making in the Digital Age: Challenges and Responses http://www.kepner-tregoe.com/ iv Santayana, G. (1980) Reason in Common Sense, p. 284. New York: Dover Publications ??
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