Why Decisions Fail: Avoiding the Blunders and Traps That Lead to Debaclesby Paul C Nutt
Nutt critiques 15 infamously bad decisions that became public debacles and offers business lessons based on decades of real-world research.See more details below
Nutt critiques 15 infamously bad decisions that became public debacles and offers business lessons based on decades of real-world research.
Why is there so much failure in corporate decision-making processes? Can companies take corrective action to prevent future failures? Nutt writes that the answers can be found in three blunders: failure-prone decision-making practices, rush to judgment, and poor allocation. The chain of events that leads to failure begins with one of these blunders, which leads decision makers toward traps that ambush them.
Nutt explains that two of every three decisions use failure-prone practices. Decision makers seem oblivious to the poor track record of these practices. Without help in determining what does and does not work, the widespread use of these practices will continue, for a number of reasons:
- Decision-making practices with a good track record are commonly known, but uncommonly practiced.
- Managers often play the "blame game."
- Failure is often placed at the doorstep of things beyond the manager's control.
Decision makers often jump on the first idea that comes along, make premature commitments, then spend years trying to follow through on those commitments and make the idea work. Decision makers, like most people, fear the unknown and seek self-gratification, two circumstances that run counter to the sometimes lonely endeavor of making difficult decisions. When answers are not readily available, grabbing on to the first thing that seems to offer relief is a natural impulse.
Nutt explains that blunders are made when decision makers make wrong-headed investments of their organizations' time and money for costly evaluations and little else. To make matters worse, these evaluations are often defensive - carried out to support an idea someone is wedded to, trying to show it will work. He writes that such decisions often breed suspicion from those who suspect a hidden agenda at work, a circumstance that results in even more evaluation expenditures, which increase as more justification is demanded. Little time or money is spent to investigate claims, set objectives, measure benefits and risk, or manage the forces that can derail a decision. Nutt writes that decision makers blunder when they fail to see any of these things as a worthy undertaking.
Debacles follow a chain of events that unfolds as blunders create traps and traps bring about failure. Nutt writes that the blunders of using poor decision-making practices, rushing to judgment, or misusing available resources point unsuspecting managers toward these seven traps:
- Failure to Reconcile Claims
- Failure to Manage Forces Stirred Up by a Decision
- Ambiguous Directions
- Limited Search and No Innovation
- Misuse of Evaluation
- Ignoring Ethical Questions
- Failure to Learn
When caught in any of these traps, Nutt writes that managers are apt to make a bad call that can become a debacle. Debacles are riddled with failure-prone decision-making practices. He explains that best practice calls for a discovery process that emphasizes process stages found to have the greatest impact on success. He says decision makers should follow this sequence of tasks that is called for by the discovery process:
- Manage forces that can block action. Implementation brings social and political issues to the forefront by uncovering the interests of people who can block action. Opposition can be expected when these interests are threatened.
- Set a direction. The direction indicates the results wanted, guiding the search for ideas with an outcome in mind.
- Search widely for ideas. If claim, implementation and direction have been attended to, the remaining steps are much easier to carry out, and there will be far less controversy in doing so.
- Evaluate options. Evaluation is straightforward in a development process. The direction specifies what is wanted, such as lower cost, making a cost criterion an appropriate and reasonable way to measure benefit. It takes away the political overtones of using evaluation to defend a course of action, replacing it with an evaluation that documents benefits and the likely risk in realizing them.
- Confront ethical questions. A decision that seems ethically neutral to a beneficiary might have a very different look to others. Ethical issues can be neutralized with actions that embrace values that are crucial to stakeholders.
- Learn about missed opportunities. Learning helps you find out what worked, what didn't and why. Various obstacles complicate learning by hiding the information required to make such assessments. Learn to get around these obstacles.
Why Soundview Likes This Book
Nutt supports his theories with numerous examples of individuals and companies that fell into traps that turned their decisions into debacles - from stalwart organizations like Disney and Ford, to lesser-known businesses and people. These case studies provide a bevy of lessons for other organizations. In addition, Nutt also gives instructions on how to avoid each blunder and trap, providing tips and techniques on consistently using the right tools and procedures to make the right decisions, every time. Copyright (c) 2002 Soundview Executive Book Summaries
- Berrett-Koehler Publishers, Inc.
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- 6.10(w) x 9.20(h) x 0.90(d)
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