The Hindu Business Line : Reducing the risk of flawed decisions

Think Again: Why good leaders make bad decisions and how to keep it from happening to you by Sydney Finkelstein, Jo Whitehead, and Andrew Campbell; Tata Mcgraw-Hill

Becoming an effective decision-maker is not just about being an expert and having good judgment; it is also about taking steps to guard against the inevitable distortions and biases that can lead to a flawed decision, advises a new book from Harvard Business Press. “You can never eliminate all flawed decisions – but you can reduce the risk,” say Sydney Finkelstein, Jo Whitehead, and Andrew Campbell in Think Again: Why good leaders make bad d ecisions and how to keep it from happening to you ( www.tatamcgrawhill.com).

The authors’ foremost recommendation is to keep things simple and then to iterate on the first answer. “If you start with what seems to be a reasonable approach you can build on it later – revising your analysis to factor in some of the real complexities of the situation.”

Second, ‘start with the most worrying red flag.’ But how do we sense that a red flag condition is ‘worrying’? We construct a movie in our mind of how the red flag condition might influence the decision-maker to favour certain options over others, the authors explain.

Business vs ethics

What They Teach You At Harvard Business School: My two years inside the cauldron of capitalism by Philip Delves Broughton; Penguin

Sample this thought: “No matter how hard it tries, business can never escape the fact that it is the practice of potentially thieving, treacherous, lying human beings. Its challenge is in reining in the thieving, treachery, and deceit sufficiently that the entire edifice of business and society does not dissolve into a medieval version of hell.” Thus writes Philip Delves Broughton in a chapter titled Ethical Jihadists, in What They Teach You At Ha rvard Business School: My two years inside the cauldron of capitalism ( www.penguin.com).

The School has produced its fair share of ne’er-do-wells, he reminisces. “Of the class of 1985, who graduated into one of the great stock market booms, 65 were prosecuted for securities violations. The most recent, and spectacular, HBS blow-up was Jeff Skilling, the CEO of Enron.”

D. Murali

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