Decisive: Stories for Good Business Decisions

Why Your Intuition Isn’t Always Right

decisiveGuess what?  I know that I’ve made some bad choices in the past year. You probably have, too!

We’re not alone. 83% of corporate mergers and acquisitions fail to produce any value. In another survey, 60% of business executives reported that bad decisions were about as frequent as good ones in their organizations. When it really matters, it sound like bad decisions outnumber the good ones.

Chip and Dan Heath, authors of such books as Made to Stick, begin their latest book, Decisive, with two big questions:

 “Why do we have such a hard time making good choices?”

“Given that we’re wired to act foolishly sometimes, how can we do better?”

The rest of the book tries to answer those two questions. The Heath brothers use stories and published research to share some startling points in this book. For example, subject matter experts aren’t much better than the general population at predicting particular situations accurately. (But they are great at knowing base rates, which, in turn, can be very useful for calculating chances.)

With an approach that sometime feels contrarian to Malcolm Gladwell’s popular Blink book on intuitive judgment, the Heath brothers explain numerous ways that following our gut feelings may not always be in our best interest.

They identify four key “villains” in the psychology of decision-making, and offer the simple WRAP model to help us overcome the four hurdles.

  • Widen Your Options
  • Reality Test Your Assumptions
  • Attain Distance
  • Prepare to Be Wrong

Stories as Guide for Decision-Making

One of my favorite sections is about “enshrining core priorities” during part 3, Attain Distance. The authors use a case study of a medical charity grappling with tough growth decisions that, at times, pitted the needs of the medical staff against the needs of the patients. Later, one of the organization’s leaders noted how helpful it had been to encode their values in simple sayings such as, “the customer is the patient, not the surgeon.”

It changed everything. Because then, when you got into a policy debate with some board or volunteers or the volunteer committees or whatever, you could always go back to our intent. Our intent is to build an organization where our customer is the patient, nobody else.

Difficult decisions could then be addressed by asking, ‘What’s best for the patient here?’

The authors point out that bland mission statements and corporate values listed on the wall such as integrity, honesty, and teamwork don’t add much to the culture, because they aren’t always helpful in thorny decisions.

What About You?

How does your organization enshrine core priorities?

What kinds of decisions are you faced with today?

How will you decide?

Posted in Book Reviews, Leadership, Positive Psychology Tagged with: , , ,

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