Strategy Dynamics Briefing 64: Types of strategic decision

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The briefings to this point have set out the main dynamic structures that determine organizations’ performance. The next few briefings examine how decisions steer those structures and how to design policies (decision-rules) that can build and sustain the resources required for strong performance. First, though, it is helpful to clarify the different kinds of strategic decisions. A logical approach is to follow a more or less chronological sequence over the life of an organization, although these questions cannot be treated ...

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Evidence-based decision-making

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We all know this ideal is far from reality, but in Is Decision-Based Evidence Making Necessarily Bad?, Sloan Mgmt Review offers 3 levels to define the role of evidence: 

  • to make a decision – when data really does lead to a decision
  • to inform a decision – when other factors such as judgment and bargaining play a role too
  • to support a decision – when data is looked for that confirms the decision, and crucially, when disconfirming evidence is avoided or rejected.

They ...

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Testing assumptions

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An interview with Dan Ariely in Sloan Mgmt Review points up the need to test assumptions – critical, of course, and can’t fault Dan’s case. But doing as he asks on serious strategic decisions is not so easy.

For many management choices, such as the pricing decision discussed in his interview, there are complex long-run dynamics that common methods simply can’t handle – hence the need for strategy dynamics.

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How good leaders make bad decisions

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… and right after the McKinsey survey, HBR has an article by Andrew Campbell, Jo Whitehead (Ashridge) and Sydney Finkelstein (Dartmouth) on neuroscience revelations about how leaders’ judgment gets distorted. It seems we have systematic biases, then land on initial conclusions we are reluctant to change, and the article offers a ‘red flag’ process for guarding against the dangers.

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How companies make good decisions

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McKinsey asked senior managers in companies that made good and bad decisions about their decision-making processes: who was involved, what drove the decisions, the analysis done, role of politics etc. Good to hear that hard benefits – like profits! – featured in successful decision-making disciplines. Article. More support for evidence-based management I guess.

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