Salinan Terjemahan HBR Tugas LOB
Salinan Terjemahan HBR Tugas LOB
Salinan Terjemahan HBR Tugas LOB
Semua
Salah
Gerakan yang
Suplemen olahraga terlaris Dengan setiap sel di tubuhnya, stock chat favoritnya. Memindai
Nutrorim ditarik kembali dia ingin sekali meletakkan daftar pengirim,
bantal di atas kepalanya dan
karena
tidur, tetapi alarm itu menambah dia melihat tanda seru merah di
kandungannya yang "baru dan luka. Menepuk tombol lepas dan sebelah nama Stan dengan judul
lebih baik". CEO perusahaan menarik jubah mandi Turki yang “Berita buruk!” Ketika dia
bertanya-tanya: Mengapa besar, dia mencuri dari kamar membaca pesan itu, Don
keputusan yang kita buat terus tidur dan diam-diam menutup terkesiap:
pintu di belakangnya,
menghantui kita? Adakah yang mendengar
meninggalkan istrinya untuk bahwa Wally Cum mings baru
T
tidur. Dia berjalan menuju dapur saja mengundurkan diri dari
dan menyalakan mesin pembuat Dipensit? Ternyata dia
kopi. berbohong di resumenya -
HE DINGIN JANUARY SKY baru saja Sambil duduk di meja dapur, tidak pernah menerima gelar
Don dengan mengantuk mengklik PhD dari UC Berkeley seperti
fajar kelabu di atas Minneapolis beberapa tombol di laptopnya
yang dia klaim! Stok akan
saat Don Rifkin terbangun. dan mulai membaca sekilas
turun dengan cepat setelah ini
diluncurkan. perusahaannya sendiri, "Sheesh, aku tidak terlalu
Don merasa agak mual. Nutrorim, telah membeli percaya pada pria itu,"
Setahun sebelumnya, sebagian kecil saham Dipensit. gerutunya.
Kasus HBR, yang bersifat fiksi, menghadirkan dilema manajerial yang umum
dan menawarkan solusi konkret dari para ahli.
Ada beberapa gumaman kekhawatiran — seseorang “Untuk keputusan dengan jumlah tertentu
bahkan mempertanyakan kredensial Cummings, CEO
perusahaan rintisan itu. Namun pada akhirnya,
yang dapat diprediksi ... prosesnya
subkomite tersebut tampaknya telah mengatasi tampaknya bekerja dengan sangat baik. Tapi
masalah tersebut, dan tim senior mendukung jika keputusan melibatkan pemenang dan
keputusan tersebut.
Don mengencangkan jubah mandinya lebih erat.
pecundang yang jelas, itu gagal. "
•••
O
ister baru, yang semuanya bertuliskan "Now with Lip itrene" di atasnya dalam huruf besar dengan huruf
besar. Dia meminta tanggapan semua orang di ruangan itu. Pada akhirnya, mayoritas - termasuk Steve
dan Don - menyukai label dengan huruf emas tersebut. Namun ketika dimintai pendapatnya, Nora Stern,
mantan pengusaha yang perusahaannya diakuisisi oleh Nutrorim setahun sebelumnya, justru bandel.
“Apakah saya harus memilih?” dia bertanya.
“Baiklah, kami ingin pendapatmu, ya,” kata Cynthia.
"Oke, ini dia," jawab Nora. “Saya tahu semua ini sudah menjadi kesepakatan yang diselesaikan, tapi saya
tidak mengerti mengapa ada kebutuhan besar untuk meningkatkan ChargeUp. Itu laris manis apa adanya.
Mengapa memperbaiki sesuatu yang tidak rusak? ”
Steve membalas, "Nora, kamu tidak tahu apa yang kamu bicarakan." Semua orang menatap Steve;
keheningan terasa jelas.
januari 2006 21
PENGAMBILAN KEPUTUSAN Matthew Norton, dan saya "Jika tidak, kita bisa menghadapi
penyelidik di departemen gugatan class action. Bicara
Don melompat, merasa perlu kesehatan negara bagian tentang masalah PR… ”
untuk menyimpan kembali Minnesota. Saya menelepon “ Mengapa kita
kedamaian. “Begini saja, Nora karena kami telah menyelidiki 11 mempertimbangkan untuk
dan Steve. Mari kita ambil ini kasus gangguan trointestinal gas menelepon ulang? ”Tanya Ned
secara off-line, oke? ” di antara orang-orang yang Horst, yang mengepalai divisi
mengonsumsi suplemen Suplemen Olahraga. "Tidak ada
Penarikan Kembali ChargeUp Anda dengan Lipitrene. yang salah dengan produknya.
Pada akhir September, pada " Saya harus tahu, karena saya
akhir kuartal pertama, penjualan "Apa? Apakah kamu yakin? ” sudah menggunakannya sejak
ChargeUp dengan itrene Lip telah Sayangnya, ya, "jawab produk itu keluar."
melompati produk standar inspektur itu." Semua pihak yang "Saya curiga Anda benar,"
sebesar 20% di pasar uji di terkena dampak adalah anggota tambah Jerry. "Dan penarikan
Minneapolis yang lebih besar. Syd's Gyms, dan mereka semua kembali akan merugikan kita."
Rencana untuk peluncuran "Ya, alhamdulillah kita belum
negara bagian, diikuti dengan memperluas distribusi," kata
peluncuran nasional, sedang June Rotenberg tampak semakin Don. "Penarikan kembali itu
berjalan dengan baik. Don muram. Ketika Don selesai, dia mahal," kata June. "Tapi dalam
senang. Dalam rapat semua staf, angkat bicara. "Saya baru saja situasi seperti itu, aku bersama
dia meminta Steve dan tim memeriksa pesan suara saya," Jerry. Selain itu, pikirkan tentang
ChargeUp untuk berdiri dan katanya. “Itu Linda Dervis di biaya untuk tidak menelepon
dikenali. "Kalian semua telah radio KXAQ. Salah satu orang kembali produk yang berpotensi
menunjukkan jenis semangat yang jatuh sakit pasti telah buruk. " “Sialan, semuanya, tidak
gung ho yang membuat Nutrorim menghubunginya. " Dia melihat mungkin ChargeUp tidak aman!”
menjadi pemimpin," katanya, ke sekeliling ruangan. "Teman- Steve berseru sambil
mengangguk kepada Steve teman, begitu berita ini muncul, membanting tangannya ke meja
sementara penonton bertepuk segalanya akan menurun dengan penganugerahan.
tangan. . cepat." “Kamimemasukkan Lipitrene
••• Jerry Garber, penasihat umum,
Panggilan telepon datang pada menimpali. "Saya pikir kita tidak
tanggal 5 Oktober. “Mr. Rifkin? ” punya pilihan selain menarik cukup. Publik sepertinya selalu
kata suara laki-laki. “Nama saya ChargeUp dari rak," katanya. mengingat bagaimana krisis
ditangani lebih dari krisis itu orang tentang kasus penarikan membuat keputusan penarikan
sendiri. Orang-orang hanya akan yang buruk - krisis Tylenol yang kembali? Lensa apa yang harus
mengingat berapa lama kami dihadapi oleh Johnson & Johnson, kita gunakan untuk mengambil
harus bertindak. ” penarikan kembali Suzuki atas keputusan penting seperti itu?
Tiba-tiba semua orang mulai model mobil tahun 2002 dan Kita membutuhkan kerangka
berbicara sekaligus. Steve 2003 - dan mencatat bagaimana seperti itu untuk menghasilkan
mengambil posisi yang semakin perusahaan menanganinya. jawaban, dan kita
sulit melawan June, yang Keributan di ruangan itu membutuhkannya dengan cepat.
mencoba membuatnya melihat semakin keras dan keras. Don, Kamu, kamu, dan kamu,
sesuatu dari perspektif frustrasi, bersiul setiap orang ”katanya, menunjuk ke June,
publik.Ned khawatir secara untuk memperhatikan. Jerry, dan Ned. “Cari tahu
terbuka tentang hubungan “Lihat, kita tidak berhasil,” sebanyak mungkin data yang
Nutrorim dengan Syd's Gyms dan katanya. “Pertanyaan pertama di relevan, dan kumpulkan analisis
mitra saluran lainnya. Jerry sini adalah, Apa kriteria untuk dalam 24 jam ke depan. Saya
mencoba mengingatkan semua akan bertemu dengan Anda, dan
ingat menggunakan produk di sana antara 25 dan 29 “Sepertinya semuanya adalah masalah
September. Para korban berkisar antara 19 hingga 55
tahun. ”
perdebatan.” Nora mendesah. “Sejak saya
Don merasakan darah mengering dari wajahnya. datang ke sini, saya telah terlalu banyak
“Apakah Anda memberi tahu saya bahwa produk rapat tentang pertemuan.”
harus ditarik?”
“Saya tidak memiliki otoritas — relawan manusia. Kemudian memanggil semua manajer
atau bukti — untuk membuat kami melakukan uji klinis senior untuk rapat jam 8 pagi
Anda melakukan itu. Jadi untuk tingkat lain pada manusia. " Dia besok. Anda dapat
saat ini, saya hanya ingin kerja menatap tajam ke bulan Juni. mempresentasikan temuan kami,
sama Anda dalam melakukan "Jika Anda membutuhkan saya dan kami akan melakukan
penyelidikan. Saya mengerti untuk membela ChargeUp ke pemungutan suara. "
bahwa distribusi terbatas pada departemen kesehatan, reporter, Dia menatap tajam ke arah
wilayah Kota Kembar, apakah itu atau siapa pun, saya memiliki Steve, yang cemberut. “Steve,
benar? ” "Iya." sekitar 500.000 halaman aku ingin kamu keluar dari
“Itu beruntung. Sementara itu, dokumen untuk ditunjukkan diskusi untuk saat ini. Anda
Anda mungkin ingin kepada mereka." sedikit terlalu bersemangat
mempertimbangkan panggilan “Tentu saja kami semua tentang ini, dan saya perlu
ulang secara sukarela, ”katanya mempercayai Anda, Steve,” beberapa analisis keren di sini.
sebelum menutup telepon. jawab June ragu-ragu, “tetapi Anda dapat mengutarakan
Don meminta asistennya untuk tanggapan semacam itu bisa pendapat Anda pada pertemuan
mengadakan rapat darurat terlihat seperti sikap defensif, besok. "
dengan kepala humas, dan bisa menjadi bumerang. Dia Keesokan paginya, setelah
penjualan, R&D, Suplemen menatap Don dengan tulus. mendengar analisis dan
Olahraga, dan bagian hukum. “Saya sudah menyusun siaran prognosis, sebagian besar
Saat ia menjelaskan diskusinya pers yang mengatakan kami manajer senior segera setuju
dengan inspektur kepada tim, akan bekerja sama sepenuhnya dengan pandangan subkomite
direktur PR dengan penyelidikan apa pun, bahwa memanggil kembali
dua tahun pengujian penuh. tapi itu bukan produk adalah satu-satunya
Kami menjalankan semua jenis kami akan membentuk pilihan. Setelah pertemuan
studi toksisitas pada hewan dan pandangan awal. Saya akan tersebut, June mengeluarkan
Buatlah Keputusan!
“Hei, Nora,” kata Steve sinis, melambai padanya saat pertemuan dibubarkan, “selamat karena telah
menjadi sukarelawan. Pertunjukan yang sangat bagus. "
Don, yang sedang berbicara dengan manajer lain, pura-pura tidak mendengar. Beberapa menit kemudian,
dia berjalan ke kantor Nora dan mengetuk pintu. "Ada waktu sebentar?" katanya sambil menjulurkan
kepalanya ke pintu.
Nora mengangguk, dan Don bertengger di sudut mejanya. “Kamu tidak terlihat senang tentang ini,” kata
Don menenangkan.
"Well, tidak," kata Nora dengan jelas kesal. “Saya benar-benar terkubur dalam peluncuran pemasaran ini
saat ini, dan saya memiliki ikan lain untuk digoreng. Dan sejujurnya, "dia melanjutkan," Aku cukup lelah
dengan semua omong kosong yang terlihat seperti pusar ini. "
Nora mengencangkan bibirnya. “Mungkin sudah waktunya bagi Anda untuk mengambil
pendekatan yang lebih diktator dalam pengambilan keputusan.”
“Baiklah, saya memilih Anda karena Anda tampaknya menahan diri dalam rapat manajemen senior,”
jawab Don, mencoba yang terbaik untuk bersikap lembut. “Anda tahu, masalah ChargeUp memberi kami
kesempatan nyata untuk melihat apa yang rusak. Anda berasal dari luar perusahaan, dan Anda memiliki
ide-ide yang cerdas dan segar. Saya pikir Anda hanya orang yang mengedepankan masalah ini. "
“Dengar, Don, aku menghargainya, dan aku sangat bersimpati dengan apa yang kamu coba lakukan. Tapi
saya berasal dari perusahaan di mana semua keputusan dibuat di ruangan itu. Saya tidak mengizinkan
siapa pun untuk pergi sampai ada panggilan dibuat. Di sini, sepertinya semuanya menjadi bahan
perdebatan. " Dia menghela napas, "Tahukah Anda, komite yang dipimpin konsultan ini hanyalah bukti
dari apa yang salah. Sejak saya datang ke sini, saya telah terlalu banyak rapat tentang rapat. ”
Dia mengencangkan bibirnya. “Mungkin sudah waktunya bagi Anda untuk mengambil pendekatan yang
lebih diktator dalam pengambilan keputusan.”
Bagaimana proses pengambilan keputusan yang tepat untuk Nutrorim? • Empat komentator menawarkan nasihat
ahli.
23
Januari 2006
PENGAMBILAN KEPUTUSAN tertarik untuk melakukan hal yang mengetahui bagaimana
benar. Keduanya adalah atribut memanfaatkan kepribadian
terpuji dalam diri seorang pemimpin, sehingga setiap anggota tim terus-
tetapi hanya sejauh itu. Rifkin menerus menantang pemikiran
tampaknya tidak memiliki masalah status-quo dan mengembangkan
dalam mengambil keputusan dan, teknik pemecahan masalah yang
Saya
terbukti dengan pilihannya untuk baru. Khusus untuk Rifkin,
meluncurkan ChargeUp yang baru keterampilan ini juga melibatkan
dan lebih baik, ia tampaknya pengajuan pertanyaan yang tepat
f saya harus memberikan poin
mendorong kreativitas, inovasi, dan kepada orang-orang yang ia
untuk niat baik, maka Don Rifkin
pengambilan risiko. andalkan untuk memberikan
akan skor cukup baik.
Di sisi lain, tampaknya Rifkin telah informasi kritis. Memang, ada seni
menciptakan budaya tanpa untuk menciptakan jenis
penyelidikan yang jujur, di mana pertunangan seperti ini, tetapi
analisis dan pengawasan yang tampaknya Rifkin sama sekali tidak
obyektif mengambil kursi belakang tahu bagaimana memulai
untuk mempertahankan "budaya percakapan itu.
Tetapi bagaimana mereka yang bahagia, partisipatif, dan Melihat kembali bagaimana
memanfaatkan dan memainkan demokratis." Akibatnya, Rifkin kiniorganisasi saya baru-baru ini
kekuatan dan keterampilan para ahli menyadari bahwa hasil keputusan menanggapi perubahan kondisi
internal mereka adalah kuncinya. Ini yang dibuat dalam budaya semacam pasar tenaga kerja lokal
ini mengarah pada dinamika menunjukkan nilai interaksi ini.
organisasi yang tidak sehat, yang Ketika pekerjaan situs dimulai pada
secara paradoks melahirkan jenis pusat kontak pelanggan LLBean baru,
budaya perusahaan yang perusahaan lain mengumumkan
diremehkan. rencananya untuk menemukan pusat
Masalah terbesar Rifkin adalah dia panggilan yang lebih besar tepat di
tidak cukup banyak bertanya. Saya sebelahnya. Karena perkembangan
sering mengatakan bahwa aset ini menimbulkan ancaman yang
terbesar perusahaan saya adalah wajar bagi kebutuhan staf musiman
orang-orangnya, dan aset ini paling kami, tantangan yang saya ajukan
Christopher J. McCormick adalah
baik saat digunakan . Tanpa kepada organisasi adalah “Apakah
presiden dan CEO dari LLBean di
kemampuan untuk menyulap sudah terlambat untuk
Freeport, Maine.
rangkaian keterampilan termasuk mempertimbangkan kembali? What
Dia tampak jujur dan benar-benar
are
Dengan mengajukan pertanyaan yang tepat kepada para ahli di organisasinya, Rifkin
memobilisasi seluruh perusahaan untuk
akan memainkan dinamika yang sehat yang
mempertimbangkan alternatif, meskipun fakta bahwa
akan mengarah pada kolaborasi yang lebih landasan telah rusak. Hasilnya adalah kami
lintas fungsi. menemukan lokasi baru dan memulai operasinya dalam
jumlah waktu yang sama dan persyaratan yang lebih
baik daripada yang kami miliki untuk proyek aslinya.
budaya penyelidikan, keterlibatan tidak terjadi pada
Tantangan Rifkin diperumit oleh fakta bahwa proses
pena. Selain menjadi juara dalam
pengambilan keputusannya telah mengarah pada
inovasi, seorang CEO bertanggung jawab untuk terus
budaya reaksioner yang ditandai dengan kebencian
menilai risiko melalui pertanyaan. Unfortu
yang dapat dipertimbangkan dan menebak-nebak di
nately, Rifkin tidak meminta jenis ques
pihak tim manajemen. Dengan fokus baru pada
tions yang akan menciptakan lingkungan ac
penyelidikan, Rifkin akan mengalami dua manfaat
tercacah organisasinya perlu untuk berhasil.
penting. Pertama, dia akan membuat akses ke informasi
Dengan tidak menyelidiki para ahli pada stafnya,
yang dia butuhkan untuk membuat keputusan yang
Rifkin telah melewatkan kesempatan besar
lebih baik. Kedua, dia akan memberi contoh bagi
untukkembali
manajernya sendiri yang berbicara tentang nilai
membentukbudaya organisasinya dan
ketekunan dan akuntabilitas pribadi.
mengangkat dirinya sebagai pemimpin yang kuat.lebih
ketat Dengan mengajukan pertanyaan yang tepat kepada
Cara penyelidikan yangakan, antara lain orang-orang, Rifkin akan memainkan dinamika yang
sehat yang akan mengarah pada lebih banyak kerja
, membuat keputusan tentang apakah akan
collintas fungsi
memanggil kembali ChargeUp jauh lebih mudah.
Y
D-nya
pilihan kami, dan berapa biayanya? ” Pertanyaan- tim banakan merasa lebih utuh. vested.
N
N
utrorim needs a serious reality check. Nora Stern, as the outsider, is the voice
Rifkin can't allow his team members to create their own versions of reality. For exam
of reason when she notes that there is too much navel-gazing at the company. Too many people, including Rifkin,
are operat ing on hunches and gut reactions that could put the company at risk. Rifkin abdicates his
responsibility when he fails to sponsor a learning organization that builds knowledge as a competitive
advantage. He needs to show leadership and a willingness to make decisions.
The stock purchase is a perfect case in point. The CFO, Laurence Wiseman, may have his talents, but it seems he
pushed through the decision to purchase stock in Dipensit without exercising due diligence. Investing in a
company is like buying a house: One makes the purchase decision based on a combination of hard factors such
as price, condition, and school system, as well as soft factors such as general impres sions, conversations with
neighbors, and so on. It is inexcusable that Rifkin allowed share holders' money to be spent on a stake in
ple, Ford, the R&D head with vested inter ests and a difficult personality, prevents people from having candid
conversations when they are most needed – during times of crisis. Rifkin needs to buckle down and make it clear
to Ford and everyone else that they will be held accountable for their ac tions and their results and that no one
gets to steamroll others. Without this rule, the com pany can only react after the horse has left the stable.
To ensure better decision making, Rifkin should work hard to create a culture that re wards on the basis of unit
performance as well as individual contributions. He should spend more time developing leaders – I like to think
of them as mini-CEOs – who have a passion for results and understand how their actions affect the company.
Rifkin's job is to monitor his managers' progress, motivate them, and give them feedback. He should make sure
that results are openly celebrated and that when failure occurs, everyone learns
Paul Domorski (pdomorski@ avaya.com) is the vice presi dent of service operations at Avaya, a communications
network and service provider in Basking Ridge, New Jersey.
The payoff for a lot of hard work and seemingly endless preparation occurs when it's time
to make hard decisions.
Dipensit without having launched a thor ough investigation of the CEO's background when questions first arose.
Rifkin and his team should have delved into any rumors, probed any allegations, studied the business model,
and fully understood any contractual obligations.
The same fact-finding failure occurred with the ChargeUp fiasco, which should have been investigated
immediately. Rifkin should have dispatched a qualified team to Syd's Gyms to investigate the facts and interview
the people affected. Ford and his team should have reviewed the allegations in light of ear lier toxicity studies
and clinical trials to deter mine whether any of the alleged problems had ever occurred during testing. Indeed, a
thorough investigation might have prevented the crisis in the first place.
dari itu. Like members of a sports team, every one of these individuals is accountable for his or her own
assignment. Without that accountability, the team cannot win. In the end, Rifkin should play the role of a quarter
back and be the one calling all the plays. Getting this role right sometimes leads to tough discussions, but the
results can be outstanding.
Sometimes the answers to dilemmas will be obvious; other times, more analysis will be required. Either way, the
teams at Nutrorim must do a better job of getting at the heart of problems. The payoff for a lot of hard work and
seemingly endless preparation occurs when it's time to make hard decisions.
Reprint R0601A
To order, see page 135.
january 2006 29
DECISIO
N A BRIEF HISTORY OF
MAKING
Humans have perpetually sought new tools and insights
to help them make decisions. From entrails to artificial
intelligence, what a long, strange trip it's been.
S
january 2006 33
DECISION MAKING
Chances Are
RISK IS AN INESCAPABLE PART OF EVERY DECISION. For most of the everyday
choices people make, the risks are small. But on a corporate scale,
the implications (both upside and downside) can be enormous. Even
the tritely expressed (and rarely encountered) win-win situation
entails opportunity costs in the form of paths not taken.
To make good choices, has tried to multiply XXIII by VI. clues to what larger powers
companies must be able to The Hindu-Arabic numeral held in store for them. It
calculate and manage the system (which, radically, progresses quickly to a new
attendant risks. Today, myriad included zero) simplified interest in mathematics and
so phisticated tools can help calculations and enticed measure ment, spurred, in part,
them do so. But it was only a philosophers to investigate the by the growth of trade. During
few hundred years ago that the nature of numbers. The tale of the Renaissance, scientists and
risk management tool kit our progression from those mathematicians such as
consisted of faith, hope, and early fumblings with base 10 is Girolamo Cardano mused about
guess work. That's because risk masterfully told by Peter probability and concocted
is a numbers game, and before Bernstein in Against the Gods: puzzles around games of
the seventeenth century, The Remarkable Story of Risk. chance. In 1494, a peripatetic
humankind's understanding of Bernstein's account begins in Franciscan monk named Luca
numbers wasn't up to the task. the dark days when people Pacioli proposed “the problem
Most early numbering believed they had no control of points”– which asks how one
methods were unwieldy, as over events and so should divide the stakes in an
anyone knows who turned to priests and oracles for incomplete game. Some 150
years later, French
subject. Many dates are approximate.
A HISTORY OF CHOICE mathematicians Blaise Pascal and Pierre de
Fermat developed a way to determine the
We created this time line to remind readers that the
likelihood of each pos sible result of a simple
history of decision making is long, rich, and diverse. game (balla, which had fascinated Pacioli).
We recognize that it presents only a tiny sample of But it wasn't until the next century, when Swiss
the people, events, research, and thinking that have scholar Daniel Bernoulli
contributed to our current understanding of this
Prehistory generations of Prophets and seers of all their natural course. Male citizens in Athens, in Plato asserts that all
Chinese rely on the poetic kinds peer into the future. an early form of perceivable things are
For millennia, human wisdom and divination Sixth Century BC Confucius says decisions democratic self derived from eternal
decisions are guided by instructions compiled in should be informed by government, make archetypes and are better
interpretations of the I Ching. The Greeks Lao-tzu teaches the benevolence, ritual, decisions by voting. discovered through the
entrails, smoke, dreams, consult the Oracle of principle of “nonwillful reciprocity, and filial piety. Fourth Century BC soul than through the
and the like; hundreds of Delphi. action”: letting events take Fifth Century BC senses.
E O
Aristotle takes an knowledge that values In an early jury-trial slices through the N
J
49 BC
Julius Caesar makes the irreversible decision to cross the Rubicon, and a potent metaphor in decision making is born.
Ninth Century
The Hindu-Arabic number system, including zero, circulates throughout the Arab empire,
stimulating the growth of mathematics.
Eleventh Century
An English friar proposes what became known as “Occam's razor,” a rule of thumb for scientists and others trying to analyze data: The best theory is the
simplest one that accounts for all the
evidence.
Seventeenth Century
Hamlet, facing arguably the most famous dilemma in Western literature, debates whether “to be, or not to be.”
january 2006 35
DECISION MAKING
1620 proposes that reason is gamblers' question Pascal's wager on the Daniel Bernoulli lays Carl Friedrich Gauss
superior to experience about the existence of God the foundation of risk studies the bell curve,
Francis Bacon as a way of gaining “problem of points,” shows that for a science by examining described earlier by
asserts the knowledge and Blaise Pascal and decision maker, the random events from Abraham de Moivre,
superiority of establishes the Pierre de Fermat consequences, rather the and develops a
inductive reasoning framework for the develop the concept of than the likelihood, of standpoint of how structure for
in scientific inquiry. scientific method. calculating probabilities being wrong can be much an individual understanding the
1641 1654 for chance events. paramount. desires or fears each occurrences of
1660 1738 possible outcome. random events.
René Descartes Prompted by a Nineteenth Century
36 harvard business review
Meanwhile, research and events collaborated to expose collective deci sion making's dark
underbelly. Poor group decisions – of the sort made by boards, product development groups,
management teams–are often attrib uted to the failure to mix things up and question assumptions.
Consensus is good, unless it is achieved too eas ily, in which case it becomes suspect. Irving Janis
coined the term “group
think” in 1972 to describe “a mode of thinking that people engage in when they are deeply involved in
a cohesive in-group, when the members' striv ings for unanimity override their mo tivation to
realistically appraise al ternative courses of action.” In his memoir, A Thousand Days, former
Kennedy aide Arthur Schlesinger re proached himself for not objecting during the planning for the
Bay of
Pigs invasion: “I can only explain my failure to do more than raise a few timid questions by reporting
that one's impulse to blow the whistle on this nonsense was simply undone by the circumstances of
the discussion.”
It seems that decisions reached through group dynamics require, above all, a dynamic group. As Clar
ence Darrow neatly put it: “To think is to differ.”
1880
Oliver Wendell Holmes, in a series of lectures later published as The Common Law, puts forth the thesis that “the life of the law has not been logic; it has been
experience.” Judges, he argues, should base decisions not merely on statutes but on the good sense of reasonable
members of the
community.
1886
Francis Galton discovers that although values in a random process may stray from the average, in time they will trend toward it. His concept of regression to the
mean will influence stock and business analysis.
1900
Sigmund Freud's work on the unconscious suggests that people's actions and decisions are often influenced by causes hidden in the mind.
1907
Economist Irving Fisher introduces net present value as a decision making tool, proposing that expected cash flow be discounted at a rate that reflects an
investment's risk.
1921
Frank Knight distin guishes between risk, in which an outcome's probability can be known (and consequently insured against), and uncertainty, in which an
outcome's
probability is
unknowable.
1938
Chester Barnard
separates personal from organizational decision making to explain why some employees act in the firm's interest rather than in their own.
january 2006 37
DECISION MAKING
Thinking Machines
COMPUTER PROFESSIONALS EULOGIZE XEROX PARC OF THE 1970S as a technological
Eden where some of today's indispensable tools sprouted. But
comparable vitality and progress were evident two decades earlier
at the Carnegie Institute of Technology in Pittsburgh. There, a group
of distin guished researchers laid the conceptual – and in some
cases the programming – foundation for computer-supported
decision making.
Future Nobel laureate Herbert computer very early experiment with the
Simon, Allen Newell, Harold models of human cognition – technology, man agers used
Guetz kow, Richard M. Cyert, the em bryo of artificial computers to coordinate
and James March were among intelligence. AI was intended production planning for
the CIT scholars who shared a both to help re searchers laundry equipment, Daniel
fascination with orga nizational understand how the brain Power, editor of the Web site
behavior and the work ings of makes decisions and to DSSResources.com, re lates.
the human brain. The philos augment the Over the next decades, manag
opher's stone that alchemized ers in many industries applied
their ideas was electronic the technology to decisions
computing. By the mid-1950s, In the 1990s, technology about invest ments, pricing,
transistors had been around advertising, and logis tics,
aided decision making
less than a decade, and IBM among other functions.
would not launch its found a new customer: But while technology was
groundbreaking 360 mainframe customers themselves. improv ing operational
until 1965. But al ready decisions, it was still largely a
scientists were envisioning how cart horse for hauling rather
the new tools might improve decision-making process for than a stallion for riding into
human decision making. The real peo ple in real battle. Then in 1979, John
collaborations of these and organizations. Decision support Rockart published the HBR
other Carnegie scientists, systems, which began ap article “Chief Executives
together with research by pearing in large companies Define Their Own Data Needs,”
Marvin Minsky at the toward the end of the 1960s, pro posing that systems used
Massachusetts Institute of served the latter goal, by corpo rate leaders ought to
Technology and John McCarthy specifically targeting the practi give them data about the key
of Stanford, produced early cal needs of managers. In a jobs the company must
1944 decision Rejecting the rationality”– they makers use its computer-based
makers are classical notion that make do with good- analyses to form decision support tools.
In their book on game rational and decision enough decisions. policy on education, 1951
theory, John von consistent. makers behave with 1948 poverty, crime, the
Neumann and Oskar 1946 perfect rationality, environment, and Kenneth Arrow
Morgenstern describe a Herbert Simon argues Project RAND, its national security. introduces what
mathematical basis for The Alabe Crafts that name a contraction of 1950s becomes known as the
economic Company of Cincinnati because of the costs of “research and Impossibility Theorem,
decision making; markets the Magic 8 acquiring information, development,” Research conducted at which holds that there
like most theorists Ball. executives make separates from the Carnegie Institute can be no set of rules for
before them, they 1947 decisions with only Douglas Aircraft and of Technology and MIT social decision making
take the view that “bounded becomes a nonprofit will lead to the that fulfills all the
think tank. Decision development of early requirements of society.
38 harvard business review
do well to succeed. That article tion tools to assess vendors before making a
helped launch “executive vulnerabilities and purchase, and 87% used the
information sys tems,” a breed opportunities. Web to size up the merits of
of technology specifi cally In the 1990s, technology- online retailers, catalog mer
geared toward improving strate aided de cision making found a chants, and traditional
gic decision making at the top. new customer: customers retailers.
In the late 1980s, a Gartner themselves. The Internet, which Unlike executives making
Group consult ant coined the companies hoped would give strate gic decisions, consumers
term “business intelli gence” to them more power to sell, don't have to factor what
describe systems that help instead gave consumers more Herbert Simon called “zillions of
decision makers throughout power to choose from whom to calculations” into their choices.
the orga nization understand buy. In February 2005, the Still, their newfound ability to
the state of their company's shopping search service make the best possible buying
world. At the same time, a BizRate reports, 59% of online de cisions may amount to
growing concern with risk led shoppers vis ited aggregator technology's most significant
more companies to adopt sites to compare prices and impact to date on corporate
complex simula features from multiple success – or failure.
1952 Edmund Learned, circumstances Corporations use IBM's of the brain's two action.
C. Roland Christensen, complex. System/360 computers hemispheres. 1968
Harry Markowitz Kenneth Andrews, and 1961 to start implementing 1966
demonstrates others develop the management Howard Raiffa's
mathematically how to SWOT (strengths, Joseph Heller's term information systems. The phrase “nuclear Decision Analysis
choose diversified weaknesses, “catch-22” becomes option” is coined with explains many
stock portfolios so that opportunities, threats) popular shorthand for Roger Wolcott respect to developing fundamental decision
the returns are model of analysis, circular, bureaucratic Sperry begins atomic weapons and making techniques,
consistent. useful for making illogic that thwarts publishing is eventually used to including decision trees
1960s decisions when time is good decision making. research on the designate a decision and the expected value
short and 1965 functional specialization to take the most of sample (as opposed
drastic course of to perfect) information.
january 2006 39
DECISION MAKING
1970 over the best result. 1973 of decision makers and problems. John Rockart explores
positions decision 1979 the specific data needs
John DC Little Michael Cohen, James Fischer Black and making within the of chief executives,
develops the March, and Johan Myron Scholes (in context of managerial Amos Tversky and leading to the
underlying theory and Olsen publish “A one paper) and work. Daniel Kahneman development of
advances the Garbage Can Model of Robert Merton (in publish their Prospect executive information
capability Organizational another) show how to Theory, which systems.
of decision- Choice,” which advises accurately value stock Victor Vroom and demonstrates that the 1980s
support systems. organizations to options, beginning a Philip Yetton develop rational model of
1972 search their revolution in risk the Vroom-Yetton economics fails to “Nobody ever got fired
informational trash management. model, which explains describe how people for buying IBM” comes
Irving Janis coins the bins for solutions how different arrive at decisions to stand for decisions
term “groupthink” for thrown out earlier for Henry Mintzberg leadership styles can when facing the whose chief rationale is
flawed decision making lack of a problem. describes several kinds be harnessed to solve uncertainties of real safety.
that values consensus different types of life.
Reprint R0601B
To order, see page 135.
1984
W. Carl Kester raises corporate awareness of real options by suggesting that managers think of investment opportunities as options on the
company's future growth.
Daniel Isenberg explains that executives often combine rigorous planning with intuition when faced with a high degree of uncertainty.
1989
Howard Dresner
introduces the term “business intelligence” to describe a set of methods that support sophisticated analytical decision making aimed at improving business
performance.
1992
Anthony Greenwald develops the Implicit Association Test, meant to reveal unconscious attitudes or beliefs that can influence judgment.
1996
Web users start making buying decisions based on the buying decisions of people like themselves.
2005
In Blink, Malcolm Gladwell explores the notion that our instantaneous decisions are sometimes better than those based on lengthy, rational analysis.
january 2006 41
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