Why Good Leaders Make Bad Decisions. Decision making lies at the heart of our personal and professional lives. Every day we make decisions. Some are small, domestic, and innocuous. Others are more important, affecting people. Inevitably, we make mistakes along the way. The daunting reality is that enormously important decisions made by intelligent, responsible people with the best information and intentions are sometimes hopelessly flawed. Consider J. He led the merger of Chrysler and Daimler against internal opposition. Nine years later, Daimler was forced to virtually give Chrysler away in a private equity deal. Steve Russell, chief executive of Boots, the UK drugstore chain, launched a health care strategy designed to differentiate the stores from competitors and grow through new health care services such as dentistry. It turned out, though, that Boots managers did not have the skills needed to succeed in health care services, and many of these markets offered little profit potential. The strategy contributed to Russell. Brigadier General Matthew Broderick, chief of the Homeland Security Operations Center, who was responsible for alerting President Bush and other senior government officials if Hurricane Katrina breached the levees in New Orleans, went home on Monday, August 2. The reality is that important decisions made by intelligent, responsible people with the best information and intentions are sometimes hopelessly flawed. All these executives were highly qualified for their jobs, and yet they made decisions that soon seemed clearly wrong. Guide for Selecting a Leader All Boy Scout leaders must be 21 years of age or older, except assistant Scoutmasters and assistant Varsity Scout coaches, who must be 18 or older and of good moral character. Men and women may serve in any position. And more important, how can we avoid making similar mistakes? We began by assembling a database of 8. From our analysis of these cases, we concluded that flawed decisions start with errors of judgment made by influential individuals. Hence we needed to understand how these errors of judgment occur. In the following pages, we will describe the conditions that promote errors of judgment and explore ways organizations can build protections into the decision- making process to reduce the risk of mistakes. To put all this in context, however, we first need to understand just how the human brain forms its judgments. How the Brain Trips Up. We depend primarily on two hardwired processes for decision making. Our brains assess what. Both of these processes are normally reliable; they are part of our evolutionary advantage. But in certain circumstances, both can let us down. Pattern recognition is a complex process that integrates information from as many as 3. Faced with a new situation, we make assumptions based on prior experiences and judgments. Thus a chess master can assess a chess game and choose a high- quality move in as little as six seconds by drawing on patterns he or she has seen before. But pattern recognition can also mislead us. Broderick had been involved in operations centers in Vietnam and in other military engagements, and he had led the Homeland Security Operations Center during previous hurricanes. These experiences had taught him that early reports surrounding a major event are often false: It. Unfortunately, he had no experience with a hurricane hitting a city built below sea level. By late on August 2. Katrina hit New Orleans, Broderick had received 1. But he also had gotten conflicting information. The Army Corps of Engineers had reported that it had no evidence of levee breaches, and a late afternoon CNN report from Bourbon Street in the French Quarter had shown city dwellers partying and claiming they had dodged the bullet. So before going home for the night, he issued a situation report stating that the levees had not been breached, although he did add that further assessment would be needed the next day. This emotional information tells us whether to pay attention to something or not, and it tells us what sort of action we should be contemplating (immediate or postponed, fight or flight). 264 l CHAPTER 10 l LEADERSHIP AND MANAGEMENT Chapter 10 LEADERSHIP AND MANAGEMENT 10.1 INTRODUCTION TO GOOD MANAGEMENT Th e aim of good management is to provide services to the community in an appropriate, effi cient. Good leaders provide a compelling vision of the future. Who do you consider to be a good leader? Maybe it's a politician, a famous businessperson, or a religious figure. Or maybe it's someone you know personally – like your boss, a teacher, or a friend. Leadership and Leadership Development in Health Care: The Evidence Base Professor Michael West. Effective leaders in health services emphasise continually that safe, high quality, compassionate care is the top priority. They ensure that the voice of. Even good leaders don’t display it all the time. Examples of Famous last words: n“I think there is a world market for about five. Cultivate the Quality of Generosity in Your Life nBe Grateful For What You Have nPut People First nDon’t Allow the Desire for n n 11. When the parts of our brains controlling emotions are damaged, we can see how important emotional tagging is: Neurological research shows that we become slow and incompetent decision makers even though we can retain the capacity for objective analysis. Like pattern recognition, emotional tagging helps us reach sensible decisions most of the time. But it, too, can mislead us. Take the case of Wang Laboratories, the top company in the word- processing industry in the early 1. Recognizing that his company. Unfortunately, he chose to create a proprietary operating system despite the fact that the IBM PC was clearly becoming the dominant standard in the industry. This blunder, which contributed to Wang. He believed he had been cheated by IBM over a new technology he had invented early in his career. These feelings made him reject a software platform linked to an IBM product even though the platform was provided by a third party, Microsoft. Why doesn? The most obvious reason is that much of the mental work we do is unconscious. This makes it hard to check the data and logic we use when we make a decision. Typically, we spot bugs in our personal software only when we see the results of our errors in judgment. Matthew Broderick found out that his ground- truth rule of thumb was an inappropriate response to Hurricane Katrina only after it was too late. An Wang found out that his preference for proprietary software was flawed only after Wang. Our brains do not naturally follow the classical textbook model: Lay out the options, define the objectives, and assess each option against each objective. Instead, we analyze the situation using pattern recognition and arrive at a decision to act or not by using emotional tags. The two processes happen almost instantaneously. Indeed, as the research of psychologist Gary Klein shows, our brains leap to conclusions and are reluctant to consider alternatives. Moreover, we are particularly bad at revisiting our initial assessment of a situation. We give students a case that presents a new technology as a good business opportunity. Often, a team works many hours before it challenges this frame and starts, correctly, to see the new technology as a major threat to the company. Even though the financial model consistently calculates negative returns from launching the new technology, some teams never challenge their original frame and end up proposing aggressive investments. Raising the Red Flag. In analyzing how it is that good leaders made bad judgments, we found they were affected in all cases by three factors that either distorted their emotional tags or encouraged them to see a false pattern. We call these factors . Research has shown that even well- intentioned professionals, such as doctors and auditors, are unable to prevent self- interest from biasing their judgments of which medicine to prescribe or opinion to give during an audit. The second, somewhat less familiar condition is the presence of distorting attachments. We can become attached to people, places, and things, and these bonds can affect the judgments we form about both the situation we face and the appropriate actions to take. The reluctance executives often feel to sell a unit they. These are memories that seem relevant and comparable to the current situation but lead our thinking down the wrong path. They can cause us to overlook or undervalue some important differentiating factors, as Matthew Broderick did when he gave too little thought to the implications of a hurricane hitting a city below sea level. The chance of being misled by memories is intensified by any emotional tags we have attached to the past experience. If our decisions in the previous similar experience worked well, we. He acquired Snapple because of his vivid memories of Gatorade, Quaker. Snapple, like Gatorade, appeared to be a new drinks company that could be improved with Quaker. Unfortunately, the similarities between Snapple and Gatorade proved to be superficial, which meant that Quaker ended up destroying rather than creating value. In fact, Snapple was Smithburg. Many experienced leaders do this already. For important decisions, we need a deliberate, structured way to identify likely sources of bias. She was promoted head of the consumer products division and needed to decide whether to promote her number two into her cosmetics job or recruit someone from outside. Can we anticipate any potential red flags in this decision? Yes, her emotional tags could be unreliable because of a distorting attachment she may have to her colleague or an inappropriate self- interest she could have in keeping her workload down while changing jobs. And since the greater part of decision making is unconscious, Rita would not know either. What we do know is that there is a risk. So how should Rita protect herself, or how should her boss help her protect herself? The simple answer is to involve someone else. That person could challenge her thinking, force her to review her logic, encourage her to consider options, and possibly even champion a solution she would find uncomfortable. Fortunately, in this situation, Rita was already aware of some red flag conditions, and so she involved a headhunter to help her evaluate her colleague and external candidates. In the end, Rita did appoint her colleague but only after checking to see if her judgment was biased. We. But few leaders do so in a structured way, and as a result many fail to provide sufficient safeguards against bad decisions. The management team in charge of the division had twice promised a turnaround and twice failed to deliver. The CEO, Mark Thaysen, was weighing his options. This division was part of Thaysen. It had been assembled over the previous five years through two large and four smaller acquisitions. Thaysen had led the two larger acquisitions and appointed the managers who were struggling to perform. The chairman of the supervisory board, Olaf Grunweld, decided to consider whether Thaysen. Grunweld was not second- guessing Thaysen. He was merely alert to the possibility that the CEO. Thus alerted to Thaysen.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. Archives
January 2017
Categories |