Written by Daniel Kahneman, Dan Lovallo, and Olivier Sibony
Reducing errors in judgment requires a disciplined process.
Envision the following situations: A board of directors considers acquiring a competitor. A marketing team decides whether to launch a new product. A venture capital investment committee chooses among an array of startups to fund.
All those strategic decisions share a common feature: They are evaluative judgments. To make such tough calls, people must boil down a large amount of complex information to either (1) numerical scores for competing options or (2) a yes-no decision on whether to choose a specific path. Of course, some management decisions are made without weighing quite so much information. But strategic decisions tend to involve the distillation of complexity into a single path forward.
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