A Structured Approach to Strategic Decisions – MIT Sloan Management Review

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.

Click here to read more.

By Geena Munroe
Geena Munroe Profile Picture