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Published: January 6, 2014
 / Summer 2014 / Issue 75

 
 

Making Better Decisions over Time

Making strategic decisions is fundamentally different from shooting baskets or landing an airplane. Decisions take longer to carry out. Feedback may be slow and incomplete. There is often little ability to assess the results of one decision before undertaking the next one. Strategic decisions often involve competition, meaning that performance is not absolute but has a relative dimension. The aim isn’t just to do well, but to do better than rivals—who are also trying to outdo us. Decisions are also hard to reverse. The hallmark of a strategic decision is precisely that it cannot be easily reversed, meaning it is important to get it right the first time.

When to Practice, When to Ponder

The complex reality of real-world decisions forces us to rethink implications for learning and improvement. Anders Ericsson, as a proponent of deliberate practice, recommends that managers and other professionals set aside two hours each day to reflect on their actions and draw lessons. Of course, reflection and evaluation are useful. Stepping back to ponder one’s actions and trying to draw lessons from experience is a very good idea. Yet when feedback is slow and imprecise, when performance is relative rather than absolute, and when particular circumstances rarely recur, we should not imagine that an emphasis on repetition will lead to the same benefits as when, say, learning to play the piano.

Which brings us to the question of coaching in business. The past decade has seen a sharp rise in coaching for executives. Like coaches in other domains, executive coaches aim to equip their clients with tools and knowledge to become more effective. The process relies heavily on providing feedback on behaviors and skills. But if decision making at this level does not improve through routine, is such coaching a waste of time? Not entirely.

Executives handle a number of routine activities that lend themselves well to deliberate feedback and practice. Presentations to employees. Interaction with key managers. Meetings. Presentations to a board. Negotiations with counterparties. Briefings with investors. Each of these involves a relatively short action for which we can usefully get feedback and try again, incorporating suggestions for improvement. It can be very useful to seek feedback from a thoughtful observer and strive to improve. Executives can indeed improve elements of their performance through deliberate practice.

But for the most consequential decisions that executives face, for which feedback cycles are longer and results less precise, coaching is a much less apt metaphor. A good executive coach can be a blend of confidant, advisor, goad, and Lear’s Fool, able to tell the truth when others may not. But we shouldn’t imagine that coaching that works for activities that lend themselves to rapid and tangible feedback can be sufficient for far-reaching strategic decisions. There’s no second chance for Edgar Bronfman selling Seagram to Vivendi. We do ourselves a disservice by implying that we can practice our way to success in all circumstances. We divert attention from asking the more important questions that are the stuff of judgment for managers and leaders. The logic of action, correction, adjustment, and repetition is less effective for strategic decisions than thorough preparation and analysis.

Managers face a series of decisions every day. Some are routine and lend themselves to the power of deliberate practice, in which feedback is rapid and tangible, and adjustments can be made to boost performance. The ability to shift mind-sets, from deliberation to implementation and back again, is vital. Other decisions are unique, and their results take longer to play out, making the use of feedback for subsequent adjustment less likely. For these, a different approach is needed. Above all, decision makers must develop the ability to recognize how decisions differ, and apply the appropriate tools to each. 

 
 
 
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Resources

  1. K. Anders Ericsson, Michael J. Prietula, and Edward T. Cokely, “The Making of an Expert,” Harvard Business Review, July 2007: The authors argue that ordinary practice is not enough. To reach elite levels of performance, you need to push yourself beyond your abilities and comfort level.
  2. Phil Rosenzweig, The Halo Effect...and the Eight Other Business Delusions That Deceive Managers (Free Press, 2007): The book exposes many of the errors and mistaken ideas that pervade the business world and suggests a more accurate way to think about company performance.
  3. Phil Rosenzweig, “What Makes Strategic Decisions Different,”Harvard Business Review, Nov. 2013: The bulk of decision-making research applies to one type of decision, and it’s not the type that’s most challenging for managers.
  4. For more thought leadership on this topic, see the s+b website at: strategy-business.com/organizations_and_people.
 
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