Fatal decisions

Even top managers with a proven reputation of intelligence can make fatal mistakes. How does that happen, and how can it be prevented? The book ‘Think Again. Why Good Leaders Make Bad Decisions and How to Keep It From Happening to You’ describes how the human brain works when one makes decisions.

Think Again. Why Good Leaders Make Bad Decisions and How to Keep It From Happening to You

The three authors, who work at renowned business schools, give examples of disastrous decisions by nevertheless capable leaders, like the acquisition of soft drink producer Snapple by Quaker, which eventually led to Quaker being taken over by PepsiCo. They also discuss strategic military mistakes, like Operation Market Garden and the Battle of Midway.

The causes for these wrong decisions are misleading experiences, misleading prejudices, inappropriate self-interest and misplaced attachment. In order to avoid making such mistakes, five types of safety precautions should be taken: new experiences, data & analyses, challenging group debates, governance teams and a monitoring process. These recommendations are extensively discussed in the (anonymous) case of a Germany company that considers moving its global headquarters. Fascinating stuff.