Executive Decisions – Behavioral Strategy
Tuesday, June 1st, 2010Just a quick post to recommend an interesting article from the McKinsey Quarterly: “The case for behavioral strategy” (free registration required to access article). Authors Dan Lovallo and Olivier Sibony present a well-reasoned discussion of the impact of cognitive biases on effective corporate decision making. After first setting the stage by noting that most of the advances in the application of behavioral science to business have been in understanding how others behave – such as in marketing scenarios, here the issue is in how the leadership behaves in making high-quality decisions.
Perhaps most interesting is the discussion of some of the top biases impacting business decisions as spotlighted in the article’s companion pdf: “A language to discuss biases” It’s not hard to see reflections of DISC concepts in terminology such as “Stability biases”, “Action-oriented biases” or “Social biases”. I would recommend this article to any business leader interested in understanding the risks of gut-based decisions and motivated to improve overall quality of decisions by using behavioral understanding to adopt a process that builds-in counters to the most prevalent business biases.
