Why do smart people make wrong decisions?

The most important part of leadership is making decisions. Decisions about products and markets to invest in, people to hire and to promote, IT-systems to select, to continue or terminate projects plagued by setbacks, mergers & acquisitions, etc. These decisions determine the success or failure of organizations, projects and individuals. 

Ever since my graduation in the field of Sociology, I have always been very interested in the topic of decision making in organizations. At university, I loved the lectures of Professor Lawler about concepts like bounded rationality. I also loved reading books on this topic, including ‘Essence of Decision’ (about decision making in the Kennedy administration during the Cuban missile crisis) and Barbara W. Tuchman’s classic ‘March of Folly’.

Do we really need another book on this topic?

Against this background, I was a bit concerned when my friend and former PA Consulting Group colleague Wim van Hennekeler, told me that he was writing a book about decision making. This was mainly due to my concern about whether he could possibly add value to the vast body of work that was already published on this topic.

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When do you need to think different?

By Dirk Verburg

One of the most inspirational videos I have ever seen is the Apple commercial ‘Think Different’. This video shows footage of several leaders from the worlds of business, arts, politics, sports and science, such as Richard Branson, Pablo Picasso, Albert Einstein, Martin Luther King, Mohammed Ali and Mahatma Ghandi. The key message of the commercial is that these people were able to change the world, because they were thinking differently. The suggestion is, of course, that people who purchase Apple products also ‘Think Different’.

The ability to ‘Think different’ is extremely important, but unfortunately not something that comes ‘naturally’ to us as human beings. There are several reasons for this. The most important ones are our ‘Bounded Rationality’, reliance on ‘Heuristics’ and ‘Theory-Induced Blindness’. Continue reading