The Future of Decision Making: Less Intuition, More Evidence - Andrew McAfee - Harvard Business Review

Human intuition can be astonishingly good, especially after it's improved by experience. Savvy poker players are so good at reading their opponents' cards and bluffs that they seem to have x-ray vision. Firefighters can, under extreme duress, anticipate how flames will spread through a building. And nurses in neonatal ICUs can tell if a baby has a dangerous infection even before blood test results come back from the lab. The lexicon to describe this phenomenon is mostly mystical in nature. Poker players have a sixth sense; firefighters feel the blaze's intentions; Nurses just know what seems like an infection. They can't even tell us what data and cues they use to make their excellent judgments; their intuition springs from a deep place that can't be easily examined. . Examples like these give many people the impression that human intuition is generally reliable, and that we should rely more on the decisions and predictions that come to us in the blink of an eye.

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Strategic Decisions: When to Trust Your Gut - McKinsey Quarterly

Nobel laureate Daniel Kahneman and psychologist Gary Klein debate the power and
perils of intuition for senior executives.

For two scholars representing opposing schools of thought, Daniel Kahneman and Gary Klein find a surprising amount of common ground.

Kahneman, a psychologist, won the Nobel Prize in economics in 2002 for prospect theory, which helps explain the sometimes counterintuitive choices people make under uncertainty. Klein, a senior scientist at MacroCognition, has focused on the power of intuition to support good decision making in high-pressure environments, such as firefighting and intensive-care units.

In a September 2009 American Psychology article titled “Conditions for intuitive expertise: A failure to disagree,” Kahneman and Klein debated the circumstances in which intuition would yield good decision
making. In this interview with Olivier Sibony, a director in McKinsey’s Brussels office, and Dan Lovallo, a professor at the University of Sydney and an adviser to McKinsey, Kahneman and Klein explore the power and perils of intuition for senior executives.

Download and read the full interview here.

Narcissism and the Importance of Partnership and Strategy - The Conversation - Harvard Business Review

As the great Nebraskan Fred Astaire (born Frederick Austerlitz, Omaha, 1899) used to sing, "There may be trouble ahead..." An article in the latest issue of Academy of Management Learning and Education reports that over the past 25 years college students in the U.S. have scored steadily higher on tests for narcissism. Professors Bergman, Westerman and Daly note that "the mean narcissism score of 2006 college students on the Narcissistic Personality Inventory (NPI) approached that of a celebrity sample of movie stars, reality TV winners and famous musicians." Fabulous. If that weren't bad news enough, "Narcissism in Management Education" (Academy of Management Learning and Education, 2010, Vol. 9, No. 1, 119-131) also cites research indicating that "narcissistic tendencies such as materialistic values and money importance tend to be particularly evident in business students." Most studies of narcissists in business focus on their usually awful eventual effect on co-workers.

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Growth Through Focus - Less is More: A Blueprint for Driving Profitable Expansion: s+b

This strategy+business article is well research and offers a comparative view on the advantages of thinking about growth as focus rather than growth as more. Faced with economic headwinds, many global corporations are struggling to grow their businesses profitably. In the consumer packaged goods business, for example, the worldwide recession has hurt premium brands as consumers have traded down to cheaper brands, private labels, or generics. In the retailing business, same-store sales are flat or declining for numerous companies. Meanwhile, many business leaders continue to seek growth by extending their existing product lines and brands, as well as by entering new geographic regions. After all, growth is supposed to be about “more” — more products on the shelf, more categories, more brands, and more markets. However, this approach is exactly the opposite of what business leaders should do to drive increased revenues and profits. A typical “growth through more” strategy

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The Case for A Behaviorial Strategy - McKinseys

Once heretical, behavioral economics is now mainstream. Money managers employ its insights about the limits of rationality in understanding investor behavior and exploiting stock-pricing anomalies. Policy makers use behavioral principles to boost participation in retirement-savings plans. Marketers now understand why some promotions entice consumers and others don’t. Yet very few corporate strategists making important decisions consciously take into account the cognitive biases—systematic tendencies to deviate from rational calculations—revealed by behavioral economics. It’s easy to see why: unlike in fields such as finance and marketing, where executives can use psychology to make the most of the biases residing in others, in strategic decision making leaders need to recognize their own biases. So despite growing awareness of behavioral economics and numerous efforts by management writers, including ourselves, to make the case for its application, most executives have a justifiably difficult time knowing how to harness its power.

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