CLINIC 3 Should We Discount Our Software?
10. The culture here makes no one want to give up on a bad project or bad idea, because that means you have to admit failure. This silly persistence hurts us
Advice: (1) Remember to toggle between the prevention and promotion mindsets, as did the companies who fared best after recessions. In your situation, the promotion mindset may help people reorient themselves toward seizing new opportunities rather than sticking with failed choices. (2) Try to insert some discon rming views. Can you have people war-game what competitors or customers will do if the bad project persists?
Better to admit failure now than face disaster in the future. (3) Andy Grove faced a
similar situation with Intel’s memory business, which had begun as a tremendous success but slid slowly into trouble. The question “What would our successors do?” gave him the strength to declare defeat on memories—while doubling down on microprocessors. (4) Set up a tripwire in the form of a resource partition that forces re-evaluation at a speci ed time. (For example, “We are going to give this legacy project six more months, or $250,000 in additional investment, but if it doesn’t turn around by then, we’ll rethink it.”) That may make it easier and less political to change course.
11. I know what the right thing to do is, but I’m not sure I could ever sell it politically. So should I ght for the right thing or just resign myself to the
“sausage factory”?
Advice: (1) Think “AND not OR”: Be careful not to frame the issue in black-and-white terms until you’ve made sure there are no solutions that would allow you to do the right thing AND satisfy your colleagues’ issues. (2) Be a devil’s advocate. Even if you don’t sway the nal decision, you might still have an impact on the way the decision is implemented. (3) Appeal to core priorities. If the “right thing” is what’s most consistent with your organization’s stated values, then the burden should be on your colleagues to dispute those values, instead of arguing with you personally. (4) If the cause is lost, shift to bookending. Find ways to cap the potential harm you envision. In doing so, you’ll be protecting the organization—and also marking yourself as the one wise person who saw the harm coming. (5) And don’t forget to assume positive intent: Your colleagues may be wrong (or you may be), but chances are all of you want to do what’s best.
ENDNOTES
Introduction
1 Daniel Kahneman. The “rarely stumped” quote is from page 97, and the “normal state” quote is from page 85 of Daniel Kahneman (2011), Thinking, Fast and Slow (New York: Farrar, Straus & Giroux). In this book, Kahneman brilliantly simpli es the confusing zoo of biases and errors that have been documented by the decision literature and shows how they are systematically produced by “what you see is all there is.” To see how this principle produces the biases we cover in Decisive, see his analysis of narrow framing (p. 87), overcon dence (pp. 199–201, 209–12, and 259–
63), confirmation bias (pp. 80–84), and emotion and indecision (pp. 401–6).
2 Career choices. The 40% failure rate is described in Brooke Masters, “Rise of a Headhunter,” Financial Times, March 30, 2009, http://www.ft.com/cms/s/0/
19975256-1af2-11de-8aa3-0000779fd2ac.html#axzz24O1DwtbW. Describing the costs of these decisions, Kevin Kelly, the CEO of the prominent executive search rm Heidrick & Struggles, says, “It’s expensive in terms of lost revenue. It’s expensive in terms of the individual’s hiring. It’s damaging to morale.” The teaching study is National Commission on Teaching and America’s Future, “Policy Brief: The High Cost of Teacher Turnover,” http://nctaf.org/wp-content/uploads/NCTAFCostofTeacher
Turnoverpolicybrief.pdf. The lawyer statistic is from Alex Williams, “The Falling- Down Professions,” New York Times, January 6, 2008, http://www.nytimes.com/
2008/01/06/fashion/06professions.html. (Interestingly, 60% of doctors had considered getting out of medicine because of low morale.)
3 Business decisions. The study of 2,207 business decisions is cited in Dan Lovallo and Olivier Sibony (2010), “The Case for Behavioral Strategy,” McKinsey Quarterly 2: 30–
45. A study by KPMG International in 1999 looked at shareholder returns on corporate mergers relative to the performance of other companies in the same industry one year after the announcement of the merger. Using this commonly cited standard of success, it “found that 83% of mergers failed to unlock value.” David Harding and Sam Rovit (2004), Mastering the Merger (Boston: Harvard Business School Press). Of mergers, 83% failed to increase shareholder and half actually destroyed it.
4 On the personal front. Elderly regrets are discussed in Thomas Gilovich and Victoria Husted Medvec (1995), “The Experience of Regret: What, When, and Why,”
Psychological Review 102: 379–95.
5 Guts full of questionable advice. The Ultimate Red Velvet Cheesecake is here:
http://abcnews.go.com/Business/diet-disasters-top-calorie-heavy-menu-items/story?
id=14114606#.UA2nOLTUPYQ;McDonald’s cheeseburgers, http://nutrition.
mcdonalds.com/getnutrition/nutritionfacts.pdf; Skittles, http://www.wrigley.com/
global/brands/skittles.aspx#panel-3. Liz Taylor’s marriage history can be found in
her entry in Wikipedia.
6 Guts can’t make up their minds. Tattoo reversals: http://www.boston.com/lifestyle/
fashion/articles/2011/09/02/tattoo_remorse_fuels_reverse_trend_tattoo_removal/
(accessed 9/27/2012). The New Year’s resolutions study was by Richard Wiseman of the University of Hertfordshire and is discussed in Alok Jha, “New Year Resolution?
Don’t Wait Until New Year’s Eve,” Guardian, December 27, 2007, http://www.
guardian.co.uk/science/2007/dec/28/sciencenews.research.
7 Lovallo and Sibony study. This impressive study is described in Dan Lovallo and Olivier Sibony (2010), “The Case for Behavioral Strategy,” McKinsey Quarterly 2: 30–
45. The Sibony analogy of the courtroom is in Bill Huyett and Tim Keller (2011),
“How CFOs Can Keep Strategic Decisions on Track,” McKinsey on Finance 38: 10–15.
The Lovallo quote is from an interview of Dan Lovallo by Chip Heath in April 2012.
8 Franklin moral algebra. The full text of this letter is widely available on the Web or in John Towill Rutt (1831), Life and Correspondence of Joseph Priestley in Two Volumes, vol. 1 (London: R Hunter). See entry for September 10, 1772, on page 182.