Why Bad Decisions Happen to Good Managers (HBR Article Collection)

Seventy-five percent of strategic decisions fail: A merger doesn't pay off. A new division won't perform as intended. An innovative product languishes on store shelves. Why? While pondering strategic decisions, we misuse our cognitive powers. For example, we wrongly assume that a competitive strategy that worked in one industry will succeed in another. Or we let the first information we receive distort our interpretation of subsequent information. Or we consider only data that support our favored choice. There's nothing wrong with drawing an analogy between two industries or filtering information to make a decision. In fact, such techniques can reveal valuable new opportunities. But wielded carelessly, cognitive shortcuts can also lead to disaster. To avoid this scenario, understand the dangers lurking in common cognitive processes, then apply potent countermeasures. This Harvard Business Review Article Collection provides guidelines and tools to help you get started. The three Harvard Business Review articles in this collection: "How Strategists Really Think: Tapping the Power of Analogy" by Giovanni Gavetti and Jan Rivkin (HBR reprint R0504C); "The Hidden Traps in Decision Making" by John Hammond III, Ralph Keeney, and Howard Raiffa (HBR reprint 98505); and "Delusions of Success: How Optimism Undermines Executives' Decisions" by Dan Lovallo and Daniel Kahneman (HBR reprint R0307D).