How Do You Make Smarter Decisions?

It’s a Good Question! How do you make smarter decisions?

According to Hugh Courtney, Dan Lovallo, and Carmina Clarke, authors of the Harvard Business Review (HBR) article “Deciding How to Decide” on page 63 of the November 2013 issue, “Senior Managers are paid to make tough decisions.” You might remember Dan Lovallo as a co-author in earlier HBR posts I’ve featured. You can read them here, and here. With the right subscription, you can read the current article, “Deciding how to Decide here. I’ll divide this post into two parts. This one will address some interesting questions, and the second part will discuss the even more interesting answers to how you make smarter decisions.

Whether you are a senior manager, a manager wanna-be, or the proprietor of a small business, you will be making decisions in an environment of uncertainty. Your tendency will be to fall back on familiar decision models, yet they might not fit the bill. What should you do?

Assess the Situation – What do you know & how certainly?

To make smarter decisions, our authors suggest you “expand your tool kit of decision support tools and understand which tools work for which kinds of decisions”. Good advice, but what does it mean for you? It means you should decide whether you have the complete and reliable information that familiar decision analysis techniques demand.

make smarter decisionsAre you operating in a decision environment of relative certainty, or uncertainty? Based on our ongoing research into poor data quality and negative business outcomes, you might be operating in an environment of uncertainty far more often than you think. How do you make smarter decisions? The first step is making a realistic assessment of what you know, and what you don’t know.


Do you know what it will take to succeed?

Good question! The authors ask you to consider whether you have a good causal model. make smarter decisionsthey ask you to consider the following:

Do you understand what combination of critical success factors will determine whether your decision leads to a successful outcome?


Do you know what metrics need to be met to ensure success?


Do you have a precise understanding of – almost a recipe for – how to achieve success?

If you can develop a decision model, the kind you would specify in a decision table tool, and feel comfortable specifying condition predicates and resulting actions, you probably do have a recipe for success. Unfortunately, most of the time this level of understanding eludes managers tasked with decision-making in untested waters. The authors mention disruption as a muddier of the decision-making waters. I agree that this ups the uncertainty ante. You can read a bit about disruption and disruptive responses here, and here.

 Can you predict the range of possible outcomes?

This one sounds like a given. Of course you should be able to predict the range of possible outcomes… but it just isn’t so. The authors ask you to consider the following.

Can you define the range of outcomes that would result from your decision, both in the aggregate, and for each critical success factor?


Can you gauge the probability of each outcome?


Other than total success or complete failure, you may have no idea of how a situation might end. Even if you have an idea of the possible outcomes, you might have no idea about the relative probabilities associated with the various outcomes. In this case, you are truly dealing in an environment of uncertainty. No worries, there are approaches that will still help you make smarter decisions.

The Bottom Line

Uncertainty in decision-making is familiar, and ignorance of mechanism, probability of success, and range of outcomes are often profound. What, you’ve been there? Well, in an upcoming post I’ll review the author’s approach to choosing the right tools to make smarter decisions. They identify five possible contexts for decision-making, and we will review each one.  Meanwhile, feel free to contact us to discuss this post, or your requirements for tech content and custom IT research that will help your prospects and clients make a better decision… one in your favor.





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