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A Structured Approach to Strategic Decisions
Article

A Structured Approach to Strategic Decisions

Daniel Kahneman, Dan Lovallo and Olivier Sibony
MIT Sloan Management Review, 2019
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Editorial Rating

9

Qualities

  • Innovative
  • Applicable
  • Eye Opening

Recommendation

Discipline and structure have improved the process of hiring at Google, Amazon and McKinsey. Now Nobel Prize–winning cognitive scientist Daniel Kahneman – the originator of the structured interviewing process these companies used – believes a similar method could enhance strategic decision making, too. Kahneman and his co-authors, business strategy experts Dan Lovallo and Olivier Sibony, make a convincing case for structured, strategic decision making in a cogent article for MIT Sloan Management Review.

Take-Aways

  • The Mediating Assessments Protocol (MAP) approach to structured decision making draws from extensive research into hiring decisions.
  • Unstructured decision making suffers from defects associated with mental models.
  • MAP structures decision making to improve results with little additional effort.

About the Authors

Daniel Kahneman is the Eugene Higgins Professor of Psychology, Emeritus at Princeton University. He received the Nobel Prize in Economic Sciences in 2002 for his work (with Amos Tversky) on cognitive biases. Dan Lovallo is a professor of business strategy at the University of Sydney and a senior adviser to McKinsey & Co. Olivier Sibony is an affiliate professor of strategy and business policy at HEC Paris; an associate fellow at Saïd Business School, University of Oxford; and a consultant specializing in the quality of strategic thinking.

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