Process or analysis: what matters most in a strategic decision
Invest in better analytical models or better debates? A field study offers an indication, to be read cautiously.
The survey
Dan Lovallo and Olivier Sibony (2010, McKinsey Quarterly) analyse over a thousand investment decisions reported by executives: process quality (debate, uncertainty) is more strongly associated with outcomes than depth of analysis.
The link to biases
Daniel Kahneman and Dan Lovallo (1993, Management Science) had shown the 'inside view' fuels over-optimistic forecasts that structured debate can correct.
Survey limits
Data are self-reported, retrospective and not peer-reviewed; respondents may reconstruct process in light of outcomes. (our executive and employee training programmes)
The limit of common practice
Enriching analysis files without changing how the decision is discussed.
A practical check in Zurich
For each major decision, appoint someone to present the best alternative option. Track over a year how many decisions this debate changed. To go further: explore the Decision-making training in Zurich, or browse our executive and employee training programmes in Switzerland.
In pictures: Decision-making in Zurich
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