Strategic Choice is Inevitably an Exercise in Decision Making Under Uncertainty

A fabulous and timely article from The McKinsey Quarterly:

The halo effect, and other managerial delusions, authored by Phil Rosenzweig, a professor of strategy and international management at the International Institute for Management Development (IMD), in Lausanne, Switzerland.

I strongly suggest that you print a copy and read every word.

Key learning from the article:

• In the business world success is the result of decisions made under conditions of uncertainty and shaped in part by factors outside our control.
• What makes strategic decision making so difficult, and therefore so valuable to companies, is precisely that there are no guaranteed keys to success. The ability to make the sorts of difficult, complex judgments that are pivotal for a company’s fortunes is, in the last analysis, a business executive’s most important contribution.
• Strategic choice is inevitably an exercise in decision making under uncertainty.
• Finally, clear-thinking executives know that in an uncertain world, actions and outcomes are imperfectly linked. It’s easy to infer that good outcomes result from good decisions and that bad outcomes must mean someone blundered. Yet the fact that a given choice didn’t turn out well doesn’t always mean it was a mistake. Therefore it’s important to examine the decision process itself and not just the outcome.

I have already decided on the next book that I am going to buy: The Halo Effect: . . . and the Eight Other Business Delusions That Deceive Managers.