Why Decisions Fail

by Paul C. Nutt

Based on the his analysis of 400 strategic decisions made by top managers in areas such as products and services, pricing and markets, personnel policy, technology acquisition, and strategic reorganization, Nutt estimates that two-thirds of all decisions are based on failure-prone or questionable tactics. He uses the fifteen monumental decision-making disasters to illustrate the potential consequences of these common tactical errors and traps and then details successful alternative decision-making approaches.
Why Decisions Fail translates decades of award-winning research into practical terms that managers can use to improve their own decision-making practices.

Genres: Business

332 pages, Paperback

First published January 1, 2002

Reviews

[MAN6726 Group · Rating 3 out of 5]

Tasked with reading and evaluating a business strategy book for a graduate MBA course, our group decided to analyze Paul Nutt’s Why Decisions Fail. We found that the text was extremely insightful, pointing out a common but less apparent trend in business: organizations commonly fail to fully analyze alternatives when making decisions. The book discussed the three most common blunders and seven traps that lead to serious debacles in organizations. Nutt did a great job of utilizing real-life examples in the form of the Ford Pinto, Denver International Airport, and EuroDisney cases along with many other mistakes to illustrate the impact of these failures.

Further, Nutt writes in a simple language that makes the concepts easy to understand and relate to situations in our own careers. He also utilizes real-world examples that are widely known, making it easier to conceptualize the information. Nutt’s research is thorough, credible, and obviously his passion in life. However, the large quantity of cases shared within the book leads to an information overload. With over twenty years of case studies, it is easy to lose sight of the main focus of the research. The wide variety of examples was overwhelming. It made remembering the takeaway points difficult as we set out to tackle the 15 case analyses and over 400 decisions. Due to the overwhelming amount of information, attempting to connect the lessons from chapter to chapter proved to be difficult. Nutt’s saving grace is the tables sprinkled throughout the text that summarized the process, outcomes, and suggestions for each decision. The other figures explaining the specific blunders and traps are also useful for reference post-reading.

The book successfully demonstrated the ways in which to avoid falling victim to bad evaluation practices, but it failed to hold our attention with its extremely repetitive content. Many of the blunders were similar in nature, making it difficult to identify any differences in the underlying reasons for the debacle. For example, the traps of “failing to take charge by reconciling claims,” “ignoring barriers to to action,” and “limiting search” have overlapping characteristics and are very similar in practice. These traps should be defined in a way that is easy to distinguish one from another and allows for successful application in real life scenarios. Again, this fault with Why Decisions Fail may relate back to the expansive scope of Nutt’s study. Narrowing the focus of the text would provide a clearer representation of the desired learning objectives and allow for better flow from chapter to chapter.

We feel that the main reason the book deserves a 3-star rating is author’s inability to condense the data into a concise, clear tool for business professionals. Improving the delineation between each trap would greatly improve the overall comprehension and usefulness of the material. Overall, we feel that Why Decisions Fail does a great job of demonstrating the importance of careful consideration in business strategy, but could be improved through editing and the addition of better summarization sections. In other words, less is more. As demonstrated by the study, today’s business professionals have enough trouble taking the time to understand the decisions before them without having to dig deep in their spare reading time. Therefore, Nutt would be more effective in conveying his points by simplifying the content of the book in order to better reach his readers.

[Simon Eskildsen · Rating 3 out of 5]

Extracts decision-making lessons from a series of interesting debacles in the business world. The main point here is that you set direction from objectives, not from ideas. We're comfortable pursuing the first idea and spending all the effort evaluating this idea, in lieu of discovering alternatives that exist in the unknown. We must be more cognizant of this bias, and realize that time may be better spent discovering alternative ideas that fulfill the objective, not optimizing the same idea. We also need to realize our bias towards ideas that seem risk-free ("no-one has ever gotten fired for buying IBM"), instead of investigating the ones with very high rewards ("but has anyone gotten promoted from buying IBM?"). This point is iterated again and again with examples, and once I got 40% into the book I ended up quickly skimming through the rest and the chapter summaries because it got incredibly dry. This is an important lesson, but the book becomes more reminiscent of a report or academic paper than a practical resource for decision-making at this point. I recommend reading the first few chapters, for sure.

[Gareth Jones · Rating 4 out of 5]

if normal management decsions fail half of the time - what is the failure rate during conditions of crisis? Useful discussion about lack of critical competence on decisions on load shedding (and contingency planning) - causing New York blackout. Discussion on barriers to organisational learning show familiar symptoms and reinforces the requirement for advisors when trying to find solutions and bring in new ideas and concepts - to use processes with high level of involvement and discovery. The 'key points' paragraphs are useful thinking cues for anyone involved in formulating resilience and continuity strategies.