Why strategies go wrong
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McKinsey Classics | April 2017
Distortions and deceptions in strategic decisions
How distortions and cognitive biases undermine decision making
Chief executives must often base big decisions on trust in other executives, but when the interests of certain people aren’t aligned with those of the organization, they tend to look out for themselves. Companies know about this problem, though few realize that it often combines with cognitive biases to form intertwined, far-reaching patterns of distortion and deception. Behavioral economics teaches us that decision making can succumb to universal human weaknesses, such as overconfidence, loss aversion, the champion bias, and “sunflower management.” To learn how to recognize and control them, read “Distortions and deceptions in strategic decisions,” a true McKinsey classic.
Understand cognitive biases
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