| Analysis and judgment aren’t enough |
| McKinsey Classics | October 2018 |
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| Making better decisions |
| Think of important business decisions your company made recently. First, it gathered and analyzed information. Then it collected insights and judgment from high-ranking executives. Finally, the company conducted a formal or informal process that transformed the analysis and judgment into a decision. Contrary to what you might assume, a good analysis in the hands of experienced, smart executives won’t necessarily yield good results. As we learned by asking managers about the nature of an important decision and the process used to make it, a third element—the decision-making process—is crucial to weed out cognitive biases such as overconfidence, misaligned incentives, and groupthink. A good process exposes those biases, and a superb analysis has no value if the process doesn’t give it a chance. Learn how to remove cognitive biases by reading our 2010 classic, “The case for behavioral strategy.” |
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| Did you miss our previous McKinsey Classics? |
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| Beating the odds in market entry |
| Eighty percent of new products fail. One way to improve on that record involves developing a reference class of similar decisions by other businesses. Read our 2005 classic “Beating the odds in market entry.” |
| Beat the odds → |
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