how to make better decisions
DESCRIPTION
Presentation by Prof. Francesca Gino of Harvard Business School at Planning-ness 2013TRANSCRIPT
Copyright © President & Fellows of Harvard College
Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan
Francesca GinoHarvard Business School
Email: [email protected] Twitter: @francescagino
Not According to Plan
Forces we do not perceive are going to matter
In 2004: case study on Ducati Motorcycle racing team (Ducati Corse)
• Long (and successful) history of racing
• Until 2003: never raced in the Grand Prix circuit (“MotoGP”)
• Being a newcomer: set low expectations
• Team director: 2003 would be a learning season for the team
• Very specific measures designed to facilitate learning (e.g., detailed tracking of bike performance, creating a group focused specifically on analyzing race data, post-race debriefs, etc.)
Surprisingly, Ducati Corse performed much better than they (or anyone else) expected during the 2003 season
• Finished season 2nd overall in the team standings
An Example
Learning took a distinct back seat to winning• Copious amount of data collected, little of it analyzed
• One team member noted, “(…) Our 2003 season was, in some way, too successful. So, our strategy was we ride, we go home, and we do not need to analyze the data. It was not important to have information at that point.”
• 2004 bike completely redesigned • More than 60% of the 915 individual components of the new bike were
totally different and could not be interchanged with the previous version
Result? Worse performance in the 2004 season and many struggles in the races, especially at first
An Example (cont’ed)
FORCES FROM WITHIN• Factors that reside in both our minds
and our hearts, and exist because of our very nature of being human
FORCES FROM OUR RELATIONSHIPS
• Factors that characterize our relationships and interactions with others
FORCES FROM THE OUTSIDE• Factors that characterize the context
in which we operate
Factors Derailing Our Decisions
Copyright © President & Fellows of Harvard College
Forces From Within
Rate Yourself
Using PERCENTILES, compare yourself relative to other people in this room on the following dimensions:
1. My ability to make good decisions2. My ability to get along well with other people3. My ability to listen to the perspective of other people4. My intelligence5. My ability to negotiate effectively6. My ethicality
Respondents asked who’s likely to get to heaven?
• Bill Clinton 52%
• Michael Jordan 62%
• Mother Teresa 79%
• Themselves 87%
US News Survey
There are certainly benefits to having a positive view of who we are and what we can accomplish thanks to our knowledge and IQ
But having inflated beliefs can also lead to problems
• E.g., in many types of competitive decision-making contexts:
• If entrepreneurs believe they are savvier than the competition, they are likely to make overly risky business decisions.
• If CEOs believe they’re smarter than other executives at their level, they will plunge ahead with ill-advised mergers and acquisitions.
• Implications for advice taking.
Force #1: Inflated Self-Views
Raise your awareness
Because our views of how capable and competent we are as individuals are often overly positive, we rely too much on our own information. By raising your awareness, you can keep your self-views in check and recognize when they may be taking you off track.
Principle to Counteract Inflated Self-views
FORCES FROM WITHIN• Inaccurate Self-Views• Infectious Emotions• An Overly Narrow Focus
FORCES FROM OUR RELATIONSHIPS• Lack of Perspective Taking• Insidious Social Bonds• Salient Social Comparisons
FORCES FROM THE OUTSIDE• Irrelevant Information• Subtle Changes in Framing• Ambiance and Opportunity
Factors Derailing Our Decisions
FORCES FROM WITHIN• Inaccurate Self-Views• Infectious Emotions• An Overly Narrow Focus
FORCES FROM OUR RELATIONSHIPS• Lack of Perspective Taking• Insidious Social Bonds• Salient Social Comparisons
FORCES FROM THE OUTSIDE• Irrelevant Information• Subtle Changes in Framing• Ambience and Opportunity
Factors Derailing Our Decisions
Example #1
A Field Study
Signature at the bottom:
Signature at the top:
~23,671 miles
~26,098 miles
A Field Study
Difference:~2,500 miles per car
Example #2
Working At Disney
Process by which an individual acquires the values, expected behaviors, and social knowledge essential for assuming an organizational role and for participating as a member (Louis, 1980; Van Maanen and Schein, 1979)
When joining an organization:
• Anxiety about the job and the need to fit in
• Negotiation of personal identity
Research to date:
• Ways in which organizations can enculturate employees (understanding of norms and culture)
Socialization Process
Relative absence of structure that creates ambiguity and encourages newcomers to question the status quo
Highlight and leverage newcomers’ new perspective and skills
2
Socialization Practices
Strategic, structured program of socialization designed to reduce ambiguity and encourage newcomers to accept preset organizational norms and values
Institutionalized tactics
Individualized tactics
Individual identity is made salient
Socialization Practices
Organizational identity is made salient
Institutionalized tactics
Individualized tactics
Reduces possibility of self-expression and authenticity
Increases possibility of self-expression and authenticity
Individual identity is made salient
Socialization Practices
Organizational identity is made salient
Institutionalized tactics
Individualized tactics
Reduces possibility of self-expression and authenticity
Increases possibility of self-expression and authenticity
To be authentic one must align his/her internal experiences (e.g., values, feelings, perspectives) with external expressions
• Key component of self-esteem
Field Experiment
November 2010 – July 2011
Wipro BPO
• Provides phone and chat support
for its global customers
• Like other call centers, high
turnover rates
• Job is stressful
We randomly assigned incoming batches of agents
into three groups:
1. Individual identity
2. Organizational identity
3. Control group (Wipro’s traditional onboarding process)
Individual identity
Organizational identity
Control
96 101 408
Participants and Conditions
Agents in the identity treatments received same training
and material as control group with three more parts:
1. One hour presentation during the first day’s
orientation session
2. Two fleece sweatshirts, customized by condition
3. One badge, customized by condition
Experimental Conditions
One hour session:
1. Senior leader spends 15 min discussing how working at
Wipro would give agents the opportunity to express
themselves and create individual opportunities
2. 15 min lost at sea exercise (individually)
3. 15 min reflection on decision made in the exercise
• Your personal highlights reel applied to job, etc.
4. 15 min introducing themselves and their decisions to the
group
Fleece sweatshirts with individual names, and badge
Individual Identity Condition
One hour session:
1. Senior leader spends 15 min discussing Wipro’s values
and why Wipro is an outstanding organization
2. Same from star performer (15 min)
3. 15 min reflection on what they heard about Wipro
• What did you hear about Wipro that makes you proud
to be part of the organization?
4. 15 min discussing answers within their group
Fleece sweatshirts with company name, and badge
Organizational Identity Condition
Summary of Findings
When the organization focused its initial socialization processes
on newcomers’ personal identities rather than on the
organizational identity, it fostered stronger employment
relationships
• lower employee turnover
• greater customer satisfaction
• greater job satisfaction
• greater work engagement
• greater feelings of authentic self-expression
YOUR TASK…
In Groups of 4-5 members
Identify one or two problems your organizations is experiencing or
experienced in the past (“Not According to Plan”)
If you were to design an experiment to tackle this problem…
• What would you manipulate
• What would you measure
• Why you think it would work
Discussion
Problem area
Design principles…
Copyright © President & Fellows of Harvard College
Sticking to the Plan…
Recognize we are human• Subtle forces influence our
decisions and behavior
Apply principles systematically
Develop plans of actions that consider and counteract the forces that sidetrack us
Check on progress
Sticking to the Plan
