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Think Again: Why Good Leaders Make Bad Decisions and How to Keep it From Happening to You

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The authors of "Think Again," impeccably credentialed and versed in management strategy, are eminently qualified to scrutinize the performance of executives and senior managers in making organizational decisions. In their book they discuss numerous cases involving high-ranking decision makers. It is quite sobering, though not at all surprising, to see so many atrocious decisions consistently being made by people who are supposed to be masters of that craft. Evidently, these professionals are nowhere near as proficient as they are usually deemed to be. In view of the prevalence of this situation, it is hard to avoid concluding that, on the whole, top decision makers are no better at doing their job --making the right decision-- than would be a randomly selected employee drawn from the ranks of their own organization. Even more troubling is the fact that no other professional field of endeavor seems to suffer from such an appalling condition.

The book tackles this disconcerting problem by proposing a framework which consists of three parts: a description of how our brains make decisions and how it can be tricked into false judgments, an explanation of four posited conditions under which flawed thinking is likely to happen, and a set of safeguards prescribing how to counterbalance the four sources of error. The brain is presented as a pattern recognition apparatus that employs emotional tagging and one-plan-at-a-time processing to make sense of what's going on in the world and devise a response to the perceived challenges. Most of that processing, however, is conducted beyond the realm of consciousness, so the hapless (and ostensible) decision maker is in an extremely weak position to question the validity of the brain's verdicts or its torrent of neural decrees. The clinical evidence sustaining this point is striking: V.S. Ramachandran's notable work in behavioral neurology is cited on several occasions. (See Phantoms in the Brain: Probing the Mysteries of the Human Mind.)

Decisions go wrong, state the authors, because of two factors: (1) an individual or group makes an error of judgment (which follows from the above) and (2) the decision process fails to correct the error. Four sources of error, called red flag conditions, are identified: misleading experiences, misleading prejudgments, inappropriate self-interest, and inappropriate attachments (yes, of the type denounced by Siddhartha Gautama). The authors then advance four categories of safeguard to counter the inevitable errors: provide decision makers with new experiences or data and analysis, create group debates which challenge biases, institute governance teams to protect against flawed judgments, and set up extra monitoring processes to track the progress of important decisions.

That is all very fine. But is it an adequate description of and, more importantly, a reliable solution to the problem of faulty managerial decision making? Let's see.

Consider one of the cases discussed in the book: John F. Kennedy's handling of the Cuban missile crisis of October 1962. According to the authors, the preceding year's Bay of Pigs fiasco taught Kennedy a lot, namely, how not to wage war or rattle sabers. This time around, "Kennedy recognized the red flag conditions and created a process that reduced the risk of a flawed decision." Specifically, "Kennedy set up a decision process to create room for rigorous and multifaceted debate" by forming the ExComm committee of senior advisers. "President Kennedy rejected early options involving air strikes or invasion, asking ExComm to think again to see whether there was a solution that reduced the risks of nuclear war. As a result, they came up with what proved to be the best option: a blockade of Cuba." (The quotations are from pp. 159 and 160.)

Proved to be the best option?

The 40th Anniversary Conference of the Cuban Missile Crisis held in Havana, Cuba on 10-12 October of 2002 revealed the following: (Source: National Security Archive, George Washington University)

1. US intelligence never located the nuclear warheads for the Soviet missiles in Cuba during the crisis, and only 33 of what photography later showed was a total of 42 medium-range ballistic missiles.

2. The US Navy dropped a series of "signaling depth charges" (equivalent to hand grenades) on a Soviet submarine at the quarantine line. According to the Soviet signals intelligence officer on the receiving end inside submarine B-59, Vadim Orlov, the depth charges felt like "sledgehammers on a metal barrel." Unbeknownst to the Navy, the submarine carried a nuclear-tipped torpedo with orders that allowed its use if the submarine was "hulled" (hole in the hull from depth charges or surface fire).

3. Exhausted by weeks undersea in difficult circumstances and worried that the U.S. Navy's practice depth charges were dangerous explosives, senior officers on several of the submarines, notably B-59 and B-130, were rattled enough to talk about firing their nuclear torpedoes, whose 15 kiloton explosive yields approximated the bomb that devastated Hiroshima in August 1945.

That nuclear war was averted was due to extraordinary prudence on the part of the Soviet leadership and naval commanders mixed with an abundance of sheer luck, not to a debate-based decision process on the American side which in several respects was clueless as to pivotal facts. One cannot conclude that just because the outcome turned out fortuitous the decision --or the decision maker(s)-- was therefore correct. Had Washington or New York been blown off the map, this book would almost certainly have not declared that ExComm "came up with what proved to be the best option." The correctness of a decision cannot be predicated on the uncontrollable occurrence of a specific favorable outcome.

The authors go on to claim: "Kennedy found a way of allowing Khrushchev to back down without losing face, by using backdoor Russian contacts to secure a trade: the withdrawal of US missiles stationed in Turkey for Soviet agreement to dismantle the missiles in Cuba." (p. 160) They repeat that claim on page 168: "... helped him [Kennedy] come up with the idea of trading the missiles in Turkey for those in Cuba." Those assertions are incorrect. In his letter to Kennedy of 27 October 1962, Khrushchev states: (Source: Letter From Chairman Khrushchev to President Kennedy, October 27, 1962, John F. Kennedy Presidential Library & Museum)

"Your missiles are located in Britain, are located in Italy, and are aimed against us. Your missiles are located in Turkey.

"You are disturbed over Cuba. You say that this disturbs you because it is 90 miles by sea from the coast of the United States of America. But Turkey adjoins us; our sentries patrol back and forth and see each other. Do you consider, then, that you have the right to demand security for your own country and the removal of the weapons you call offensive, but do not accord the same right to us? You have placed destructive missile weapons, which you call offensive, in Turkey, literally next to us. How then can recognition of our equal military capacities be reconciled with such unequal relations between our great states?"

"I therefore make this proposal: We are willing to remove from Cuba the means which you regard as offensive. We are willing to carry this out and to make this pledge in the United Nations. Your representatives will make a declaration to the effect that the United States, for its part, considering the uneasiness and anxiety of the Soviet State, will remove its analogous means from Turkey. Let us reach agreement as to the period of time needed by you and by us to bring this about. And, after that, persons entrusted by the United Nations Security Council could inspect on the spot the fulfillment of the pledges made."

The point to be made here is this: even the authors, who --individually and as a monitoring team-- are deliberately focusing their best efforts at explaining and promoting the Think Again framework as the recommended means of safeguarding against errors of judgment, failed to catch and correct the error. Why should one expect things to be any different in the executive suite? This lapse calls into question the credibility of the entire framework, particularly when it comes to real-time situations where the available information is rarely unambiguous, complete, properly structured, sufficiently precise or demonstrably accurate.

Consider another case from the book: Paul Wolfowitz's dalliance with questionable ethics at the World Bank. True to their framework, the authors attribute Wolfowitz's conduct to inappropriate attachments (pp. 129-34). Perhaps this was far too generous a judgment. Other possibilities spring to mind, including outright corruption and, if Wolfowitz's role in instigating the still ongoing war in Iraq is allowed to figure in the assessment, plain old managerial incompetence. The possibility arises that by pigeonholing the faculty of reason with preconfigured templates of red flags and safeguards, the Think Again framework may actually hinder the process of procuring accurate interpretations of reality necessary for unbiased and efficacious decision making.

That might explain why the authors' judgment of Admiral Yamamoto Isoroku in the Battle of Midway (chapter 4) seems biased. Their portrayal of Yamamoto as an inflexible strategist bent on carrying out his pet plan irrespective of the concerns of his superiors (which was a factor, though by no means the only one nor the most critical, as shown below) is compatible with the framework's one-plan-at-a-time assumption. But never is it mentioned or taken into account (1) that Lt. Col. Jimmy Doolittle's air raid on Tokyo and other Japanese cities seven weeks before Midway had suddenly made the destruction of the American carriers --and therefore, the Midway operation-- a top priority throughout the Imperial Japanese military establishment; (2) that the Battle of the Coral Sea, four weeks before Midway, "the first naval engagement in history in which the participating ships never sighted or fired directly at each other," had conclusively proved that naval supremacy now depended on the aircraft carrier; and (3) that Yamamoto had no reason to suspect that the Allies had recently cracked the Japanese JN-25 naval code -- the sole reason why the American ambush at the Battle of Midway ever came to take place at all. The reality of the situation was much more complex than the facile interpretation given in the book, which, as would be expected, happens to conform to the framework's a priori worldview. In addition to this, the authors' judgments once again evince being influenced by hindsight. (Sources: Wikipedia; Naval Historical Center, US Navy)

If hindsight serves to prove anything, it would be that Yamamoto's preoccupation with eliminating the American carriers as soon as possible was indeed rationally justified.

These observations suggest that the Think Again framework could benefit from certain improvements. Interestingly, the main candidate is already listed in the framework, although it is not given the full attention it deserves. The first of the safeguards calls for providing decision makers with "new experiences or data and analysis." By "data" I understand the authors to mean information. Analysis, however, is the key concept that should be stressed. The author's mention the point now and then, but only once is there a forceful assertion of its importance: " 'Objective strategic analysis' is close to useless if the key decision makers are not part of that analysis." Bravo! "Leaders have the responsibility to ensure that those involved in an important decision are ['are' is italicized] part of the analysis." (p. 203)

Executive decision making has traditionally relied much too heavily on judgment and intuition --to wit, personal opinions-- which are of limited value when dealing with the complex problems typically faced by modern organizations. Management thinking and practice must adapt to the demands of modern times. It is no longer possible for senior managers to continue acting like brightly garbed generals flaunting plumed headgear while commanding their troops atop handsome white steeds. Those days are gone. Modern-day managers must roll up their shirtsleeves and learn how to make use of the array of instruments available for the modern cockpit. And learn to think like analysts by becoming analytically involved. Resistance is futile. In a fiercely competitive Darwinian environment, ignoring the new rules of the game will only result in more atrocious decisions, which invariably lead to extinction.

That said, I should add that the book is a worthy and enjoyable read, and should figure on any manager's reading list. There's plenty of practical advice for the responsible decision maker who values professional competence.

Addendum (19 June 2009): Michael Dobbs's One Minute to Midnight: Kennedy, Khrushchev, and Castro on the Brink of Nuclear War (Vintage) re-examines the Cuban missile crisis in the light of declassified American and Russian documents.

"Most leaders make bad decisions. Even great leaders can make bad decisions." The introduction to "Think Again" leads with this statement. The authors Fnklestein, Whitehead and Campbell then proceed to show why. Most importantly, they provide a framework for recognising when such bad decisions may occur and how to safeguard against such decisions.

The book is in three parts - How your brain makes decisions; Why decisions go wrong; and Red flags and safeguards (for recognising and preventing bad decisions).

Part 1, reviews much of the research and current thinking on how the brain works. One particular point of interest that the authors note, is our propensity to tag all our major decisions with emotional tags - tags which can and often do, override rational thinking.

Part 2 chronicles many of the wider known decisions that have proven to be wrong, such as Kennedy's Bay of Pigs invasion of Cuba, Wang Computers' disastrous (the company now no longer exists) decision to opt for their own proprietary operating system rather than adopt the industry IBM PC standard, and Margaret Thatcher's Poll Tax debacle. But the authors also provide many case studies of practising managers who have made mistakes in areas such as change management, taking on new roles, and new product or production processes etc. These should prove most insightful to managers at all levels.

All of the cases in Part 2 are used to illustrate the four reasons for bad decision making - misleading experiences, misleading pre-judgments, inappropriate self-interest and inappropriate attachments. The authors describe these as potential "red flags". In addition to cases, the authors describe a number of studies to demonstrate their point. One that stood out was on "inappropriate self-interest" where 139 experienced auditors (not students) were asked to evaluate a case study to ensure the firm met certain standards. Half the group were told they had been hired by the firm to do this analysis and the other half told they had been hired by another firm wishing to trade with this firm. Those who had been told they were hired by the firm were 30% more likely to find the firm met the standards than those hired by the potential customer!

Part 3 then describes the four "safeguard" strategies for preventing bad decisions - experience, data and analysis; group debate and challenge; governance; and monitoring. None of these will be new to the reader. However, it is the practical and structured way the authors show how these safeguards can be used, that make this book really worthwhile.

There's also a Database of Cases and a Database of Safeguards with examples that summarise how the red flags have been identified and the safeguards can be used in practice. These make an excellent "how to" and easy reference source for practising managers.

This is a good book. It's a dense book - and it needs to be, for the subject is complex. The authors have done a great job simplifying the subject and at the same time providing us with a practical way of identifying (red flags) when we might be likely to make a bad decision and how to help avoid (safeguards) making one. It would be a very useful text for any serious management student and will also be highly useful to any manager serious about minimising the chance of making poor decisions.

Bob Selden, author What To Do When You Become The Boss: How new managers become successful managers

First of all, if you haven't read any other titles on neuro-science or decision-making, this will be a good introduction.

I gave it a 2-star rating because I have read books like: How We Decide, Why We Make Mistakes: How We Look Without Seeing, Forget Things in Seconds, and Are All Pretty Sure We Are Way Above Average, Sway: The Irresistible Pull of Irrational Behavior and I found these titles more informative and engaging. If you have similar stuff on your bookshelf, don't bother reading this one.

This book tries to do 3 thihgs:
1. How we make decisions and why are we prone to making wrong decisions.
2. What are the situations under which we are most vulnerable in making a flawed decision.
3. What can we do about it.

For starters, 95% of what is written about 1. is a shallower and briefer reproduction of the books I mentioned above.

For 2., it tries to teach us how to spot "red flags" i.e. misleading experience, misleading judgments, inappropriate self-interest and inappropriate emotions. (Which, I think, could be summarized in one word: biases). Basically, it says that we have to beware of our biases, which are generated from our previous experiences and emotions, because they work subconsicously.

For 3., it basically tells us what we already know: we should confront the decision makers with alternative views and options and arguments against their initial judgment; we should discuss and debate before making important decisions; we should have corporate governance mechanisms to counterbalance the key decision-makers' views and we need to track the outcomes of the decisions in order to spot problems early. Aren't all these intuitive?

The reality is, even if we have all the above "practical suggestions" in place, there's still no guarantee that the decision-makers - usually those with great power and a huge ego - to listen to other people's opinion and take heed of contrary data that is staring at their faces. And the truth is, risk and contrary views are inherent in every decision. It is very likely that even after considering, thoroughly and whole-heartedly, all the options available, people calling the shots would stick to their own judgments - with a much stronger claim: now that they have already discussed and considered alternative courses of actions.

Not that practical after all.

I was handed this book at the conclusion of a management seminar I had unexpectedly enjoyed, and so spurred by that novel experience but otherwise against my better judgement, decided to give it the benefit of the doubt.

The authors' programme is interesting enough - to analyse famous the decision-making process that culminated in the most egregious political and corporate blunders - but it would be guilty of 20:20 hindsight were it not for the caveat that examples selected were those which were patent howlers even at the time the decision was made, as opposed to informed punts that just didn't work out. Some of the examples may well be controversial: time might have sufficiently told on Kennedy's Bay of Pigs fiasco, but I dare say there are more than a defiant few who would still defend the decision to invade Iraq, which makes me wonder whether the determination "obvious on its face howler" itself is only that can only emerge after the passage of time and opportunity for sober reflection. If so, much of this book's thrust is undermined.

In any case the authors have sifted through literally hundreds of such obviously catastrophic decisions and from them extracted some commonly occurring "red flags" which, they say, could have pointed to concerns about the soundness of the decision at the time - "misleading experiences" and "misleading pre-judgements" informing the decision, and "inappropriate attachments" and "inappropriate self-interest" undermining the judgement of the decision-maker. If you spot one or more of these reg flags floating about when you're about to make that major call, reach quickly for what the authors identify as "safeguards" - seek more data and further analysis; conduct full and open group debate (but no more than is necessary) to surface contrary points of view; insist on rigorous governance for the decision governance; and monitor the decision-making process.

All of which is fine, and so much common sense, but it's hard to put into any kind of workable practice. Exactly which experiences and pre-judgements are misleading, and which are on the money, is the sixty-four thousand dollar question - difficult to know until the scenario has played out, at which point - too late - it becomes dead easy. Yet this is, of necessity, the point before which the authors cannot begin their data-gathering. And the authors present cogent evidence of our tendency to rationalise or justify inappropriate conflicts and attachments, meaning it will be necessarily difficult to know what we're on the lookout for.

I have a sense that the case-histories are somewhat self-selecting and suffer from a sort of inverted survivor bias: from the fact of a catastrophic decision one then proceeds to identify the missed red flag behind it (and there must be one, or it wouldn't have been a catastrophic decision, by the authors' own theory). All these car-crash anecdotes make for entertaining, schadenfreude-filled reading (it's a bit like watching one of those police chase TV shows) but its value informing a prevention strategy is not easy to gauge. It is much harder, after all, to identify those decisions where red flags were identified, safeguards employed and a catastrophe was unequivocally averted.

That said, "Think Again" is definitely food for thought, so it certainly does what it says on the tin, and the case studies make eye-watering reading, but the real lesson is the more general one that we're far less rational and far more dangerously capricious than we like to think.

Olly Buxton

In a previous book published in 2004, Sydney Finkelstein explains why smart executives fail and what we can learn from their mistakes. In Think Again, he and his co-authors, Jo Whitehead and Andrew Campbell, investigate this subject in much greater depth. They "traveled to the heart of decision making in organizations of all shapes and sizes throughout the world" and began to assemble a database of decisions that went wrong, "decisions in which any clearheaded analysis at the time would have concluded that it was the wrong decision." They realized that at least some decisions based on considered thinking can turn out badly because of unforeseen risks. Also, "Sometimes people are just unlucky." With considerable difficulty, they differentiated between flawed decisions and calculated risks that turned out badly. What did they learn? "The answers were "simpler and more powerful than we were expected. Two factors are at play in a flawed decision: an individual or group of individuals who have made an error of judgment, and a decision process that fails to correct the error. Both have to be present to produce a bad decision. This is an important realization." Indeed it is. There are others throughout the authors' narrative.

First, they focus their research on how brains make decisions. They explain how the brain "has been wonderfully designed for decision making - but also how it can be tricked into false judgments." (Part One, Chapters One-Four, Pages 3-71). Next, they examine the four conditions under which flawed thinking is most likely to happen. "We call these [begin italics] red flag conditions [end italics] because they provide a warning that when these conditions exist, even an experienced decision maker can get it wrong." (Part Two, Chapters Five-Eight), Pages 75-153). Then in Part Three (Chapters Nine-Eleven, Pages 157-204), they suggest which "special steps" must be taken to ensure that a decision does not go "off the rails." When there are red flag conditions, they recommend four types of external "safeguards," each of which can help an individual to "strengthen the decision process, so that the distorted thinking is diluted or challenged." Readers will also appreciate the provision of two appendices: a database of cases and a database of safeguards. The authors also extend an invitation to visit two Web sites, www.tuck.dartmouth.edu/thinkagain and www.thinkagain-book.com, for additional advice, ideas, and resources.

It is important to keep in mind, of course, that there are limits to the extent that safeguards can defend against the risk of error. For example, one or more of them may not be fully understood and/or improperly established and/or ineffectively applied. The same is true of red flags. There must be a comprehensive and active system in place throughout the organization that will elevate them whenever flawed thinking is about to produce a bad decision. In many organizations, governance processes and rules in place and rigorously maintained can cause other problems. "Each major blunder leads to additional processes and rules that are applied to all major decisions. The result is a bureaucracy that is costly, time consuming, and demotivating. Most importantly, managers start to lose respect for the system and seek ways of circumventing the processes." The safeguards framework described in this book will be effective only if and when there is a culture of candor, one in which everyone is not only encouraged but required to express principled dissent, especially when doing so "speaks to power." Dante had excellent reasons for reserving the last and worst ring in hell for those who, in a moral crisis, preserve their neutrality.

I commend Sydney Finkelstein, Jo Whitehead, and Andrew Campbell on their rigorous and thorough coverage of a major challenge that decision-makers in all organizations face each day: What are the right questions to ask, what is the best answer to each, and how can I verify that? Even then, it is not possible to eliminate all the risks. "Even armed with our safeguards framework, leaders will still make mistakes - but it possible to improve the odds."

Those who share my high regard for this book are urged to check out Finkelstein's aforementioned Why Smart Executives Fail: And What You Can Learn from Their Mistakes and Judgment: How Winning Leaders Make Great Calls co-authored by Noel Tichy and Warren Bennis as well as Torkel Klingberg's The Overflowing Brain: Information Overload and the Limits of Working Memory, Jonah Lehrer's How We Decide, Joseph Hallinan's Why We Make Mistakes: How We Look Without Seeing, Forget Things in Seconds, and Are All Pretty Sure We Are Way Above Average, and Phil Rosenzweig's The Halo Effect: ...and the Eight Other Business Delusions That Deceive Managers.

'Think Again' is highly readable - even enjoyable - and has something interesting and useful to say. From the very first story explaining the poor decision-making underpinning the delayed U.S. federal government's response to Hurricane Katrina, you will be hooked. It is a real and much underestimated skill to be able to translate thorough, rigorous research into comprehensible and practical prose. These authors are skilled in this art and experienced in the science underpinning it. This book is a genuine rebuttal to the plethora of snake oil salesmen peddling management cures that are appealing but serve often as little more than a placebo, having little basis in extensive data points or comparative and objective analysis.

This book includes popular examples in recent history and successfully provides specifics where flaws in decision-making may have occurred. Perhaps more importantly, a broad range of ideas are offered and matched to these "red flags" to tip the balance back in favor of logical decision making. I highly recommend this book.

This book is a timely and useful guide to the art of organizational decision-making. The subject is presented in three parts. First, there is a clear reader friendly description of how the human brain functions. This section takes complex information from the field of neuroscience and makes it accessible and relevant for the business reader. Next, the impact of brain function on faulty decision making is explained and illustrated using a range of case studies. The usual suspects of ignorance and corruption are put aside. This explanation of failure and mistakes is far more rigorous and insightful. I found it incredibly refreshing to read that accepting human beings as we really are and working with the grain of human behaviour can actually yield better results. The final section of the book offers a number of practical suggestions for improving decision quality and avoiding major failures. Given the difficult circumstances business leaders around the world are currently facing, this book is highly recommended.

Perfect timing for this book, when we're dealing with the aftermath of poor oversight from all these corporate boards who let their companies get over-extended without proper risk management. Think Again helps to understand how executives, CEOs, and boards end up making bad decisions. There is no shortage of "smart" people working on Wall Street or for major companies and it's too simplistic to say these leaders didn't have integrity and that's how they got into this mess.

The Think Again authors delve into research on decision-making and cognitive functioning to help explain what happened and how we can all learn from it to prevent ourselves from making poor decisions in the future. Required reading for these times.

The authors have written an engaging and enlightening book on the traps that lead to bad decision-making and specific ways to keep decision makers from falling victim to these pitfalls. Misleading prejudgments, misleading experience, misleading self-interest, and inappropriate attachments are the pitfalls. These are explored in depth and made clear by numerous examples, from the Bay of Pigs to the Enron debacle. But there are safeguards to strengthen the decision-making process. These are: providing new experiences, or data and analysis; creating group debate and challenges; governance, independent of the decision; and strong monitoring (extra monitoring) which makes decision-makers aware that decisions and outcomes will be recorded and publicized. The book offers a clear and penetrating examination of decision-making and reveals how it can be protected from weaknesses to which we are all vulnerable. Highly recommended!