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How the Wise Decide: The Lessons of 21 Extraordinary Leaders Hardcover – Deckle Edge, August 26, 2008
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“How the Wise Decide is akin to sitting down for a mentoring session with some of the great leaders of recent years. Its commonsense lessons on decision-making, clear writing, and practical guidelines make it a wise choice for both people just starting their careers as well as those with years of experience under their belt.”
—Frank Blake, chairman and CEO, Home Depot
“Bryn Zeckhauser and Aaron Sandoski offer a rich collection of insights on how leaders make and implement important decisions, distilled from an impressively wide range of major decision-makers. The discussion of risk, risk mitigation, and incentives is particularly useful. The importance of transparency and its relation to self-selection is very interesting. And the commentary on the no-carryover principle and the pocket veto is just fascinating.
—A. Michael Spence, former dean, Stanford Graduate School of Business, and winner of the Nobel Prize in Economics
“What is wisdom? How is it acquired? Can it be codified? Can it be learned? Bryn Zeckhauser and Aaron Sandoski have attacked these questions head-on by focusing on how twenty-one remarkable leaders make decisions. They discern some fascinating patterns, which form the basis for concrete and practical advice. Zeckhauser and Sandoski have done us a great service by picking these people to study and helping us learn from them. Every reader can benefit from reading How the Wise Decide since we all can certainly use a dose of wisdom.”
—William A. Sahlman, Dimitri V. d’Arbeloff– MBA Class of 1955 Professor of Business Administration, Harvard Business School
“How the Wise Decide thoughtfully examines principles that inform effective decision-making and shows how successful leaders have used them to make critical decisions. In a series of interesting and well-researched lessons, Bryn Zeckhauser and Aaron Sandoski offer practical advice and a method that all managers can use to improve their decision-making.”
—Roger W. Ferguson Jr., president and CEO, TIAA-CREF
“The most difficult dilemma in business is how to make the tough decisions. How the Wise Decide provides compelling examples from our greatest leaders as to how they source information, deal with risk, and let their long-term vision guide them in making the tough calls. For anyone who wants to be a wise decision-maker, the first choice should be to buy this book.”
—Sarah Levy, COO, Nickelodeon
About the Author
BRYN ZECKHAUSER is a senior fellow at Harvard University’s Mossavar-Rahmani Center for Business and Government and a principal at Equity Resource Investments, a real-estate investment firm with funds in the United States and Asia. She developed her interest in strategic decision making working with portfolio companies at Kleiner Perkins Caufield & Byers and with her Fortune 500 clients at McKinsey and Company.
AARON SANDOSKI is managing director of Norwich Ventures, a medical device venture capital firm. He began his professional career with the consulting firm McKinsey & Company and has also been a teaching fellow at Harvard University, where he won the Allyn Young Teaching Prize.
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Although quite different in terms of their personality, leadership style, and circumstances, what do the 21 share in common? Zeckhauser and Sandoski spent three years in search of the answer and concluded that all of them make their "tough calls" based six core decision-making principles. Here are two:
Go to the Source: "Making it a routine part of your job to go to the source will require a new mind-set, a realignment of your priorities and the tenacity to pursue firsthand information wherever it may take you. But if you become skilled at using this powerful tool as the three leaders you're about to meet [i.e. Bill George, Mike Reuttgers, and Orin Smith], you can beat competitors, find new markets, and generate terrific new products." Other leaders discussed include Paul Galvin (Motorola), John Whitehead (Goldman Sachs), and Supreme Court Justice Stephen Breyer
Listen with Purpose: "Are you listening carefully? Then you're missing the point. It isn't how you listen, it's why you listen that's important." Zeckhauser and Sandoski have identified three major purposes leaders have for listening. "The first is listening to gather information." More specifically, listening "to fill in gaps in the information you already have...Finally, listen with the purpose of generating ownership." That is, to ensure that the decision once made will be properly executed, first seek out and respect the opinions of others to reassure them that their input is valued. "A great decision that can't or won't be executed is no decision at all." Leaders discussed in this chapter include Vernon Loucks (Baxter Healthcare), Prime Minister Lee Hsien Loong of Singapore, Bill Riley (World Wildlife Fund), and Rick Wagoner (General Motors).
Zeckhauser and Sandoski devote a chapter to each of the six principles, citing real-world examples to illustrate it, then suggest in the final chapter that as a manager masters one principle, she or begin working on another. This is an excellent suggestion because, although separate, the principles are also interrelated, if not interdependent. That is "bad news" if you are fearful of contacting an irate customer to discuss a serious problem because, if you don't, the problem is certain to become worse. This is also "good news" because if you listen with purpose to those who inform you of a serious problem, and do so with respect and appreciation, they and others will continue to do so and then support your efforts to solve the given problem.
I urge those who read this review not to be deterred by the fact that all of the 21 exemplary leaders whom Zeckhauser and Sandoski discuss are prominent. Together, it is true, they demonstrate the power and value of the six core decision-making principles but that is because they have mastered those principles and, in most cases, did so only after experiencing one or more of what Warren Bennis and Robert Thomas characterize as "crucibles" in their book, Geeks & Geezers. Centuries ago, metallurgists attempted to transform chemical compounds into gold. Their instrument was a crucible, a cup-shaped receptacle that they heated to very high temperatures. Most managers in today's business world have already experienced - or will experience -- personal tragedies, failures, disappointments, dysfunctional relationships, etc. Some managers emerge from these modern-day "crucibles" stronger, wiser, and better prepared to cope with whatever may await them. Other managers do not. Although Bryn Zeckhauser and Aaron Sandoski make no such claim, I think that mastery of the same six principles can help managers to avoid or at least emerge from crucible-like experiences. Better yet, they will help managers to become more fully developed human beings as well as more effective leaders.
The book they have written is a brilliant achievement.
Go to the source
Fill a room with barbarians
Conquer the fear of risk
Make vision your daily guide
Listen with purpose
The stories are terrific -- it is always helpful to hear what others have accomplished and learned. No need to reinvent the wheel, in classic consulting-speak (the authors would be proud). That said, while I was riveted in the beginning, I was less interested towards the end. The stories were still compelling but in an effort to tie them all together perhaps the 6 overarching lessons seemed thin.
That said, the lessons are important and easily overlooked in the daily grind. "Go To The Source", the first lesson which espouses going back to the raw data where you can (a healthcare CEO watches surgeries, for example) was my favorite and a great coaching lesson. How many of you are going to read this or other review of the book, feel like you got enough, and never read it for yourself? Maybe I needed to read Go To The Source because of my habits, but you need something else from the book that I won't cover. The coaching takeaway? Look at the data, question your assumptions, realize that what you hear is already filtered by the lens from where the info came. What are you assuming in the decisions that you have made and still need to make? Go to the source first before deciding.
1. Go to the source - eliminate communication layers and go straight to the person or people who either use your product or service or have influence.
2. Fill a room with barbarians - do not surround yourself with "yes" men who will hardly ever challenge your perceptions or decisions. We all need people who will sometimes challenge us without making it personal.
3. Conquer the fear of risk - do not be afraid of taking chances when the payoffs are huge. Many businesses and individuals experience great success only when they are willing to take risks.
4. Make vision your daily guide - never forget why you are in business and make sure that everything you do reinforces that vision.
5. Listen with purpose - why we listen instead of how we listen is more important. Listen for a good reason.
6. Be transparent - be honest about your decisions (good and bad).
The authors use the experiences of 21 influential leaders from various backgrounds for real-life illustrations of these principles.
A good read to consider how to make wise decisions. Recommended.
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Stories of how some very smart people go through their decision process.Read more
1. Go to the source