Slow Deciders Make Better Strategists
It's not easy to split people into the good/bad strategy decision-makers.
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Imagine recording decision-makers' solutions to a competitive-strategy problem using four categories:
The Now-I-know and the I-already-know are very confident while I-do don't-know and the I-guessed are unsure. The Now-I-know and the I-don't-know are slow in making a strategy-decision while the I-already-know and the I-guessed are fast at making a decision.
A database of business executives, consultants, professors, and students was given the same unfamiliar pricing-strategy problem.
When the overconfident think they already know the answer, they may believe it's a waste of time to keep looking for answers. But in deciding on a strategy, overconfidence may not lead to a workable option.
An essential lesson for competitive-strategy decision-makers is not to be so fast. Take your time and don't be so sure.
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When we don't understand the details, it can cause much trouble. If a nation is overconfident that they will win a war, they will fight more wars. An investor that is to sure of their estimate of an asset's value will trade too much.
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Focusing on specific details in a complex system while ignoring the amount of detail contained within the system may at first show a benefit. However, it can create a massive collapse in the long-run.
In the late 18th century, the German government wanted to grow "scientific forests" to track and harvest timber. Underbrush was cleared, and tree species reduced. The first planting did well because of nutrients that were still left in the soil. But the clearing of underbrush reduced insect, mammal, and bird populations essential to soil building. Pests had few enemies left and infected the entire forest, resulting in massive forest death across the country.
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When it comes to setting strategy, there are benefits to both popular and loner strategies.
If you want to outperform the crowd, learn the following two essential skills.
When we need to make a decision, we tend to ask "What should we do?" However, it narrows our thinking to one right decision.
If we ask the question: "What could we do?" it broadens our decision-making frame, because we can consider multiple futures. Could ask what if, what else, and why not.
For example: Ask what would be the equivalent in your industry of something that’s working well in another.
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