Reviewing strategic decision making - interesting article

As dear old Henry [Mintzberg] said - we are all too frequently presented with aspects of the trivial new at the expense of the significant old.  There have been many clever minds and wonderful papers and articles written on strategic management but often they are forgotten, seen as now out of date whereas they are often principles based and just as insightful today as they were all those years ago.

One such paper I struggled to find again, but thankfully did, was written in 1988 by William Starbuck and Frances Milliken (Starbuck, W. H., & Milliken, F. J. (1988). Executives' perceptual filters: What they notice and how they make sense. In D. C. Hambrick (Ed.), The Executive effect: Concepts and methods for studying top managers (pp. 35 - 65). Greenwich, Connecticut: JAI Press.) on the subject of Executive perceptions.  The reason it is a little hard to get hold of is that it is part of an edited book but I have included the reference above for those keen enough to want to track it down.

It makes a number of very interesting observations about Executive perception and how filters are employed for them to make sense of what they see and how this flows onto strategic decision making.  In this blog though I'd just like to highlight quite a simple observation but one I think potentially effect a lot of us and the way we see and then look at the management world of decision making.

'People seem to see past events as much more rationally ordered than current or future events because retrospective sense-making erases many of the causal sequences that complicate and obscure the present and the future.'

This basically means as we look back, the links that occurred to get us to the present seem somehow obvious  and 'relatively inevitable' as though they were always going to happen and therefore we should have been able to see the now obvious, previously.  A simple example, once the St Louis cardinals won the World Series it doesn't seem that surprising and somehow they were always on track yet 6 weeks previously they actually appeared to have little to no chance.  Once we know what happened it all looks so obvious but off course it isn't.

So in management when we review decisions or projects we often do so with the outcome known and this equally colours our view of the merits of the decision or project.

'Knowing that bad results occurred, observers search for the incorrect actions that produced the bad results.  On the other hand, organisational success is often credited to executives accurate and insightful vision.'

I think this is summed up beautifully with the following.  Imagine you are on a Board faced with a strategic decision that has a medium element of risk but a balancing element of reward.  You decide to go for it and there are off course two future possibilities, success or failure and these will now colour the decision even though the decision is taken with the best information available at the time.

• If it fails (the decision and decision makers maybe looked upon as) - a poorly thought through and rash decision that did not take into account the risk sufficiently
• If it succeeds -  A courageous and far sighted decision in the face of adversity

The key point is of course that success or failure contains a myriad of factors, many outside the control of the organisation so success or failure may have a lot to do with luck and circumstance.  The key learning, try to look at past decisions within the context they were made and not the now obvious context of the present.  This may stop incorrect witch hunts or the promotion of individuals based on luck.......