By Chip Heath, Dan Heath
A framework for better decision making
Subject
Themes
Every day, people make consequential decisions using methods that are demonstrably flawed. A head of a consulting firm debates whether to fire an underperforming employee without considering alternatives like reassignment. A teenager frames a relationship crisis as a binary stay-or-leave choice. A CEO acquires a company for $1.8 billion because nobody in the room argues against it. Across domains, from personal relationships to corporate strategy, the failure rate is staggering: 83% of mergers destroy shareholder value, 44% of lawyers would discourage others from entering the profession, and people routinely save too little for retirement.
Every day, people make consequential decisions using methods that are demonstrably flawed. A head of a consulting firm debates whether to fire an underperforming employee without considering alternatives like reassignment. A teenager frames a relationship crisis as a binary stay-or-leave choice. A…
Decisive occupies a distinctive position within the behavioural science movement that reshaped popular understanding of human cognition in the early twenty-first century. Published in 2013, it arrived at a moment when works by Daniel Kahneman, Dan Ariely, Richard Thaler, and Cass Sunstein had…
Human beings operate under the illusion that they see reality clearly. In truth, attention works like a spotlight: it illuminates whatever falls within its beam while leaving everything else in darkness. Daniel Kahneman's research demonstrates that people consistently give disproportionate weight to…
The conventional wisdom about decision making assumes that better outcomes require better information, sharper analysis, or deeper expertise. This assumption is wrong. A five-year study tracking over a thousand business decisions found that the quality of the decision process mattered six times more…
One of the most consequential errors in human reasoning is the systematic neglect of base rates: the statistical outcomes of people who have faced similar situations before. People routinely consult reviews before booking a hotel but rarely seek equivalent data before accepting a job, starting a…
The human impulse to predict the future is deeply ingrained, yet decades of research demonstrate that this impulse is profoundly misguided. Phil Tetlock's landmark study tracked 284 credentialed experts making 82,361 predictions over nearly twenty years. The results were humbling: experts performed…
Short-term emotions are among the most powerful distorters of human decision making, yet their influence is often invisible to the person experiencing them. The car dealership provides a controlled laboratory for observing this phenomenon. When journalist Chandler Phillips went undercover as a car…
Every decision follows a predictable sequence: encounter a choice, analyse options, make the choice, live with it. At each stage, a specific villain distorts the process. Narrow framing limits the options people see. Confirmation bias warps the information they gather. Short-term emotion clouds the…
Considering multiple options simultaneously, rather than sequentially, produces dramatically better outcomes. The naming firm Lexicon in Sausalito demonstrates this when Colgate hires them to name a disposable mini-toothbrush. CEO David Placek resists the obvious angle of smallness. After his team…
Confirmation bias is the tendency to seek information that flatters existing beliefs, and fighting it requires deliberate strategies to consider the opposite. Researchers Mathew Hayward and Donald Hambrick analysed 106 large acquisitions and found that CEO hubris directly inflated purchase premiums.…
Ooching means running small experiments to test assumptions before committing fully. John Hanks at National Instruments wanted to enter the wireless sensor market but lacked confidence. Rather than investing millions immediately, he found a demanding pilot customer: UCLA professor Bill Kaiser, whose…
Kim Ramirez, 26 and recently married, receives an exciting start-up offer in Boston. After visiting the company, she calls her husband from the airport in euphoria: "This is such an amazing opportunity!" But as the excitement fades over the Christmas holidays, she feels nauseous every day. Her…
One of the most insidious threats to good decision making is the tendency to run on autopilot. People often remain locked into failing courses of action simply because no one ever defined a point at which to reconsider. The concept of a tripwire addresses this problem directly: it is a predetermined…
By Chip Heath, Dan Heath
Subject
Themes
Every day, people make consequential decisions using methods that are demonstrably flawed. A head of a consulting firm debates whether to fire an underperforming employee without considering alternatives like reassignment. A teenager frames a relationship crisis as a binary stay-or-leave choice. A CEO acquires a company for $1.8 billion because nobody in the room argues against it. Across domains, from personal relationships to corporate strategy, the failure rate is staggering: 83% of mergers destroy shareholder value, 44% of lawyers would discourage others from entering the profession, and people routinely save too little for retirement.