Here is an excerpt from an article written by Tom Davenport for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.
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The world continues to honor and mourn Steve Jobs weeks after his death, and there is plenty to praise. His legacy lives on in today’s iCloud and iOS 5 availability, and in the new iPhone 4S being praised by several prominent technology reviewers. David Pogue, my favorite technology writer, is so enthusiastic as to call the new phone’s features almost magical.
I’ve long admired Apple products, too. By my count there are six Macbooks, two iPads, and three iPhones—not to mention a few iPods—in my family’s possession. If you judge only by the product outcomes or by Apple’s market value, Jobs seems the best decision-maker in the history of consumer products.
But of course, like every other human, his decisions weren’t all great. In the 1980s he hired John Sculley to succeed himself as CEO of Apple, and Sculley presided over a period of slow growth and product missteps in the ensuing years. Jobs commented about Sculley: “What can I say? I hired the wrong guy. He destroyed everything I spent 10 years working for, starting with me.” Jobs’ major startup during his hiatus from Apple, NeXT Computer, was largely unsuccessful — at least in the hardware business. His decision to sell all of his Apple stock when Sculley pushed him out cost him billions. And when he came back as CEO, he allowed the backdating of stock options.
In terms of decision processes and style, Jobs was famous for being a tough micro-manager, at least where product design decisions are concerned. As a Fortune magazine article on Apple’s culture put it: “He’s a corporate dictator who makes every critical decision—and oodles of seemingly noncritical calls too, from the design of the shuttle buses that ferry employees to and from San Francisco to what food will be served in the cafeteria.”
He also didn’t believe in analytical decisions based on extensive market research. From The New York Times‘ obituary: “Mr. Jobs’s own research and intuition, not focus groups, were his guide. When asked what market research went into the iPad, Mr. Jobs replied: “None. It’s not the consumers’ job to know what they want.”
Based on the evidence, I will grant that he made some fantastic design decisions, but not that he was an expert on effective decision processes.
Granted, there is some evidence that even Jobs came to realize the shortcomings of one man’s intuition as the only source of decision wisdom. In a summary of a 1997 interview, a New York Times article published earlier this year noted: “In his early years at Apple, before he was forced out in 1985, Mr. Jobs was notoriously hands-on, meddling with details and berating colleagues. But later, first at Pixar, the computer-animation studio he co-founded, and in his second stint at Apple, he relied more on others, listening more and trusting members of his design and business teams.”
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To read the complete article, please click here.
Tom Davenport is the President’s Distinguished Professor of Information Technology and Management at Babson College and has taught at Harvard Business School, Dartmouth’s Tuck School, the University of Texas, and the University of Chicago. He is a widely published author and speaker on the topics of analytics, information and knowledge management, reengineering, enterprise systems, and electronic business. He has written over 100 articles for such publications as Harvard Business Review, Sloan Management Review, California Management Review, the Financial Times, and many other publications, and has been a columnist for Information Week, CIO, and Darwin magazines. His latest of a dozen books is Judgment Calls: Twelve Stories of Big Decisions and the Teams That Got Them Right, co-authored with Brook Manville and published Harvard Business Review Press (2012). To check out Tom’s other blog posts, please click here.
How and why to take full and systematic advantage of technology and analytics to create deeper and more sustainable judgment
To introduce this review, I call upon Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” How to make the best decisions? Enter Thomas Davenport and Brooke Manville. In their book, Judgment Calls, they explain how and why decisions made by a Great Organization tend to be much better than those made by a Great Leader. Why? While conducting rigorous and extensive research over a period of many years, they discovered – as Laurence Prusak notes in the Foreword — “that no one was looking into the workings of what we term [begin italics] organizational judgment [end italics] – the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.”
The mistake to which Drucker refers is much less likely to occur when organizational judgment is centrally involved in a decision-making process. My own opinion is that this process resembles a crucible of intensive scrutiny by several well-qualified persons. Moreover, the eventual decision is the result of what Roger Martin characterizes, in The Opposable Mind, as “integrative thinking.” That is, each of those involved has “the predisposition and the capacity to hold two [or more] diametrically opposed ideas” in mind and then “without panicking or simply settling for one alternative or the other,” helps to “produce a synthesis that is superior to either opposing idea.”
Organizational judgment must not only be discerned but also managed. And precautions should be taken to ensure, as Prusak notes, “that the courses of action taken by organizations are more grounded in reality and a shared sense of what is right.” In recent years, the rapid emergence and development of social media enable organizations to become even more grounded in what has become an expanded reality. Only through an open and inclusive collaborative process can the use of social media enable any organization to tap the collective genius of its stakeholder constituencies.
In this brilliant volume, Davenport and Manville rigorously examine “12 stories of big decisions and the teams that get them right.” However different the nature and extent of the circumstances as well as of implications and potential consequences of the given decision may be, all twelve followed essentially the same process, one that takes into full account four separate but related trends:
o The recognition that “none of us is as smart as all of us”
o Tapping not only the so-called wisdom of the crowd but also its leadership
o The use of data and analytics to support – sometimes even make – decisions
o Information technology that enables and then supports better decisions
Shrewdly, Davenport and Manville focus on an exceptionally diverse group and the major decisions to be made. They include NASA STS-119 “Should we launch?”), McKinsey & Company (“Should we recruit from a different pool of talent?”), Charlotte-Mecklenburg Schools (“How can we improve student performance?”), Ancient Athenians (How can we defend against a life-or-death invasion?”), and the (DeWitt and Lila) Wallace Foundation (“How can we focus a strategy for more mission impact?”). These mini-case studies achieve two critically important objectives. First, they help the reader to understand how each of the major decisions was made? Also, they help the reader to understand what lessons can be learned from the process by which the decisions were made.
No organization ever has too many great men and great women. Indeed, few have any. However, I agree with Davenport and Manville that all organizations can establish and then constantly improve a collaborate process by which organizational judgment produces a much higher percentage of appropriate decisions. This does not require a Great Leader. Rather, it requires development of collective leadership (i.e. results-driven initiative) at all levels and in all areas. It also requires constant communication, cooperation, and (especially) collaboration. These are among the defining characteristics of a Great Organization.
With their book, Tom Davenport and Brook Manville will help you and your colleagues to build one.
- Here is an excerpt from an article written by Thomas Davenport for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.
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(Larry Prusak, Brook Manville, and I are at work on a book on judgment and how to cultivate it as an organizational, not just individual, strength. Over the next few months, we’ll each be authoring posts in this blog to test-drive ideas and invite input as the research progresses.)
I’ve been mulling over a column by The Wall Street Journal‘s Peggy Noonan since it came out last month. Entitled “Youth Has Outlived Its Usefulness,” it was about good judgment, and who has it. The premise of the piece, ever so gently chiding our current President, was that our nation is in bad need of wise policy, and isn’t likely to get it from youthful politicians.
What is needed, Ms. Noonan suggests, is more “adult supervision,” a phrase she uses jokingly and yet with deep conviction. She worries that the Obama administration lacks for experienced, elder counselors — or, in her words, “old and august … wise and weathered … bruised and battered veterans of life who’ve absorbed its facts and lived to tell the tale.”
The article’s nostalgic yearnings for the likes of a Harold MacMillan (the wizened Prime Minister who guided the young Jack Kennedy during the Cuban missile crisis) aren’t limited to the political sphere. Noonan goes on to lament the lack of grey hair in the ranks of hospital administrators, publishing enterprises, and other important public and commercial institutions.
As someone who spends some of his professional time providing executive coaching for younger men and women, I have no interest in denying the value that an old hand can provide to a less experienced leader. And I don’t worry about the concern sometimes expressed that a young leader might become overly reliant on a Rasputin-like elder — too callow or lazy to exercise independent thought. But I wonder if by casting the critical feature of a “trusted advisor” as age, or even long experience, we run the danger of mistaking what truly valuable advisors bring to the table.
Even Noonan acknowledges that older, more experienced men in advisory roles haven’t always resulted in good judgment. In the Vietnam era, the United States was led into one disastrous military and political decision after another by such counselors (as chronicled in the film The Fog of War [click here], Noonan, gracefully backpedalling in mid-argument, notes that while it is wrong to conclude that we should “Never listen to wise men,” we should have learned: “Wise men can be wrong, listen close and weigh all data.”
Building good judgment in an organization is not as simple as giving our youngest leaders silver-haired counselors. It’s the result of drawing on a much broader base of learning for all decisions — from people up, down, and sideways in the organization; from people outside the organization, including customers, competitors, rivals, and partners; and from other sources of data. And therefore, it’s a question of developing cultures and processes that enable that kind of multi-dimensional learning and allow collective wisdom to emerge.
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Tom Davenport holds the President’s Chair in Information Technology and Management at Babson College. His most recent books are Competing on Analytics: The New Science of Winning and Analytics at Work.
Brook Manville consults to socially-minded enterprises on matters of strategy and organizational development. He is author (with Josiah Ober) of A Company of Citizens: What the World’s First Democracy Teaches Leaders About Creating Great Organizations.
Here is an excerpt from an article written by Tom Davenport for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.
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I’m writing a new book with Larry Prusak and Brook Manville. If we had to name it today, we’d call it Judgment Days: How Great Organizations Make Great Decisions. It’s about how organizations — rather than individuals — build their capacity for good judgment and decision making. We’re going to try to show how individual decisions, made on particular “judgment days,” were shaped and succeeded by activities to improve organizational judgment. We hope to describe a variety of organizations — from companies to schools to hospitals to foundations — that make consistently great decisions over time. In order to surface some of the ideas and get feedback from readers, I’m going to start blogging about the book and plan to get Larry and Brook involved in that activity.
We think that organizations with good judgment have a number of typical attributes. One is that they involve a number of different people in making important decisions. Their senior executives keep in mind that they don’t have a monopoly on knowledge and judgment and therefore involve multiple people in decision processes.
Let me give you an example. Pixar (btw, I really enjoyed Toy Story 3) has a phenomenal track record for making great animated movies. (Ed Catmull, the studio’s president and co-founder, recently wrote an article for HBR called, “How Pixar Fosters Collective Creativity.” Click here.) We don’t have access — at least yet — to details of the particular decisions made at Pixar, though some must have been difficult: for instance, the decision to make the movie Up about a 78-year old man who loses his wife and rides his balloon-floated house to South America.
How did Pixar make that and other good decisions? There seem to be several factors going on:
Its managers give its directors a lot of autonomy. The studio prides itself on being “director led” and gives them a high degree of autonomy. “Managers like to be in control,” but Pixar fights it, according to an interview with Catmull at an event The Economist put on in March. [Click here.]
Even though directors have autonomy, they get feedback from others. “Dailies,” or movies in progress, are shown for feedback to the entire animation crew. In The Economist interview, Catmull also describes a more extensive periodic peer review process:
“We have a structure so they get their feedback from their peers…. Every two or three months they present the film to the other filmmakers…and they will go through, and they will tear the film apart. Directors aren’t forced to respond to the feedback, but they generally do — and the films are generally better for it.”
Pixar uses a process for “postmortems” on the major aspects of movies after they’re completed. Ed Catmull described it as “like taking cod liver oil,” but the company insists on it anyway. During the postmortems, the team involved in the film is asked to come up with five things they’d do again and five things they wouldn’t do again. Postmortems not only surface the information but also help to prevent the problems from festering among team members. Catmull comments that because people are starting to game that postmortem process, Pixar is thinking of alternative approaches.
Pixar admits mistakes in other ways. Sometimes, when a movie project isn’t going well, Pixar will “restart” it. Toy Story 2, for example, wasn’t going well and had to be restarted. Catmull points to that restart as a catalyst for the articulation of several key values at the company.
Pixar has an extensive education program at Pixar University, with more than 110 different courses. That’s got to improve organizational judgment. And even there, employees are encouraged to make and admit mistakes. Randy Nelson, the director of Pixar University, says, in the book Mavericks at Work: “It’s the heart of our model…giving people opportunities to fail together and to recover from mistakes together.”
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To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.
Tom Davenport holds the President’s Chair in Information Technology and Management at Babson College. Over many years he’s authored or co-authored nine books for Harvard Business Press, most recently Competing on Analytics: The New Science of Winning (2007) and Analytics at Work: Smarter Decisions, Better Results (2010). His byline has also appeared for publications such as Sloan Management Review, California Management Review, Financial Times, Information Week, CIO, and many others. For more from Tom, visit his website [click here].