Gunther - The Truth About Using Facts AND Intuition in Decision Making

Robert E. Gunther

2008 by Pearson Education, Inc.
Publishing as FT Press
Upper Saddle River, New Jersey 07458

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Printed in the United States of America

First Printing April 2008

ISBN-10: 0-13-235463-2
ISBN-13: 978-0-13-235463-9

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Library of Congress Cataloging-in-Publication Data

Gunther, Robert E., 1960
The truth about making smart decisions/ Robert E. Gunther.
p. cm.
ISBN 0-13-235463-2 (pbk. : alk. paper) 1. Decision making. I. Title.
HD30.23.G86 2008
658.4'03--dc22
2007034060

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For my wife, Cynthia. Marrying you was the best decision of my life .

" The Truth About Making Smart Decisions offers a truly valuable and entertaining journey through the complex terrain of decision making. Robert Gunther combines a writer's gift of the pen with a keen understanding of human nature, drawing upon his own experiences, business anecdotes, and vignettes from other walks of life. His selection of traps, insights, and truths are edifying as well as amusing, and many readers will recognize themselves as he exposes our weaknesses, and occasional brilliance, as we carve the trajectory of our life one decision after the next."

Paul J. H. Schoemaker , Ph.D., coauthor of Decision Traps and Winning Decisions

"Robert Gunther crystallizes years of expertise and insight in business writing into a book on probably life's most important matter: decision making. How do you do it and how do you do it much better? He offers many tools to organize the mind and maximize your ability to be a leader and money maker."

Rick Rickertsen , Managing Partner of Pine Creek Partners and author of The Buyout Book and Sell Your Business Your Way

"We make decision errors predictably, and Robert Gunther offers fifty ways of taking decisions more intelligently. The Truth About Making Smart Decisions is a concise and actionable guide for what to consider when facing critical choice points."

Michael Useem , Ph.D., Wharton Professor of Management and author of The Go Point: When It's Time to Decide

"If you think decision making is cut and dried, this book will make you think again. In The Truth About Making Smart Decisions , Robert Gunther offers challenging insights on how factors from sleep to intuition to emotions to mental models affect the quality of our decisions. He urges readers to take a broader view and raises issues that anyone should consider in making smarter decisions."

Yoram (Jerry) Wind , Ph.D., The Lauder Professor and Wharton Professor of Marketing, and coauthor of The Power of Impossible Thinking

Think quickly. Should you buy this book? You have to make a decision. Every minute of every day, you are making a series of small decisions that could change the course of your career and your life. Our lives are the sum of our decisions. Your success is largely a result of the quality of your decisions. Have you given any thought to how you make decisions?

This book won't keep you from making stupid decisions. Alas, it won't offer you a life without regret or buyer's remorse. It will help you step back from the heat of decision making and think about how you approach decision making. I've had the opportunity to work with some of the leading researchers in the field of decision making, including Paul Schoemaker, author of Decision Traps and Winning Decisions , Howard Kunreuther, co-director of the Wharton School's Risk and Decision Processes Center, and Jerry Wind and Colin Crook, authors of The Power of Impossible Thinking . I have learned a great deal from them about making decisions.

I wish I could say that all this good schooling has kept me from making absolutely disastrous decisions, but I'd be lying. I've walked away from a stable job to start a business (turned out to be a pretty good decision). I've moved 2,000 miles from Pennsylvania to Colorado with a St. Bernard and three kids and back again in one year (a disaster but a fascinating adventure as well). It is a decision I'd make again in a heartbeat because it was for the sake of family. So the little knowledge I have hasn't kept my tail out of the fire. But the way I think about and approach decisions has changed.

There is no simple formula for decisions, but we can become better at making them. No decision is perfect, but often doing nothing is worse. The time to act is now. On the following pages are a series of sharp insights that will give you new ways of thinking about your decisions. There are no shortcuts or machines to make decisions for you. You just need to dig in, open your eyes and get to work. I hope the following truths about decision making can help you in making your own tough decisions.

But some decisions are not all that tough. I mean, buy the book already.

Robert Gunther

In his '50s, after leaving the White House, President Theodore Roosevelt was faced with the opportunity to explore the Amazon in South America. The journey down the appropriately named River of Doubt (now Rio Roosevelt) was a prospect that was fraught with danger and almost killed his son Kermit. This was a time when the twenty-sixth U.S. president could have basked in the glory of his past achievements, writing his memoirs and putting his presidential library in order. A careful and calculating decision maker might have weighed the risks against the opportunity and wisely decided to stay at home. Roosevelt was not that kind of man. You can almost hear him responding enthusiastically with a single word: "Bully!" He said the trip made him feel like a boy again.

There is an underlying assumption in much of the decision-making literature that making decisions should be based on a rational process. We know that it isn't, but these detours from rationality are usually seen as obstacles to effective decision making. And they certainly can be. Rational approaches also represent the part of decision making that is most easily trainable. We can recognize how problems such as overconfidence or groupthink cloud our judgment, as we will consider later in this book. It is important to recognize these challenges, particularly for large decisions that need to be carefully thought out. But it is also important to recognize that none of this would have led Roosevelt into the Amazon, for better or worse, or to the other wild successes of his hard-riding career.