Why Decisions Fail

About the Author

Paul C. Nutt is a distinguished professor of Management Sciences and Public Policy and Management at The Ohio State University's Fisher College of Business. With over 20 years of research focused on decision-making processes, Nutt has extensively explored what strategies work, what don’t, and the reasons behind the successes and failures in organizational decisions. His profound understanding and analysis of decision-making are encapsulated in his book, "Why Decisions Fail: Avoiding the Blunders and Traps That Lead to Debacles", where he presents his findings and offers practical advice to improve decision-making outcomes.

Main Idea

In "Why Decisions Fail," Paul C. Nutt asserts that decision failures are alarmingly common, occurring half of the time. This high rate of failure can be attributed to three primary blunders and seven ensuing traps that decision-makers often fall into. Nutt's key message is that by understanding and avoiding these blunders and traps, organizations can significantly reduce their failure rates and make more effective decisions.

Table of Contents

1. Blunders to Debacles
2. Decision-Making Traps
3. Failure to Reconcile Claims
4. Failure to Manage Forces Stirred Up by a Decision
5. Ambiguous Directions
6. Limited Search and No Innovation
7. Misuse of Evaluation
8. Ignoring Ethical Questions
9. Failure to Learn
10. Staying Issue-Centered
11. Using Resources Wisely
12. Adhering to Best Practices

Blunders to Debacles

The chain of events that leads to decision failures begins with one of three blunders: failure-prone practices, premature commitments, and wrong-headed investments. These blunders direct decision-makers towards traps that further compound the failure. Nutt emphasizes that by recognizing and addressing these blunders, organizations can avoid subsequent traps and improve their decision-making success.

Failure-Prone Practices

Two out of every three decisions involve failure-prone practices. Decision-makers often remain unaware of these poor practices due to a lack of understanding or avoidance of proven methods. Common reasons for this include:

• Blame Game: Managers often push bad but low-cost practices to avoid blame for increased costs, placing failure on external factors like government regulations.
• Lack of Participation: Although participation prompts acceptance, it is rarely encouraged, leading to a lack of buy-in from key stakeholders.

Nutt highlights the importance of adopting practices with a good track record to mitigate failure rates.

Premature Commitments

Decision-makers frequently jump on the first idea that comes along, making premature commitments without thoroughly vetting alternatives. This rush to judgment stems from a natural impulse to seek quick solutions and avoid the unknown. Nutt advises that taking the time to explore multiple options and gather sufficient information can prevent costly premature commitments.

Wrong-Headed Investments

Blunders also occur when decision-makers invest organizational resources into costly evaluations with little return. These evaluations are often defensive, aiming to justify a predetermined idea rather than objectively assess its feasibility. Nutt suggests focusing on setting clear objectives, measuring benefits and risks, and managing forces that can derail a decision to avoid wrong-headed investments.

Decision-Making Traps

Debacles follow a chain of events where blunders create traps that bring about failure. Nutt identifies seven common traps that decision-makers fall into, each leading to compromised decisions.