Judgment Calls. Thomas H. Davenport

      

      THOMAS H. DAVENPORT & BROOK MANVILLE

      Harvard Business Review Press • Boston, Massachusetts

      Copyright 2012 Harvard Business School Publishing Corporation

      All rights reserved

      Printed in the United States of America

      10 9 8 7 6 5 4 3 2 1

      No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.

      Library of Congress Cataloging-in-Publication Data

      Davenport, Thomas H., 1954-

      Judgment calls : twelve stories of big decisions and the teams that got them / Thomas H. Davenport, Brook Manville.

      p. cm.

      ISBN 978-1-4221-5811-1 (alk. paper)

      1. Decision making. 2. Problem solving. I. Manville, Brook, 1950- II. Title.

      HD30.23.D3718 2012

      658.4'03—dc23

      2011040344

      The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Publications and Documents in Libraries and Archives Z39.48-1992.

      Contents

       Cover Page

      Title Page

      Copyright

      Contents

       Foreword by Laurence Prusak

	Introduction Great Men, Not So Great Decisions
Part One	Stories About the Participative Problem-Solving Process
1.	NASA STS-119 Should We Launch?
2.	WGB Homes How Can We Sell This House?
3.	McKinsey & Company Should We Recruit from a Different Pool of Talent?
Part Two	Stories About the Opportunities of Technology and Analytics
4.	Partners HealthCare System How Should We Treat This Patient?
5.	Cognizant How Will All These Daily Decisions Get Made?
6.	Charlotte-Mecklenburg Schools How Can We Improve Student Performance?
Part Three	Stories About the Power of Culture
7.	Ancient Athenians How Can We Defend Against Life-or-Death Invasion?
8.	Mabel Yu and The Vanguard Group Should We Recommend This Bond to Investors?
9.	EMC How Can We Cut Our Costs in Tough Times?
Part Four	Stories About Leaders Setting the Right Context
10.	Media General Should We Restructure for a New Strategy?
11.	The Wallace Foundation How Can We Focus a Strategy for More Mission Impact?
12.	Tweezerman Should We Take the Business to the Next Level of Growth?
13.	Conclusion Final Reflections and Some Implications for Tomorrow's Leaders

       Notes

       Acknowledgments

       About the Authors

      Foreword

      At the outset of a book of stories about judgment, perhaps the way to begin is by telling the story behind the book itself. In the spring of 2010, Tom Davenport and I met for lunch, not with any thought of embarking on a new project but only to catch up. But with two disasters much in the news at the time—the continuing fallout from the global economic meltdown and the explosion of BP's Deepwater Horizon oil platform in the Gulf of Mexico—our conversation kept returning to the question of why it is so hard for organizations to do the right thing.

      Our prior research together, spanning two decades, was a source of pride for us. We had focused on knowledge in organizations rather than the more prevalent subjects of information technology and data management and felt we had made a serious difference in at least some management thinking, conversation, and actions. Knowledge, we had argued, was the most valuable asset in modern organizations, and their success depended on their attention to cultivating it, sharing it, and using it.

      Now, however, we had to admit that the catastrophes being visited on the world weren't owing to failures of knowledge. Not at all. Who knew more about finance than the employees of the firms that precipitated the financial crisis? Their halls were full of Ivy League graduates rubbing shoulders with the world's leading economists and finance professionals. How could anyone say there wasn't sufficient know-how? And who knew more about how to rein in the risks of their operations than the regulators? Often hired directly from the very entities they were to regulate, they had not only the requisite intellectual tools to understand complex financial structures but intimate familiarity with how they were being applied. Yet all this knowledge, the product of the very strong investments in human capital these organizations made, had brought us to our collective economic knees. So what was missing if it wasn't information or even knowledge? Try judgment.

      As that conversation led to others, it wasn't long before Tom and I asked Brook Manville to join the discussion. Not surprisingly, given how long we have been friends and colleagues, he had also been thinking along the same lines. All of us knew something of the existing literature on judgment, which is not unsubstantial. We wondered whether its lessons had simply gone unheeded, or whether it fell short in some way of offering the right lessons for today's organizations.

      What we discovered, first, was that the wealth of material already published on judgment treated it as only an individual capacity and exercise. Whether the source is an ancient one, like Aristotle's inquiries into “practical wisdom,” or a thoroughly modern one, like Dan Ariely's fascinating behavioral economics studies, the focus is on the sole actor and his or her ability to choose a wise course of action. At the same time, most writing on judgment conflates judgment and decision making, to the former's disadvantage. People chipping away at the subject tend to opt for one of two modes, approaching it either as an application