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Eratosthenes Teaching in Alexandria, by Bernardo Strozzi, 1635 (Courtesy: Montreal Museum of Fine Arts)

Algorithms and Statistical Models Vs Human Judgement

Idea posted: July 2017
  • Learning & Behaviour

For businesses frustrated by algorithm aversion — the tendency of people to reject forecasts based on algorithms and statistical models in favour of less dependable human judgement — there is hope: a new study shows that people will choose to use algorithms if they can modify them, even slightly.

Idea #664
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Red flag on the beah

Avoiding Bad Decisions: ‘Red Flags’ and Reflection

Idea posted: January 2013
  • CSR & Governance
  • Leadership & Change
  • Learning & Behaviour

Decision-making can be understood better with an awareness of the brain processes involved in it. There are certain ‘red flag’ conditions that can lead to distortions in judgement, in turn leading to bad decisions being made. The authors provide examples of where this has been the case, and highlight safeguards that can be adopted to avoid them.

Idea #028
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Man jumping cliff

Avoiding Flawed Decisions: A Finance Manager's Role

Idea posted: January 2013
  • CSR & Governance
  • Finance
  • Leadership & Change
  • Learning & Behaviour

Finance executives are particularly well-positioned to help organizations improve their decision-making and introduce more rational decisions-making processes. In particular they are in a position to help management teams learn to identify ‘red flags’ and adopt extra safeguards against them. 

Idea #037
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Jean Charles de Menezes, memorial plaque at Stockwell Station, London (Source: Wikimedia Commons)

Bad Framing Leads to Bad Decisions and Bad (Even Fatal) Actions

Idea posted: October 2015
  • Strategy
  • Leadership & Change
  • Learning & Behaviour

Decision makers must frame or ‘make sense’ of events and situations, and then make their decisions accordingly. A groundbreaking analysis of an innocent civilian’s tragic shooting by anti-terrorist police reveals how groups of individuals commit, through the interaction of communication, emotions and material cues, to a single, common frame — in this case an erroneous frame. It is a cautionary tale for leaders and other decision makers, exposing how errors or assumptions can cascade into a complete misunderstanding of situations.

Idea #563
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 View of the MS Costa Concordia shipwreck, 2012 (Source: Wikimedia Commons)

Bad Luck Doesn’t Just Happen: The Case of the Costa Concordia

Idea posted: March 2016
  • Learning & Behaviour
  • Operations

Using the case of the Costa Concordia cruise ship sinking, researchers demonstrate the threat posed by ‘zemblanity.’ While serendipity occurs when a company is prepared to take advantage of good fortune, zemblanity is the polar opposite, occuring when a company creates its own bad luck.

Idea #592
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Beating Bias through Mindfulness Meditation

Idea posted: September 2013
  • Leadership & Change
  • Learning & Behaviour

Mindfulness meditation, the practice of clearing one’s mind of all other thoughts but the ‘present moment’, partly by focusing on the physical sensation of breathing, has long been associated with personal feelings of ‘wellbeing’ and positivity. But it has wider, more practical, benefits. New research suggests that leaders who use the technique are more likely to be resistant to the decision-making curse of ‘sunk cost bias’ — and, consequently, more likely to create value.

Idea #225
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‘Red Dwarf - Series II’, starring Chris Barrie (Rimmer), Craig Charles (Lister), Danny John-Jules (Cat). First broadcast in 1988, Red Dwarf was created by Rob Grant and Doug Naylor and ran on BBC2 for eight series. In 2009, the show was brought back for a three-part special by UK digital broadcaster Dave © 2013 Grant Naylor Productions (Source: www.reddwarf.co.uk)

Better and Fairer Management Control Systems

Idea posted: January 2013
  • Strategy
  • Finance
  • Leadership & Change
  • Learning & Behaviour
Institutions: IESE Business School

Management control systems can be formal and/ or informal, fair or unfair. In order to achieve an organizations overall goals, the best systems are fair and formal, with the users of the system also fair. The opposite, an unfair system with unfair users (i.e. two unstable states) leads to total goal incongruence – a not unusual state which can be very damaging to any organization.

Idea #061
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The German delegation at the Treaty of Versailles, 1919 (Source: Wikimedia Commons)

Conducting Better Meetings - Can Data Help?

Idea posted: July 2013
  • Leadership & Change
  • Learning & Behaviour

The science of meetings — which includes collecting sophisticated data that analyzes meetings word-by-word and phrase-by-phrase — is still in its infancy. Researchers from MIT, however, used an available database with a myriad of data to reach some tentative conclusions about different facets of meetings, from calculating average ‘wrap-up’ times once a decision is reached to identifying the most persuasive words used in meetings. They were even able to use language analysis to identify when participants in a meeting were about to make a decision

Idea #182
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King John signs the Magna Carta, engraving by James William Edmund Doyle, 1864 (Source: Wikimedia Commons)

Corporate Governance from the Bottom Up

Idea posted: January 2014
  • CSR & Governance
  • Finance
  • Learning & Behaviour

Non-executive directors are often seen as a way to avoid corporate ‘buccaneering’ and tame reckless CEOs. Their exact contribution to companies, however, remains unclear. Independent executives, on the other hand, have been shown to be accurate ‘predictors’ of profitability, performance and value creation.

Internal monitoring by the CEO's immediate subordinates should be the new area of focus in the corporate governance debate.

Idea #299
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Graphic of staff superimposed on a background of skyscrapers

Creating a High Integrity Corporate Culture

Idea posted: January 2013
  • CSR & Governance
  • Leadership & Change
  • Learning & Behaviour
Institutions: INSEAD

At what point do employees realize, if at all, that they are making an inappropriate decision? And what interventions are available to help ensure they make the right ones? When employees fail to act with a strong sense of integrity, there are conscious and unconscious factors at play. Leaders should be aware of these in order to create and sustain a corporate culture where doing the right thing becomes second nature.

Idea #058
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WH Situation Room, 2010 (Source: Wikimedia)

Crisis As Opportunity: Leadership, Change and Renewal

Idea posted: January 2013
  • Leadership & Change
  • Learning & Behaviour

Arguably the greatest gift we can glean from a crisis is an improvement in our ability to see the next one coming, to prevent it coming if possible, and to lead our organization successfully through that next crisis situation. We learn Crisis Leadership. This is essential: crises are inevitable. Similarly, there are essential characteristics and skills required to navigate them, and to ensure your organization not only survives but emerges from the crisis better off.

Idea #078
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Decision Support Systems: Under-rated and Under-used?

Idea posted: June 2014
  • Strategy
  • Learning & Behaviour
  • Marketing

Technology now provides a range of decision support systems to interrogate, process and analyse data on markets and customers and help companies answer ‘what-if’ questions. The best ones, however, could be being neglected by organizations. Recent empirical research finds a clear discrepancy between users’ perceptions of decision support systems and how these systems actually perform. 

Idea #387
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A scene from 'Iphigenia in Tauris' by Euripides. Roman fresco in Pompeii (Source: Wikimedia Commons)

Decision-Making With Emotional Intelligence

Idea posted: September 2013
  • Leadership & Change
  • Learning & Behaviour

Decisions, especially decisions involving risk, are often guided by emotions, such as anxiety, that in fact emerge from completely unrelated events. Emotionally intelligent leaders are less likely to make a mistake with “incidental” anxiety because they recognize the irrelevant source of their emotions. Leaders can also help others reduce the impact of incidental anxiety by simply pointing out the true source of their emotions.

Idea #217
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The Creation of Adam, Sistine Chapel, fresco detail, 1509, by Michelangelo

Digit Ratio Predicts Men's Product Choices

Idea posted: April 2014
  • CSR & Governance
  • Learning & Behaviour
  • Marketing

Marketers have long known that product choice cannot be predicted reliably by knowing someone’s sex. Multiple factors — ranging from age and income to lifestyle and family preferences — influence purchasing decisions. Now, there’s another variable to add to the list. Recent empirical research suggests that digit ratio — the relative lengths of the fore and third fingers — is linked to the product choices of men.

Idea #366
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Tea pluckers in Darjeeling, 2004 (Source: Wikimedia Commons)

Economic Initiatives Can Lead to Unexpected Behaviours... at First

Idea posted: December 2015
  • Finance
  • Learning & Behaviour

Employee behaviour sometimes contradicts standard economic models. A study of a contract change in India, for example, led to greater output when the models called for less output. As the study reveals, however, the conflicting behaviour was only temporary; over time, employee behaviour in this case complied with the models. The study offers a warning to use longer-term data to measure the impact of economic initiatives or a policy change. 

Idea #568
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The Adventures of Sherlock Holmes, 1939, Dir. Alfred L. Werker

Evidence, Facts and Intuition in Decision Making

Idea posted: February 2013
  • Leadership & Change
  • Learning & Behaviour

One of the ways we strive to make a good decision is through evidence-based decision-making. Just as often though, and sometimes without realizing it, managers are fitting the evidence to the decision they’ve already made in fact ‘decision-based evidence making’. A clear understanding of the roles evidence can play in making a decision can help avoid this. Although, as explained in this Idea, there are certain times when this is not necessarily a bad thing. Sometimes evidence-based decision-making is less appropriate than decision-based evidence making.

Idea #021
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Flattened Organizations: When Cons Outweigh Pros

Idea posted: February 2013
  • Strategy
  • Leadership & Change
  • Learning & Behaviour
  • Operations

When an organization is ‘flat’ employees report directly to senior managers; but as management layers increase, so too does the hierarchical gap between employees the CEO and the C-suite, leading to decision-making being focused at the top of the organization. So should firms eliminate these layers in order to shift more decision-making powers downwards? Well, this Idea shows that this may in fact achieve the opposite. Flattening can lead to more control at the top. 

Idea #083
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Samurai at a Waterfall, 19th Century Japanese Woodblock Print, Fuji Arts

Grapes of Wrath: How Self Control Leads to Anger

Idea posted: January 2013
  • CSR & Governance
  • Leadership & Change
  • Learning & Behaviour
  • Marketing
  • Operations

Does making a healthy food choice make us angry? In an important piece of consumer research, a relationship is found to exist between exerting self-control, and a preference toward ‘themes of anger’ in e.g. entertainment. This mismatch - getting irritated by our own self-control - has far-reaching implications for marketers and policy-makers as we try to further understand consumer behaviour.

Idea #034
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Triple Portrait of Cardinal de Richelieu, Philippe de Champaigne, 1642 (Courtesy: National Gallery, London)

How Bringing Self to Work Inspires Ethical Behaviour

Idea posted: December 2018
  • Learning & Behaviour

People have different ‘selves’: the same person might be a politician, a grandparent, an avid golfer, and an aspiring novelist, for example. New research shows that if you believe that how you act in one self reflects who you are in all your selves — for example, being a ruthless politician makes you a ruthless person as a whole — you are less likely to commit immoral acts. This research offers new evidence that encouraging employees to bring their personal selves to work encourages moral behaviours and ethical decisions in the workplace.

Idea #722
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How Employees Win ‘Voice’ and Influence Decisions

Idea posted: June 2014
  • CSR & Governance
  • Leadership & Change
  • Learning & Behaviour

High levels of engagement and commitment in the workplace could be both a cause and an effect of involving employees in decision-making processes. Research suggests that leaders ‘grant voice’ to followers who combine a need to influence the organization with a need to belong and take part — and that followers work better for leaders when they do.

Idea #391
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Man with light bulb

How Evidence-Based Management Reduces Entrepreneurial Risk

Idea posted: January 2013
  • Innovation & Entrepreneurship
  • Leadership & Change
  • Learning & Behaviour

Despite the fact that many talented individuals put hard work and diligence into new start-ups, why do high failure rates still exist? This Idea proposes that evidence-based management could help with this, reducing risks, costs, and wasted time and effort. However, the mindset-shift required to implement this approach is significant; as such, not many leaders adopt it, even though the risk of failure could be demonstrably reduced and vast sums of money saved.

Idea #036
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Kalfafell Iceland. Photo by Gian Reto Tarntzer on Unsplash

How Linear Thinking in a Non-Linear World Leads to Wrong Decisions

Idea posted: December 2017
  • Learning & Behaviour
  • Marketing

Our brains prefer to think in straight lines: if one bag of oranges costs $5, then two bags cost $10 and three cost $15. However, this bias toward linear thinking often traps unwary business decision-makers who fail to recognize the non-linear relationships they are dealing with (e.g. increasing retention rates from 10% to 30% or from 60% to 80% does not have an equal 20% impact on customer lifetime value).

Idea #685
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An umpire: Australia v World XI, Sydney Cricket Ground, 2005 (Source: Wikimedia Commons)

How People React to the Fairness of Decisions: Trust Makes a Difference

Idea posted: February 2016
  • Leadership & Change
  • Learning & Behaviour

Perceived fairness, whether of the outcome or procedural fairness, impacts on how people react to decisions. New research shows that the level of trust in decision makers sets expectations that significantly influence this interaction of outcome and procedural fairness.

Idea #583
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How Price, Time and Functionality Affect Customers' Choices

Idea posted: March 2014
  • Learning & Behaviour
  • Marketing

New research shows that when purchases are time-sensitive — buying a camera the day before leaving for vacation, for example — consumers tend to look for convenient, easier-to-use products. But in the long term, consumers are more interested in desirable product features. According to the research, reminding consumers of a product’s price will help them focus, even in the short term, on what they truly value: functionality over convenience.

Idea #338
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Traders on the New York Stock Exchange, 1963 (Source: Wikimedia Commons)

How Testosterone Leads to Overpricing on Wall Street

Idea posted: June 2016
  • Leadership & Change
  • Learning & Behaviour

New research shows that testosterone increases the over-confident and over-optimistic impulses of male traders, resulting in higher prices and more frequent bubbles. It also reveals, in general, that we are not always as rational as we believe.

Idea #608
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Steve Jobs and Bill Gates at 'D5: All Things Digital' conference in Carlsbad, California, in 2007 (Source: Wikimedia Commons)

How to Formulate a Winning Strategy

Idea posted: July 2014
  • Strategy
  • Leadership & Change
  • Learning & Behaviour

Many companies struggle to develop a good competitive strategy and to set a clear direction for managers and employees. Strategy formulation, in fact, almost poses as many challenges for business leaders as strategy implementation. The solution is a back-to-basics approach — and a framework that addresses four fundamental questions about where and how the business will compete.

Idea #411
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HQ Controls and the Speed of Strategic Decision-Making

Idea posted: March 2014
  • Strategy
  • Leadership & Change
  • Learning & Behaviour

How do control mechanisms set by corporate headquarters in large organizations influence decision-making speed at lower levels? In this Idea, six types of corporate controls are identified, their effects on decision speed are discussed, and the key mechanisms accounting for these effects are outlined.

Idea #339
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DIANA, the first computer built by Norwegian pioneer  Jens Glad Balchen at the Department of Engineering Cybernetics, NTNU in mid 1950s (Source: NTNU)

Human Judgement Vs Computer Aided Forecasting

Idea posted: May 2013
  • Innovation & Entrepreneurship
  • Leadership & Change
  • Learning & Behaviour
  • Operations

Is your company about to launch a new product or service into the market? If so, you know how crucial it is to predict as accurately as possible how it will be received; otherwise, you are putting at risk precious time and resources engaged. According to this Idea, there is a way to make an intelligent forecast that involves a combination of human and computer judgement. Faculty from Judge Business School and IE Business School explain how.

Idea #139
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Early experimental digital photograph by Rick Doble, 2000 (Source: Wikimedia Commons)

IT Leadership: Shifting Mindsets to Add Value

Idea posted: April 2014
  • Strategy
  • CSR & Governance
  • Innovation & Entrepreneurship
  • Learning & Behaviour

How is IT managed in your organization? Most organizations do not think of this as a crucial question to consider, but in order to ensure competitive success in today’s complex business environment, responsibility for IT decision-making should be shared and not left solely in the hands of the CIO. Read on to find out more.

Idea #359
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The Meeting, Ester Almqvist, 1929, (Source: The Swedish National Museum. Wikimedia Commons)

Leadership Ensembles: 4 Blueprints for Senior Decision-Making

Idea posted: October 2013
  • Leadership & Change
  • Learning & Behaviour

The ‘Lone Ranger’ style of senior leader decision-making is a thing of the past; most organizations now bring together groups of leaders (‘ensembles’) for input into different types of decision-making. This Idea identifies approaches for these ensembles to follow in order to make the most successful choices and reach the best decisions when they come together.

Idea #229
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