Decisions, Decisions

Article in Transforming Management. Manchester Business School. March 9, 2010

The Decider Vacillates

December 13th. 2006
Sent to but not published in the New York Times

So the great decider, cannot decide what to do in Iraq. George Bush's aphorism "I'm the decider" was a paraphrase of Harry Truman's "The buck stops here." As Bush shilly-shallies, young men and women are dying in Iraq. If he cannot decide in a timely fashion, the President should take to heart another of Truman's sayings "If you can't stand the heat, get out of the kitchen." He should step down and let his Vice-President take the decisions -- if he is not doing so already.

Perhaps Cheney with his impeccable marksmanship could go Iraq and lead some patrols in person, to compensate for the more important priorities he had during the Vietnam era. There is a precedent. The neo-cons' darling, Winston Churchill, after being ousted from the Cabinet commanded a regiment in the trenches during World War I.

Management ignorance and the Big Dig

July 18th. 2006
Sent to but not published in the Boston Globe

Managerial lessons from the Big Dig


We learned today that, back in 1999, workers on the Big Dig project expressed concerns to their managers that the bolts holding the roof panels might not be up to the task.

There are a number of managerial lessons to be learned from this episode.

Lower level employees have a wealth of tacit knowledge; knowledge that is not codified and written in engineering manuals but that is based upon experience with the tools and materials in their interaction with other materials on the work site. Both codified and tacit knowledge are valuable. In combination, the two types of knowledge provide a formidable underpinning to enable the manager to make correct managerial decisions.

Inexplicably, this information seems to have been discounted in the decision to continue to use the epoxy based bolts. Even more surprising, given that managers had this information, we are informed that the decision was also made to stop testing the epoxy to make sure that it was being mixed correctly. If this is true, this is cost cutting at its worst. Surely spot checks on the viability of the epoxy bond should have continued throughout the construction phase.

This may also illustrate the effect of uncertainty absorption. As information is passed through several levels of the hierarchy it is changed. Some information is dropped or smoothed, other information is sharpened. It is likely that as information passed up the line to ratify these decisions that the employees concerns were given less emphasis than the codified engineering knowledge.

In 1999, employment in Massachusetts was quite high (an unemployment rate of about 3.3%). When Labor Markets are tight, employers are usually forced to treat workers well and allow them some empowerment in order to retain high quality employees. Workers respond, as in the Big Dig case, with constructive criticism. They respond to commitment by the firm with commitment to the firm.

The good times continued until the recession of 2001 when the unemployment rate almost doubled from 2.8% to 4.7% in a single year. During that year, over 70,000 Massachusetts residents lost their jobs – a dramatic illustration of the unwillingness of managers to show any commitment to their employees when they no longer needed to do so in the new Labor Market conditions. There are after all alternatives to layoffs. For example for a company to share the pain by having all members of the organization take a 10% cut in both hours of work and pay rather than firing 10% of the workforce would be a vivid statement that the top management was truly committed to their work force.

If managers show a high level of commitment, then employees will reciprocate in kind. If the 1999 problems had occurred in 2002 or 2003 in firms that experienced big layoffs, it is unlikely that constructive comments would have been made – rather the attitude would be, “It´s management´s problem, let them solve it!’

It is a truism to say that organizations are systems. All the parts are important. Managers and executives may be more important, but lower level workers are also needed to do their part – and their part is more than just following order unthinkingly as those workers in 1999 showed at the Big Dig. What a pity their views were discounted.

Big Dig Investigation

July 14th. 2006
Sent to but not published in the Boston Globe

The Big Dig Investigation

Those politicians calling for an independent review of the Big Dig catastrophe are absolutely correct. It is a mistake to allow those responsible for creating the situation to have a major role in investigating the problems.

One of the more pervasive phenomena in human decision-making is “escalating commitment to a losing course of action.’ This occurs when early investments in terms of money, resources, energy, and time have been committed to a project. At a later stage, the expected pay-offs from the investment have not materialized and the person or organization has to decide whether or not to “cut their losses’ or to make an additional investment. Almost inevitably the person or organization “throws good money after bad.’

This occurs for a couple of reasons. People are very good at identifying external causes for the initial failure and do not expect those causes to recur so they can justify an additional investment in the project. Secondly, success in the project becomes inextricably tied up with their desire to prove themselves competent so the desired outcome has shifted from a successful project to that of a successful project PLUS a successful organization or individual. Te initial objective is swamped by the personal objective.

I said earlier that it is “almost’ inevitable for good money to be thrown after bad. The exception occurs when a different person makes the second decision whether or not to make an additional investment. Successful Banks demonstrate this when they turn non-performing loans to a “work-out’ unit rather than have the original loan officer attempt to resurrect the deal with the client – that way you get escalation!

If the engineers and officials of the Turnpike Authority are to be responsible for the inspection process, we run the danger that – despite their undoubted professionalism – they will be concerned about justifying their prior decisions and work at developing rationalizations rather than reasons for the problems with the tunnel.

It is essential for new eyes, with no emotional commitment to the past decisions,  to investigate the problems.

Decision Making

Date: December 14th., 2005
Sent to but not published in the New York Times

To: The Editor, New York Times



I was horrified to read in Maureen Dowd's column (Times, December 14th 2005, A35) that according to Jack Murtha "when they were planning the invasion [of Iraq], the administration wouldn't let one of the primary three star generals in the room."



When I was teaching MBA's in 1973 (the year George W. Bush entered the Harvard Business School) my colleagues and I taught, among other things, that in complex situations and if managed properly, group decision making was superior to individual decision making because the variety of points of view expressed by group members would result in a decision that better reflected the facts of the situation. We also taught that having the people who were going to execute the subsequent actions participate in decision making had two useful consequences: as already mentioned  increasing the relevant knowledge brought to bear; and  increasing peoples' commitment to the decision.



Excluding a key group member violated both those recommendations.



George W. Bush must have skipped classes at the Harvard Business School on those days.