The book Decisions Traps is a generation old now but it remains a useful book on decision making. Occasionally it veers a bit too far with its claims — for instance it has “brilliant decision making” in the title — but I can forgive that as it may have helped sales. I will say that overall it does a good review of the early judgment and decision making literature spliced in with practical advice for decision makers. (There are a few little worksheets to help you analyze your decision making).
The authors, Russo and Schoemaker, cover many of the classics. They discuss the problem of overconfidence and groupthink. They highlight reference points and much of their advice on framing is interesting and makes sense. They give an interesting example of what they call the “marketing frame” and how “Hundreds of companies reached new heights adopting the marketing frame” (Russo and Schoemaker, 1989, page 25). Basically this means listening to consumers matters. We teach this as pretty standard in marketing classes but to outsiders this is the “marketing frame”.
They have a large section on outcome bias which I agree seems to be a persistent problem in life. Where there is random noise they say that “you have to focus not on learning from outcomes but on learning through analysis of the decision process itself.” (Russo and Schoemaker, 1988, page 206). The advice is that you shouldn’t think that a decision was great simply because it all turned out well. Plenty of bad decisions turn out good through luck and vice versa. It is decision quality, not outcome, that matters.
I enjoyed their description of why learning is so tough and was most interested in their story of one manager who received the feedback that:
“”We already knew that,” or “This is so implausible that your model must be wrong…”” (Russo and Schoemaker, 1989, page 185). I got that response from two different reviewers at an academic journal not so long ago so I guess that not much has changed in the last twenty eight years despite the authors’ best efforts.
Though old, Decision Traps remains a good read. Easy to read, with interesting observations and some practical advice.
Read: J. Edward Russo and Paul J.H. Schoemaker (1989) Decision Traps: The Ten Barriers to Brilliant Decision Making and How to Overcome Them, Simon and Schuster