In their new book, Decision Leadership, Don Moore of Berkeley Haas and Max Bazerman of Harvard Business School provide practical advice on how leaders can improve decision-making for themselves and those around them.
When people think of great leaders—whether of a country or an organization—they often imagine them affecting change through the sheer force of their outsized personalities.
“Great leader theories are often so simplistic in how they imagine the power of a leader to rule by fiat or inspire others with visions or goals that motivate them to work,” Moore says. “The evidence on leadership and organizational processes suggests that leaders’ potential influence is both more and less than those theories would imply.”
On the one hand, it’s quite rare that a leader can direct an organization through force of will, Moore explains. “On the other hand, most leaders have enormous untapped potential when it comes to empowering those who work with them in designing systems that facilitate the success of the broader organization.” The new book, Decision Leadership: Empowering Others to Make Better Choices (Yale University Press), launching April 19, uses research in decision science and behavioral economics to examine how leaders can be more effective in two ways: first, by learning how to make better decisions themselves, and second, by influencing those around them to make better decisions as well.
“There are a lot of conceptions of leadership that imagine a leader’s job is to change hearts and minds and inspire followers with some great vision of the organization’s potential,” says Moore, who is Associate Dean for Academic Affairs and Lorraine Tyson Mitchell Chair in Leadership and Communication at Haas. “But changing hearts and minds is often a much more difficult and less successful way to lead than by simply changing behavior—which leaders can do in by virtue of their power to structure organizations and social environments.”
Talent vs luck
Most leaders get to where they are through a combination of talent and luck, Moore says. Once in a position of power, however, they tend to overweight the former, thinking they are where they are due to talent alone. “It’s tempting to say, I got here because I’m really good, and my intuition is always right,” he says. Such a reliance on intuition, however, can lead to dangerous overconfidence that results in flawed decision-making.
To illustrate the point, the authors use a topical example: the response to the COVID-19 pandemic. “Donald Trump was someone who very intentionally engaged in a leadership strategy that went first to positive spin and optimism—he never admitted an error, and everything he did was always great,” Moore says. “As president, he insisted at every turn that the pandemic was almost behind us and everything was going to be fine.” That relentless optimism, however, led to some dangerous miscalculations that exacerbated the pandemic’s effects. By contrast, countries such as South Korea took a much more pessimistic but realistic approach to the dangers of COVID-19, causing them to take stronger preventive measures and mitigate the virus.
“The goal is honesty,” says Moore, “and learning how to calibrate your confidence in order to create a better forecast to prepare for an uncertain future.”
Dangers of intuition
In a series of chapters, he and Bazerman present real-world strategies to overcome the inherent biases in decision making that intuition can create. Rather than engaging in all-or-nothing thinking, for example, effective leaders learn to think probabilistically about the future. In addition, they learn to capitalize on the wisdom of crowds within their organization, empower others to give better advice, and design experiments that can help provide better information to make good decisions.
In an example involving Netflix, Moore and Bazerman describe how in 2011 CEO Reed Hastings split his company in two, by focusing Netflix on streaming content, while launching another company, the ill-fated Qwikster, that would send DVDs by mail. While many of his fellow executives were skeptical of the idea, Hastings was so confident and enthusiastic about it, that they kept silent, leading to a debacle when customers rebelled against having to pay separate fees for both services. “Great leaders have to be decisive, but that does not mean cutting short the gathering of evidence and useful perspectives,” Moore says. “In order to make wise decisions, leaders should question their assumptions and be open to inputs from advisors.” Oftentimes, says Moore, that means not just asking if anyone has any questions or suggestions, but actively seeking out clashing opinions in order to fully vet an idea before executing it. “That’s courageous leadership.” (To Hastings’ credit, he learned from his mistakes, scrapping Qwikster and committing to soliciting better advice in the future.)
Using behavioral science
In the final chapters of their book, Moore and Bazerman expand beyond individual decision-making to examine how leaders can influence the behavior of those around them. Behavioral science research shows that oftentimes that can be better achieved through subtle “nudges” than through more heavy-handed interventions. The concept of a nudge, popularized by the eponymous book by Richard Thaler and Cass Sunstein, involves designing an environment in such a way that the default decision leads to the desired behavior—oftentimes for both the individual and the organization. While the concept has been used successfully in domains from organ donation and financial savings, Moore and Bazerman argue that it can be a powerful tool for leaders to use in a wide variety of situations within organizations. “It’s paternalistic in providing guidance to individuals, while at the same time libertarian in allowing people the freedom to choose for themselves.”
Through all these suggestions and techniques, Moore and Bazerman hope that they can empower leaders to improve decision-making, leading to organizations run according to scientific principles rather than arbitrary hunches. “If our fondest hopes came true and leaders implemented the lessons of the book,” says Moore, “they would be running more effective decision factories that maximize the welfare of people both inside and outside the organization.”
Decision Leadership: Empowering Others to Make Better Choices
by Don A. Moore and Max H. Bazerman
Yale University Press, 2022