However much thou art read in theory,
if thou hast no practice thou art ignorant.
After working as a strategy consultant as my first job after graduate school, I was interested in learning more about what it takes to make change from the inside. I also was hoping that an insider would be able to pursue more difficult tasks than consultants usually addressed.
The management at Heublein, the Fortune 500 food and beverage company (products included A.1. Sauce, Grey Poupon mustard, Ortega chiles, Kentucky Fried Chicken, Smirnoff vodka, Harvey’s Bristol Cream, and Italian Swiss Colony, Beaulieu, and Inglenook wines), asked me to become their corporate planner back in the days when that was a popular thing for companies to do. Today, organizations prefer to have their leaders learn strategic thinking rather than to rely too much on staff people.
I soon found that changing opinions was, if anything, more difficult to do from the inside than it had been as a consultant. But I thought I had an ace up my sleeve.
Everyone at Heublein thought that Professor Peter Drucker, the founder of the management discipline, knew what he was talking about. Having failed to convince our organization to shift its focus from after-tax profit to another financial ratio, I decided to find out what Professor Drucker would have to say.
I attended a public lecture he gave at New York University and had the good fortune to be called on at the end of the talk. I asked him which one measure of corporate performance was the best to use as a goal.
After a lengthy pause, he replied with irritation in his deep, gruff voice, “My dear sir, you obviously know nothing. There is no single measure of corporate performance that is any good. Use them all and try to develop new ones, and each will teach you something you need to know.”
I sat down, much chagrined, but with a profoundly helpful business principle in hand. I was encouraged, however, because I was very good at coming up with new measurements. This approach was right up my alley! Besides, with more measures it might be easier to convince management of the need to make changes. Surely some one of many measures would get each person excited.
There was a bigger lesson: Whenever I thought that I knew how to apply a theory, I had better check with someone who developed successful theories to validate my thinking. You should, too!
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Making Better Decisions introduces readers to some of the principal aspects of decision theory, and examines how these might lead …
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In this new edition the author has added substantial material on Bayesian analysis, including lengthy new sections on such import…
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* Basic decision theory techniques including:
1:40 conservative decision maker
2:20 optimistic decision maker
3:15 equal likelihood
4:30 expected value–risk neutral decision maker
6:35 decision tree
10:00 expected value of perfect information
Decision Theory Basics