Rotman Management Winter 2010

AT ITS CORE, BUSINESS IS ABOUT ONE THING: decisions. Every day, in every organization, people make decisions ranging from the micro (which e-mails to answer, which meetings to hold) to the macro (which product to launch, and when.) Across industries, more people are making more decisions – and faster – than ever before, making high-value decision making a critical skill. Today’s ‘high-value decision maker’ is a manager of complex interactions who faces a multitude of inputs on a daily basis – different value systems, ways of knowing, ways of managing, and ways of choosing between them. In the midst of this turmoil, the decision maker is called upon to internalize the clash between multiple models and resolve it productively. Indeed, an individual’s value to an organization increases exponentially with her ability…

Building Better Decision Makers: The 3D MBA MBA EDUCATION HAS COME UNDER some heavy criticism in recent years. In my view, much of the criticism is fair, though superficial, focusing on the type and extent of our ethics training or on the lack of real-world experience embedded in MBA programs. The surfeit of easy critiques threatens to obscure the real problem, which is that we fail to prepare our graduates to make smart decisions in the face of complexity and ambiguity. As a whole, MBA programs have taught students a suite of tested and trusted models, but left unanswered the problem of what to do when those models don’t apply or start to break down. As a result, we have left our graduates under-prepared to function in the ethically-murky, complex world outside…

Taking a 3D approach leads some of our students into areas they might never have expected to find themselves. In one case, it led them to the chemotherapy clinic of Princess Margaret Hospital (PMH) in Toronto. PMH – which ranks among the top cancer research and treatment hospitals in the world – received a donation to overhaul the design of its chemotherapy clinic. When Brian Golden, the head of the Rotman Collaborative for Health Sector Strategy, heard about the project, he called Heather Fraser, director of Rotman DesignWorks, to encourage her to get involved. The team at DesignWorks had already tackled projects ranging from high-performance bicycles to enterprise software. Working with a broad array of corporate clients, they had aggregated or developed a wide array of tools centred around the three…

Your Marketing textbook is now in its 13th edition and is used in MBA programs worldwide. Are the ‘four Ps’ still a useful framework? Definitely, because all marketing plans must still address those four big questions: Product, Price, Place and Promotion. However, I’m currently working on the 14th edition, and my colleagues and I are developing a new framework that will involve a more holistic set of considerations. What we call ‘holistic marketing’ entails the development, design and implementation of marketing programs, processes and activities that recognize a wide range of interdependencies, including the work of integrated marketing (the four Ps); internal marketing (i.e., getting support from the other functional areas); performance marketing (i.e., developing metrics to indicate what you’ve accomplished); and relationship marketing. The concept of holistic marketing goes way…

RESEARCH IN COGNITIVE PSYCHOLOGY and the relatively new field of NeuroEconomics consistently demonstrates that people violate the strictures of rationality on a regular basis. Pioneered by the seminal work of Nobel Laureate Daniel Kahneman and Amos Tversky, this literature has generated a lengthy list of irrational behaviours to which many of us are subject on any given day, whether we like to admit it or not. These well-documented violations of rationality have, in turn, spawned a list of biases that can be used to define ‘rational thinking’. That is, we can assess degrees of rational thinking in terms of the number and severity of cognitive biases that an individual displays. In this article we will describe some of the most common biases that challenge rational thinking, with the hope that a better…

OVER THE PAST 50 YEARS, research by esteemed academics including Nobel Laureate Daniel Kahneman has uncovered a wide variety of biases that plague decision makers on a regular basis. Thanks to this groundbreaking work, we know that predictable errors lead people to commit sub-optimal acts on a regular basis, ranging from undersaving for retirement to engaging in needless conflict, marrying the wrong partners and accepting the wrong jobs. Unfortunately, we have yet to uncover systematic strategies to help people overcome these biases and behave more optimally. As the global economy becomes increasingly interconnected, every biased decision will have implications for a broader swath of society. Given the massive costs that can result from sub-optimal behaviour, it is time to focus on improving our knowledge base around strategies that can lead to…