Olivier Sibony

• HEC Paris

Using a behavioral strategy lens, we introduce a framework to categorize and improve strategic decisions. The typology uses two dimensions, salience and framing, while considering whether decisions truly produce strategic consequences. This yields six relevant types of decisions. “Archetypal” decisions are single strategic decisions that are labele...

This chapter applies the 4S method from end to end to a disguised, real-life case. It starts with a brief description of the Kangaroo Company and the issue at hand, which is basically to look into the attractiveness of “Kangaroo” (the leader in the men’s underwear market in “Syldavia”) as an acquisition target. It then discusses the problem stateme...

Most business people tend to have a hypothesis-driven approach to problem solving. When confronted with a problem, they naturally and almost immediately generate a candidate solution. In such circumstances, the problem-solving process essentially consists in trying to prove this solution right or wrong by confronting it with relevant evidence. The...

In practice, intuitive problem solving can go badly wrong. This chapter discusses its five specific pitfalls, based on real-life cases. First, a flawed problem definition almost invariably leads to irrelevant solutions. Second, most problem solvers start with a hypothetical solution in mind, which they tend to confirm instead of systematically chal...

Analytical frameworks come either from “theoretical” knowledge around the different functions of business management, such as the four P of the marketing mix, or from industry-specific expertise, such as the ARPU (average revenue per user) in telecom. They can be used as prepackaged, MECE breakdowns of typical business problems. As such, they provi...

The design thinking path to problem solving is appropriate whenever the problem is human centered, complex, and too poorly understood to be defined using the analytical TOSCA approach. In design thinking, the problem owner you consider is the user of the solution you are trying to design. Typically, this is a product or service, but the design thin...

The design thinking approach to the Structure stage in the 4S method is the Ideate phase. It entails generating a large and diverse set of concepts, using creativity techniques such as analogical thinking, brainwriting, morphological analysis, and SCAMPER (Substitute, Combine, Adapt, Modify, Put to some other use, Eliminate, and Reverse) questions....

Problem structuring results in a list of elementary issues to crack or elementary hypotheses to test. You will address them one by one through various types of analyses. Start with an analysis plan, in which you identify the analyses and sources you need to address each elementary item. You must give priority to the analyses that can radically chan...

Walking the audience through PowerPoint slides is both the most frequent and the least efficient way to deliver recommendations. The challenge is to steer a productive conversation with problem owners in which visual aids do not become visual impediments. Telling relevant stories and using striking examples can help. Handing out a neat and concise...

Non-routine business problems, such as a sudden drop in performance a few months after a change of CEO, are hard to frame and involve a fuzzy combination of factors. Nevertheless, the human brain works in such a way that “obvious” conclusions immediately come to mind: putting the blame on the new CEO and firing him! Therein lies the core challenge...

Problem solving and solution selling are skills: they require practice to be learned. And since the tools covered in this book are not widely and systematically taught, you may not have had many opportunities to use them. But business life presents you with an endless supply of problems, which provide many learning opportunities. Seize them, starti...

Before reporting your recommendation, you must organize your findings into a compelling “story.” The most efficient storyline is a top-down pyramid that starts with communicating the core message head-on, and then discussing the few key points that collectively support it, while at the same time announcing the overall structure of the report. There...

The 4S method is an integrated, four-stage problem-solving approach that combines the tools of strategy consulting with insights from cognitive science and design thinking. The first S is to State the problem properly, identifying the core question at hand as well as its context, owner, and stakeholders. The second S is to Structure the problem, ei...

Ask the TOSCA questions to define the problem effectively. (1) What is the Trouble or symptoms that make this problem salient at the time it is considered? (2) Who is the Owner of the problem, or, in other words, who is the “client” of the problem-solving initiative? (3) What does Success mean? More specifically, what performance criteria will the...

Decision theory offers a formal approach to decision making, which is often viewed and taught as the rational way to approach managerial decisions. Half a century ago it generated high hopes of capturing and perhaps replacing intuition, and providing the “right” answer in practically all managerial situations. Today it seems fair to say that decisi...

Solving complex problems and selling their solutions is critical for personal and organizational success. However, it doesn’t come naturally and most of us haven’t been taught how to do it well. Research shows a host of pitfalls trips us up when we try: We’re quick to believe we understand a situation and jump to a flawed solution. We seek to confi...

Les erreurs récurrentes et systématiques dans les processus de décision stratégique sont fréquentes ; et les théories actuelles des organisations sont insuffisantes pour les expliquer. La « Behavioral Strategy » suggère de lier ces erreurs à la psychologie des décideurs, et notamment à leurs biais cognitifs. Toutefois, cette vision suppose de conne...

This special issue explores the impacts of behavioral strategy on management practice. Behavioral strategy can best contribute to management practice by shifting its focus from individual decision biases to the design of behaviorally informed decision processes at the level of the firm. This introduction identifies three types of organizational dec...

Previous studies of strategic decision-making have demonstrated a relationship between the strategic decision-making process and its effectiveness, namely whether the decision delivers the expected results. In this article, we demonstrate that there are two key dimensions of strategic decision-making: 1) the analysis performed, and particularly fin...

Good managers—even great ones—can make spectacularly bad choices. Some of them result from bad luck or poor timing, but a large body of research suggests that many are caused by cognitive and behavioral biases. While techniques to " debias " decision making do exist, it's often difficult for executives, whose own biases may be part of the problem,...

Editors' note: The authors invite you to take a quick survey that will provide you with feedback on how your decision-making style compares with those of other survey respondents and on how to avoid biases. Thanks to a slew of popular new books, many executives today realize how biases can distort reasoning in business. Confirmation bias, for insta...

When an executive makes a big bet, he or she typically relies on the judgment of a team that has put together a proposal for a strategic course of action. After all, the team will have delved into the pros and cons much more deeply than the executive has time to do. The problem is, biases invariably creep into any team's reasoning-and often dangero...

Despite growing awareness of behavioral economics, very few corporate strategists consciously take into account in their decision making the cognitive biases-systematic tendencies to deviate from rational calculations-revealed by the discipline. Yet new McKinsey research highlights the significant financial benefits that come from "debiasing" decis...

Even in these tumultuous times, strategic planning doesn't have to be an exercise in anxiety—or futility. A P R I L 2 0 0 9 s t r a t e g y p r a c t i c e 1 Strategic-planning season has arrived for many companies, and it couldn't be more different than it has been in years past. Gone are the days of linear trend-extrapolation exercises that produ...

Résumé Les arbitrages stratégiques ne sont jamais faciles à faire. Les mauvais choix résultent parfois d’erreurs de jugement et de tromperies plus ou moins intentionnelles.