When a leader decides to launch a major project that is sure to attract public scrutiny, such as opening a new amusement park or building a new international airport, the result is often far from what was promised in the original press release. The resulting debacle often draws a great deal of attention to the decision maker. Paul C. Nutt reveals why such debacles happen. The original article was written by Paul C. Nutt for Business Strategy Review, 2001 and was republished in Volume 24, Issue 21 - 2013. Subscribe today to receive your quarterly copy delivered to your home or work place. http://bit.ly/BSR-subscribe

1. AVOIDING DECISION DEBACLES
The pressure to act rapidly draws decision-
makers to the conspicuous solution. If the first
idea that crops up in a search seems workable,
why not use it?
© Copyright 2013 London Business School

2. BUSINESS STRATEGY REVIEW 1
When a leader decides to launch a major project that
is sure to attract public scrutiny – such as opening a
new amusement park or building a new international
airport – the result is too often far from what was
promised in the original press release. The resulting
debacle often draws a great deal of attention to the
decision-maker. Paul C. Nutt reveals
why such debacles happen.

3. BUSINESS STRATEGY REVIEW 2
Decision debacles – decisions that go so
wrong that they are reported in the media –
involve three mistakes: faulty decision
practices, premature commitments and
misallocation of resources.

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Relying on failure-prone practices
There are several reasons why failure-prone
practices are used and better ones ignored. Some
decision-making practices with a good track record
are commonly known, but uncommonly practised.
Telling people the desired outcome – lower cost, for
example – produces better results than finding the
root cause of the cost problem. Indicating what is
wanted, such as lower cost, liberates subordinates
to look for answers. Yet, managers often default to
practices that too often end in failure.

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Making premature commitments
Premature commitments are seductive and often
deadly. Many of the decision-makers in my studies
jumped on the first idea that came up and then
spent literally years trying to make it work. This rush
to judgement is a prime cause of failure. This often
leads to unanticipated delays as retrofits are carried
out and attempts are made to convince
stakeholders that the company’s interests, not the
decision-maker’s, are being served.

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Investing in the wrong things
Managers often fail to use their resources wisely.
Blunders are made, for example, when decision-
makers use their time and money for analytic
evaluations and little else. Expensive analyses are
undertaken in a debacle to demonstrate that the
decision-maker’s idea was useful, feasible or both.
The expenditure for evaluation grows as more and
more justification is called for.

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Failure traps
The chain of events in which mistakes create traps –
and traps bring about failure – is found in all debacles.
One or more of the blunders point the unsuspecting
manager toward seven traps that can ambush them:
1. Not taking charge by reconciling claims
2. Failing to appreciate barriers to action
3. Ambiguous aims
4. Limited search and no innovation
5. Misusing evaluations
6. Ignoring ethical questions
7. Failing to learn

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Not taking charge by reconciling claims
Disagreements about claims that never get resolved fashion
the first trap. A decision can be hindered, if not derailed,
when decision-makers assume that the concerns and
considerations that motivated them are understood and
agreed to by others.
Decision-makers often react to criticism by acting in ways
that imply they will have no patience with any more
questions – and interpret the silence that follows as
signalling agreement.
Many debacles had hidden concerns that could be
uncovered with careful probing.

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Failing to appreciate barriers to action
Taking steps to uncover the interests and
commitments of key people usually pays dividends.
Despite a reputation for being savvy, many decision-
makers spend little of their time managing the social
and political forces that can derail a decision. Dealing
with the interests and commitments of key players
increases the chance of success. Savvy decision-
makers use participation, because it increases their
chance of success.

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Ambiguous aims
• To head off real or imagined critics, decision-makers feel compelled to
have a way to deal with a challenge claim soon after one is
acknowledged. This triggers a rush to find a remedy. The urge to start
with a concrete remedy sidetracks direction setting, and this rush to
judgement sets the ambiguous aims trap.
• Being clear about what is to be gained puts the best face on projects,
which makes them potentially defensible. Overselling plans with bloated
and unrealistic expectations often characterises a debacle.
• Aims that are assumed by the decision-maker but never understood by
key players create difficulties as well.
• Being clear about what is wanted by setting an objective clears away
ambiguity and conflict and helps the decision-maker find an appropriate
course of action.

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Limited search and no innovation
The pressure to act rapidly draws decision-makers to the
conspicuous solution. If the first idea that crops up in a
search seems workable, why not use it? The quick fix is
hard to back away from. Business practices are copied to
provide a workable, if not ideal, solution. Adopting the
business practices of others is thought to reduce
decision-making time, cost and risk. This can work out
when the other company’s circumstances are much like
your own. When the companies lack compatibility, a
retrofit is needed and costs quickly escalate.

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Misusing evaluations
Once a conspicuous solution is found, evaluation soon
follows. Decision-makers take a defensive posture at this
point, trying to justify their favoured course of action. More
time and money are spent doing this type of analysis than all
the other decision-making activities combined.
Making a comparison to a norm – such as what other,
successful, organisations do – provides a way to assess the
benefits of the single option. Such a comparison gives
insight into the merits of a possible action before
commitments are made.

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Ignoring ethical questions
Tough decisions often pose ethical dilemmas. Concerns about ethics
arise in many ways. But, though ethical issues can be clear they are
often also ambiguous. Pushing a self-serving idea, opposing a good
idea that presents a personal threat or engaging in conflicts of
interest – most would agree that such behaviours display questionable
ethics. Views of what is ethical seem to depend on who is being
deceived. Deception is more likely to be tolerated or even encouraged
when directed toward an ‘outsider’.
At best, new insights can develop using such an approach. If not, one
can at least say that he has taken steps to show that the views of
critics were considered.

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Failing to learn
Without learning, decision-makers will go down the same failure-prone
path over and over again. But, learning about what went wrong and
what can be prevented in the future is thwarted when leaders show no
tolerance for mistakes.
People who can be held accountable for a failed decision find
themselves caught in a no-win trap. Some failure is inevitable, but
superiors and oversight bodies do not tolerate failure. Caught in such a
bind you have only two options: own up or cover up.
An environment in which decisions can be discussed that avoids this
blame-finding mentality is essential if learning is to occur. After perverse
incentives have been rooted out, managers can set learning in place by
creating win-win situations in which everyone can benefit.

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Reducing failure
The key to reducing failure is to use decision-
making practices or tactics that have a good
track record and to avoid those that are failure-
prone. Consider the seven traps that lead to
failure – failing to take charge, ignoring barriers
to making changes, ambiguous directions,
limited search, defensive evaluations, ignoring
ethical questions, and failing to learn.

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Without learning, decision-makers will go down
the same failure-prone path over and over again.
Those who have had similar decisions turn to
debacles can often trace their failure to the actions
of those who made the original decision.

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This article by Paul C. Nutt, Emeritus Professor at
Fisher College of Business, Ohio State University
was first published in Business Strategy Review,
2001 and republished Volume 24 Issue 1 - 2013
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