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Advances in the field of behavioral economics ought to make us at least aware of what goes into making good decisions, if not make us better decision-makers. The McKinsey Quarterly is featuring an interview with two people who are putting some important lessons about decision-making out into the world: McKinsey's own Olivier Sibony , and Chip Heath --co-author, with his brother Dan, of Made to Stick and Switch . The interview centers on the Heaths' latest book, Decisive , and Sibony's research on effective decision making among global business leaders. Here is an excerpt: The Quarterly: Is the right approach to suggest a couple of simple things senior executives can do or to recommend that they take a step back and look at a whole checklist or framework to create a healthier process? Chip Heath: I’m a fan of frameworks, but you don’t have to be 100 percent there to improve dramatically. One legitimate criticism of the decision-making field is that we have this overwhelming zoo of biases. In our most recent book, Decisive, we therefore came up with 4 intervention points in the decision process. Others propose 40 intervention points. Nobody will be successful intervening at 40 decision points. Olivier Sibony: We too have looked at this zoo of biases and tried to sort out what really matters to executives. When people ask me what will make a difference as they build decision processes, I emphasize three things. First, recognize that very few decisions are one of a kind. You are not the first person to decide on an acquisition. Lots of M&A happened before, and you can learn many things from that experience. Second, recognize uncertainty—have alternatives, prepare to be wrong, and have a range of outcomes where the worst case is real and not “best case minus 5 percent,” which is very common. Creating a setting where it’s OK to admit uncertainty is very difficult. But if you achieve that, you can make headway. Third, create a debate where people speak up. It’s the most obvious but also the most difficult. If you’re the decision maker, when you get to the debate you’ve already got an idea of where you want it to lead. And if you’re an experienced executive, you’ve already influenced your people, consciously or unconsciously. A good intervention point, for instance, is to ask subordinates if anyone disagreed with them about a recommendation they bring to you. If everybody agreed, that’s a sign that there may have been “groupthink.”3 Chip Heath: All of the things you’ve highlighted are things we grappled with in designing the WRAP process we propose in our book (see sidebar, “Four principles for making better decisions”). A Wider set of options means you’re going to have more debate. By Reality-testing assumptions, you look at the reference class of events. If you make a decision about restaurants, you read reviews because that’s your reference class. Yet if you’re making a merger decision, you won’t look at the reference class of companies in similar situations. Why do this research for a $200 dinner but not a $200 million acquisition? Then there is the process of actually making a decision. It’s now slightly more complicated because instead of one option you’ve got two, and you’ve done some due diligence on both. When you find yourself agonizing about a choice, it’s important to step back and Attain some distance. Finally, you should be Preparing to be wrong at the end of the process—that’s about hard-to-acknowledge uncertainty. Read the full interview here .

Do we really make our own luck? It seems we might, and it has everything to do with increasing our relative skill level. In the business world, Michael Mauboussin argues that successes and failures are the result of skill and luck. We can only work on our skill, but it might be doubly motivating to learn that by doing that we also increase our luck. Of course, it is important, when looking back on past successes, to separate out when your skill really made the difference lest you confuse luck with skill and become overconfident. Mauboussin, author of The Success Equation: Untangling Skill and Luck in Business , discusses the "paradox of luck" in this Knowledge@Wharton interview:

For those executives who have not convinced themselves they have all the answers, strong leadership depends in part on utilizing the collective wisdom of all members of an organization. At Fast Company , Fort Hill President Michael Papay outlines some best practices for using crowdsourcing techniques to tackle organizational challenges. One tip is to " Create a Great Experience ": The quickest way to get to some fast answers is to make the experience a good one, perhaps even delightful. Time compresses when we’re engaged. The trouble is: Most survey methods are too cumbersome and too dreaded because the experience is dry and usually awful. What if you engaged people--perhaps even delighted them--in the process of asking them questions? This is less about driving people to do a survey, and more about the experience pulling them into a process where they see where others are, contribute, and shape direction. Facebook and other social media took off when the experience was simple and when people knew they’d learn something as they participated. And, in the process, those experiences created “stickiness”--the idea that people are drawn to return for more. In fact, the dominant social media sites--Facebook and Twitter--each ask simple questions to prompt posts and tweets: What’s going on and what are you doing? How about something that’s a good experience for the users--a crowdsourcing tool that engages the crowd and people see they can shape the opinion of a company? The process is transparent--people can see what others are doing. You get more engagement and you compress the time. Read Crowdsourcing Your Way to More Effective Leadership here .

Don Tapscott says that it is time for organizations to shift their internal communication platforms. Out with email. In with effective use of social media. But don't make the mistake that he is making a simple point about just about how workers send messages. This is about decision making and knowledge management, Tapscott says. In this interview at the McKinsey Quarterly , Tapscott says that knowledge management "has failed." And the only way to fix the problem is to take knowledge out of a "container" and focus on "content collaboration":

London Business School Professor of Management Practice Lynda Gratton studies organizational behavior and human resources. She argues, that in the digital age, one's value is now based "not only the knowledge you have in your own head, but the collective knowledge of the networks that you maintain." And there are three types of networks that matter, Gratton says. 1. The modern posse; 2. The regenerative community; and 3. The big idea crowd. Gratton describes these networks in a helpful Harvard Business Insight video:

In a Harvard Business Insight video, Robert Austin --dean of the business faculty at the University of New Brunswick--shares a remarkable story of a company building an extraordinary workforce. The Danish company Specialisterne has built a practice of hiring people with autism and training them to test software. And Austin says they are "the best software testers in the world." The lesson here is not about the capacity of people with autism to become top employees (even though that is an important lesson). Rather, Austin shares this story to make a point about talent. Some of the most talented workers might be "idiosyncratic" and less appealing in standard hiring processes. But a failure to examine the potential for these people is equivalent to, Austin says, "leav[ing] talent on the table."

Innovation isn't coming up with new ideas out of the blue. Innovation is about solving problems. So Clay Christensen advises that we spend time with our problems. Get to understand why certain problems keep on slowing us down--or rather our keep our organizations from reaching our goals. When we find "problem patterns," then we can truly innovate, as Christensen explains in this Harvard Business video: