The Six-Minute Guide to Making Better High-Stakes Decisions
November 5, 2013 Editor 0
When making big decisions, executives use familiar tools like discounted cash flow analysis far too often. That’s because the more uncertain a business context is, the less likely running some numbers and probabilities through a spreadsheet will be helpful. It’s much more useful to take a different approach: to build multiple qualitative scenarios, for example, or to develop a set of comparative reference cases.
This video introduces a methodology for helping you choose the best decision-support tool for your business situation. It walks through a set of decisions that McDonald’s might need to make, ranging from straightforward (locating a new U.S. restaurant) to highly uncertain (responding to a backlash against the fast food industry’s role in childhood obesity).
For much more, including details on the decision-support tools outlined in this video, read ”Deciding How to Decide,” by Hugh Courtney, Dan Lovallo, and Carmina Clarke.
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