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Golfer Phil Mickelson won the 2010 Masters tournament by making a daring yet calculated shot. (JOE SKIPPER/REUTERS)
Golfer Phil Mickelson won the 2010 Masters tournament by making a daring yet calculated shot. (JOE SKIPPER/REUTERS)

MANAGING BOOKS

A calculated risk can equal a great decision Add to ...

Left Brain, Right Stuff

By Phil Rosenzweig

(Public Affairs, 315 pages, $32)

In the 2010 Masters golf tournament, Phil Mickelson had battled to a two-stroke lead when he hit his ball into the rough to start the 13th hole. Most onlookers expected him to lay up on his next shot, hitting safely onto the fairway rather than try to snake through the trees and over the creek just in front of the green. His caddy promoted that safe approach, even if it would cost a stroke.

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But Mr. Mickelson was coming to a different conclusion, after judging his own capabilities and the competitive situation. Once committed to the tough shot, he shut out everything around him and focused on the perfect swing he needed to execute his strategy. He made the stunning shot, landing just a few feet from the hole.

It was more than a golfing triumph, securing the Masters title. It was also, according to Phil Rosenzweig, a management professor at Swiss business school IMD, an example of the decision-making approach managers must follow: Left brain, right stuff. He analyzed the situation carefully, using his left brain, and then decided on a daring approach, acting with the right stuff to turn his decision into gold – or in this case Masters green.

In recent years, we have been exposed to a variety of studies on decision making, drawn from the field of behavioural economics. People have been advised not to be overconfident; to beware of the tendency to find information that will confirm biases; to avoid the illusion of control; to keep from finding patterns where none exist; and to steer clear of hindsight bias, in which we believe we were right all along.

That’s all good advice, but because it’s drawn from rather simplistic studies of behaviour that are vastly different from the complex situations managers face, Prof. Rosenzweig insists it’s not sufficient to guide executive decision making.

Sometimes, for example, it pays to be confident – as Mr. Mickelson was when he tried his daring shot. A positive attitude is important because it improves performance, and managers often have some control over the outcomes of the decisions they make.

In competitive business situations, the safe, sensible approach may just lead you, as in bids for contracts, to being sidelined. It’s smarter to gamble a bit, win the contract, and then use your expertise to find out a way to make the numbers you have agreed to.

You still need a thoughtful, deliberate, analytical approach – call it left brain. Leaders must know the difference between what they can control and what they can’t. They must know the difference between absolute and relative performance, between times when they must do well and times when they must do better than others. They must sense whether it’s best to err on the side of acting, even if that might mean failing, and when it is smarter to not act, because the consequences would be too great.

They must also understand that as leaders they don’t act alone but as part of a social system, in which they must inspire. Indeed, managers are expected to make things happen, and undercut themselves when they aren’t seeking change.

Beyond those left-brain situations, however, leaders must be willing to take risks, pushing boundaries. Borrowing from Tom Wolfe’s 1979 book about the intangible qualities of the pilots who pioneered U.S. manned space flight, Prof. Rosenzweig argues that decision makers need the right stuff.

That’s not just about a willingness to risk one’s neck; Mr. Wolfe said any fool could do that. It was about having “the moxie, the reflexes, the experience, the coolness” – or in decision-making terms, the intelligent management of risk.

So left brain, right stuff. “Great decisions call for a capacity for considered and careful reasoning and also a willingness to take outsize risks,” Prof. Rosenzweig concludes.

And you can’t practise these decisions, he stresses. Much has been written in recent years about the importance of deliberate practice, be it a violinist learning to play more proficiently or a basketball player shooting endless foul shots to improve his game.

But he notes that some things can be improved by such practice and some things can’t. A cosmetics salesperson, going door-to-door, can probably improve her approach as there are many interactions, each of a short duration and quite similar. But a salesperson hawking enterprise software is involved in an elaborate process much more difficult to compare with previous efforts.

“Executive decisions aren’t like shooting baskets. In fact, as a general rule the more important the decisions, the less opportunity there is for deliberate practice,” he warns.

The book carefully probes the latest research on decision making, forcing us to rethink the studies and the apparent truths they have promulgated. It also presents an alternative structure for approaching decisions in business and in life. Prof. Rosenzweig writes clearly and colourfully, helping readers through the sometimes complicated material, and then summarizes aptly at the end.

POSTSCRIPT

In The Rise of Superman (New Harvest, 234 pages, $23.99) journalist Steven Kotler looks at high-performance athletes to draw some lessons on the elusive flow we all seek at work.

Communications coach Carmine Gallo shares nine public-speaking tips from the world’s top 10 minds in Talk like TED (St. Martin’s Press, 278 pages, $28.99)

Innovating for the Global South (University of Toronto Press, 185 pages, $34.65) edited by University of Toronto professors Dilip Soman, Janice Gross Stein, and Joseph Wong, offers solutions to poverty in the developing world from experts in engineering, medicine, management and global public policy.

Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter

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