Class 3 (Judgment under Uncertainty: The Difficulty of Learning)
PART A
Read: J. Edward Russo and Paul J.H. Schoemaker, Winning Decisions, Chapter 8.
Chapter 8 of Russo and Schoemaker points out many of the difficulties of learning from experience.
Preparation Questions:
1. Why does hindsight bias inhibit learning? Why does taking credit for success and rationalizing failure inhibit learning?
2. What steps can be taken to overcome hindsight bias in an organization?
3. What kind of feedback is necessary for learning? Is this sort of feedback also sufficient for learning (i.e., if I give you this feedback, then you will learn)? If not, why?
4. Many studies have shown that there is essentially no added value of using job interviews to predict the quality of future work experience. Nevertheless, individuals persist in using job interviews and are convinced of their worth. Why might there be such a divergence between the research results and what is commonly believed?
PART B
Read: Jon Krakauer (1996), "Into Thin Air", Outside Magazine. Available in your course package
William M. Carley (1998). "Swissair 111 Crash Spurs Debate on Following Cockpit Procedure", Wall Street Journal, December 16, 1998. Available in your course package.
Many of you are familiar with the 1996 Everest disaster that claimed the lives of several people including experienced climbers and expedition leaders Rob Hall (of Adventure Consultants) and Scott Fischer (of Mountain Madness). I strongly recommend that you read the book if you have not. This disaster illustrates how certain pressures lead to decision errors for individuals and organizations.
Prep Note (Group Assignment):
The assignment is online. Please complete the survey here. Please submit one per group. The survey should be submitted by 8:30 on Tuesday morning.
http://faculty.chicagobooth.edu/george.wu/surveys/xp3.html
The questions are repeated here for your convenience.
Question 1. Clearly the two expedition leaders, Scott Fischer and Rob Hall, had multiple objectives and used very different approaches in pursuing those objectives. Rate the effectiveness of each leader's management philosophy in pursuit of his objectives:
-Scott Fischer (1 ("Not at all effective") to 5 ("moderately effective") to 9 ("very effective")
-Rob Hall (1 ("Not at all effective") to 5 ("moderately effective") to 9 ("very effective")
Question 2. Provide three reasons for your rating of Scott Fischer.
Question 3. Provide three reasons for your rating of Rob Hall.
Question 4. The leaders of a commercial expedition organizing an Everest attempt in May 2014 has hired you as consultant. They are seeking advice on how they can minimize the probability of disaster while maximizing the probability of summiting. Please provide three recommendations for his expedition. These recommendations should be SPECIFIC, CONCRETE, and REALISTIC. (Be concise. Limit responses to the space shown.)
Additional Preparation Questions (to be discussed in class; not to hand in):
1. Why are the climbers up there? Consider the motivation and incentives facing each participant. What are the implications for potential decisions biases and corrective measures?
2. What are the defining characteristics of the decision-making environment on Mt. Everest? Setting aside the extreme physiological conditions, what are the biggest challenges for good decision making?
3. Describe the decision process used by Hall and Fischer. What mistakes did the guides or members of the climbing teams make during the climb to the summit? Why were these mistakes made? How do these mistakes relate to concepts we have discussed in the course?
4. If you were advising a friend interested in organizing an expedition to the top of Everest (or some other large but potentially dangerous mountain), what advice would you give him or her based on the concepts of this course?
- Malcolm Gladwell (2000). “The New-Boy Network”, New Yorker (May 29). Available at: http://gladwell.com/pdf/newboy.pdf
- Malcolm Gladwell (2003). “Connecting the Dots”, New Yorker (March 10). Available at: http://gladwell.com/pdf/dots.pdf