CVC THOMAS AFFAIR

THE CVC THOMAS AFFAIR

Imagine the following situation:

You are the CEO of a company. Your R &D department presents two new products for your consideration. You are told authoritatively that Product [A] has a 55% chance of success while Product [B] has a 45 % chance of success. You think deep about the options and decide to go ahead with ‘A’ .

THE CVC THOMAS AFFAIR

Unfortunately ‘A’ flops while your competitor who markets ‘B’ succeeds beyond his wildest dreams . Now the question is this--If I ask you to make an evaluation of your decision and tell you to give marks on a scale of 1 to 7 .Here 1 stands for ‘CLEARLY MADE A WRONG DECISION and 7 stands for CLEARLY MADE THE RIGHT DECISION’-- How many marks would you give yourself?

I asked this question at a seminar on DECISION MAKING .A majority of Executives gave themselves close to 1-- –they admitted that they had made a wrong decision.

I am afraid if you are tempted to give yourself a low mark you may be erring.

It is a common tendency to evaluate decisions in terms of their outcome rather than process. After all rewards and punishments are based on outcomes. It is this that also makes managements reward executives who make no mistakes though my observation is that it is only executives who do not work that make no mistakes!

The factors that influence outcomes are

--the thinking and deciding process

--Implementation and other factors under your control

--Chance factors not under your control

In the CVC Thomas appointment case what some Opposition members have been demanding--irrespective of their motives—is simply this –what were the lapses in the decision process that led to an erroneous outcome?

In many cases that I have come across I have noticed that when things go wrong, even horribly wrong, many organisations are content with fixing responsibility—what is referred to as accountability. But rarely is the decision maker let off when his decision process was correct but the outcome was wrong. In fact little attempt is made to ascertain WHY the decision went wrong, where were the lapses in the PROCESS. We even go to the other extreme—reward people who got outcomes right but whose decision process was wrong .

Here is another test .M.S Dhoni asks your advice as follows :In the last four matches I have called TAILS and lost the toss. Should I now call heads in the Match with South Africa at Nagpur?’

You reply that’ it does not really matter what you call. The odds are still 50/50’ . Your friend advises Dhoni ‘Since you have called tails consistently and failed you must now call heads –after all your luck HAS to change’ .

Your friend turns out to be right and he is rewarded with a pavilion seat at the semi final.

Would you say that you are a poor consultant while your friend is smart?

K.R.RAVI

WWW.KRRAVI.COM