All posts by John Persico

Why do so many great businesses fail?

John Persico Photo 2013 edited 2 (640x423)Dr. John  Persico, since i986, has worked with organizations in both the profit and non-profit sector. He specializes in the area of quality improvement, service management, leadership development, team building and strategic
planning. Received his PhD degree in Training and Organizational Development from the University of Minnesota. He worked closely with Dr. W. E. Deming early in his career. Has taught at the Glob University Graduate School where he continues teaching part time. He has written two books on business strategy including the “TQM Transformation” and “The New Business Values.”

A few years ago, I started thinking about all of the “mistakes” that management and organizations have made. There are several books dealing with the subject and various companies, leaders and managers are noted for the blunders they have made in decision making. For instance, out of the top ten mergers undertaken in the 90’s, eight of them lost money or shareholder value. Not just a little money, but billions and billions of dollars. We are all familiar with other noted disasters such as “New Coke”, Apple’s Newton and Ford’s Edsel. The question I wanted to answer was simply: “what is behind such faulty decision making?” I found an excellent article that looked at the top ten mistakes managers make in decision making. The title of the article was “10 reasons people make stupid decisions.” I have found this article posted on many blogs but I am unable to find the author of the article. The top ten reasons the author lists are:

Attribution error, Illusion of control, Conformity, Availability bias

Endowment effect, Dysfunctional competition, Overconfidence

Confirmation bias, Egocentric bias, Sunk cost bias

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