Evidence Doesn't Argue for Itself: The Value of Disinterested Dialogue in Strategic Decision Making

Long Range Planning, Forthcoming

Posted: 20 Nov 2014

See all articles by Massimo Garbuio

Massimo Garbuio

The University of Sydney Business School

Dan Lovallo

The University of Sydney

Olivier Sibony

McKinsey & Co. Inc.

Date Written: November 19, 2014

Abstract

Previous studies of strategic decision making have demonstrated a relationship between the strategic decision-making process and its effectiveness, namely whether the decision delivers the expected results. In this article, we demonstrate that there are two key dimensions of strategic decision-making: (1) the analysis performed, and particularly financial aspects of a decision; and (2) strategic conversations about the decision at hand, or the “disinterested dialogue” about the decision, as we refer to it. Whereas it is well accepted that a robust analysis is important for effective decisions, we argue that disinterested dialogue is also a necessary construct in explaining the effectiveness of strategic decisions. To test this hypothesis, we undertook a study of 634 strategic decisions made by executives across multiple industries and regions. The results confirmed that both a robust analysis and disinterested dialogue have a significant positive relationship with decision-making effectiveness. However, disinterested dialogue has a significantly greater impact on the effectiveness of strategic decisions than robustness of analysis. We discuss the impact of our results for theory and practice.

Keywords: analysis, behavioral strategy, disinterested dialogue, evidence-based management, strategic decision making

Suggested Citation

Garbuio, Massimo and Lovallo, Dan and Sibony, Olivier, Evidence Doesn't Argue for Itself: The Value of Disinterested Dialogue in Strategic Decision Making (November 19, 2014). Long Range Planning, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2526491

Massimo Garbuio

The University of Sydney Business School ( email )

H70 Abercrombie Building
Darlington
Sydney, 2006 2006
Australia
+61 2 9036 5046 (Phone)

HOME PAGE: http://sydney.edu.au/business/staff/massimog

Dan Lovallo (Contact Author)

The University of Sydney ( email )

University of Sydney
Sydney, NC NSW 2006
Australia

Olivier Sibony

McKinsey & Co. Inc. ( email )

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