Tag: decision making

entrepreneurship, Management, uncertainty

Entrepreneurship and human action: Why the award received by Darden’s Saras Sarasvathy is important

Saras Sarasvathy, the originator of the entrepreneurial theory of effectuation, has just received the prestigious Swedish Global Award for Entrepreneurship Research. Organized since 1996 by the Swedish Foundation for Small Business Research (FSF) and the Swedish Agency for Economic and Regional Growth, the award recognizes researchers who made major contributions to entrepreneurship research. She joins such great researchers as Sidney Winter, Shaker Zahra, Kathleen Eisenhardt, Scott Shane, Israel Kirzner, William Gartner, William Beaumol or Zoltan Acs and David Audretsch. The prize is the recognition of more than twenty years of efforts to promote a radically different approach to entrepreneurship. But its significance goes far beyond that, as effectuation is above all a vision of human action and freedom.

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decision making, uncertainty

Frank Knight’s century-old wisdom on risk, uncertainty, and profit

What can we learn from a little-known economist’s book published exactly a century ago? Quite a lot. Is it useful for us today? Yes, very. It turns out that Risk, Uncertainty and Profit, published by Frank Knight in 1921, is an essential book, even if it is difficult to read. It is the first book to really define uncertainty and show what it means in decision making and how it explains profit.

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decision making

The public decision-maker in uncertainty: towards the technical democracy

The generalized uncertainty in which our societies are immersed, combined with their growing complexity, undermines the authority of experts whose knowledge is more easily questioned. This is particularly true for public decision-makers, who are now faced with systematic challenges to their decisions, whatever the field. Understanding the causes and stakes of what some call “technical democracy”, but also its potential dangers, is becoming essential.

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Strategic surprise, uncertainty

Covid-19: Four Rules for the Decision-Maker to Work with Experts in the Face of an Unprecedented Event

[Version française disponible ici]

The situation has become familiar with the covid-19 epidemics, and in particular with the controversy over the use of chloroquine: everyone has an opinion and groups are being formed in favor or against it. Yet regularly, people are being called to order by others who demand that only experts should be allowed to talk on issues relating to the management of the epidemy. The message seems to have been heard: for the past three weeks, doctors have been massively present on television sets. The country has become a large proxy medical consultation room. But the question remains: faced with a complex and unprecedented situation such as the coronavirus, who has the right to speak out? To what extent can experts be trusted? More importantly, how can the decision-maker work with them?

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Management, Strategic surprise

Covid-19: How Crises Disrupt our Mental Models and What That Means

[Version française ici]

The coronavirus constitutes a major event that completely disrupts world life, rendering all forecasts and plans based on them obsolete within a few weeks. The very nature of a surprise is to bring to light an element of our mental model (deep beliefs that guide our actions) and invalidate it. Our model told us that the world was going in direction A, but it turns out to be going in direction B and we are surprised. This surprise can have more or less serious consequences. Most of the time the reaction will be to dismiss it. When there is a difference between reality and our beliefs, we try at all costs to maintain the latter by inventing all sorts of reasons to minimize the meaning of surprise; it is a matter of integrity because our mental models are constitutive of our deep identity: how we see the world is also how we see ourselves, and how we are in the world. With the coronavirus, learning to manage our mental models has become critical.

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entrepreneurship, Strategic surprise, uncertainty

Responding to the Covid-19 Crisis: Three Courses of Action for a CEO

[Version française ici]

In these times of coronavirus epidemic, I have the opportunity to talk to people from very different backgrounds (emergency doctors, researchers, self-employed people, entrepreneurs, retirees, business leaders, etc.) to understand how they “live” the current crisis both personally and professionally. From these discussions, I can draw three courses of action that a CEO can usefully adopt in the face of the extreme and unprecedented situation we are experiencing. (more…)

Strategic surprise, uncertainty

The Four Things that Covid-19 Reminds Us About Decision Making in Uncertainty

The unexpected emergence of the coronavirus and its uncertain consequences remind us of four things that we should have known, or that we knew but did not apply about the environment in which we live: the unpredictability of the future, the difference between risk and uncertainty, the non-linearity of the evolution of the world, and the social construction of surprises.

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