Making Good Marketing Decisions - And How to Do It - Rex Zenger
Making Good Decisions
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MAKING GOOD DECISIONSSOMIK RAHA
STANFORD SPLASH 2013
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QUICK EXERCISE
For each situation below, write down whether you agree or disagree.
A. “The terrible situation in Iraq is proof that Bush made a bad decision invading it.”
B. “I decided to breakup with my boyfriend and am so happy now – that shows my decision was good.”
C. “The Columbia shuttle blew up and therefore the decision to let it launch was a bad one.”
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HOW DO YOU JUDGE THE QUALITY OF A DECISION?
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YOU CANNOT JUDGE THE QUALITY OF A DECISION FROM THE OUTCOME!
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Drive Drunk, Crash
Drive Drunk, Safe
Drive Sober, Crash
Drive Sober, Safe
Bad Outcome
Good Outcome
Bad Decision
GoodDecision
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WHAT DO YOU SAY NOW?
A. “The terrible situation in Iraq is proof that Bush made a bad decision invading it.”
B. “I decided to breakup with my boyfriend and am so happy now – that shows my decision was good.”
C. “The Columbia shuttle blew up and therefore the decision to let it launch was a bad one.”
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FROM THE ONLINE SURVEY
Making Good Decisions 6
2
19
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Political Bias?
Personal Bias?
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QUICK EXERCISEFor each situation below, write down whether you agree or disagree with the reasoning below.
A. “We have invested so much time in Afghanistan, and all of that effort would have been for nothing if we pull out now.”
B. “I have invested so much time on my relationship and I don’t want to move on or else all of that investment would be a waste.”
C. “We have spent so much money on tutors and my skills have still not improved. Even though I believe the next tutor will succeed, I don’t want to lose any more money on this.”
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THE SUNK-COST PRINCIPLE
The past matters only for learning, not for accounting!
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WHAT DO YOU SAY NOW?
A. “We have invested so much time in Afghanistan, and all of that effort would have been for nothing if we pull out now.”
B. “I have invested so much time on my relationship and I don’t want to move on or else all of that investment would be a waste.”
C. “We have spent so much money on tutors and my skills have still not improved. Even though I believe the next tutor will succeed, I don’t want to lose any more money on this.”
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FROM THE ONLINE SURVEY
Making Good Decisions 10
6
10
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Personal Bias?
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HOW DO YOU KNOW YOU’VE MADE A DECISION?
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When you’ve put in some resources (e.g. time/money/energy) that will never come back
to you (i.e. taken action)
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WHO IS THE BEST JUDGE OF A GOOD DECISION?
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The Decision-Maker
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HOW DO I JUDGE THE QUALITY OF MY DECISION?
From the process used to make the decision
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COOL HEAD
WARM HEART
COOL HEAD
WARM HEART
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Alte
rnati
ves
Info
rmati
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Valu
esFRAME
INTEGRATION
COOL HEAD
WARM HEART
COMMITMENT TO ACTION
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FRAME
What questions should we ask to judge a frame from a cool-head and a warm heart?
JUDGING OUR FRAME
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Frame: Your window to the world
What’s in? What’s already decided? What’s coming later?
What’s out?
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Should I ask him/her out on a date?
Is this useful?
Is this meaningful?
What questions should we ask to judge this frame from a cool-head and a warm heart? 18
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Where and when should I ask him/her out on a date?
Is this useful?
Is this meaningful?
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How can I get to know him/her at a deeper level?
Is this useful?
Is this meaningful?
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FRAME Useful Meaningful
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Alte
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Info
rmati
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Valu
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INTEGRATION
COOL HEAD
WARM HEART
COMMITMENT TO ACTION
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ALTERNATIVES: What can I do?
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“Honey, do I look fat in this shirt?”
My wife wants to tell me, “It’s not this shirt, you look fat in everything you wear.”
What are her alternatives?
What questions should we ask to judge alternatives from a cool-head and a warm heart?
Distinct, Doable
Creative,Intriguing,
Deepening, Interesting
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“Honey, do I look fat in this shirt?”
My wife wants to tell me, “It’s not this shirt, you look fat in everything you wear.”
What are her alternatives?
“You’d better change into another shirt.”
“You look wonderful!”
“Sorry, its not the shirt, its you. You look fat in every shirt you wear.”
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Distinct, Doable
Creative,Intriguing,
Deepening, Interesting
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“Honey, do I look fat in this shirt?”
My wife wants to tell me, “It’s not this shirt, you look fat in everything you wear.”
What are her alternatives?
“If you’re really asking me whether I love you, the answer is yes, and it has nothing to do with how fat you are. Now, are you still interested in whether you look fat in this shirt?”
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Distinct, Doable
Creative,Intriguing,
Deepening, Interesting
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“You are a *#X*?@@!@##!”
I want to beat the hell out of this person.
What are my alternatives?
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Distinct, Doable
Creative,Intriguing,
Deepening, Interesting
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“You are a *#X*?@@!@##!”
I want to beat the hell out of this person.
What are my alternatives?
No, you are mistaken.
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Distinct, Doable
Creative,Intriguing,
Deepening, Interesting
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“You are a *#X*?@@!@##!”
I want to beat the hell out of this person.
What are my alternatives?
Oh, that was a cannonball that flew over my head! I wonder what made you say that?
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Distinct, Doable
Creative,Intriguing,
Deepening, Interesting
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Thank you all for listening to our architect’s plans for the new dorm. Any suggestions from the students? Yes, we feel strongly
about having unisex toilets?
Oh oh.
What’s the head of the committee thinking?
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Yes, we feel strongly about having unisex toilets?
But I want to honor the students’ suggestion.
This is sure to fail a month or two after we make it, and we will have to rebuild the toilets.
Distinctive, Doable
Creative, Intriguing, Deepening
What can I do?
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Use Options thinking, create an option
Make two bathrooms instead of one, but make both of them unisex
If it doesn’t work out, simply change the signs
Distinct, Doable
Creative, Intriguing, Deepening, Interesting32
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FRAME Useful Meaningful
ALTERNATIVES Distinct, Doable
Creative, Intriguing, Deepening, Interesting
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Alte
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Info
rmati
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Valu
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INTEGRATION
COOL HEAD
WARM HEART
COMMITMENT TO ACTION
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INFORMATION: What do I know?
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“I know this test is disgusting, but I want you to take it. Do you have any questions?”
What should you ask the doctor?
What questions should we ask to judge information from a cool-head and a warm heart?
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“I know this test is disgusting, but I want you to take it. Do you have any questions?”
What would you do differently depending on the result of the test?
What questions should we ask to judge information from a cool-head and a warm heart?
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“I know this test is disgusting, but I want you to take it. Do you have any questions?”
For positive cases, what fraction has the test reported as “positive?”
For negative cases, what fraction has the test reported as “negative?”
What questions should we ask to judge information from a cool-head and a warm heart?
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“You are a *#X*?@@!@##!”
I want to beat the hell out of this person.
What are my alternatives?
Oh, that was a cannonball that flew over my head! I wonder what made you say that?
What questions should we ask to judge information from a cool-head and a warm heart?
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FRAME Useful Meaningful
ALTERNATIVES Distinct, Doable
Creative, Intriguing, Deepening, Interesting
INFORMATION Reliable, Relevant
Interesting, Exploratory, Surprising
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INTEGRATION
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COMMITMENT TO ACTION
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Alice: ‘Would you tell me, please, which way I ought to go from here?’Cheshire Cat: ‘That depends a good deal on where you want to get to’Alice: ‘I don't much care where—’Cheshire Cat: ‘Then it doesn't matter which way you go’Alice: ‘—so long as I get SOMEWHERE’Cheshire Cat: 'Oh, you're sure to do that, if you only walk long enough.'
For the one who believes every outcome is the right outcome, there is no decision to be made.
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COOL HEAD
WARM HEART
COOL HEAD
WARM HEART
What questions should we ask to judge our values from a cool-head and a warm heart?
What are my preferences? What metrics do I need to use? How do I tradeoff these metrics?
Who do I want to be? Inspirational
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“Honey, do I look fat in this shirt?”
My wife wants to tell me, “It’s not this shirt, you look fat in everything you wear.”
What are her alternatives?
If you’re really asking me whether I love you, the answer is yes, and it has nothing to do with how fat you are. Now, are you still interested in whether you look fat in this shirt?
Preferences/ metrics/ tradeoffs
Who do I want to be?
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“I dare you to a fight.”
Insulted over something and challenged to a fight, standing eyeball-to-eyeball, before the
first blow is given. I pause and think.
What should I be thinking?
Can I really win? (RELIABLE, USEFUL INFORMATION)
Do I want to get hurt?(PREFERENCES)
How do I get out of this?(CREATIVE ALTERNATIVES)
I don’t really want to hurt anyone (WHO DO I WANT TO BE)
How can getting out still be cool for both of us? (INTRIGUING ALTERNATIVES)
True 11th grade story
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“I dare you to a fight.”
Insulted over something and challenged to a fight, standing eyeball-to-eyeball, before the
first blow is given. I pause and think.
I say, “Dude, you are a strong guy, and I can’t beat you. But if you swing, so will I, and both of us will
be hurt. Since neither of us can win without getting hurt, there’s no point fighting. Why not go
back to our seats?”
He grins, and says, “Good idea.”
True 11th grade story
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“Where should we take our company in the next five
years?”
How can we sustainably serve the world?
Who do we want to be?
Road Values Mountain Values
What big impact on the world do I want to have in my career at
Company XYZ 47
Videos of two companies sharing values with their employees• Southwest• Apple
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FRAME Useful Meaningful
ALTERNATIVES
INFORMATION Reliable, Relevant
VALUESPreferences, Metrics, Tradeoffs
Inspirational
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Distinct, Doable
Creative, Intriguing, Deepening, Interesting
Interesting, Exploratory, Surprising
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Alte
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INTEGRATION
COOL HEAD
WARM HEART
COMMITMENT TO ACTION
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INTEGRATION
COOL HEAD
WARM HEART
What questions should we ask to judge our integration from a cool-head and a warm heart?
Am I using the right logic?Logical Reasoning
Am I taking everyone along?Narrative, Community
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QUESTION
If someone is a haemophiliac, what is your probability that this person is a male?
If someone is a male, what is your probability that this person has haemophilia?
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Male given Haemophiliac Haemophiliac given Male
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3%33%
27%33%
3%50%
13%27%
7%
3%
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Male given Haemophiliac Haemophiliac given Male
http://themedicalbiochemistrypage.org/hemophilia-a.html
Haemophilia A: 1 in 5000 males; 1 in 50 million females
Joint Probability0.02% Haemophiliac
0.01%50% Male
99.98% Not Haemophiliac49.99%
0.000002% Haemophiliac0.000001%
50% Female
99.999998% Not Haemophiliac49.999999%
Joint Probability99.99% Male
0.01%0.01% Haemophiliac
0.01% Female0.000001%
49.99% Male49.99%
99.99% Not Haemophiliac
50.01% Female49.999999%
Associative Logic Error: Treating M|H
same as H|M
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3%33%
27%33%
3%50%
13%27%
7%
3%
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QUESTION
If someone has lung cancer, what is your probability that this person was a smoker?
If someone is a smoker, what is your probability that this person will get lung cancer?
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Smoker given Lung Cancer Lung Cancer given Smoker
What do you notice?
The weight is in the lower half on the right! Could this be an associative logic error?
Male given Haemophiliac Haemophiliac given Male
3%33%
27%33%
3%50%
13%27%
7%
3%
17%30%
13%40%
3%13%
20%40%
13%10%
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Smoker given Lung Cancer Lung Cancer given Smoker
CDC: 19.3% of all Americans are smokers (2010)National Cancer Institute: 226,000 Americans in 2012 will be diagnosed with lung cancerUS Census Bureau: 313 million people in the US as of Apr 21,2012% with lung cancer: 0.07%Lung Cancer Prognosis: 8.9% of around 25,000 lung cancer patients were never smokers; therefore 91.1% of lung cancer patients were smokers
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Smoker given Lung Cancer Lung Cancer given Smoker
CDC: 19.3% of all Americans are smokers (2010)National Cancer Institute: 226,000 Americans in 2012 will be diagnosed with lung cancerUS Census Bureau: 313 million people in the US as of Apr 21,2012% with lung cancer: 0.07%Lung Cancer Prognosis: 8.9% of around 25,000 lung cancer patients were never smokers; therefore 91.1% of lung cancer patients were smokers
Joint Probability91.10% Smoker
0.06%0.07% Lung Cancer
8.90% Never Smoker0.01%
19.3% Smoker19.286490%
99.93% No Lung Cancer
80.7% Never Smoker80.643510%
Joint Probability0.33% Lung Cancer
0.06%19.35% Smoker
99.67% No Lung Cancer19.29%
0.01% Lung Cancer0.01%
80.65% Never Smoker
99.99% No Lung Cancer80.64%
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NARRATIVE
Logic is not enough
We need a powerful narrative that helps us connect with our deepest values
The narrative helps us rally together as a community
Let’s watch a video:
• Apple – WWDC 1997, Steve Jobs provides a narrative at Apple’s Worldwide Developer Conference – 05:00-07:00
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FRAME Useful Meaningful
ALTERNATIVES
INFORMATION Reliable, Relevant
VALUESPreferences, Metrics, Tradeoffs
Inspirational
INTEGRATION Logic/ Reasoning
Narrative, Community
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Distinct, Doable
Creative, Intriguing, ExcitingInteresting, Exploratory, Surprising
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COOL HEAD
WARM HEART
COMMITMENT TO ACTION
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COOL HEAD
WARM HEART
COMMITMENT TO ACTION
What are my action plans?Action planning
Am I dedicated to the vision? Leadership, Followership, Quality Commitments
VIDEO
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COOL HEAD
WARM HEART
COMMITMENT TO ACTION
KNOWING-DOING GAPWe know what’s good for us, but we still don’t do it
AWARENESSHow can we become more aware of our choices?
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FRAME Useful Meaningful
ALTERNATIVES
INFORMATION Reliable, Relevant,Decisive
VALUESPreferences, Metrics, Tradeoffs
Inspirational
INTEGRATION Logic/ Reasoning
Narrative, Community
COMMITMENT TO ACTION
Action Plans Leadership, Followership 63
Distinct, Doable
Creative, Intriguing, ExcitingInteresting, Exploratory, Surprising
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YOUR LEARNING
What are you going to take back with you?
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