Making Great Decisions in Business and Life

When was the last time you saw a personal advice book that, instead of using some type of trendy "pop-psychology" approach, applied economic theory? This is what makes David Henderson and Charles Hooper's book Making Great Decisions so unique. At the same time, the authors make the application of economics seem simple. Easily understandable language replaces economic jargon, and the point of a paragraph is never ambiguous. The book is packed with interesting, real-life examples and conversations. It overflows with personal stories, each to make a point or to illustrate a particular concept. Most of the economic principles that are applied come right out of Econ 101. For example, the authors advise readers to ignore "sunk costs" (expenses that have already been made, in time or money) when making decisions. In other words, your initial investment, whether in the form of yearlong training to climb Mt. Everest or the establishment of a coin shop, should not be considered when deciding whether to pursue the venture further. The authors say that one common error made by companies and individuals is assigning the wrong priorities to projects. They point to a company that spent far more money and time deciding how to make company printers more alike than it did determining whether to license a product worth $100 million a year. They should have realized the massive difference in importance between the two problems and divided resources accordingly. The authors give personal advice throughout the book. "Think on the margin," they say. Henderson gives as an example his procrastination in graduate school, when he needed to complete his dissertation. He estimated that he would have to put in six hours a day to finish his dissertation before the deadline, but instead found himself avoiding the work day after day. The solution, he found, was to aim to work just two hours every day. This modest goal made it easy for Henderson to get started on his work every day, and once he had started, he found it easier to keep going. Think on the margin, the authors advise; even if you can't get a full six hours of writing done, two are better than none. While the advice is very much apolitical, with the goal of helping the reader make better decisions, the basis for it relies on free-market economic theory. Some parts of the book reflect this essentially libertarian political approach. The authors remind us, for example, that recycling is not free and that, depending on the value of one's time, it may not be worthwhile to sort recyclables and carry them to the curb every week. They also debunk complaints about sweatshop labor, warning readers beforehand that they are "about to challenge a commonly accepted belief". Sure, the workers have low pay and poor conditions by American standards - but what is their alternative? The foreign workers voluntarily chose "sweatshop" employment over their other choices. Will they be better off if western activists eliminate that op

This is a book in which you can learn some economics, you'll actually be fairly glad to learn it and you'll be very glad you know it when you're done reading the book. One of the disadvantages of teaching economics is an all-too-frequent conversation when meeting people. When someone finds out what I do, they say "That was the hardest course that I took in college." Unfortunately, I also know what's implied. They learned little and probably remember virtually nothing. And that's a shame. Economics is not just about graphs, obscure equations and abstract notions. Economics is a useful way of thinking about the world. In this book, you'll see that basic economic notions can be used to help you make decisions in your everyday life. The usefulness is illustrated with many stories, all informative and some amusing. The authors go further than basic economics, including decision science and thoughtful common sense. For example, you'll find out how David Henderson resolved a problem with hard pillows at an otherwise fine hotel by buying better pillows, and why this made more sense than going to a better hotel. This is the start of a chapter on creating better alternatives, in which the authors make the point that evaluating alternatives requires thought and sometimes imagination. It's a fun read, besides which it's well written and clear. You're unlikely to be sorry that you read it.

Sometimes you don't need revolutionary new information to start doing things better, you just need a new way of seeing things. This book did that for me. It offers simple, clear methods of evaluating your choices that allow you to move forward effectively. I should have bought it sooner, but I couldn't decide. Bill Dyszel, Author, Microsoft Outlook for Dummies

Making Great Decisions is a great book! The authors do not only provide a complete collection of effective decision making tools but also make professional decision making concepts simple to use and simple to understand. The result is a versatile book suitable to support decision makers and problem solvers in various settings. For professionals, it provides a quick reference of important concepts and a guide for the decision making process. For personal decisions, Making Great Decisions is a treasure box of powerful tools without the need for the resources of a corporate headquarters. Beyond decision making, the book also helps with handling complex problems and identifying situations when different techniques of decision making can be useful. As a capstone, the authors also explain the relation between good morals and good decisions - an important lesson to learn in many parts of the world. The reader will find the book useful in such different environments like the public and private sector, or U.S. and international settings (I work and make decisions in Hungary's public sector). Making Great Decisions will be essential for professionals who need to convince partners with less developed decision making culture of the advantages of formal decision making. Think of joint ventures in emerging markets or reconstruction in Iraq! Cooperation with locals in decision making can be crucial for lasting results, and building trust or winning support is easier if you can explain the process clearly and quickly. Beyond improving their own decisions, personal decision makers can understand how decisions are made by organizations of various scales. Real life, personal stories transform the learning experience into a recreational activity even for individuals not really fond of management and economic topics. I recommend Making Great Decisions for everyone who wants to handle problems in personal life or carrier more effectively without the risk of loosing important points between the lines of boring textbooks.

Far too many people see economics as difficult, boring, and totally irrelevant to their daily lives. Henderson and Hooper demonstrate in clear and compelling language that economics is really a straightforward and exciting way to make your life more productive and enjoyable. With a large number of short, interesting and largely diagram-free examples, the authors do exactly what the title of their book promises. They show the reader how to make great decisions in their businesses and their lives. Mentioning two of their many topics, the book emphasizes how easy it is to let your fantasies obscure the realities you face and lead you into harmful decisions with a number of useful examples. There is a wonderful discussion on the importance of considering cost and being careful to distinguish between real cost and what is easily thought of as cost, but isn't. I will be teaching a one-half semester capstone MBA course on economics in the second half of the spring semester, and this book will be the central reading. I cannot think of a better book to bring home the message I think is crucial for MBA students to understand--that the insights of economics can improve their business skills and make them more effective in all walks of their lives. But you don't need to be an MBA student to benefit from this book. Just someone who enjoys a well-written and interesting book and wants to make better decisions.