Decision making and negotiation play an important role in nearly all professional fields —politics, law, medicine, and more. However, it has always had special importance at business schools. In the case of Booth, it brought us the Center for Decision Research in 1977, opportunities to stab our classmates in the back in negotiation class, and most importantly, George Wu, the John P and Lillian A. Gould Professor of Behavioral Science. Among other things, Wu is best known for his Advanced Negotiations and Managerial Decision Making Class as well as his participation in the three-year, $3.6 million, “New Paths to Purpose” project.
How did an Applied Math major develop a passion for negotiations? “What I like about negotiations is that it involves both psychology and analytics. The challenge isn’t about psychology or analytics—it’s about marrying the two together. What makes negotiation hard is that there isn’t a clean recipe on how to balance and combine psychology and analytics.” While a lot of what we may see in the Negotiations or Advanced Negotiations courses is around how people and businesses make decisions, much of Wu’s world is around exploring how managers, policy, makers, firms, and governments can impact how customers, citizens, and other individuals make decisions.
How has studying decision making shaped how you make decisions? “I recognize that even with all the things that I’ve studied, decision making is still hard. I know that I’m not immune to making bad decisions or falling victim of the biases I teach about in class.” Claiming that he is not more risk tolerant than average, he adds, “The reality is that even though I know that it’s not the way I should think, small losses are still painful. You can try and reengineer the way you think, but a lot of times, they’re still painful.” While this may suggest that we battle the strong force of human nature that is at odds with sound decision making, Wu gives us a work around: “I think it’s much easier in many ways to see the errors in other people. For example, if you and I are in an organization, we can work with other people to make better decisions, because I can see your errors much more clearly than I can see my own.”
In this age of increasing information, how can we continue to make good decisions? “There are lots of situations these days where the amount and specificity of information gives us a very clear direction. On the other hand, there is a lot of information and much of that information is, by necessity, going to conflict with other information. A generation ago, we would just make a decision. Now, there is this kind of ‘analysis paralysis’ that ends up afflicting a lot of people. MBAs like to look at a lot of data. They feel like they haven’t done the work if they haven’t looked at all of the data. And maybe that’s not the right way of looking at things. The goal isn’t to turn over every rock, but to turn over enough rocks that you feel confident in the decision that you’re making.” Wu notes that this is becoming increasingly important as the velocity of technological change is such that having all of the relevant data from one instance in time may never be enough to shed light on the ultimate concern, which is what the future will look like.
Wu’s parting advice to graduating students is short and sweet: “Reproduce the spirit of Booth in your life. What we’ve done here is set up this idealized environment to learn, but I think that you can pick up a lot of those pieces in the spirit of what we’ve done in the classroom and extend it into your lives, long after you have left Hyde Park.”