Decisive: How to Make Better Choices in Life and Work

by Chip Heath

Yet the wisest decisions may combine the caution of the prevention mindset with the enthusiasm of the promotion mindset. Consider a study of the way 4,700 public companies navigated three global recessions (1980 to 1982, 1990 to 1991, and 2000 to 2002). Three Harvard researchers—Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen—pored over the companies’ financial statements, analyzing the way they’d responded to the tough market conditions. The top-level findings were sobering: 17% of the companies didn’t survive the relevant recession, and another 40% of them, three years after the recession ended, hadn’t returned to their prerecession levels of sales and profits. The researchers sorted the companies into categories based on how they reacted to the recession, and two of the categories were inspired by the promotion and prevention mindsets. Prevention-focused companies made primarily defensive moves—they tightened their belts and tried to reduce risks. Promotion-focused companies went on the offensive, continuing to make strategic bets and investments. Both categories of companies tended to suffer because of their disproportionate focus on one set of tools. The researchers report that prevention-focused companies, with their focus on cost cutting, tended to adopt a “siege mentality.” Inside these companies, they write, “pessimism permeates the organization. Centralization, strict controls, and the constant threat of more cuts build a feeling of disempowerment. The focus b...