Works
- Timid Choices and Bold Forecasts: A Cognitive Perspective on Risk Taking, Management Science 39(1), with Daniel Kahneman, 1993
- Delusions of Success: How Optimism Undermines Executives' Decisions, Harvard Business Review, with Daniel Kahneman, 2003
- Before You Make That Big Decision, Harvard Business Review, with Daniel Kahneman and Olivier Sibony, 2011
In Tactics of Organizational Politics
Ideas
The inside view and the outside view. Decision-makers tend to treat each problem as unique: they isolate the current choice from future ones and ignore statistics from past cases. Taking this inside view, which anchors forecasts on the specific plan and its scenarios, produces bold, optimistic forecasts; the authors contrast it with an outside view that judges the plan by the results of a class of similar past cases.
What it explains
Lovallo and Kahneman explain why plans built from their own details are reliably too optimistic, and why comparing a proposal with how similar projects actually turned out is the strongest check on it.
Tactics that draw on Dan Lovallo (1)
In Thinking Tools
Known for
A professor of business strategy at the University of Sydney who, with Daniel Kahneman, named the inside view and the outside view of forecasting and argued that planners should anchor estimates on the outcomes of a reference class of similar past projects.