Dealing with Dilemmas: Where Business Analytics Fall Short

Chapter 9. Now and Later

Luck favors the prepared mind.

—Louis Pasteur

In managing the short term versus the long term, it would help to know where things are going, to be able to leverage short-term investments for the long term. Knowing where things are going would help in knowing how to place the right bets in terms of innovation, leading your customers. And insight into the future would certainly help in putting the business case together to justify innovation over optimization. However, there is always strategic uncertainty. There is no telling what the future will bring. There are simply too many factors that influence our environment and internal operations.

And even if we would have all the information we can think of, there is still no telling if we would make the right decision. One of the core principles in decision-making theory is that we human beings suffer from something called bounded rationality. The capacity of the human mind for formulating and solving complex problems is very small compared with the size of the problems whose solution is required for objectively rational behavior in the real world.^[156] It is hard enough to think through the consequences of a decision in the short term, let alone the longer-term choices.

The Global DwD Survey showed that managing the long term and the short term at the same time, and managing innovation as well as optimization, are indeed seen as the most difficult dilemmas in business. Most organizations could benefit from improvement ...