Chapter Six
WHY LEARNING FROM EXPERIENCEIS AN UNNATURAL ACT
WHEN EXECUTIVES wrestle with the decision to invest in high-potential new businesses, many of them naturally wish for more information. It would be comforting to believe that the decision to invest is made on the basis of data and rational calculation. But estimates of how emerging industries will develop are unreliable at best. For example, when AT&T consulted McKinsey & Company in the mid-1980s for advice on the cellular telephone market, McKinsey concluded that the worldwide potential was 900,000 units. Today, 900,000 new subscribers become mobile-phone users every three days.1
The essence of strategic experiments is that much more is unknown than known. No amount of research and ...
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