09/16/96 DUMB MOVES

DUMB MOVES

THE LOGIC OF FAILURE
Why Things Go Wrong and What We Can Do to Make Them Right
By Dietrich Dorner
Metropolitan -- 222pp -- $25

Quick, somebody give Bill Clinton and Bob Dole copies of The Logic of Failure. Hand them to CEOs of the BUSINESS WEEK 1000, while you're at it.
Everybody knows that people in authority make dumb mistakes. Dietrich Dorner explains why they do so, drawing on psychological experiments conducted via computer simulations with role-playing volunteers. Readers will recognize themselves or colleagues in the volunteers, who invariably under- or overreact to changing circumstances; micromanage or remain overly detached; misread cause and effect; fail to set sensible goals; and apply past knowledge inappropriately.
In one experiment, volunteers became mayors of fictitious ``Greenvale.'' Several lost track of key town needs, distracted by a report on a shortage of equipment in the municipal gym that led to a lengthy investigation on the number of horizontal and parallel bars there. In another case, volunteers became so intent on developing the economy of an African nation that they didn't notice that people were starving.
The Logic of Failure, first published in Germany in 1989, traces the psychological lineage of such errors. Dorner, director of the Cognitive Anthropology Project at the Max Planck Institute in Berlin, believes that guided role-playing can help people understand what they're doing wrong and get better at making decisions. Writes Dorner: ``Anyone who thinks play is nothing but play and dead earnest nothing but dead earnest hasn't understood either one.''
By Peter Coy