This is an MIT Sloan Management Review article. To succeed in the long run, businesses need to create and leverage some kind of sustainable competitive edge. Although the authors say that advantages can still come from sources such as lower cost, intellectual property, motivated employees, and strategic leaders, they argue that in the knowledge economy, strategic advantages will increasingly depend on a capacity to make superior judgments and choices. Intelligent enterprises today are being shaped by two distinct forces. The first is the growing power of computers and big data, which provide the foundation for operations research, forecasting models, and artificial intelligence. The second is our growing understanding of human judgment, reasoning, and choice. Decades of research has yielded deep insights into what humans do well or poorly. In this article, the authors examine how managers can combine human intelligence with technology-enabled insights to make smarter choices in the face of uncertainty and complexity and thus gain a cumulative advantage in business. They note five strategic capabilities that intelligent enterprises can use to develop an advantage over competitors: 1. Find the strategic edge. In assessing past organizational forecasts, home in on areas where improving subjective predictions can really move the needle. 2. Run prediction tournaments. Discover the best forecasting methods by encouraging competition, experimentation, and innovation among teams. 3. Model the experts in your midst. Identify the people internally who have demonstrated superior insights into key business areas, and leverage their wisdom using simple linear models. 4. Experiment with artificial intelligence. Use deep neural nets in limited task domains to outperform human experts. 5. Change the way the organization operates. Promote an exploratory culture that continually looks for better ways to combine the capabilities of humans and machines.

Organizations and individuals are notoriously poor at judging the likelihood of uncertain events. Predictions are often colored by the forecaster's understanding of basic statistical arguments, susceptibility to cognitive biases, desire to influence others' thinking, and concerns about reputation. Indeed, predictions are often intentionally vague to maximize wiggle room should they prove flawed. But getting judgments wrong can of course have serious consequences. On the basis of research involving 25,000 forecasters and a million predictions, the authors identified a set of practices that can improve companies' prediction capability: providing training in the basics of statistics and biases; assembling teams of forecasters to debate and refine predictions; and tracking performance and giving rapid feedback. To improve prediction capability, companies should keep real-time accounts of how their top teams make judgments, including underlying assumptions, data sources, external events, and so on. Keys to success include requiring frequent, precise predictions and measuring prediction accuracy for comparison.

Taboos are a universal feature of social systems. Even the most avowedly open-minded organizations place tacit constraints on what can be said and even thought. Business leaders ignore these constraints at their peril. This article examines the role of the sacred, profane, and taboo in society, and links these phenomena to the psychology of moral outrage. In public debates, taboos are rarely as absolute as first assumed and can often be reframed as tragic choices. Leaders must performa delicate balancing act if they are to prevent taboos from blinding managers to either threats or opportunities. On the one hand, leaders who let their intellectual curiosity get the better of them risk paying a steep career price. On the other, leaders who bury their heads in the sand risk even worse consequences. Navigating this dilemma brings into sharp tension the policy prescriptions of advocates of authentic leadership (who see honesty as a trump virtue) and proponents of Realpolitik (who see organizational hypocrisy and obfuscation as unfortunate but unavoidable tactics necessary in an imperfect world.)