Can We Give System 2 Its Due?
Our BrainJuicer Book Clubs started a year ago and have become one of our most popular initiatives – an opportunity for people to get together and talk ideas and issues in a friendly, non-“hard sell” environment. (The free food and wine probably doesn’t hurt, either!) This blog post spins out of recent Book Clubs we ran on Daniel Kahneman’s Thinking, Fast And Slow. Normally in talking about Kahneman’s work we focus on the implications for consumer decisions – here we look at what it implies about our OWN business decisions.
Assume you like to think of yourself as a rational person, and you read about Daniel Kahneman’s work on System 1 and System 2. You accept its premise – that most of our decisions are fast, implicit and intuitive. What do you do? One thing you might conclude is, “Well, I need to use System 1 less and System 2 more.”
But this misunderstands the problem. The issue isn’t that System 2 makes better decisions but isn’t used enough. The issue is that System 2 is weak, and lazy, and even when we consciously try and think slowly and methodically we simply don’t have the tools to do it.
A large part of Daniel Kahneman’s Thinking, Fast And Slow is devoted to this problem, and to helping people make better decisions. Reading the book, you get the impression that this is at best extremely difficult and at worst basically futile. But perhaps it’s worth trying anyhow. Here are five possibly practical tips, drawn from the book, on how to make slow decisions well.
1. Account for luck: Most good (or bad) outcomes will have a random factor in – which we shorthand as “luck”. Fail to account for this in future predictions and you’ll end up overconfident. Sportspeople know this: “form is temporary, class is permanent.”
2. Consider alternative outcomes: Rather than try and allot a probability to the outcome you want to happen (or to avoid), create several different outcomes and try to allot probabilities summing to 100 for each. You won’t necessarily get the right probability but it’s more likely to be realistic.
3. Run a premortem: On a related note, before you settle on a plan, run a “premortem” – ask people involved to imagine themselves a year in the future, telling a story of why the plan failed. The point isn’t “negativity” – it’s a way of turning up factors you might have not included, because of optimism and overconfidence.
4. Quantify it: As Kahneman points out, even a self-created ‘algorithm’ to guide decisions – marking candidates on a set of criteria, for instance – is better than pure intuition, because it limits your ability to create “broken leg” scenarios – unlikely future events which might justify a hunch. Of course, this has its own risks – pick completely wrong metrics and you might end up worse off.
5. Use intuition right: There is still a place for human judgement, Kahneman says – but it’s at the end of the process, not the beginning. Go through the various slow-thinking techniques above, and then ask your gut how it feels – you’ll probably get a more useful answer.
These are difficult things to do. They go well beyond the things we do – weighing up options, making simple trade-offs – when we feel we’re being rational, because mostly they explicitly ask us to consider stuff beyond the information that System 1 brings easily to mind, and System 2 ratifies.
In fact they feel boring and mechanistic, the enemy of dynamic leadership, and they will often delay decision-making. You might even say they’re designed to do that. Their very difficulty is a reminder of how much easier and quicker our usual, implicit decision making processes are.
Kahneman suggests you should apply processes like this to important decisions like who to hire, what to invest in, or who to award a contract to. And he’s probably right. Though he’s also right to say that you almost certainly won’t be able to do this.
What’s even more certain is that your customers aren’t making decisions like this. They aren’t putting intuition at the end of the process when they choose which apples to buy. They aren’t accounting for luck and regression to the mean when they give you a glowing (or stinking) customer service review. They are using instinct, emotion, prior experience and mental shortcuts just like we all do. Trying to improve your own System 2 decision making is extremely difficult. Trying to fit your customers’ decision making into that lens might be fatal.