Data, Thinking, & Wisdom

After learning the pitfalls of relying on common sense  and our shortcomings in using heuristics for judgment, I am left with, “now what?” Knowing all the foibles doesn’t automatically, or easily, propel us to temper our old tendencies. Neither does the newfound awareness immediately lead us to locate newer and better tools with which to navigate our daily lives, and more importantly, to make weighty decisions. The tension between relying on intuition and researching for facts and data will always be there. Intuition isn’t always faulty and data don’t always inform better outcomes. Indeed, at the end of our quandary, we usually have to fall back on “making that judgment call.”

I am a firm believer of evidence-based management; however, I am dismayed whenever I hear cases of managers using data at the expense of humanity. The escalation of pushing Black Friday shopping to Thanksgiving Day is such a case of allowing data, here competing for profit, to supplant our higher inclinations (instead, we demonstrate with abandon our baser aspects, elbowing, tussling, shouting or fist cuffing at the bargain sites). More and faster data mean that we have to absorb more information more quickly and make decision even faster as well. So, in a sense, we are where we have always been…relying on “common sense” and “heuristics.” Regardless of how much better our tools are in aiding our decision-making, the quality of the outcomes are still going to follow a bell-curve distribution, with half of them falling below average. Even if we can shift the whole bell curve toward more informed and better quality decisions, the bell shape of the distribution remains the same.

Yet, yet…a friend reminds me, “I’d rather have someone who decides with data than without data.” I have to concur, 100%.

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Daniel Kahneman’s Thinking, Fast and Slow, offers some clues and tools for improving our decision-making abilities. In his analysis, “system 1” handles the quick decisions using intuition based on years of experience in pattern recognition.   And “system 2” gets to mull over bigger and important matters whenever we confront something unfamiliar or complicated. This way of thinking has always been the same. However, whenever we improve upon system 2’s reservoir of knowledge, we also help system 1 in producing better quality decisions. Put it another way, we accumulate the knowledge and improve the quality of experience for system 2 so that system 1 can produce more accurate assessment and wiser judgment

You might have heard of this story about firefighters. As a group of firefighters started hosing down the kitchen where fire was most intense, the captain heard himself yelling, “Get out of here.” The kitchen floor collapsed within seconds after the firefighters vacated. It turned out that the origin of the fire was in the basement beneath the kitchen. In reconstructing the scene, the captain realized that the fire was quieter and hotter than usual. However, at that moment, he didn’t have time to process such analysis; his “sixth sense” propelled him to yell out. Herbert Simon, one of the most prominent social scientists, summarized such sentiments, “Intuition is nothing more and nothing less than [pattern] recognition.”

In most cases, experts’ intuition has a solid foundation. It is only when they get carried away with their own opinions (and egos) that they lead us into mischief. When experts’ opinions diverge widely, or contradict each other, that’s a warning sign.

As data become bigger and more complicated, and managers need to make decisions ever faster, the risks seem higher. Paradoxically, as risks get higher, managers are even more reluctant to make judgment calls when they are most needed. If managers make “a good call,” such as the fire captain of the aforementioned story, we celebrate their intuition, if not, we criticize them right away. Collectively, we don’t stop and ponder, gather and process information, and allow some risks any more.

Relying on others’ opinions is metaphorically like relying on those who can see better in the dark than ourselves. The ability to see in the dark is an ability that may be more natural in some than in others. To push the metaphor further, we would be better equipped by learning from the blind (or eye-sight challenged?!). In real terms, it is about learning from as wide a range of people (their skills and knowledge) as possible. That’s what true leaders would do…learning from people thinking and operating outside the box so that they themselves can think outside the box eventually. In other words, true leaders boost system 2’s capability to increase system 1’s reliability…a principle for everyone.

Thanksgiving is upon us. I wish you a safe, peaceful, and joyful holiday. I will resume in this space on December 7th.

TG

 

Till then,

Staying Sane and Charging Ahead.

Direct Contact: taso100@gmail.com

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