In the last blog we discussed examples of organisations which recognise that decisions with big impact and which demand immediate action can be successfully delegated. These are instances of very narrowly confined decisions, but not all decisions are so neatly packaged.
Let's quickly complete these trivial questions to get a glimpse into how our thinking reflects cognitive dissonance.
bat and a ball cost $1.10
The bat costs $1 more than the ball.
How much does the ball cost?
is the product of 17 and 23?
of these lines are parallel? Are the two end lines parallel? Any
flirting with; or to be helped cross the road?
the blue line shorter than the orange?
these shapes rotating clockwise or anti-clockwise?
of these individuals is frustrated, and which one is threatening?
Q1 - You are solving x + (x+ 100) = 110, so the ball costs 5c (not 10 cents!!) I know YOU didn't get it wrong but a surprising amount of people do
Q2 - The product of 17 and 23 = 391, which requires effort! What is effort? For one thing an activity requiring effort or concentration initially is accompanied by your pupils dilating. Could you answer this question when cross a busy road or when driving whilst lost? (Please don't attempt this!)
Q3 - Q6 - These are all examples of well-known optical illusions that, in some instances, you require training to see or some extra effort to discern. You know that sometimes what you see is often not reality, but can you discern when, reliably? Depending on the situation you are in, your brain will be making assumptions about the data received via the optic nerve. What you are seeing, even now as you read this page, has much of it interpreted and filled in for you! If you need convincing, try and find your blind spot (where you optic nerve attaches to the eye itself. There are no photo-sensitive rods or cones, hence the empty space that objects disappear into as you discover from here. Likewise, when that beautiful brain of yours, takes short-cuts and fills in the blanks for you in other instances, are you aware of some of the "undocumented features"? Con-artists, advertisers, politicians, they all take advantage of these!
Q7 - Even toddlers get this correct, and yet this pattern recognition problem is extremely difficult to solve "for a computer". A chess playing game, able to consistently beat a grand-master was developed years before this problem could be solved! The amount of amazingly sophisticated “software” running in your brain sub-consciously is astounding, and as with all software we encounter “bugs” (or as MicroSoft call them, “undocumented features”).
The point here is that all questions have answers that we provide either through an autonomous intuitive process or one in which the working out is structured and requires focus and concentration. Part of the problem is that we do not appreciate how amazing some of our autonomous thinking is especially at pattern recognition processing But too often we forget that we are pattern-seeking creatures by nature, and find patterns where there are none.
And yet, often, and sometimes rightly so, intuition is discounted and ignored, but you do this at your peril because well-founded intuition is really a misnomer for pattern recognition and an attribute of our experienced and older colleagues. Go a few kilometers down a gold mine and see how you trust the old hands when facing a rock-burst scenario. Go out to sea and see how you trust an old hand when a storm is forecast. In each case what is called intuition is actually a subconscious pattern recognition process of hundreds of other similar scenarios. Interrogate how the prescience of danger is gained from the old hand and you will not get a useful answer.
The problem then is how to not be victim to our habit of resorting to autonomous processing too often and ignoring it when it can benefit us. This is an example of a dominant cognitive bias and the origin of many errors but not all in our critical thinking. How is it then that in a generally hostile and dangerous world, we have developed this mode of thinking?
Our brains have evolved short-cut mechanisms to deal with situations where the following is involved: personal physical danger, low complexity and a variety of almost always good as well as useless or incomplete information.
Typically, in these situations we sample the information available to us, focus on just those bits of information we think most relevant to our decision task and then take a cognitive short cut. This enables us to make decisions very quickly, and allows us to do something that “just does the job”. This has been a sound survival mode from an evolutionary perspective, but unfortunately ill-suited to the business world of complex decision making.
Our ancestors lived in a world which tolerated and rewarded sub-optimal decisions. If that rustle in the undergrowth happened to be the wind, and not a sabre tooth tiger, no harm was done if I dropped everything and ran or reached for the nearest weapon. In these instances the cost of a false positive was hugely outweighed by the outcome of ignoring a true positive. This is in complete contrast to the business world where mobilisation costs are great and always include opportunity costs, whilst benefits are often asymmetric, relative and questionable. Our ancestors too lived in a world in which the advantages of youth, strength and energy did not crowd out the wise voice of the older tribe members, those that had lived through a drought or two. So decisions that needed a quick response got them and were acted upon with alacrity. Where decisions needed time, they got time, and the people able to contribute were called upon. This is in stark contrast to our modern corporate world.
When the next financial crisis hits us (and it will!), just like those periodic droughts, which wise voice at the back of the room will have been drowned out by younger more ambitious, and overly confident voices? Which leadership team will have their time horizon's cut by a 23 year old fund manager demanding short-term performance? Apart from actuaries managing economic capital, who of us appreciate a balance sheet that reflects assets not being “sweated”, but redundancy that reflects an ability to absorb shock? If a fund manager designed the human body would it have two kidneys and two lungs? Serious problems arise when short-term in efficiency is demanded at the expense of long-term sustainability. What dissonance is there at play here?
then we should ask ourselves why we don't take time to reflect more
on our lives and the world about us. We should all of us take 20
minutes to quietly reflect, some might even say meditate, each day.
If you don't have the time, then you probably need an hour!
In the next article on Decision Making, we'll look at quantifying our over-confidence in situations that require it.
PS: If you enjoy optical illusions visit: