Strategy. Innovation. Brand.
Epistemological Modesty
Rational or emotional?
I used to be a rationalist. I enjoy math and statistics and I always thought that any problem could be rationally (and quantitatively) parsed, if only we could frame it correctly. The issue, as I saw it, was not our quantitative, logical tools but rather the slippery ambiguity of our language. If we could only make our language as precise, logical, and, yes, quantitative as our tools, we could make huge strides in understanding our world and solving the problems of living together.
Although I enjoy languages, I thought numbers were better. Numbers are precise, rational, and universal. Language, other the other hand, is beautiful but also sloppy. It’s so difficult to convey certain concepts and emotions. You have to approach them elliptically, as novelists do rather than head-on as mathematicians do.
I also assumed that rational thought was superior to all other forms of thought. If only we could be rational and banish emotions from our decision making, we would be far better off.
Now I’m not so sure. The more I read about our brain and the way we make decisions, the more I’ve adopted epistemological modesty (EM). EM is one of those ideas that is fairly easy to understand but more difficult to adopt as a way of thinking and living.
Epistemology asks a simple question: how do we know what we know? I used to think that the best (perhaps the only) way to truly know something was through rational thought and logical deduction. I also thought that rationalism would ultimately – sometime in the distant future – allow us to know everything.
I was very sure of my position. Now I’m much more modest. EM (also known as epistemological humility or relativism) suggests that: 1) there are multiple paths to knowledge, and; 2) there are limits to our knowledge – even teenagers can’t know it all.
I used to think that rational thought was the best way to make decisions. It turns out that most of our decisions are made without any conscious thought whatsoever. Our subconscious does the work. Our best decisions are often based on emotions rather than logic. In fact, there’s a growing body of evidence that we don’t use logic to make decisions at all. We use logic to justify decisions. We use emotions to make them.
As I become more modest in my approach to knowledge, I also wonder whether rationalism doesn’t sometimes cause our problems rather than solve them. Our business schools teach a very rational approach to business. Just put it into a spreadsheet and you can manage it successfully. Yet, as business thinkers ranging from Peter Drucker to Paul Nutt point out, most of our business decisions are just plain wrong. Perhaps it’s because we’re too much in love with the rational, quantitative, and logical approach.
In my critical thinking classes, I teach that the first thing to do in making a decision is to step back and look around. Consider multiple alternatives rather than just one. Perhaps it’s time to do the same thing with the way we think. Let’s step back and think about our thinking. Let’s not assume that there’s one right way to think. By being epistemologically modest, we may just think our way to a better place.
Deciding Decisively
I want more options.
Last week. I wrote about Chip Heath’s presentation skills. Today, let’s talk about his cognitive skills. Chip, with his brother Dan, has written three books: Switch, Made to Stick, and Decisive.
I’ve written about Decisive before and I expect to write about it again. Today, I’ll give an overview of the four major parts of the Decisive paradigm. I hope this will be useful in itself and it should also serve to introduce future articles that delve more deeply into each of the four elements.
Heath suggests that the path to better decision making is summarized in a simple acronym: WRAP. Here’s a thumbnail description of each.
Widen Your Options – too often, our decisions come in the form of “whether or not”. For instance: “We need to decide whether or not we’re going to acquire Company Z.” Much better to say, “What’s the best way to invest our capital to increase our market share?” Heath reports on one study that suggests that multiple-choice decisions are six times more likely to result in good decisions than are whether-or-not decisions. (This is very similar to Paul Nutt’s concept of premature commitment or to a doctor’s narrow framing based on your medical record.)
Reality-test Your Assumptions – I’ve written about confirmation bias before; Heath says that it’s much more pervasive in business than we might realize. The boss wants to do something, so all of us underlings look for evidence that she’s right. Moral: don’t surround yourself with yes-people. Before making a big decision, hold a trial with two well-prepared groups arguing the pros and cons. Also, remember the base rates. If nine out of ten start-ups fail, there’s a 90% chance that your start-up will fail. Really, there is – you can learn more here.
Attain Distance Before Deciding – My Mom used to say, “It’s easier to avoid temptation than to resist it.” In essence, that’s Heath’s advice, too. Making a big decision stirs up emotions ranging from fear to greed and most everything in between. So, get some distance. Time can be a form of distance; putting off a decision may help you think more clearly. (But not always). You can also ask yourself a simple question: “If my best friend asked for my advice in a similar situation, what would I say?”
Prepare to Be Wrong – when I climbed in the Andes, my buddies and I would often create a go/no go decision like this: “If we don’t reach such-and-such point by such-and-such time, we need to abandon the climb and return to camp.” Heath calls these tripwires. They’re agreed upon milestones or events that will jolt us out of autopilot. Without tripwires, we may just go merrily on our way, assuming that our original decision was correct. Tripwires help us focus on unfolding events and take corrective action.
Is that all there is to decision making? Not at all, Heath tells some great stories along the way and I’ll write about them in the future. For today, however, that about WRAPs it up.
Want a Good Decision? Go to Trial.
We all know what the decision should be.
Let’s say that you’re arrested for a terrible crime. After a few months in jail, you’re taken to court for a trial. In the courtroom, you meet your lawyer for the first time. The judge selects a jury. You notice that all the jurors are white males and that they all went to the same business school.
As the trial begins the judge tells the jurors – very directly – that she believes you’re guilty. The prosecutor then uses Power Point to present the evidence against you. The presentation consists of over 200 slides.
Your lawyer is not allowed to present any evidence – he can only respond to the prosecutor’s slides. He raises a number of objections but the prosecutor handles each one smoothly. You notice that the prosecutor doesn’t refute the objections but merely brushes them aside. The slides are complicated and hard to follow. You notice that some of the jurors are glassy-eyed. Others are checking their BlackBerries.
When the prosecutor’s presentation concludes, the jurors don’t adjourn to a separate room to discuss the case. Rather, the judge simply asks them, “So, do you agree with me?” Most of the jurors nod their heads and you’re whisked off to jail.
Could that really happen? Let’s hope not in a court of law. But, as Chip and Dan Heath point out in their book, Decisive, that’s exactly how corporations make bazillion dollar decisions. Echoing Paul Nutt’s book, Why Decisions Fail, the Heaths point out that most business decisions really are one sided.
Here’s how it goes. An executive gets an idea that just might be brilliant – or not. Then a process begins to justify the idea and convince top management to support it. Most of the members of top management recognize that a justification process is going on. They don’t really object to it because 1) they don’t have a forum to present their ideas; and 2) they don’t have the resources to develop the other side of the story or to investigate alternatives.
The justification process grinds on. As the Heaths point out, the process usually results in a “whether or not” decision. Executives don’t consider a range of alternatives but simply vote up or down, yes or no.
The process usually includes a top management meeting with a barrage of Power Point slides. I’ve participated in dozens of them. Usually someone in the meeting says, “Well, let me play devil’s advocate for a moment ….” No matter what that person says, the objection is somehow handled and brushed aside. The devil’s advocate may have a good point but he doesn’t have the data to back it up. The result is that the group feels “better” about the decision … “after all, we did consider both sides.”
Paul Nutt writes that business “…decisions fail half of the time. Vast sums are spent without realizing any benefits for the organization.” In other words, we could flip a coin and do just as well – and save a bundle on consulting fees.
We often complain about our judicial system. But the trial by jury – with evenly matched sides presenting evidence – is probably the best system ever developed for discerning the truth when the evidence is murky. In business, the evidence is often murky; we’re trying to predict the future with incomplete data. You want the best decision? Put it on trial.
The Anatomy of Debacles
I was satisficing. If only I had known.
What’s a debacle? According to Paul Nutt, it’s “…merely a botched decision that attracts attention and gets a public airing.” Nutt goes on to write that his “…research shows that half of the decisions made in business and related organizations fail.” Actually, it may be higher because, “failed decisions that avoid a public airing are apt to be covered up.”
Remember that I wrote not long ago (click here) that perhaps 70% of change management efforts fail? Now we learn that half — or more — of all business decisions fail. We’re not doing so well. Nutt has studied over 400 debacles — botched decisions that became public disasters — and has created an anatomy of why and how they happen. Nutt’s book, Why Decisions Fail, is a sobering look at how we manage our organizations and, more specifically, our decisions.
Critical thinking should help us avoid botched decisions and public debacles. I’ll be writing about critical thinking over the next several months and, from time to time, will pull ideas from Nutt’s book. Today, let’s set the stage by looking at the basics. Nutt writes that blunders happen because of three broad reasons:
- Failure-prone practices — Nutt claims that two-thirds of business decisions are arrived at via common practices that are known to fail. One of our problems is that we typically don’t analyze the decision-making process itself. We tend to ask, “how can we correct the problem?” rather than “how did our decision-making process lead us astray?” As an example, Nutt notes that “Nearly everyone knows that participation prompts acceptance, but participation is rarely used.”
- Premature commitments — Nutt writes that “Decision makers often jump at the first idea that comes along and then spend years trying to make it work.” In the vocabulary of critical thinking, this is known as satisficing or temporizing — two heuristics that can lead us astray. Nutt concludes that, “A rush to judgment is seductive and deadly and can be headed off.” I’ll write more on how to head it off in future articles.
- Wrong-headed investments — the basic problem here is that we spends lots of time, energy, and money to demonstrate that our decision is correct and the ideas behind it are sound. We call it an evaluation but really, it’s a justification. It’s better to invest our energy in clarifying objectives, discovering issues (and opportunities), and identifying measures of risk and benefit.
Nutt also criticizes contingency theory — the idea that your situation dictates your tactics. For instance, if you’re faced with a community boycott, you should do X; if you’re faced with cost overruns, you should do Y. Nutt concludes that, “Best practices can be followed regardless of the decision to be made or the circumstances surrounding it.” The bulk of his book outlines what those best practices are.
Of course, there’s a lot more to it. I’ll outline the highlights in future posts and put Nutt’s findings in the general context of critical thinking. I hope you’ll follow along. In the meantime, don’t make any premature commitments.
Innovation, Persuasion, and Listening
I’m listening.
I struggle to be a good listener. When I’m engaged in an intense conversation, I’m often: 1) Framing my response; or 2) Thinking about a solution to the problem at hand. Of course, when I’m thinking about something else, I’m not really listening — I’m maneuvering. More importantly, I’m not being persuasive. If the other side thinks I’m not listening, they’re less likely to be persuaded to my point of view.
So I was pleased to find a recent McKinsey white paper by Bernard Ferrari titled “The Executive’s Guide to Better Listening”. (Click here). As Ferrari points out, “Listening is the front end of decision making.” If you want your company to be more innovative, you’ll need to make a number of critical decisions. If you’re a good listener, you’ll make better decisions and be more persuasive. That’s the best double play since Nellie Fox and Luis Aparicio.
So how do you become a good listener? Ferrari suggests three critical skills. First, show respect. Respect breeds confidence and trust. (This is essentially the same lesson that Greek rhetoric teaches — build trust first). If you’re a manager, you probably have a complex set of responsibilities. You can’t know everything about every facet of your domain. By respecting your teammates, you will naturally draw them into the conversation and learn from them. If you simply jump to a solution (as I sometimes do) you short circuit the entire process. Not only do you miss out on any advice about the current situation, you also teach your colleagues not to offer advice in the future. This doesn’t mean you should avoid incisive questions. Au contraire, the more the better to keep the conversation flowing.
Second, keep quiet. Ferrari suggest a variation of the 80/20 rule — let the other person speak about 80% of the time while you speak only 20% of the time. (This also works when you’re on a date — always encourage your partner to speak more than you do). This is a particularly hard one for me. I want to jump in and share my opinion because I know it’s … well, brilliant. But often times, I wind up answering the wrong question or chasing an irrelevant tangent because I’ve spoken too soon. As Ferrari notes, it’s important to take your time: “…if a matter gets to your level … it is probably worth spending some of your time on it.”
Third, challenge assumptions. This doesn’t just mean that you challenge other people’s assumptions. It also means that you encourage your colleagues to challenge your assumptions. As Ferrari writes, “… too many executives … inadvertently act as if they know it all … and subsequently remain closed to anything that undermines their beliefs.” Ultimately, “The goal is common action, not common thinking…” So, be explicit. Let your colleagues know that you don’t know everything and welcome their questions, especially the challenging ones.
I’ve found that it’s not easy to master these three skills. But when I do succeed, I learn more and, frankly, I have more fun. That makes me a better manager and a better teammate. And that makes my company more innovative.
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