A salute to Daniel Kahneman
I had a colleague who was phenomenal in a crisis with his amazing capacity to process meager information and take immediate action. After the crisis was over and the dust settled, after-action reviews invariably affirmed that his shoot-from-the-hip decisions proved superior to deferring decisions for more data and deliberation.
He’s the guy you want in your corner when you are cornered!
Unfortunately, he used the same style under normal conditions. He still made snap decisions based on preliminary, often superficial understandings of situations and refused to move off those premature conclusions. After-action reviews regularly revealed over-spending on resources because lower-cost solutions were overlooked. Worse, opportunities were squandered because the market research was incomplete.
These were avoidable errors. Correction required only a few days, sometimes only a few hours, of decision disciplines whose benefits would have far outweighed the costs. Even so, he resisted slowing down when time wasn’t of the essence – over-relying on his outstanding success during crises. He eventually lost his leadership position.
In Praise of Slow
This week we received news of Daniel Kahneman’s passing. He is widely credited as a father of behavioral economics, documenting distortions in judgement and flaws in decision-making as far back as the 1950s. He published “Thinking, Fast and Slow” in 2011, a marvelous compendium of our very human weaknesses revealed over the last five decades.
The book is a compelling indictment of how we typically make decisions. We are not protected by intelligence, education, experience or titles. These are deep-seated instincts that served us well on the savannah when we heard a rustling from the tall grass – but our brains are not wired for modern complex decisions.
“Thinking, Fast and Slow” entertains with ample evidence of our need for establishing reliable disciplines to act as guardrails to maintain decision excellence. I know many who are delighted by the book, relating their own anecdotes of missteps observed in others throughout their careers. But strangely, they never gave examples of their own shortcuts, biases or blind spots degrading their performance. Whenever I asked if they fell into any of the traps, they genuinely struggle to recall such an event – certainly affirming the term “blind spot”!
Moving Beyond Anecdotes
The undeniable lesson from “Thinking, Fast and Slow” is that organizations gain powerful advantages from developing effective defenses against Thinking Fast errors. They employ reliable processes and dedicate facilitators to guide business case development. Review & Approval meetings are too late to catch most missteps – flaws are largely invisible by that stage.
Some industries began adopting Strategic Decision Management programs in the 1990s – usually highly capital-intensive industries with very long-lasting assets (think billion-dollar plants that would stand for decades as painful reminders of poor investment decisions).
Best practices begin at the moment of an idea’s inception. They boost innovation and defend against unconscious biases. The result is the ability to stretch resources (capital, talent, etc.) further, generating greater growth at higher returns with fewer surprises. The tools are there waiting to be picked up by those willing to trust the evidence.
Strategic Bets 