The Power of Noticing: What the Best Leaders See

The Power of Noticing, Max Bazerman

In The Power of Noticing: What the Best Leaders See, Harvard Professor Max Bazerman, opines about how the failure to notice things leads to “poor personal decisions, organizational crises, and societal disasters.” He walks us through the details of each of these, highlighting recent research and how it impacts our awareness of information we’re prone to ignore. Bazerman presents a blueprint to help us be more aware of critical information that we otherwise would have ignored. It causes us to ask the questions, typically found in hindsight but rarely in foresight, “How could that have happened” and “Why didn’t I see it coming?”

Even the best of us fail to notice things, even critical and readily available information in our environment “due to the human tendency to wear blinders that focus us on a limited set of information.” This additional information, however, is essential to success and Bazerman argues that “in the future it will prove a defining quality of leadership.”

Noticing is a system 2 process.

In his best-selling book from 2011, Thinking, Fast and Slow, Nobel laureate Daniel Kahneman discusses Stanovich and West’s distinction between System 1 and System 2 thinking. System 1 is our intuitive system: it is quick, automatic, effortless, implicit, and emotional. Most of our decisions occur in System 1. By contrast, System 2 thinking is slower and more conscious, effortful, explicit, and logical. My colleague Dolly Chugh of New York University notes that the frantic pace of managerial life requires that executives typically rely on System 1 thinking. Readers of this book doubtless are busy people who depend on System 1 when making many decisions. Unfortunately we are generally more affected by biases that restrict our awareness when we rely on System 1 thinking than when we use System 2 thinking.

Noticing important information in contexts where many people do not is generally a System 2 process.

Logic and other strategic thinking tools, like game theory, are also generally system 2 thinking. This requires that we step away from the heat of the moment and think a few steps ahead – imagining how others will respond. This is something that “system 1 intuition typically fails to do adequately.”

So a lot of what Bazerman spends time on is moving toward system 2 thinking when making important judgements.

When you do so, you will find yourself noticing more pertinent information from your environment than you would have otherwise. Noticing what is not immediately in front of you is often counterintuitive and the province of System 2. Here, then, is the purpose and promise of this book: your broadened perspective as a result of System 2 thinking will guide you toward more effective decisions and fewer disappointments.

Rejecting What’s Available

Often the best decisions require that you look beyond what’s available and reject the presented options. Bazerman didn’t always think this way, he needed some help from his colleague Richard Zeckhauser. At a recent talk, Zeckhauser provided the audience with the “Cholesterol Problem.”

Your doctor has discovered that you have a high cholesterol level, namely 260. She prescribes one of many available statin drugs. She says this will generally drop your cholesterol about 30 percent. There may be side effects. Two months later you return to your doctor. Your cholesterol level is now at 195. Your only negative side effect is sweaty palms, which you experience once or twice a week for one or two hours. Your doctor asks whether you can live with this side effect. You say yes. She tells you to continue on the medicine. What do you say?

Bazerman, who has naturally problematic lipids, had a wide body of knowledge on the subject and isn’t known for his shyness. He went with the statin.

Zeckhauser responded, “Why don’t you try one of the other statins instead?” I immediately realized that he was probably right. Rather than focusing on whether or not to stay on the current statin, broadening the question to include the option of trying other statins makes a great deal of sense. After all, there may well be equally effective statins that don’t cause sweaty palms or any other side effects. My guess is that many patients err by accepting one of two options that a doctor presents to them. It is easy to get stuck on an either/or choice, which I … fell victim to at Zeckhauser’s lecture. I made the mistake of accepting the choice as my colleague presented it. I could have and should have asked what all of the options were. But I didn’t. I too easily accepted the choice presented to me.

The Power of Noticing: What the Best Leaders See opens your eyes to what you’re missing.

What makes Warren Buffett a great investor? Is it the intelligence or the discipline?

I thought this excerpt from Warren Buffett’s 2011 interview in India was relevant to not only investing but also decision making. A member of the audience says to Buffett: “As we all know, you are an extremely intelligent person. At the same time, you are very disciplined with your investing approach. What makes Warren Buffett a great investor? Is it the intelligence or the discipline?”

Here is Warren’s response.

Warren: The good news I can tell you is that to be a great investor you don’t have to have a terrific IQ.

If you’ve got 160 IQ, sell 30 points to somebody else because you won’t need it in investing. What you do need is the right temperament. You need to be able to detach yourself from the views of others or the opinions of others.

You need to be able to look at the facts about a business, about an industry, and evaluate a business unaffected by what other people think. That is very difficult for most people.

Most people have, sometimes, a herd mentality which can, under certain circumstances, develop into delusional behavior. You saw that in the Internet craze and so on. I’m sure everybody in this room has the intelligence to do extremely well in investments.

Moderator: They’re all 160 IQs.

Warren: They don’t need it. I’m disappointed they haven’t sold off some already. The 160s won’t beat the 130s at all necessarily. They may, but they do not have a big edge. The ones that have the edge are the ones who really have the temperament to look at a business, look at an industry and not care what the person next to them thinks about it, not care what they read about it in the newspaper, not care what they hear about it on the television, not listen to people who say, “This is going to happen,” or, “That’s going to happen.”

You have to come to your own conclusions, and you have to do it based on facts that are available. If you don’t have enough facts to reach a conclusion, you forget it. You go on to the next one. You have to also have the willingness to walk away from things that other people think are very simple.

A lot of people don’t have that. I don’t know why it is. I’ve been asked a lot of times whether that was something that you’re born with or something you learn. I’m not sure I know the answer. Temperament’s important.

Moderator: That’s very good advice, to be detached from all the noise. You shouldn’t go with the herd.

Warren: If you don’t know the answer yourself don’t expect somebody else to tell you. If you don’t know the answer yourself and somebody else says they know the answer, don’t let that fact push you into coming to a conclusion about something that you don’t know enough to come to a conclusion on.

Stocks go up and down, there is no game where the odds are in your favor. But to win at this game, and most people can’t, you need discipline to form your own opinions and the right temperament, which is more important than IQ.

Pascal said it best: “All men’s miseries derive from not being able to sit in a quiet room alone.”

Warren: If you look at the typical stock on the New York Stock Exchange, its high will be, perhaps, for the last 12 months will be 150 percent of its low so they’re bobbing all over the place. All you have to do is sit there and wait until something is really attractive that you understand.

And you can forget about everything else. That is a wonderful game to play in. There’s almost nothing where the game is stacked in your favor like the stock market.

What happens is people start listening to everybody talk on television or whatever it may be or read the paper, and they take what is a fundamental advantage and turn it into a disadvantage. There’s no easier game than stocks. You have to be sure you don’t play it too often.

You need the discipline to say no.

Ajit: The discipline to say no, if you have that and you’re not willing to let people steamroll you into saying yes. If you have that discipline, that’s more than 50 percent of the battle.

Warren: Don’t do anything in life where, if somebody asks you the reason why you are doing it, the answer is “Everybody else is doing it.” I mean, if you cancel that as a rationale for doing an activity in life, you’ll live a better life whether it’s in the stock market or any place else.

I’ve seen more dumb things, and sometimes even illegal things, justified (rationalized) on the basis of “Everybody else is doing it.” You don’t need to do what everybody else is doing. It’s maddening, during the Internet craze when the bubble was going on.

Here’s your neighbor who’s got an IQ of 50 points below you, and he’s making all this easy money and your wife is telling you “This jerk next door is making money, and you’re smarter than he is. Why aren’t you making money?”

You have to forget about all those things. You have to do what works, what you understand, and if you don’t understand it and somebody else is doing it, don’t get envious or anything of the sort. Just go on and wait until you find something you understand.

From this video, a watermarked transcript of which is available for purchase.

Changing How We Think

Mind the Gap-compressed

What kind of thinking leads to better outcomes? That’s the question that Roger Martin addresses in his wonderful book Diaminds: Decoding the Mental Habits of Successful Thinkers.

The world is awash in complexity. Nearly every decision we make is uncertain. There is no one way to look at uncertainty. There are as many ways of seeing, experiencing and representing problems as there are people. Each person, in turn, brings their own mental models.

Successful thinking integrates several radically different models while preserving the thinker’s ability to act decisively. The successful thinker is an integrator who can quickly and effectively abstract the best qualities of radically different ways of seeing and representing; in doing so, that person develops ‘a better lens’ on the bewildering phenomenon we call the ‘world.’

Integrators attempt to hold two, often contradictory, ways of seeing the world. Rather than fearing the ensuing tension they embrace it.

This is reminiscent of F. Scott Fitzgerald, who said:

The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless yet be determined to make them otherwise.

But that view is not out of reach to the layperson. It’s also not new. Thomas C. Chamberlin, President of the University of Wisconsin from 1887 to 1892, proposed the idea of “multiple working hypotheses.” In an article published in Science, he wrote:

In following a single hypothesis, the mind is presumably led to a single explanatory conception. But an adequate explanation often involves the co-ordination of several agencies, which enter into the combined result in varying proportions. The true explanation is therefore necessarily complex. Such complex explanations of phenomena are specially encouraged by the method of multiple hypotheses, and constitute one of its chief merits.

Martin believes that “thinkers who exploit opposing ideas to construct a new solution enjoy a built-in advantage over thinkers who can consider only one model at a time.”

This is not either/or thinking, it’s using a broad-based education to push past the limits of binary thinking and into new ways of combining things. Another of Martin’s books, Opposable Mind: Winning Through Integrative Thinking, defines integrative thinking as:

The ability to face constructively the tension of opposing ideas and, instead of choosing one at the expense of the other, generate a creative resolution of the tension in the form of a new idea that contains elements of the opposing ideas but is superior to each.

Martin argues that this type of thinking is both identifiable and learnable.

Thinking is Habitual

What we think is often made up of habits or, as Martin calls them, “repetitive and recurrent units of mental behaviour that occur on very short time scales.” Most of our mental models and internal stories work by matching patterns — they close off ideas as soon as one fits without attempting to falsify it. In an evolutionary context this makes a lot of sense. If you see a lion, you run. This is fairly closed. You don’t ask a lot of questions or attempt to discern if the lion is friendly or not. Our minds are optimized to think and act quickly. This is system one thinking at its evolutionary finest and it’s fairly inexpensive as far as mental habits go.

Think about how we respond when asked a question of the sort – why did you do X. Our inclination is to respond with a because answer, which rarely includes a cause. If you made a decision, you would offer a reason “this was the best decision given the information” and not “it caused me to avoid someone I’ve been trying to avoid.”

Habits are not all burdens. Often, as Martin points out, they “make thinking bearably simple” But we need a way to describe them if we are to understand them. In Diaminds: Decoding the Mental Habits of Successful Thinkers, Martin writes:

Mental habits work in conjunction with one another to make up patterns of thinking, which are analogous to patterns of behaviour in that they are reliably reproducible and yield predictable results in similar circumstances. It is a commonplace that ‘marketing people’ and ‘engineering people’ process information in different ways. But in what ways are they different? and what difference do their differences make?

This is where the language of cognitive science comes in handy as a language for describing patterns of thought. Thus one finds that ‘marketing people’ pay attention to a lot of information – they are informationally broad in their thinking patterns. They are constantly foraging the world for new bits of information and comparing that new information with parts of their existing database – which they keep around in working memory – in order to arrive at action prescriptions or decision rules. But they spend less time than engineers thinking about each piece of information and about how the various pieces fit together. In other words, compared to engineers, marketers are logically shallower in their thinking approach.

By contrast, one finds that ‘engineering people’ are informationally narrower but logically deeper in their thinking styles. They seek out far less information than do their marketing counterparts; then, having gathered it, they strive for logical consistency among the various pieces of information they deem relevant. For instance, they look for ways in which what they believe connects to what they know. They look for the logical implications of what they already know or believe in order to decide what new beliefs to hold out for testing. They look for connections of the logical and causal type among facts and quasi-facts, rather than just associations and correlations.

Aware of this difference, we can ask: In what circumstances should logical depth dominate informational breadth and, vice versa? In what situations is more thinking better than more foraging or more asking, given that one can only think (or forage) more if one forages (or thinks) less?

The point is to get marketing people and engineering people to think together to create better thinkers. We want to combine the broad thinking the marketers bring to bear on the problem with the logical depth the engineers bring to come up with better solutions.

Mental Habits: A Deep(er) Dive

Martin defines a mental habit as “a pattern of thought that is so entrenched and feels so natural that it has become unconscious and therefore goes unnoticed.” Elaborating on this, he writes:

What we look for when looking for a mental habit is a consistently recurring way in which these explanations are produced, a guiding rule or principle that remains unchanged no matter what the specific explanation.

These thoughts are unconscious and feel natural.

Consider the ‘place responsibility for negative effects elsewhere’ habit.

You arrive late to a meeting. While the reasons vary from situation to situation, you likely never tell the truth but rather blame something else. Traffic was bad. My alarm clock didn’t go off. You almost never hear anyone say, ‘I was late because I forgot to check the room for the meeting.’

This, in Martin’s words, is the difference between responsible and defensive behaviours.

Systematically producing responsible (rather than defensible) causes for one’s behaviour – even when it would be easy to produce irresponsible ones – is likely to feel effortful and to require an exercise of the will.

Consider the mental habit of ‘certainty entails truth’, also known as over-influence from precision.

A CEO asks his CFO if he is sure about the data in the report. If the CFO responds with a no, the CEO thinks he is incompetent. Or maybe the CEO asks the lead on an important project what the odds are they can hit the deadline. The person responds with 80% and the CEO’s next question is “how can we hit 100%?”

As unconscious and intuitive habits, these are often hidden from us and often come from our desire to feel good. Over time, however, these habits become our reality. We believe in the validity of these explanations and this affects how we think about ourselves and the world around us, and how we approach problems. The words we speak become the way we think.

Eminem had it wrong when he said, “I am whatever you say I am.” He should have said, “I am whatever I say I am.”

Tinker With your Thinker

Designing and controlling our mental habits is possible because thinking, when done deliberately, is a sequence of words and sentences. The Panopticon Effect impacts how we design our minds.

Thinking – especially thinking in words and sentences – is a form of internal communication. In thinking, you-in-the-present communicates with you-in-the-future. But though thinking is a private and covert activity, it is influenced by external interactions – in particular, by how you communicate with others. Communicative patterns become mental habits. The implication is that counterproductive – closed, oblivious, disconnected, narrow, hermetic, rigid – ways of communicating are thereby internalized and become counterproductive ways of thinking.

The key to changing how we think, then, is to switch from intuitive to deliberate thought, observe our patterns of communication, and then change the way in which we communicate. As Heinz von Foerster put it, ‘If you want to think differently, first learn to act differently.’

Communicating differently with others and yourself is the key to changing your mind.

What does this look like in practice?

… how one thinks is an internalized version of how one communicates – indeed, it sheds light on how one communicates. The systematic placing of responsibility elsewhere for ills and mishaps is a locally effective social strategy – one that is often rewarded by nods of understanding and (potentially false, but who looks that closely?) expressions of sympathy. It also helps one avoid being placed on the spot by difficult ‘why?’ questions. It feels good to get understanding from others and to avoid such difficult moments. In time, this way of communicating becomes a script.

There is one problem: it is difficult to produce the message convincingly without at least half-believing it. Most humans are reasonably good at identifying liars and dissimulators, even if they are not professionally trained to do so. … But a solution is at hand: make a habit of the way you communicate part of the very fabric of thinking. ‘Place responsibility for ills elsewhere’ thus becomes a mental habit, not just a social and communicative habit.

In the end changing our patterns of thinking becomes about changing the language we use for internal and external communication. We need to move to ‘I was late for the meeting because I forgot to check the room number’ instead of ‘I was late because of something outside my control.’ By addressing problems honestly (especially when they are ambiguous) we change how we think. This isn’t new. Your body language affects how you act too.

Our ‘mind design principle’ for new and more successful mental habits is thus a simple one: because thinking is self-talk, talk and thought are linked. To change patterns of thinking, change patterns of talking.

Diaminds: Decoding the Mental Habits of Successful Thinkers is a fascinating exploration of how we think and offers a new way to improve our ability to think.

(image source)

Charlie Munger on the Value of Thinking Backward and Forward

One of the five simple notions to solve problems is the concept of inversion. To solve problems we need to look at them both forward and backward.

But how does this look in practice? Let me give you an example that Charlie Munger gave during a speech.

Munger liked to give his family little puzzles. And one of the puzzles he gave his family was:

There’s an activity in America, with one-on-one contests, and a national championship. The same person won the championship on two occasions about 65 years apart.

“Now,” I said, “name the activity.”

Any ideas? How would you answer this?

“In my family,” Munger said, “not a lot of light bulbs were flashing.” Except for one.

But I have a physicist son who has been trained more in the type of thinking I like. And he immediately got the right answer, and here’s the way he reasoned:

It can’t be anything requiring a lot of hand-eye coordination. Nobody 85 years of age is going to win a national billiards tournament, much less a national tennis tournament. It just can’t be. Then he figured it couldn’t be chess, which this physicist plays very well, because it’s too hard. The complexity of the system, the stamina required are too great. But that led into checkers. And he thought, “Ah ha! There’s a game where vast experience might guide you to be the best even though you’re 85 years of age.”

And sure enough that was the right answer.

Flipping one’s thinking both forward and backward is a powerful sort of mental trickery that will help improve your thinking.

Ruth Chang: How to Make Hard Choices

"A world full of only easy choices would enslave us to reasons."
“A world full of only easy choices would enslave us to reasons.”

Ruth Chang is a philosopher at Rutgers University with an interesting background. After graduating with a J.D. from Harvard Law School and dipping her toe into the legal world, she went off to Oxford University to study philosophy. Her work focuses on how we make the decisions that shape our lives.

In her recent TED talk (video below), she talks about how we make hard choices and in the process offers a framework for making decisions consistent with who we truly are.

What makes a hard choice hard is the way alternatives relate.

In any easy choice, one alternative is better than the other. In a hard choice, one alternative is better in some ways, the other alternative is better in other ways, and neither is better than the other overall. You agonize over whether to stay in your current job in the city or uproot your life for more challenging work in the country because staying is better in some ways, moving is better in others, and neither is better than the other overall. We shouldn’t think that all hard choices are big. Let’s say you’re deciding what to have for breakfast. You could have high fiber bran cereal or a chocolate donut. Suppose what matters in the choice is tastiness and healthfulness. The cereal is better for you, the donut tastes way better, but neither is better than the other overall, a hard choice. Realizing that small choices can also be hard may make big hard choices seem less intractable. After all, we manage to figure out what to have for breakfast, so maybe we can figure out whether to stay in the city or uproot for the new job in the country.

In hard choices we tend to prefer the safest option.

… I can tell you that fear of the unknown, while a common motivational default in dealing with hard choices, rests on a misconception of them. It’s a mistake to think that in hard choices, one alternative really is better than the other, but we’re too stupid to know which, and since we don’t know which, we might as well take the least risky option. Even taking two alternatives side by side with full information, a choice can still be hard. Hard choices are hard not because of us or our ignorance; they’re hard because there is no best option.

Now, if there’s no best option, if the scales don’t tip in favor of one alternative over another, then surely the alternatives must be equally good, so maybe the right thing to say in hard choices is that they’re between equally good options. That can’t be right. If alternatives are equally good, you should just flip a coin between them, and it seems a mistake to think, here’s how you should decide between careers, places to live, people to marry: Flip a coin. There’s another reason for thinking that hard choices aren’t choices between equally good options.

Our search for physics like exactitude and our desire to quantify everything into scientific thinking combine to lead us astray.

We unwittingly assume that values like justice, beauty, kindness, are akin to scientific quantities, like length, mass and weight. Take any comparative question not involving value, such as which of two suitcases is heavier? There are only three possibilities. The weight of one is greater, lesser or equal to the weight of the other. Properties like weight can be represented by real numbers — one, two, three and so on — and there are only three possible comparisons between any two real numbers. One number is greater, lesser, or equal to the other. Not so with values. As post-Enlightenment creatures, we tend to assume that scientific thinking holds the key to everything of importance in our world, but the world of value is different from the world of science. The stuff of the one world can be quantified by real numbers. The stuff of the other world can’t.

Another way to see things is that they are in the same ball-park. This is what happens in hard choices, the alternatives are “on a par.”

When alternatives are on a par, it may matter very much which you choose, but one alternative isn’t better than the other. Rather, the alternatives are in the same neighborhood of value, in the same league of value, while at the same time being very different in kind of value. That’s why the choice is hard.

From the Independent on Sunday, Feb 19, 1995
From the Independent on Sunday, Feb 19, 1995

We create reasons.

Understanding hard choices in this way uncovers something about ourselves we didn’t know. Each of us has the power to create reasons. Imagine a world in which every choice you face is an easy choice, that is, there’s always a best alternative. If there’s a best alternative, then that’s the one you should choose, because part of being rational is doing the better thing rather than the worse thing, choosing what you have most reason to choose. … A world full of only easy choices would enslave us to reasons. … (However) when alternatives are on a par, the reasons given to us, the ones that determine whether we’re making a mistake, are silent as to what to do. It’s here, in the space of hard choices, that we get to exercise our normative power, the power to create reasons for yourself …

When we choose between options that are on a par, we can do something really rather remarkable. We can put our very selves behind an option. … This response in hard choices is a rational response, but it’s not dictated by reasons given to us. Rather, it’s supported by reasons created by us. When we create reasons for ourselves to become this kind of person rather than that, we wholeheartedly become the people that we are. You might say that we become the authors of our own lives.

When you face hard choices you need to look inside yourself.

… Instead of looking for reasons out there, we should be looking for reasons in here: Who am I to be? You might decide to be a pink sock-wearing, cereal-loving, country-living banker, and I might decide to be a black sock-wearing, urban, donut-loving artist. What we do in hard choices is very much up to each of us.

If you don’t exercise your normative powers you become a drifter.

Drifters allow the world to write the story of their lives. They let mechanisms of reward and punishment — pats on the head, fear, the easiness of an option — to determine what they do. So the lesson of hard choices reflect on what you can put your agency behind, on what you can be for, and through hard choices, become that person.

Hard choices are part of what makes us human.

Far from being sources of agony and dread, hard choices are precious opportunities for us to celebrate what is special about the human condition, that the reasons that govern our choices as correct or incorrect sometimes run out, and it is here, in the space of hard choices, that we have the power to create reasons for ourselves to become the distinctive people that we are. And that’s why hard choices are not a curse but a godsend.

Here is Ruth’s full TED talk:

5 Simple Notions that Help Solve Problems

Here are five simple notions, found in Damn Right!: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger, that Charlie Munger, the Billionaire business partner of Warren Buffett, finds helpful in solving problems.

***
1. Simplify

My first helpful notion is that it is usually best to simplify problems by deciding big “no-brainer” questions first.

***
2. Numerical Fluency

The second helpful notion mimics Galileo’s conclusion that scientific reality is often revealed only by math, as if math was the language of God. Galileo’s attitude also works well in messy practical life. Without numerical fluency, in the part of life most of us inhabit, you are like a one-legged man in an ass-kicking contest.

***
3. Invert

Inverting the problem won’t always solve it, but it will help you avoid trouble. Call it the avoiding stupidity filter.

The third helpful notion is that it is not enough to think problems through forward. You must also think in reverse, much like the rustic who wanted to know where he was going to die so that he’d never go there. Indeed, many problems can’t be solved forward. And that is why the great algebraist, Carl Jacobi, so often said: “invert, always invert.” And why Pythagoras thought in reverse to prove that the square root of two was an irrational number.

***
4. Study The Basics

The basics are something that keeps coming up. The first of the five elements of effective thinking is understand deeply.

Munger also believes in the basics:

The fourth helpful notion is that the best and most practical wisdom is elementary academic wisdom. But there is one extremely important qualification: you must think in a multidisciplinary manner. You must routinely use all the easy-to-learn concepts from the freshman course in every basic subject. Where elementary ideas will serve, your problem solving must not be limited, as academia and many business bureaucracies are limited, by extreme balkanization into disciplines and subdisciplines, with strong taboos against any venture outside assigned territory. …

If, in your thinking, you rely on others, often through purchase of professional advice, whenever outside a small territory of your own, you will suffer much calamity.

This happens in part because professional advisors are often undone, not by their conscious malfeasance rather by troubles found in their subconscious bias.

His cognition will often be impaired, for your purposes, by financial incentives different from yours. And he will also suffer from the psychological defect caught by the proverb: to a man with a hammer, every problem looks like a nail.”

***
5. Lollapalooza Effects

And you need to combine really big things.

The fifth helpful notion is that really big effects, lollapalooza effects, will often come only from large combinations of factors. For instance, tuberculosis was tamed, at least for a long time, only by routine combined use in each case of three different drugs. And other lollapalooza effects, like the flight of an airplane, follow a similar pattern.

***
Still Curious?

See how Munger applies these in this essay. Learn more about the wit and wisdom of Charlie Munger by picking up a copy of Poor Charlie’s Almanack and Damn Right!: Behind the Scenes with Berkshire Hathaway billionaire Charlie Munger.

Winning An Argument

talk

We spend a lot of our lives trying to persuade others.

This is one of the reasons that Daniel Pink says that we’re all in sales.

Some of you, no doubt, are selling in the literal sense— convincing existing customers and fresh prospects to buy casualty insurance or consulting services or homemade pies at a farmers’ market. But all of you are likely spending more time than you realize selling in a broader sense—pitching colleagues, persuading funders, cajoling kids. Like it or not, we’re all in sales now.

There are many ways to change minds. We often try to convince people. In the difference between persuading and convincing, Seth Godin writes:

Marketers don’t convince. Engineers convince. Marketers persuade. Persuasion appeals to the emotions and to fear and to the imagination. Convincing requires a spreadsheet or some other rational device.

It’s much easier to persuade someone if they’re already convinced, if they already know the facts. But it’s impossible to change someone’s mind merely by convincing them of your point.

But what do we do when this doesn’t work?

Kathryn Schulz, in her book Being Wrong: Adventures in the Margin of Error, explains:

… The first thing we usually do when someone disagrees with us is that we just assume they are ignorant. You know, they don’t have access to the same information we do and when we generously share that information with them, they are going to see the light and come on over to our team.

When that doesn’t work. When it turns out those people have all the same information and they still don’t agree with us we move onto a second assumption. They’re idiots …

This is what we normally do. We try to convince them that we’re right and they are wrong. (Most people, however, are not idiots.)

In many cases this is just us being overconfident about what we think — the illusion of explanatory depth. We really believe that we understand how something works when we don’t. In a study about a decade ago, Yale professors Leonid Rozenblit and Frank Keil, in a small study, asked students to explain how simple things work, like a flush toliet, a sewing machines, piano keys, a zipper, and a cylinder lock. But we’re not nearly as smart as we think. When their knowledge was put to the test, their familiarity with these things led to an (unwarranted) overconfidence about how they worked.

Most of the time people don’t put us to the test. When they do, the results don’t match our confidence. (Interestingly, one of the best ways to really learn how something works is to flip this around. It’s called the Feynman Technique.)

***
The Era of Fake Knowledge

It’s never been easier to fake what you know: to yourself and others.

It’s about energy conservation. Why put in the effort to learn something if we can get by most of the time without learning it?

Unable to discern between what we know and what we pretend to know, we ultimately become victims of our own laziness and intellectual dishonesty.

We end up fooling ourselves.

In a lecture at the Galileo Symposium in Italy in 1964, the future Nobel Laureate Richard Feynman, said “The first principle is that you must not fool yourself, and you are the easiest person to fool.”

***
How to Win an Argument

Research published last year and brought to my attention by Mind Hacks shows how this effect might help you convince people they are wrong.

Mind Hacks summarizes the work:

One group was asked to give their opinion and then provide reasons for why they held that view. This group got the opportunity to put their side of the issue, in the same way anyone in an argument or debate has a chance to argue their case.

Those in the second group did something subtly different. Rather than provide reasons, they were asked to explain how the policy they were advocating would work. They were asked to trace, step by step, from start to finish, the causal path from the policy to the effects it was supposed to have.

The results were clear. People who provided reasons remained as convinced of their positions as they had been before the experiment. Those who were asked to provide explanations softened their views, and reported a correspondingly larger drop in how they rated their understanding of the issues.

***

This simple technique is one to add to our tool belt.

If you want to win an argument, ask the person trying to convince you of something to explain how it would work. Odds are they have not done the work required to hold an opinion. If they can explain why they are correct and how things would work, you’ll learn something. If they can’t you’ll soften their views, perhaps nudging them ever so softly toward your views.

It is worth bearing in mind, however, that someone might do the same to you.

Miracles Happen — The Simple Heuristic That Saved 150 Lives

"In an uncertain world, statistical thinking and risk communication alone are not sufficient. Good rules of thumb are essential for good decisions."
“In an uncertain world, statistical thinking and risk communication alone are not sufficient. Good rules of thumb are essential for good decisions.”

Three minutes after taking off from LaGuardia airport in New York City, US Airways Flight 1549 ran into a flock of Canada geese. At 2800 feet, passengers and crew heard loud bangs as the geese collided with the engines rendering them both inoperable.

Gerd Gigerenzer picks up the story in his book Risk Savvy: How to Make Good Decisions:

When it dawned on the passengers that they were gliding toward the ground , it grew quiet on the plane. No panic, only silent prayer. Captain Chesley Sullenberger called air traffic control: “Hit birds. We’ve lost thrust in both engines. We’re turning back towards LaGuardia.”

But landing short of the airport would have catastrophic consequences, for passengers, crew , and the people living below. The captain and the copilot had to make a good judgment. Could the plane actually make it to LaGuardia, or would they have to try something more risky, such as a water landing in the Hudson River? One might expect the pilots to have measured speed, wind, altitude, and distance and fed this information into a calculator. Instead, they simply used a rule of thumb:

Fix your gaze on the tower: If the tower rises in your windshield, you won’t make it.

No estimation of the trajectory of the gliding plane is necessary. No time is wasted. And the rule is immune to calculation errors. In the words of copilot Jeffrey Skiles: “It’s not so much a mathematical calculation as visual, in that when you are flying in an airplane, things that— a point that you can’t reach will actually rise in your windshield. A point that you are going to overfly will descend in your windshield.” This time the point they were trying to reach did not descend but rose. They went for the Hudson.

In the cabin, the passengers were not aware of what was going on in the cockpit. All they heard was: “This is the captain: Brace for impact.” Flight attendants shouted: “Heads down! Stay down!” Passengers and crew later recalled that they were trying to grasp what death would be like, and the anguish of their kids, husbands, and wives. Then the impact happened, and the plane stopped. When passengers opened the emergency doors, sunlight streamed in. Everyone got up and rushed toward the openings. Only one passenger headed to the overhead bin to get her carry-on but was immediately stopped. The wings of the floating but slowly sinking plane were packed with people in life jackets hoping to be rescued. Then they saw the ferry coming. Everyone survived.

All this happened within the three minutes between the geese hitting the plane and the ditch in the river. During that time, the pilots began to run through the dual-engine failure checklist, a three-page list designed to be used at thirty thousand feet, not at three thousand feet: turn the ignition on, reset flight control computer, and so on. But they could not finish it. Nor did they have time to even start on the ditching checklist. While the evacuation was underway, Skiles remained in the cockpit and went through the evacuation checklist to safeguard against potential fire hazards and other dangers. Sullenberger went back to check on passengers and left the cabin only after making sure that no one was left behind. It was the combination of teamwork, checklists, and smart rules of thumb that made the miracle possible.

***

Say what? They used a heuristic?

Heuristics enable us to make fast, highly (but not perfectly) accurate, decisions without taking too much time and searching for information. Heuristics allow us to focus on only a few pieces of information and ignore the rest.

“Experts,” Gigerenzer writes, “often search for less information than novices do.”

We do the same thing, intuitively, to catch a baseball — the gaze heuristic.

Fix your gaze on an object, and adjust your speed so that the angle of gaze remains constant.

Professionals and amateurs alike rely on this rule.

… If a fly ball comes in high, the player fixates his eyes on the ball, starts running, and adjusts his running speed so that the angle of gaze remains constant. The player does not need to calculate the trajectory of the ball. To select the right parabola, the player’s brain would have to estimate the ball’s initial distance, velocity, and angle, which is not a simple feat. And to make things more complicated, real-life balls do not fly in parabolas . Wind, air resistance, and spin affect their paths. Even the most sophisticated robots or computers today cannot correctly estimate a landing point during the few seconds a ball soars through the air. The gaze heuristic solves this problem by guiding the player toward the landing point, not by calculating it mathematically . That’s why players don’t know exactly where the ball will land, and often run into walls and over the stands in their pursuit.

The gaze heuristic is an example of how the mind can discover simple solutions to very complex problems.

***

The broader point of Gigerenzer’s book is that while rational thinking works well for risks, you need a combination of rational and heuristic thinking to make decisions under uncertainty.