Great article in the financial times with the subtitle: Watching the world’s best tennis players at Wimbledon over the next fortnight can help us make better decisions.
Here is what I learnt from interviewing more than 100 experts in different fields and working through several hundred recent studies and experiments: given the fast pace of modern life, most of us tend to react too quickly. We don’t, or can’t, take enough time to think about the increasingly complex timing challenges we face. Technology surrounds us, speeding us up. We overreact to its crush every day, both at work and at home.
One of the most surprising aspects of Lehman’s collapse was that the firm’s leaders had tried so hard to understand the problems associated with their own decision-making. In autumn 2005, Lehman’s senior managers hired a group of experts to teach four dozen top executives how to make better decisions. Max H Bazerman, a chaired professor at Harvard Business School, reviewed cutting-edge decision research. Mahzarin Banaji, a Harvard psychologist, administered custom-designed tests to help the executives understand their biases. Malcolm Gladwell, who had just published Blink, a bestseller about the “first two seconds” of our reactions, gave the capstone lecture.
These managers sat for a cutting-edge course on the timing of decisions. Then, they rushed back to their offices and made some of the worst decisions in the history of financial markets. Three years later, their firm was gone.
If Lehman had lived until today, its decision-making course would look radically different. The core message of recent research is the opposite of the one Lehman’s executives learnt in 2005: the longer we can wait, the better. And once we have a sense of how long a decision should take, we generally should delay the moment of decision until the last possible instant. If we have an hour, we should wait 59 minutes before responding. If we have a year, we should wait 364 days. Even if we have just half a second, we should wait as long as we possibly can. As the matches at Wimbledon will illustrate, even milliseconds matter.
Thinking about the role of delay is a profound and fundamental part of being human. Questions about delay are existential: the amount of time we take to reflect on decisions will define who we are. Is our mission simply to be another animal, responding to whatever stimulations we encounter? Or are we here for something more?
Life might be a race against time but it is enriched when we rise above our instincts and stop the clock to process and understand what we are doing and why. A wise decision requires reflection, and reflection requires a pause.
If we are limited to just one word of wisdom about decision-making for children born a hundred years from now, people who will have all our advantages and limitations as human beings but will need to navigate an unimaginably faster-paced world than the one we confront now, there is no doubt what that word should be.