"…All perceptions, judgments, and beliefs are inferences and not direct readouts of reality. This recognition should prompt an appropriate humility about just how certain we should be about our judgments, as well as a recognition that the views of other people that differ from our own may have more validity than our intuitions tell us they do."
Richard Nisbett, a renowned psychologist who Malcolm Gladwell calls the most influential thinker in his life, joins others, including Daniel Kahnemann (Thinking Fast and Slow) and Chip and Dan Heath (Decisive), in exploring how our thinking works for—and against us. Many of the conclusions he reaches and some of the examples he brings may be familiar to readers of these authors. Reading Nesbitt’s book reinforced, clarified and solidified my understanding of what I’d already learned. His explanations are clear, examples easy to comprehend (and often fun), and there are studies galore to read about.
Nesbitt also demonstrates ways to think better—and presents many practical and immediately useful tools and concepts. Finally, Nesbitt includes a discussion about Western and Eastern thought—demonstrating that some of what Westerners consider absolute truth is not part of the Eastern way of thinking—and vice versa. To recognize that our definitions of logic are not universal is humbling—and to understand the value of dialectical thinking, an Eastern alternative, opens up new ways of thinking about what is true.
Assumptions Tend to be Wrong—Test Them
"The bad news is that our beliefs about many important aspects of the world are often sorely mistaken, and the ways in which we acquire them are often fundamentally flawed. "
Nisbett presents, throughout the sixteen chapters of the book, a compendium of concepts that can help us become aware of the way our assumptions fail us. He covers everything from logic errors, to a variety of “heuristics” and schemas that trip us up (e.g., things that are recent seem truer than things that are distant), to our tendency to not allow our unconscious to work when we get stuck (thus the value of sleep and of taking breaks.) Recognizing the significant limitations of our assumptions is a critical take-away. Like other authors who cover this territory from a psychology, neuroscience or economics lens, the message that we are better off being less certain is one of the primary ones of this book as well. Equally important is recognizing that we have many more opportunities than we might think to test our assumptions and beliefs and to think well.
One of the methods we have for thinking better and making better decisions is by doing lots less assuming and lots more testing. One of the innovations of the Obama campaign was using A/B testing for its website design rather than doing what had been done before—i.e., trusting the the HiPPO (Highest-Paid Person’s Opinion.) The web developers set up A/B testing models. For example, they built two pages with different language and found out which language drew people in more. While exceedingly simple, this approach was new and innovative. Different combinations were tested and a rather counter-intuitive (at least to me) combination prevailed—which changed the nature of how campaign websites work.
Nesbitt suggests examples of how we can apply A/B testing to business problems as well as personal ones. We can become experimenters rather than basing our decisions and actions on our (often flawed) assumptions. He also suggests that when we are evaluating decisions others have made and information that we receive, we should try to understand whether it is backed by assumptions—or experiments.
"A direct consequence of… ‘context blindness’ is that we tend to exaggerate the influence of personal, 'dispositional' factors—preferences, personality traits, abilities, plans and motives—on behavior in a given situation. "
Our inability to recognize the importance of context and to overestimate personality is the source of what Nisbett calls the “most pervasive and consequential inference mistake” that we make in our lives. So much so that this has been labeled as the “fundamental attribution error.”
Here’s a study that makes this error exceptionally clear. Seminary students (people we tend to think will help others in need) were sent to a building across campus to deliver a sermon on the Good Samaritan (yes, really!) and told what path to take. Some students had lots of time to get there; others were told they were running late already. In both situations, they encountered a person sitting, groaning and coughing in a doorway. What percentage of students offered help?
The answer: if the students had lots of time—almost two-thirds stopped to help. If they were running late—just 10% stopped.
Not only does context influence behavior—it’s also hard for us to believe it does. Most people, when told about this situation, do not expect the seminarian running late to behave differently from the one who has lots of time. We believe it’s about the person, not the situation—unless we are the person, in which case we give a lot more credence to context.
If we can recognize this error and then step back and think about context, we can make better hiring decisions and management decisions—in fact, any decision we make about people can be made more generously and more effectively.
The Sunk Cost Fallacy
"The economist’s motto, and it should be yours, is that the rest of your life begins now. Nothing that happened yesterday can be retrieved. No use crying over spilt milk. "
Here’s a relatively simple, yet very practical principle—and one that we can easily understand yet struggle to operate according to. It is almost never a good idea to keep going because you’re trying to “rescue” money you’ve already spent. Only future benefits and cost are relevant in your choices. If you’ve got tickets to a performance and you find the lead performer won’t be there—don’t go just because you’ve spent the money. Go only if it’s still what you want to do.
In a business context—don’t continue with a plan that’s not working just because of money you’ve spent to date. Cut your losses. At its worst, in the public arena, this fallacy has not infrequently been used as justification for continuing wars—so that the fallen won’t have died in vain.
Nisbett does tell us that the sunk cost fallacy is not an excuse for walking out of a relationship that takes work—so be careful how you apply this one!
I love books that challenge our thinking about our thinking—I especially love books that help us become better thinkers. Nisbett does both. And, as with all good books in this genre, I walk away both humbled by the realization that I will continue to misinterpret, be certain when I shouldn’t be, and believe I know what I really don’t. I also walk away hoping that I’ll be a little bit more aware of my not knowing, and will get better and better at using new tools to think, reason and intuit better—and to catch myself when I am wrong.