Social Animal: #2--Decision Making

Decision Making: 90% of all communication is nonverbal. So, what we take in lies well below the conscious surface of our minds. Yet that unconsciousness takes command of our minds when we make decisions—the most important of which is with whom we mate. Men are attracted to women based on a number of nonverbal cues like facial symmetry, full lips, full hair and waist-to-hip ratios. Indeed, both men and women are attracted to each other based on kindness and displays of compassion. And language itself fuels the courtship process. We have over 60,000 words but use only 100 words to express 60% of our world and 4,000 to express 98% of life. Emotion, it seems, is at the heart of all decision making. Researcher Kenneth Dodge says, “…emotion is the energy that drives, organizes, amplifies and attenuates cognitive activity and in turn is the experience and expression of this activity.”

Secrets of You Brain: Post #2--Understanding

Understanding Your Brain. This section covers a half dozen articles, all largely based on how the brain works and how much and how little we now know about it. In “It’s One Amazing Machine,” the brain is diagrammed with key functions explained in a sentence or two, which I found extremely effective and a great baseline for the rest of the publication (see p. 13). “Compared to other animals, humans have an extremely large cortex—thus their superior intelligence” (p. 14) puts a cap on this article after a lot of specific detail. In “Your Teen’s Amazing Brain,” we learn that the brain physiologically prunes back cells to prepare it for adulthood. But it does so from the back of the brain forward; thus the executive control center, the prefrontal cortex, is the last to get upgraded…so judgment in teenagers is their short suit. Controlled risk taking for teens might actually help them mature faster. “Rewiring Your Decision Making” discusses heuristics (short cut rules of thumb) that make life easier for us to make decisions. The problem is that shortcuts in critical situations, like skiing in threatening terrain or driving in dangerous conditions, can get us hurt or even killed. The authors talk about three common perilous heuristics: the familiarity heuristic (we take things for granted at our own peril); the default heuristic (we stick with what we know, even when it might hurt us); and, the acceptance heuristic (we make decisions based on the approval of others). “Straight-A Students, Take Note [Your Emotional Intelligence Might Mean More to Your Success in Life Than Book Smarts]” discusses the importance of emotional intelligence—self awareness, self regulation, empathy and social intelligence. The author warns us about things like e-mails that lack the benefit of non-verbal feedback, are often interpreted as negative, and can lead to risk taking that causes us to say things we might later regret.

Wisdom of Crowds: Post #4--Decentralization

Decentralization: By not predicting Pearl Harbor or terrorist events like 9/11, US intelligence agencies have been roundly criticized. In particular, the FBI was beaten up after 9/11 because in hindsight there had been many hints that the attacks were imminent. That very same criticism was made of the CIA about Pearl Harbor. We just can’t stand that we can’t predict the future! The big criticisms of the CIA, the FBI, NSA, and other intelligence agencies was the lack of centralization for decision making. The author argues that decentralization is the key to success, not its Achilles heel. What is core and missing is how to aggregate the diverse, decentralized experts, so that the wisdom of these very smart folks can be brought to bear on the decision-making process—which we know is geometrically better than centralized, homogenized thinkers. On this one, Congress and the president need to take heed.

Wisdom of Crowds: Post #2--Independence

Independence: We’re all aware of peer pressure. In research, it’s called social proof and has been studied for many years. Whether the experiments were people pointing at the sky (the more people pointing at the sky, the more people stopped and looked up) or whether it’s a rush to buy an iPod because everyone around you is, this gets to the heart of the phenomenon of independence. While groups, especially cascading groups (based on early adopters convincing others to come along for the ride), who move toward iPods or Starbucks often make decent decisions, they’d make far better ones if they decided things as a group—but independently! Often groups make decisions sequentially. Think about how what you say in a group might depend on what your colleague or boss might say and how it could easily influence you. What if you collected data simultaneously and anonymously?

Wisdom of Crowds: Post #1--Overview

The Wisdom of Crowds by James Surowiecki (Anchor Books, 2005). Reviewed by Steve Gladis, Ph.D., July 2011.

Overview: Here’s a question—Who’s smarter than any CEO? Answer—the marketplace. So, does that make product development a crap shoot? Hardly. In fact, long before a product gets developed, CEOs have a built-in marketplace to help them. They’re called employees. In a smart and readable text, New Yorker writer James Surowieki, in the genre of Malcolm Gladwell (Blink, The Tipping Point, & Outliers), gives us hope in the form of a crowd. Here’s the shorthand summary of the book: When the educated guesses of a diverse and informed group—guessing about possible outcomes of uncertain events—are aggregated, a near perfect answer results. Surowiecki supplies us with compelling historical and modern-day examples, including one he conducted in Times Square by asking people to guess how many jelly beans were in a jar. But believe me, his examples get bigger and better when he discusses how companies like Eli Lilly, GM, and Hewlett-Packard have successfully enlisted the wisdom of internal crowds to predict where to invest their money for the future. He even offers the Federal Reserve as an example of how a complex issue can be addressed with a structure that uses internal crowds for collective judgment.
A couple of other key concepts were pointed out by the author. First, if you want such groups to be effective, you have to give the group a method to aggregate the opinions and data of their members. Second, if you engage a group in decision making, allow them to assist in implementing decisions. Too often we task groups and then treat them like they were merely advisors. This is the kind of book that senior officers of a company and board members should read right before strategic planning time and not long after it’s all over. According to the author, wise crowds need to have four elements: 1) independence from each other; 2) diversity in their point of view; 3) decentralization; and 4) a good aggregation method. Briefly, independence keeps groups from falling into an “expert” or power trap; diversity of point of view and opinion allows others to look at the problem from different and often revealing perspectives that provide varying glimpses into complex issues; decentralization points out the need for diverse people to think independently from each other in a way that doesn’t comingle the data; and aggregation ensures a way of collecting those data points while preserving the singularity of it. This week, I’ll talk about each of these four of these constructs that make wise crowds.

Why Good Leaders Make Bad Decisions

In the January 2009 issue of the HBR, authors Andrew Campbell, Jo Whitehead, and Sydney Finkelstein describe why good leaders can sometimes make bad decisions. Key quote of the article: “Our brains leap to conclusions and are reluctant to consider alternatives; we are particularly bad at revisiting our initial assessment of the situation(p.86)."

The authors offer three compelling unconscious reasons/distortions from neuroscience:
--Self Interest—if inappropriate, always distorts and corrupts decisions.
--Misleading Memories—subconscious pattern analysis sometimes sees what’s happening as the same pattern we’ve seen before, but that’s not always the case and gets us into troublesome decisions.
--Distorting Attachments—we fall in love with ideas, people, and places, which can become infatuations that take us down a road of infatuation that clouds judgment.

The authors point out “red flags” to look for. Here are just a few of the many they offer; :
--Lay out all options.
--Consider the principal decision maker—and assess his/her possible self interests, misleading memories, and distorting attachments (I have my clients always appoint a “devil’s advocate” for all major decisions. It can be a person or a team, but it/they keep the process honest).
--Consider anyone else whose opinion holds great weight in the decision- making process and consider his or her self interest, misleading memories, and distorting attachments.