Three Ways to Create Breakthrough Thinking for More Powerful Decisions
Listen to Episode 107:
Episode 107 Transcript:
This episode is brought to you by Business Advancement Incorporated − enabling successful leaders and companies to accelerate to their next level of growth. On the web at BusinessAdvance.com. And now, here’s Pam and Scott.
Pam Harper: Thanks, Chris. I’m Pam Harper, Founding Partner and CEO of Business Advancement Incorporated, and right across from me as always is my business partner and husband, Scott Harper. Hi, Scott.
Scott Harper: Hi, Pam. As always, it’s wonderful to be joining you again for another episode of Growth Igniters Radio with Pam Harper and Scott Harper. If this is your first time listening, our purpose is to spark new insights, inspiration, and immediately useful ideas for visionary leaders − and their companies − to accelerate to their next level of growth and success. So Pam, what are we going to take on today?
Pam Harper: Three ways to create breakthrough thinking for more powerful decisions.
Scott Harper: Okay − always a good thing.
Pam Harper: As the year is unfolding, what we’re already seeing is that it is a dramatically different place. We’re going to need to make more powerful decisions. That means not just thinking incrementally, it means taking a radically different approach to respond to all of these changing conditions, − and that’s breakthrough thinking. The issue is that we have cognitive biases that tend to get in the way of this kind of thinking.
Scott Harper: Right. These are tendencies towards habits of thought, or mental illusions analogous to optical illusions that can lead us astray sometimes.
Pam Harper: Now, you read a book that is called The Undoing Project, and that’s very apt because to create breakthrough thinking that leads to more powerful decisions, we have to undo a lot of the cognitive biases that we’ve acquired over the years.
Scott Harper: That’s right. As you said, The Undoing Project − the subtitle is, “A Friendship That Changed Our Minds.” It’s by Michael Lewis, who wrote, Moneyball and The Big Short.” He’s a really great popularizer of economic thinking. This book is about the friendship of two really amazing psychologists, experimental psychologists originally from Israel, Daniel Kahneman and Amos Tversky. They collaborated together for over 16 years and created the foundation of what is now known as “Behavioral Economics.”
Pam Harper: What did you like about this book, Scott?
Scott Harper: This book was in Lewis’ style, very readable, and it really captured the idea of two very, very different personalities working together. Tversky was very outgoing, he was brave, he was a decorated soldier and Israeli army. Kahneman was much more introverted, more uncertain of himself. He had survived the Nazi occupation in Europe and had been in a concentration camp. He was struggling to find the meaning of why people do such outrageous things.
Pam Harper: So very different personalities?
Scott Harper: Very different personalities, but they came together in a way that really drew out thinking that neither of them by themselves would’ve been able to come up with. I found that very inspirational. What I also was inspired by was the process that Lewis talked about on how they set about undoing, unraveling how people think that can really lead them astray. They started out by asking simple questions that had correct answers, but people almost never got correct.
Pam Harper: Our cognitive biases enter in at all different times?
Scott Harper: Right. Of course, at that time − the time that they were doing the research in the 60s, no one was talking about “cognitive biases.” They really were at the forefront of developing this concept. In doing this, they created a foundation of “why,” why sometimes our intuition just doesn’t work. Other times it does. As you know, you can’t take the scientist out of me − I love to understand why, because if you understand why, why things work the way they work, then you can do something about it. You can use that for that insight in unfamiliar conditions and unfamiliar situations, and make better decisions, and create the reality that you want to create in a very purposeful way.
Pam Harper: We’re going to take a quick break. When we come back, we’re going to learn more about some of the stories behind the why of The Undoing Project. Stay with us.
Scott Harper: Thanks for joining us on Growth Igniters Radio with Pam Harper and Scott Harper. We are brought to you by Business Advancement Incorporated. We focus on enabling visionary leaders to dramatically increase momentum in their companies for game-changing results. We’re on the web at BusinessAdvance.com.
Pam Harper: Does this topic resonate with you? Check out related episodes to expand your perspectives and take away even more immediately actionable ideas. Just go to GrowthIgnitersRadio.com, select Episode 107, and scroll down to resources.
Scott Harper: And while you’re there, sign up for our weekly alert of upcoming episodes so you’ll always be up to date.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper, − that’s me − and Scott Harper. Today, Scott and I are talking about three ways to create breakthrough thinking for more powerful decisions. You can get resources for this episode by going to GrowthIgnitersRadio.com, Episode 107. Scott, we started out talking about The Undoing Project by Michael Lewis, which is a very compelling book.
Now let’s talk about three ways to create breakthrough thinking through undoing some of our cognitive biases. Let’s talk about the first one.
Scott Harper: Okay. First off, let’s acknowledge that since Kahneman and Tversky did their research back in the 60s, other people have picked up on it, and now you can Google “cognitive bias” and come up with over 100 different types.
Pam Harper: That’s right. Now, some of them I am a little suspect of. If you go to Wikipedia, you see some that are just weird, but whether they’re scientific or not, the fact is that we have a lot of biases. We don’t go around talking about, “This is the monkey-wrench bias,” and all of this. What’s important is that we can recognize a cognitive bias when we experience it. In that book, what I appreciated about it was that he told stories illustrating cognitive biases, and it’s through stories that we learn.
Scott Harper: Just to represent one that comes up time and again − people frequently refer to this cognitive bias as “pigeonholing” or “putting people in a box.” The way that Kahneman and Tversky did the research was they would very frequently lay out little scenarios to people and then have them make choices for answers. One very famous example from one of their best papers was what became known as the “Linda question.” I’m going to read this from page 324. The question was framed, “Linda is 31 years old. She’s single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social injustice. She also participated in the anti-nuclear demonstrations.”
Then they ask questions about, “To what degree does Linda resemble the typical member of each of the following classes?” They gave several classes. One of them was that “Linda’s a bank teller;” another one was that “Linda is a bank teller and is active in the feminist movement” − how likely are each of these things to be? To their amazement − and they did this experiment multiple times and multiple ways − what do you think that the majority of people said Linda was?
Pam Harper: I don’t know. You tell me…
Scott Harper: The majority said, “Linda’s a bank teller and is active in the feminist movement.” Now, the fact is that if you just look at probabilities, the probability of Linda’s being a bank teller… Okay, that’s possible.
Pam Harper: That is.
Scott Harper: “Linda is a feminist…” that’s possible too.
Pam Harper: That’s possible.
Scott Harper: But if you take the two of those together, just statistically they are less likely. Because “Linda is a feminist bank teller” is entirely encompassed in “Linda is a bank teller.” Okay; so what you’re doing is you are looking at the characteristics of this person and saying, “She has to be that,” but it’s not strictly logical.
Pam Harper: It may not be logical, but it is understandable. This is very interesting Scott. Why did this happen? Why was this pigeonholing happening?
Scott Harper: In Tversky and Kahneman’s research, they came up with the concept that people create mental models based upon experience. Often you see this, and this is the cause of that, or this is related. The relatedness is what can trip people up. In this Linda model, they describe someone who would have maybe some of the typical characteristics of a feminist, but they didn’t ask, “Is she a feminist?” − full stop. They said, “Is she a bank teller, or is she a bank teller who is also a feminist?” What’s more likely is one thing, and not two things combined. And yet people allowed that anchoring to bias them and draw the incorrect conclusion. They were asked about probabilities, and it was less probable.
Pam Harper: We can’t make assumptions about a person based on only knowing some of their characteristics. That’s true in all kinds of cases. In order to have those breakthrough decisions that lead to more powerful results, we need to be able to shed the cognitive biases. In this case, we’re talking about pigeonholing, which impacts not only hiring. It also impacts strategy and execution. If we’re making decisions about something based on only a few factors, we can jump to wrong conclusions. We have to look at the complete picture. Scott, what’s another cognitive bias?
Scott Harper: Another very common cognitive bias that Tversky and Kahneman first turned up has a label. It’s called, “The halo effect.” It really is the close cousin of pigeonholing, but different.
Have you ever experienced in a meeting, where you have someone − maybe they’re a little soft-spoken, maybe they’re a little lower rank than some of the other people in the meeting − and they say something, but it’s ignored or dismissed − pushed aside. The meeting goes on and a little bit later someone else says something fairly similar, but maybe they’re a little more attractive or they’re more self-assured, or they’re a higher rank. And people go, “Great idea!”
Pam Harper: There is the halo.
Scott Harper: Right, have you ever seen that? That’s the halo effect. It may not be actually correct, but the researchers found that there is a correlation between how confident someone is, or the higher level in the hierarchy that they are, and how believable people can perceive them to be.
Pam Harper: This is very important because, in the uncertain world which we now live in, people aren’t always going to be right just because they’re confident.
Scott Harper: Right.
Pam Harper: To create breakthrough thinking for more powerful decisions, we need to look beyond the confidence into the substance of the message. We need to find ways to test it out, to see if it’s really viable.
Scott, what’s a third cognitive bias we can challenge to create breakthrough thinking and more powerful decisions?
Scott Harper: Okay, another one that Kahneman and Tversky made famous was what has become known as is the “availability bias.” That is that what we can easily remember can really color the decisions and the conclusions we make. One of the early questions they ask was, “For any given consonant − say, R − is it more likely that on a page of a book that you’re going to find more words with R as the first letter or R as the third letter? They did this for and other consonants as well. Almost every time people said, “Oh, much more frequently as the first letter.” Why? Even though 2:1, these consonants were more frequently in third place. It’s almost impossible to think of a word where R is the third letter. But rat, right, rate − okay easy. If you go for the third letter, you can’t think of it. Availability in memory influences the decision.
Now, in more practical terms in business, which they did not study, but we’ve seen time and again and other people have as well − there are times where we associate a prior effect or a prior result with the future. For instance, “we tried a strategy and it didn’t work.” Or “we tried a certain strategy and by golly it was great.” The tendency is to turn off to strategies similar to those that failed, and turn on to those similar to what worked. However, the fact is that allowing memories of something that happened in the past that are easily retrievable to influence the conclusion so we make about the future without really diving deeper into what’s going on − it can lead us astray.
Pam Harper: This is especially dangerous as things are changing rapidly. That strategy that did or did not work even six months ago could play out very differently today. It’s critical to dig deeper and look at what’s the same and what’s different before you make your decision.
Scott Harper: Now, it’s very important to point out that these cognitive biases, and all the other cognitive biases that have been described since Kahneman and Tversky did their work, are are not related to how smart we are, how experienced we are, how successful we are or haven’t been…
Pam Harper: They’re related to how human we are. We’re in our own systems. We’re hardwired to think like this.
Scott Harper: That’s right. What we have to do is accept it, know that these cognitive biases exist, know that tendencies to have instincts and intuitions that can lead us astray exist. We also have to recognize that sometimes, intuitions and instinct are very, very good and extremely useful to guiding us to new breakthroughs and new ways of doing things that will create entirely new opportunities for success.
The question is, how do you tell the difference between the two types of instinct and intuition? How can we immunize ourselves as individuals and as companies against tendencies that will run counter to getting the outcomes that we really need, and tendencies that will advance our objectives?
Pam Harper: Let’s dig deeper into that in a moment. But now, we’re going to take another quick break. When we come back, Scott and I are going to talk about three immediately useful ideas for creating breakthrough thinking for more powerful decisions. Stay with us…
Scott Harper: You are listening to Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated. On the web at BusinessAdvance.com.
Pam Harper: Scott, we’re now entering our third year of Growth Igniters Radio with Pam Harper and Scott Harper.
Scott Harper: That’s right. It’s almost exactly two years ago that we started the podcast series. We’re so glad that we’re getting more and more listeners all the time.
Pam Harper: If you’ve been finding the series valuable, would you help us spread the good word?
Scott Harper: Just go to GrowthIgnitersRadio.com; select Episode 107 and use the social media share links on the left side of the page to tell your communities all about us.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper and Scott Harper. Today, Scott and I have been talking about creating breakthrough thinking for more powerful decisions. We’re doing it in the form of shedding our cognitive biases. Now we’re going to talk about three immediately actionable ideas for putting the concepts we discussed in the second segment to use.
The first idea is to test out whether you have a cognitively diverse group of people around you − a network of people who can help you identify if you’re being influenced by cognitive biases.
For instance, are there people who, if you’re a quick thinker, that you can tap into who can slow things down a little bit and be a little more analytical? Do you have people in your network who see the signs of emerging trends and opportunities? That’s great. Who do you have in your network who can be sensitive to the signs of long-term threats and imminent dangers?
Scott Harper: And who would you have in your network that can project out some of the practical implications of mobilizing these decisions?
Pam Harper: Who do you have in your network who can talk to you about the cultural implications of whatever that decision is?
Scott Harper: The point is that the more cognitive diversity you have in a group of people that will talk to you and each other frankly and openly, the more that each of your individual biases will cancel out. This will help you come to a more robust idea of what the best breakthrough ideas really are that can be moved forward and elevate you to that next level of success.
Pam Harper: Exactly. A second immediately useful idea is now more of a responsive kind of test. In other words, when people push back at you, how do you respond?
Scott Harper: Do people push back at you? That’s the first question. Because if they aren’t − if you’re not getting people questioning and asking questions, and you’re not questioning them− then you have to ask yourself, “Have I created a environment where we’re having the type of conversation that is going to surface cognitive biases and test out implications and say, “Okay, this is a great idea. What’s our evidence for this? What’s changed? What’s the same?” This will help you reach beyond thinking like “That worked. It’s going to work again.” So that’s the critical question: Are you having those challenging conversations? And how are you reacting to them?”
Pam Harper: It all comes down to creating a safe environment for people to push back. You do that by modeling, asking questions, and listening to the responses. It’s that productive give-and-take that raises the level of creativity and produces breakthrough thinking and more powerful decisions.
Scott Harper: Right. And by modeling this open conversation with your own network and community, you actually create an environment which propagates it through the entire organization.
Pam, what’s a third practical piece of advice that people can use to put these ideas to work?
Pam Harper: The third thing is to make sure that these kinds of conversations are happening on a regular basis.
Scott Harper: Okay, so it’s not just an occasional thing when we’re doing a strategic retreat or something like that?
Pam Harper: Not at all. Because the world is changing so rapidly, we need to have these conversations come up continually − “where are the opportunities? Where are the dangers? How can we make things work even better?”
Scott Harper: “What’s the evidence for our decisions? How can we really get a feeling that we’re not being beguiled by some cognitive bias that could lead us astray?”
Pam Harper: There’s no exact recipe for this. Every organization does it differently, but the criteria is that it’s regular, that it’s frequent, that there is a lot of give and take − and that it’s working.
Scott Harper: Right. That’s the real test of the whole mix there.
Pam, do you have any final thoughts on challenging cognitive biases and changing our minds to create that breakthrough thinking that we need to get to the next level?
Pam Harper: We can’t completely undo our cognitive biases. There are too many of them and we’re hardwired for them. However, we can accept that we have them, and we can find ways to outsmart them. The more we ensure that we’ve built a cognitively diverse network and community that can communicate with us in different ways, the more likely it is that we’ll be able to break through these cognitive biases and create more powerful decisions.
Scott Harper: Thanks, Pam, and thanks to you out there for listening to Growth Igniters Radio with Pam Harper and Scott Harper. To get show notes and links to resources for today’s episode, go to GrowthIgnitersRadio.com and select Episode 107.
Pam Harper: Until next time, this is Pam Harper…
Scott Harper: And Scott Harper…
Pam Harper: Wishing you continued success, and leaving you with this thought to consider:
Scott Harper: What can I do − starting now − to increase the strength of the networks for myself and for the rest of my company that will enable us to challenge cognitive biases and create the thinking we need to break through to even higher levels of success?