December 30, 2009
News & Opinion: In the Books - Off to the Printers V
Though I fully support guns, children, the flag and American entrepreneurship, I do not condone guns that shoot flags at children for money. I’ve always been very clear about that.Robbie tried to reconcile his unhinged reasoning skills with reality in last year's issue of In the Books, looking at the many books published in 2008 that explored human psychology. As you'll see below, he counsels that we not be too human and, possibly, that we tie ourselves to the masts of ships like Odysseus. I think you'll want to read this.
Explorations Into the Human Psyche BY ROBBIE HARTMAN
To err is human. Of course, when it comes to your career, you don’t want to be too human. Cutting-edge research focusing on our decision-making tendencies, workplace interactions and the limitations of the mortal mind is casting new light on those moments when we’re all too human. The recent influx of books addressing the who, what, when and why of human behavior can help us understand—and guard against—our error-prone side, no matter how divine forgiveness may be. In a world where mankind too often relies on instinct and conventional wisdom, these books offer us an advantage by delving deeper into the human psyche.
For all of its unique talents and traits, the human mind exhibits familiar patterns from person to person. Whether we’re marketers, artists, athletes, teachers or CEOs, we tend to procrastinate, disavow numbers in favor of gossip and allow loss-aversion to influence our decisions. And while no book reveals a magic formula for creating a mistake-free super-brain, Gary Marcus posits in Kluge: The Haphazard Construction of the Human Mind that we can learn to modify our behavior to counteract these foibles of the mind.
When it comes to dealing with procrastination, Dan Ariely emphasizes the importance of setting deadlines in Predictably Irrational: The Hidden Forces That Shape Our Decisions. During a semester-long experiment at MIT, Ariely demonstrates that even elite students need set deadlines to improve performance. In one 12-week experiment involving classes that must complete three main papers by the end of the semester, the author found that a class with evenly spaced deadlines dictated by the professor outperformed a class that could choose its own deadlines, which in turn performed better than another class that received no deadlines at all. As Ariely states, “Interestingly, these results suggest that although almost everyone has problems with procrastination, those who recognize and admit their weakness are in a better position to utilize available tools for precommitment and by doing so, help themselves overcome it.”
Then again, seeing isn’t always believing. Even with numerical data to corroborate evidence, people sometimes look away. As Daniel Gardner explains in The Science of Fear, people tend to view statistics as “a cold, empty number. In itself, [a number] makes us feel little or nothing.”
Fortunately, that’s where people like Leonard Mlodinow come in. In The Drunkard’s Walk: How Randomness Rules Our Lives, Mlodinow walks readers through the numerical fog of mathematics. Using layman’s terms and familiar examples, like movie studios, Mlodinow explains randomness and probabilities to demonstrate how these concepts can lead to better business decisions. Recently, some studios have made changes at top-level positions because of a poor year at the box office, only to find that previous financial results (as well as ensuing successes or failures) simply reflected random fluctuations or regressions to the mean, not necessarily the skills of the executives. If a movie studio averages $500 million in gross domestic box office, then explodes to $1 billion, followed by a drop back to $350 million the next year, it doesn’t mean that the studio head was a genius for one year and a dunce the next. The sudden increase could have been a random jump: Perhaps economic concerns caused more families to go to the movies instead of on summer vacations; or a cultural event, such as an actor’s death or a political scandal, that coincided with a film’s release date could have provided an unexpected boost at the box office. Likewise, random events can cause fewer people to visit movie theaters and result in lower box office performances. The bottom line isn’t always a direct reflection of executive skill, good or bad. By increasing our understanding of mathematics, we—and movie studios—can better avoid assigning blame or credit for random events, and thereby make decisions based on more sound reasoning.
Mathematics may not come naturally to most of us, but on the flip side, not all that comes naturally is beneficial in the professional realm. As Gardner states in The Science of Fear, “People love stories about people. We love telling them and we love hearing them. It’s a universal trait, and that suggests to evolutionary psychologists that storytelling—both the telling and the listening—is actually hardwired into the species.”
Put simply, storytelling and gossip serve an evolutionary purpose by strengthening social bonds and roles. But when it comes to numbers-driven business, as Gardner warns, “Anecdotes don’t prove anything. Only data—properly collected and analyzed—can do that.”
In The Watercooler Effect, Nicholas DiFonzo explains how stories, in the form of gossip and rumors, can take flight even in the midst of contradicting data. DiFonzo, like all authors in the field of human behavior, offers solutions to combat instincts that may be holding us back professionally.
This isn’t to say that human nature is treated as a trivial force that can be manipulated at will. Ariely, who literally wrote the book on irrational behavior in Predictably Irrational, admits to falling victim to one of the same tendencies he warns about: spending too much time deciding between two similar options, consequently expending time, energy and resources in return for minimal gain.
“In the end, and with all my foreknowledge of the difficulty in this decision-making process, I was just as predictably irrational as everyone else,” Ariely notes.
A likely explanation for his (and our) hemming and hawing is our loss-averse nature. Loss-aversion, which refers to our preference for avoiding loss even over potential gain, leads people to hang onto a falling stock too long, to rush a product into the market before it’s ready, to compound mistakes while trying to stave off perceived losses.
“As difficult as it can be to admit defeat, staying the course simply because of a past commitment hurts us in the long run,” Ori Brafman and Rom Brafman explain in Sway: The Irresistible Pull of Irrational Behavior. Once again, the solution sounds easy: Slow down and look at the big picture. “When things go wrong, we can either apply a short-term, Band-Aid solution or remember that in the grand scheme of things it’s only a minor misstep,” they remind us. “Having a long-term plan—and not casting it aside—is the key to dealing with our fear of loss.”
Many of the authors’ solutions stem from commonsense advice, like avoiding decision-making when tired or distracted, and making contingency plans. The trick is to learn how to apply these lessons when our instincts would lead us astray. In other words: We can’t make our irrational side disappear, but we can start to avoid its allure.
In Kluge, Marcus reminds readers to consider concepts such as sample size and correlation vs. causation, and to reframe questions in order to view them from multiple angles.
As Marcus notes, “Odysseus tied himself to a mast to resist the temptations of the Sirens; we would all do well to learn from him.”