April 12, 2012

What We Are On About Here

Patrick Marren

Few people think more than two or three times a year. I've made an international reputation for myself by thinking once or twice a week. - George Bernard Shaw

The Nobel-winning economist and psychologist Daniel Kahneman published a book late last year entitled Thinking, Fast and Slow. In it, he distinguishes between two modes of thinking used by humans. The first is System 1: fast, automatic and intuitive. It suffices for the vast majority of our everyday purposes. We don't need to think deeply about not touching hot stoves, which leg to put our pants on first, or swerving to avoid an oncoming truck.

The second (surprise!) is System 2: slow, conscious, and laborious. It's probably the type of thought that George Bernard Shaw was describing. Most people cannot, for example, multiply large sums in their heads without expending some serious effort. As Kahneman's experiments have showed, such thinking actually exacts a physical toll upon humans; their pupils actually dilate and energy expended increases.

(A recent book by the psychologist Roy Baumeister and journalist John Tierney, Willpower, documents research that shows that decision-making is about the most taxing kind of mental activity there is. Ever felt sapped from having to make a lot of choices in a short period of time? Well, you probably really were fatigued, and it was the decisions you made that tired you out - something akin to the System 2 thought Kahneman describes. But I digress.)

Between Kahneman's two types of thought, we at FSG are in the #2 business.

(Wait, that does not sound right.)

To put it more socially acceptably, we are about making System 2 thinking, the laborious, pupil-dilating, difficult type of thought Kahneman describes, into something more like the easy, more intuitive System 1 type of thought. The way we do this is by designing analytical frameworks that guide our workshop participants' thinking without predetermining their outcomes. (No, we don't actually have "The Answer" in our back pockets before we start. So much the worse for us.)

Kahneman also says that many things people deal with on a regular basis start out requiring "System 2" laborious thought processes, then, with time, experience, and increased confidence, become amenable to the "System 1" intuitive approach.

"As you become skilled in a task, its demand for energy diminishes. Studies of the brain have shown that the pattern of activity associated with an action changes as skill increases, with fewer brain regions involved." - p. 35

(Think of your first time trying to drive, especially if it was a stick shift, versus the last time you went out for milk.)

But one of my core competencies gets a big boost at the end of the next few sentences (and no, it's not "talent"):

"...Talent has similar effects. Highly intelligent individuals need less effort to solve the same problems, as indicated by both pupil size and brain activity. A general 'law of least effort' applies to cognitive as well as physical exertion. The law asserts that if there are several ways of achieving the same goal, people will eventually gravitate to the least demanding course of action. In the economy of action, effort is a cost, and the acquisition of skill is driven by the balance of benefits and costs. Laziness is built deep into our nature [my emphasis]." - p. 35

After twenty-plus years of doing scenario planning, many of the elements of the process have become "System 1" to us; but there's a seemingly irreducible amount of painful "System 2" to this process each time we do it for a new client, or simply for a new purpose. A lot of "System 2" thinking has to be done up front to create the analytical frameworks that will make our strategy workshops, for example, run smoothly and produce creative, useful output mostly using the participants' "System 1" intuition.

One last quote from Kahneman's book Thinking, Fast and Slow: "...[A] puzzling limitation of our mind: our excessive confidence in what we believe we know, and our apparent inability to acknowledge the full extent of our ignorance and the uncertainty of the world we live in. We are prone to overestimate how much we know about the world and to underestimate the role of chance in events. Overconfidence is fed by the illusory certainty of hindsight." - p. 14

And one last illustrative example from a recent James Fallows article in the Atlantic about the Obama administration: "Lawrence Summers...made a similar argument about Obama's health-care legislation. 'If he is re-elected, 40 years from now this will be like Medicare...part of the landscape....' And if Obama should lose, ...'then the health-care plan will be presented as a sign of 'overreach' and 'hubris' and the administration's 'inevitable' failure." - James Fallows, "Obama, Explained," The Atlantic, March 2012, p. 60

(Apparently a need to think we are a lot better than we are is also built deep into our nature.)