Management, Posts

Beware the Bandwagon Effect

Personal Development, Posts, Understand Yourself

Outsmart the Availability Heuristic

Salient events are easier to remember, so we give them more importance in our decisions. Psychologists call this simple fact “the Availability heuristic”, which is a cognitive bias.

Cognitive Bias?

Remember that cognitive biases are mental shortcuts that help us survive in a dangerous world, but they fool us in a complicated one. When you see a lion in the Serengeti, you need to run without thinking. But when you decide to buy a car, it would be better to avoid running to buy the one you see frequently in the ads and think thoroughly before making the decision.

Examples of the Availability Heuristic

Salient memories from one’s experience will impact its future decision, when searching for a job, a neighborhood, a partner, a vacation destination, etc. We focus on that specific event and forget about the rest. We make a poor decision, and we often regret it.

Plane crashes are so rare that everyone knows about them when they happen. Yet they seem to horrify people much more than car accidents, which cause many more victims… Sharks, Tsunamis, Terrorist attacks, etc. These are a salient cause of death, but they have, by far, the least number of victims compared to car accidents or medical errors.

AvailabilityHeuristic.png

The media are an enormous « availability bias » machine. Journalists and reporters are both victims and contributors to this social phenomenon. A journalist that reports “a plane departing from Berlin had landed safely in CDG airport this afternoon” will most probably lose his job. Continue reading “Outsmart the Availability Heuristic”

Management, Posts

Checklists: where the Disciplined Outperforms the Genius.

Checklists are a simple, powerful, yet often ignored, business tool. They provide a reliable and quick shortcut that improves our performance in the task at hand with less mental effort. Whether flying a plane, operating a surgery, troubleshooting a system, or making big decisions, checklists are always useful.

This post gives the reasons why checklists are paramount in some situations and emphasizes their importance in the process of decision-making.

What is a Checklist?

A checklist is a pre-defined standard operating procedure to follow when performing a specific task. It is a proven business tool that improves performance and minimizes human errors and mental effort.

How to build Checklists?

Both knowledge and experience contribute to checklist definition, in a closed feedback-loop fashion, where the checklist definition contributes to the knowledge and experience too.

Build_Checklist

Checklists are useful for frequent routines, which reduces the cognitive effort needed to perform them. Nevertheless, we can use them in any other task, profession or industry.

Why do we need Checklists?

Image result for checklist manifestoSimply put, we need to use checklists to perform some tasks because we cannot be sure we have considered all the details of the task at hand. Our brains have blind spots. Sometimes, we overlook even the most basic fact of the problem, which may lead in some circumstances to catastrophic results. In a hospital, for example, a nurse may treat the wrong patient if the name is not verified. Worse, a surgeon may operate the wrong patient! Yes, it happened and may happen again even for the highest skilled nurse and surgeon.

Here are some reasons why we are often unable to consider all the facets of the problem at hand:

  • We simply forget: as human beings, we are prone to forgetting. This is why we often write things down in the form of to-do lists and checklists.
  • Complexity: as human knowledge and technology grow in complexity, so does our professional tasks (finance, software design, hardware design, etc.). The memory alone does not help.
  • Limited attention: pay attention to something, and you’re almost sure you are missing something else. It is a scientific fact that our conscious mind can handle only one object at a time, and leaves rest for the unconscious autopilot. That is why we may forget the pizza in the oven if we engage in an interesting discussion. This is also the principal cause of car accidents, medical errors, etc.
  • Expertise: an increasing number of professions require super-specialized experts. A domain expert is prone to both complexity and overconfidence and may overlook basic facts.
  • Cognitive biases: our cognitive biases, such as the confirmation bias, the planning fallacy, the availability heuristic, etc. are the major cause of errors.

Continue reading “Checklists: where the Disciplined Outperforms the Genius.”

Management, Posts

Outsmart The Planning Fallacy

Projects go over-budget and over-schedule; small ones, like renovating your kitchen, and huge ones, like constructing the Sydney Opera House. One main reason is our overconfident optimistic approach to planning. Behavioral psychologists call this the “Planning Fallacy“.

This post defines the concept of planning fallacy, gives examples of its consequences on some global projects, and provides some tips to mitigate it.

The Planning Fallacy

The planning fallacy is when we underestimate the time and resources needed to complete a project. We are often optimistic about our performance and the outcome of the project, so we take our desires for real plans.

The planning fallacy is a cognitive bias that fools our decision-making ability into considering the best-case scenario. It has a somewhat positive side, which is risk-taking. This cognitive bias allows us to take both small risks, such as opening a small business, and huge risks such as starting a war.

Catastrophic Project Plans

The following chart presents some major projects around the globe that went catastrophically over-budget. Notice the trend; the bigger the project, the higher the overbudget.

Sans titre

Mitigate the Planning Fallacy

Among the methods to mitigate the planning fallacy, we present the major three: Continue reading “Outsmart The Planning Fallacy”

Personal Development, Posts, Understand Yourself

Outsmart your Confirmation Bias

The first cognitive bias that we will review in the series “Outsmart Your Biases” is the Confirmation Bias, that is, the tendency to search for, interpret and recall information in a way that confirms our opinion, and neglect information that contradicts it.

The Confirmation Bias

Confirmation bias is one of the most common biases that have direct consequences on our personal life and professional career. The examples are endless. We often seek information to prove that our political party is right. When we like a person, we don’t want to see her character flaws. To prove the validity of our proposed strategy we search on google for “Is the [proposed strategy] better than [opposite strategy]?”. In a job interview, we frame our questions in a way to confirm our beliefs or our first impression of the candidate. etc… Try to figure out in which decision you were prone to it.

Jeff Bezos about today’s internet: “a Confirmation Bias Machine”.

To outsmart your confirmation bias, you may use the following tricks:

  • Ask for an outside view of the topic at hand and seek criticism.
  • Search for the pros and cons of the different options.
  • Suppose the opposite: be the devil’s advocate.

Such debiasing strategies can be performed in brainstorming format, in informal discussion, etc.

Personal Development, Posts, Understand Yourself

Outsmart Your Biases

Do you think you are rational? Are you sure that you often make the best decision? Do you feel that your reasoning is superior to that of others? Do you regret some acts and wish you had thought more before committing them? You are, like all human beings, a victim of your cognitive biases.

What is cognitive bias?

Cognition is the mental process of understanding and acquiring knowledge. Cognitive bias is an unconscious cognitive process in human psychology that makes us prone to errors in our reasoning and judgment. It is the gap between rational thinking and our actual way of thinking.

There exists a lot of biases that affect our interaction with the world; we seek pattern in everything even if there is none, we confuse correlation with causality, we hire people who are similar to us, we don’t react the same way to the same information if framed differently, we don’t understand why the opposite side don’t see the ‘truth’, we overestimate our knowledge, etc.

Cognitive biases are an important cause of many catastrophes and tragedies in business, politics, relationships and everyday life. Outsmarting our cognitive biases is key to good decision making and critical thinking.

A New Blog Post Series “Outsmart your Biases”

Outsmart your biases is a forthcoming series of posts that will discuss some of the major cognitive biases, illustrated with examples; the confirmation bias, the availability heuristic, the Dunning-Kruger effect, the planning fallacy, the halo effect and more. In this series, you will find mental tricks and processes that you can use to outsmart these biases and become a better decision-maker. Stay tuned!

Personal Development, Posts, Understand Yourself

The Dunning–Kruger Effect

Dunning-Kruger-Chart-1

Book Review, Posts

Factfulness – Hans Rosling

  • FactfulnessTitleFactfulness – Ten Reasons We’re Wrong About the World and Why Things Are Better Than You Think.
  • Authors: Hans Rosling, Ola Rosling, Anna Rosling Rönnlund
  • Publication Date: 2018
  • Recommendation Score: 5/5

Book Review

Factfulness is about how to get the world right. In a fast-changing world, our brains are bombarded with a large amount of information all the time. This book gives insights about how to deal with data and build a fact-based view of global events and issues. It provides some mental tools for individuals, organizations, and governments to make better decisions. Factfulness is full of eye-opening facts and is very pleasant to read.

Hans Rosling, the main author, argues that young people today see the world and think about it, as it was several decades ago (when their professors were young), and that older people have not updated their information since then. We would like to think about the world in a static way, whereas it is changing continuously and at a faster pace. He proves this by a series of tests (multiple answer questions) like the following one taken from the book:

QCM_Factfullness

and gives you the right answer, with the percentage of people who answered correctly in several countries as follows.

Continue reading “Factfulness – Hans Rosling”