Thinking as strength that delivers top decisions

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Personal Finance

Thinking as strength that delivers top decisions


Memory-

Summary

  • Paradox is that the jua kali mechanic is likely to be a better thinker, imagining solutions to a problem better than the self absorbed university professor.
  • Time to rethink how we think.
  • Weakness for all of us is that we tend to seek out evidence that confirms what we already believe is correct, rather than seeking out data and information that would give us a more robust view of what is happening.

Think about how you think. It’s helpful to have a self awareness about thinking in management.

Not only coming up with the answer, but more importantly, realising the route taken, to create the solution to the business problem. How did you come up with the result, was it logical, or did you apply a dash of ‘out of the box’ lateral thinking? What are the various thinking hats we can put on, to be better decision makers ?

Paradox is that the jua kali mechanic is likely to be a better thinker, imagining solutions to a problem better than the self absorbed university professor.

Time to rethink how we think. Weakness for all of us is that we tend to seek out evidence that confirms what we already believe is correct, rather than seeking out data and information that would give us a more robust view of what is happening.

CONFIRMATION BIAS

Trick is to recognise that we fall victim to this ‘confirmation bias’, being attracted to facts that seem to support, what we assume is the case. We hate being wrong. Yet, it is the mistakes, and failures in experimentation that make for learning and genuine steps forward.

In our social media world of gadgets and distractions, shallow work and thought is everywhere. In contrast, deep work and thought require longer uninterrupted periods. Start with a long walk and let your mind drift. Strange thing is that, what often seems like intractable business problems are best solved out of the office, with the effective way forward just coming to you.

Recognise that it’s possible to put on various ‘thinking hats’, that there are all sorts of ways to think about a business problem. That you can switch the channel, instead of seeing things in black and white, helps to recognise that there are all sorts of shades of grey.

Let’s start with our default reasoning mode of logic. In inductive logic, one goes from the particular, the specific, to the general. Based on a scientific method approach, a manager makes many observations, spots a pattern, makes a generalisation, and from that infers an explanation, or even creates a theory.

Deductive thinking goes in the opposite direction and shifts from the general, the theory, to the particular.

In problem solving in the workplace, it’s best to apply inductive thinking, creating a ‘best guess’, what one thinks the answer to the problem is, then goes about examining either proving or disproving your hypothesis. [Best to focus on ‘test answer’ as opposed being lost in a sea of possibilities.]

Both approaches have their weaknesses; for instance, while inductive reasoning can be quite useful, there is always likely a case that proves the best guess wrong. Imagine Susan, the bank manager who deals with two difficult customers, both of whom work in the same large parastatal, who are just unreceptive to her requests. She gets a call from a third customer, in the same organisation. Inevitably, Susan’s bias comes into play, and she steels herself, expecting the worst, yet the customer is receptive, helpful and bordering on charming.

Edward de Bono, the Oxford trained physician and psychologist, is the father of ‘out of the box’ lateral thinking, which moves away from using logic to solve management problems, to applying creativity.

Since he first published The Use of Lateral Thinking in 1967, de Bono has been an advocate of the idea that anyone can learn creative thinking. All sorts of examples of ‘out of the box’ thinking can be seen on, for instance, the streets of Nairobi, and on social media. Lateral thinking is a powerful tool to solve business problems, and those issues in the ‘realm of the public good’ like how to address youth and graduate unemployment.

One example of lateral thinking is so simple that it is hard. A four-year old will be more likely to get the correct answer than a bank manager. What are the next three letters in the sequence: o, t, t, f, f, s, s …. [Hint: it is as easy as 1, 2, 3]

Daniel Kahneman, a psychologist who won the Nobel Prize for economics in 2002, wrote a wonderful book called Thinking, Fast and Slow published in paperback in 2012.

Your fast thinking operates automatically and quickly, with little or no effort, with no sense of voluntary control. Slow thinking requires effort and concentration, for instance what is 67 x 56 =? Kahneman pointed out that the ‘rationale economic person’ found in textbooks, taught in economics 101, is a myth, they don’t exist.

In practice, managers are often not rational, emotions come into play in decision making. Imagine you are on a Kenyan Airways three-hour flight.

Sitting beside you is a friendly affluent older man who asks you if you would like to try something ? He says he is ready to give you Sh100,000 cash, but it is a lady sitting next to you [a stranger to both of you] who will decide how the funds are to be allocated.

For instance, she may decide to give all the funds or keep Sh99,000 for herself. The experiment goes ahead, the well dressed woman passenger decides to give you Sh5,000 and keep the rest for yourself. Do you accept the offer? Chances are you will refuse it, you have your pride, you’re a touch offended. In practice, the decision is not rational, after all having Sh 5,000 is better than nothing, yet your emotions have decided.

Last three letters in the sequence are: e, n, t, representing eight, nine, ten. In thinking about thinking, having a mindset open to possibility, is everything. When all is said and done, the age old adage applies: We become what we think about.

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