Category: TFS Project
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Heath Brothers’ most recent book compiles decision-making wisdom
I confess I haven't had time to read the most recent book from Chip and Dan Heath, Decisive, but I've looked at the workbook, and it's clear they've done a good job of compiling the latest wisdom around decision making from Daniel Kahneman and others. I'm going to read it soon, and let me know…
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In defense of complex models of decision-making (i.e., wisdom)
Learning to make sound decisions in the face of uncertainty has to be the most important skill a manager person can have. Knowledge of what worked in the past is fundamental. Ability to recognize potential bias is the hallmark of a more experienced decision-maker. But nothing can make uncertainty disappear. We have to decide in…
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TFS: Entrepreneurial risk-taking in the context of bad options
Entrepreneurs are famous for taking crazy risks, but according to Kahneman, it's easy to understand their behavior in context. When the plane is falling out of the sky, how should you respond? The entrepreneurs who opted for the "Hail Mary" pass were piloting a crazy idea to avoid catastrophe. The more imminent failure becomes, the…
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TFS: A premortem to strengthen every project
We can improve our planning. We can fight back against competitor blindness and irrational optimism. Daniel Kahneman recommends an idea developed by Gary Klein called a premortem. A typical premortem begins after the team has been briefed on the plan. The leader starts the exercise by informing everyone that the project has failed spectacularly. Over…
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TFS: Get lots of ideas from your competition
Chapter 24 of Thinking, Fast and Slow is called "The Engine of Capitalism." It is, of course, about irrational optimism. But that's not the only type of bias which afflects entrepreneurs. One of the others is "competition neglect." We become so focused on the originality of our ideas, we forget that we have competition, and…
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TFS: Do your want to be inside or outside? The view is different.
Insiders are biased into thinking they have more control than they actually have, or probably should have. That's one of the reason it can be so valuable to have a consultant come look at your business. But the article below also shows the dangers of the outside view. It's cold out there, and the perspective…
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Marketing is a Wicked Environment
According to Robin Hogarth, a 'wicked environment' is one where "feedback on decisions is infrequent, it can be distorted (e.g., biased by unexpected events), and [decision makers] cannot learn from the decisions they did not take." [Emphasis mine.] Hogarth wrote one of my favorite books, Educating Intuition, and is mentioned admiringly by Daniel Kahneman in…
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TFS: In choosing advisers, avoid certainty
In his chapter on the illusion of validity, Daniel Kahneman discredits all efforts to take the uncertainty out of the future. In fact, he finds the more confident an adviser becomes, the more likely they will miss the mark. This false confidence is often based on all the research and analysis the adviser has performed.…
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TFS: You can’t reap what you didn’t sow–but no guarantees
In "The Illusion of Understanding," Kahneman observes, "A very generous estimate of the correlation between the success of the firm and the quality of its CEO might be as high as .30, … [This] implies you would find the stronger CEO leading the stronger firm in about 60% of the pairs–an improvement of a mere…
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TFS: Extreme events breed extreme predictions
As marketers, sometimes the best thing to do is hold our course and avoid reacting to extreme events. When something exciting happens we immediately start looking for causes and planning for new directions. But a single off-the-chart event does not improve our ability to make predictions. We should become observers at that point. For me,…
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