THINK TWICE

By | March 30, 2014

THINK TWICE – Harnessing the power of COUNTERINTITUTION by Michael J. Mauboussin is a sharply focussed book. What makes it interesting is the way  it shows you the possible reasons : why you must THINK TWICE?. Then follows it with sharply defined MISTAKES you could be making in reaching your decisions inferences. At the end it delivers the benefit statement- as to how you can make THINK TWICE a HABIT.

MICHAEL J MAUBOUSSIN

MICHAEL J MAUBOUSSIN

I liked the book. It is easy impactful impressive reading. Very tightly written with enough of fluid grounded common examples- and that makes it that much better to read. There is a hell lot of learning in there and hence in this review more than adding my voice and impressions- I will just borrow snippets from the book to make the case. ONE OF THE BETTER BOOK READ THIS YEAR. GO READ IT. AND PEOPLE IN MANAGERIAL CADRE MUST READ IT. .

I like this start- when it acknowledges the universal truth- ‘No one wakes up thinking. “I am going to make bad decision today” yet we all make them’… and that ‘Smart People make big, dumb and consequential mistakes’. I look back in my professional and personal life and find a few of such mistakes. It reassures me that I am SMART.

But it tell us, “Smart people make poor decisions because they have the same factory settings om their mental software as the rest of us and that software is not designed to cope with many of today’s problems’ MAKES ME FEEL BETTER. So our mind wants to see the world one way- the default- while a better way to see the world takes some mental efforts.  A simple example is an optical illusion: you perceive one image while the reality is different.

We all work on Intuition and more experienced we are the more dependent we are on the intuition. BUT. think-twice‘To make good decisions, you frequently must think twice- and that’s something our minds would rather not do’. It is no rocket science ( so are most of the managerial processes) that you can reduce the number of mistakes you make by thinking about problems more clearly- and that is Thinking Twice. It is all about identifying 3 steps- to PREPARE ( mental preparation to learn about mistakes) RECOGNISE  ( Recognise the mistakes in their context) and APPLY ( and thus mitigate your potential mistakes)

He goes on to present the 3 factors that really decide the outcome of decisions- How you think about the problem, Your action and Luck. And it may be prudent that instead of evaluating the decisions by the RESULTS, we must evaluate based on the PROCESS by which we make the decisions. And this will help create better decision making.

IF YOU MAKE A GOOFD DECISION AND SSUFFER A POOR OUTCOME, PICK YOURSELF UP, DUST YOURSELF OFF, AND GET READT TO DO IT AGAIN.

The major mistakes we made while arriving at decisions most if which are more intuitive than analytical are

  • THE OUTSIDE VIEW– Tendency to consider each problem as unique rather than considering carefully the experience of others
  • OPEN TO OPRTIONS– where decisions are affected by unrelated items. Here we need to consider alternatives open- when mind wants to close thinking alternatives – we must still force ourselves to remain open
  • THE EXPERT SQUEEZE: Uncritical reliance on the experts
  • SITUATIONAL AWARENESS– Reminding that the behaviour of people around us extraordinarily influences our decisions
  • MORE IS DIFFERENT: Attempting to understand Macro behaviour by aggregating Micro behaviour
  • EVIDENCE OF CIRCUMSTANCES- Predicting cause and effect for a system based on attributes rather than circumstances
  • GRAND AH WHOOMS– that moment when just a little extra nudge creates disproportionate changes
  • SORTING LUCK FROM SKILL– over reliance on statistics

THE ANSWER TO MOST QUESTIONS IN LIFE IS ‘’IT DEPENDS’.

And it introduced me to HARVARD’s LAW which explains most of the questions, behaviour and outcomes : ‘Under the most rigorously controlled conditions of pressure, temperature, volume, humidity and other variables, the organism will do as it dam well pleases.

And that we must keep clear of two illusions

Illusion of Optimism- most people see their future as brighter than that of others.

Illusion of Control: People behave as if chance events are subject to their control.

And above is the reason why most people ( that include you and me too) find it hard to estimate how long a job will take and how much will it cost.

And it also explains that- we humans have an odd tendency- once an event has passed, we believe that we knew more about the outcome beforehand than we really did.

And here is a question that emerges from Tetlock’s work- and you must try answering it honestly. Are you a Hedgehog or a Fox. Hedgehogs know one big thing and try to explain everything through that lenses. Foxes tend to know a little about a lot of things and are not married to a single explanation for complex problems. Once you have answered this- try answering the two follow up questions- what you would want to be and Who will succeed in current world.

Here is a simple process before your decisions get trampled under the co-relation trap. There are 3 conditions that must hold true before we can claim that X causes Y. X must occur before Y. Existence of a functional relationship between X and Y, including that the cause and effort takes two or more values. There is no other factor Z that causes both X and Y.

SO READING THIS BOOK HELPS  YOU MAKE BETTER DECISIONS- may seem co-related- but if you would really dig deep- you would find that the statement is not true- not really true.

THINK TWICE by Michael J Mauboussin.  HBR books. 190 Pages ( including 50 pages of references) 250 INR. Non Fiction. Management.

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