Alan Barker

It all makes sense with hindsight

Daniel Kahneman: Thinking, Fast and Slow 

Penguin Books, 2012  £8.99

ISBN: 978 0 141 03357 0

 

 

 

Daniel Kahneman is a behavioural economist.  He’s spent decades studying the effects of social, cognitive and emotional factors on the decisions we make – economic and otherwise.  In Thinking, Fast and Slow, he shares some of the insights of his work in decision science: to stimulate, as he says, “watercooler conversations” so that we can better understand the systemic errors of judgement and choice that humans are prone to.

What has all this to do with rhetoric?  Aristotle tells us that rhetoric concerns “things about which we deliberate but for which we have no systematic rules”.  Decision science deals in the same matters.  It offers evidence-based theories about how we choose in the face of uncertain outcomes: when we face risk, when a situation is incomprehensibly complicated, or when information is scarce. 

 

Kahneman explains his findings by invoking the fiction of two ‘systems’.  System 1 is intuitive, associative and fast; System 2 is rational, logical, slow and lazy.  System 1 prefers plausibility to probability; it craves coherent meaning and will do everything it takes to construct it from any scrap of information.  It cannot deal with statistics; it prefers causal explanations every time.  It hates doubt.  System 2 does its best to understand the truth in all its fullness; but it can only work with what System 1 gives it, and it’s lazy:  without conscious attention and effort, System 2 will simply ratify the decisions of System 1.

 

Rhetoric exploits the relationship between these two systems – for good or ill.  Almost every one of Kahneman’s examples has rhetorical implications.  Here’s an obvious one:  your audience will accept a message more easily if it’s repeated or primed  (if you’ve just seen the word EAT, you’re more likely to interpret SO_P as ‘soup’ than ‘soap’).  They will also accept it more easily if they feel good.  Physical actions prime their emotional correlates: for example, if the audience all grasp pencils in their mouths while listening to you, they’re forced to smile – which will make them feel happier and make them more receptive to your message.  (Go on: try it.)

 

 

 

 

 

As so often with discussions based on experimental social science, I found myself mildly irritated that experiments seemed merely to confirm what most of us know by experience already.  But that, of course, is precisely Kahneman’s point: experience is not an infallible guide to truth. “Everything,” he says, “makes sense in hindsight.”  The illusion that we understand the past fosters overconfidence in our ability to predict the future.

The penny, for me, dropped with a resounding crash in Chapter 20.  At one point, Kahneman and his colleague, Amos Tversky, worked with a group of investment advisers, looking for evidence of skill in their ability to predict movements in stock prices. 

They found none.  The results of every single adviser, over time, were no better than blind betting. 

As someone who coaches analysts who write advisory reports for investors, this confirmed what I’d always suspected: the only real power of persuasion available to these professionals is rhetorical.  In efficient markets, stocks can never be definitively judged to be wrongly priced.  The highly sophisticated skills of evaluating a business aren't sufficient; an analyst needs to know whether information about a firm is already incorporated into the stock price.  Kahneman's research proved conclusively that the advisors he examined lacked that skill.  The conclusion is inescapable: the livelihoods and self-esteem of thousands of financial professionals depend entirely on their rhetorical skills.

Kahneman delivers over 400 pages of material showing how incapable we are of understanding statistics, how brilliant we are at ignoring our ignorance, how we regularly substitute easy questions for hard ones in decision-making, and other cognitive biases.  Getting through the book can be hard work, not least because Kahneman is broadly pessimistic about our ability to manage our illusions.  True, he claims that ‘our thoughts and actions are routinely guided by System 1and are generally on the mark’; but his book is overwhelmingly more concerned with the flaws of intuition than its marvels.  Above all, he seems to ignore one aspect of System 1 that provides some of the most powerful illusions driving progress.  Look in the index, and you will find no entry for imagination.

Nonetheless, Thinking, Fast and Slow contributes hugely to the conversation about intuition and reason.  It’s in the borderland between the two that rhetoric lives and feeds; this book, and others in its field, offers vast potential for reinvigorating rhetoric, both as knowledge and practice.

Surfing the waterfall: a new approach to planning

Planning is the process of preparing, making and managing change.  We’re here, now; and we want to be somewhere else, at some point in the future.  So we can ask four questions.

• Where are we?
• Where do we want to be?
• How could we get there?
• What limits our options? 

We use plans to create new things: a cake, a new product, a work of art.  So the first question might be: what do I want to create?  The more clearly we can answer that question, the clearer the plan. 

So what makes for a clear goal?  If we’re solving a mathematical equation, the goal is a checkable correct answer.  But plans in real life tend not to be right or wrong.  They tend to be acceptable or not acceptable.  How good is the cake?  Do our customers like the new product?  Does a glass of water on a shelf in a gallery count as a work of art? 

(Michael Craig Martin: An Oak Tree, 1973.)

The next step is to construct a route from where you are to where you want to be.  The plan you create is the set of operators that will help you achieve your goal.

The standard advice is to work backwards.  Most of us, say the experts, plan forwards: we begin by identifying the first step.  Instead (they say), start at the goal and look back.  Map out the milestones you need to reach, and measure your progress against them.

The result of this approach is the ‘waterfall model’: a neat, linear sequence of stages, each of which should be completed before we embark on the next.

The model originated in manufacturing and construction: sectors where changing the sequence of operations can be prohibitively expensive.  The waterfall has become a fairly standard model for projects in other fields.  Every time you see a Gannt chart on a project manager’s wall, you’re looking at a waterfall.

The question is: does the model work?

It’s a question of context. 

Think back to that mathematical equation.  You’re operating in a closed system:  all the parameters are clear, checkable and stable.  (Imagine being told midway through your work that the number base has changed from ten to – say – eight.) 

When you’re planning in a more-or-less closed system – an assembly plant, a structured administrative process – the waterfall model will work, more or less.  Open up the system – introduce dynamic factors or multiple stakeholders, each with a different view of how the system operates – and the plan is very unlikely to follow a neat linear progression. 

So do we abandon the waterfall method?  Well, no.  Not entirely.  But we need another model to complement it.

Here’s another model.  Think about it.  In fact, don’t think about it.  Do it.

You’ll need a blank piece of paper – at least A4 size would be good – and your wallet or purse.  Put the blank piece of paper on the table and look at it. 

Go ahead: look at the paper for at least 15 seconds.  It’s blank.  Let it be blank.  There’s nothing wrong with a blank piece of paper.

Now take everything out of your wallet or purse.  Credit cards, photographs, old tickets or cash machine printouts; paper money and coins.  You’ll need at least ten objects.

You’re going to make an assemblage on the blank piece of paper, using the objects from your wallet or purse.  You can use only the objects you have, but you don’t have to use all of them.  You have three minutes. (Use a stopwatch or your wristwatch to measure the time; you’re not allowed to go past the three-minute mark.) 

Don’t read on until you’ve completed the task.

Ready?

Go!

 

(Thanks to Robert Fritz for this idea.  His book, Creating, is a source of constant inspiration.)

 

 

Now: did you follow the waterfall model? 

My guess is that you were almost certainly not planning backwards from a goal.  Instead, you were negotiating in your mind between a vague idea of what you wanted to achieve, and what you could do.  The gap between the two creates a tension that you tried to resolve by taking action.

It’s called ‘opportunity-led thinking’.  And it’s not entirely rational. We look for opportunities to create a solution. We create possible solutions and see how they might work.  We then adjust our search for opportunities based on what we found.  We’re looking for the places where we can make headway: backing up when an opportunity leads to a dead end, pushing forwards when it promises help. 

The resulting activity can look pretty chaotic.  But in fact it’s very well organized: we’re making opportunity-led switches of attention between our vision and current reality: between what we want and what we’ve got.

Planning in open systems demands opportunity-led thinking.  The key factor, often, is people.  If we’re planning a solution that involves users, customers or colleagues, then we shall need to accommodate some opportunity-led thinking.

Easier said than done, of course.  Imagine you’re a project leader:  you’re responsible for keeping the project to time and within budget.  If the project fails to meet all the requirements in the brief, you’ll be accountable.  You know that the process will – must – include opportunity-led thinking; but you must still make plans, create schedules and commit to milestones.

The key is to recognize when such thinking is necessary and to manage it dynamically.  The control we need is the control of a surfer, balancing forces and looking for the way forward.

So opportunity-led planning is like - well - surfing a waterfall.

This post is based on material from my book, How to Solve Almost Any Problem.

   

 

Design thinking for presentation slides

Thanks to Joe Dager who tweeted this.  It's by Michael Evanchan, who hangs out in Chicago, and has a neat website and blog.