A surprising number of critical decisions are made around the proverbial office water cooler, sparked by gossip and driven by first instincts. When you stop and think, it makes you wonder about how ingrained beliefs shape our judgments and the choices we make. That is not just a brilliant, insightful observation, but the starting point for Daniel Kahneman’s latest book, a rather unlikely runaway international bestseller, Thinking, Fast and Slow.
With the release of Thinking, Fast and Slow, Kahneman’s reputation as the world’s most influential living psychologist is secure. The winner of the 2002 Nobel Prize for Economics, hailed by TED Talks as "the founder of behavioural economics," has produced the most talked-about book of the year and a favourite current topic of conversation far beyond university coffee shops and common rooms.
Kahneman’s latest book succeeds in bringing his groundbreaking academic work on prospect theory and economic rationality to a new, more popular audience. A sure sign of his genius is his rare ability to connect decision-making theory with real-life experience. He has plenty to say about how we think, react and reach (or jump to) conclusions in a variety of situations. What is most fascinating is the way he explains the irrational ways we make decisions and how errors in judgment occur, time and time again, in real life.
Kahneman hooks most readers with a rather compelling explanation of two fundamental thinking mechanisms, termed System 1 and System 2. While System 1 involves intuitive thinking and instantaneous decisions, System 2 is more deliberative, looking at things more in-depth and taking longer to make a decision.
The problem is, according to Kahneman, that System 2 tends to be "lazy" and often has to be prodded into action. In other words, most people simply prefer to go with their first instincts, confounding those who seek to promote sound, rational and, most likely, the correct or longer-term decisions. Summarizing decades of research, he lays bare the architecture of human decision-making, providing a map of the mind that looks like a finely tuned machine, albeit one with faulty wiring and a few "bugs."
Kahneman’s Thinking, Fast and Slow is a tremendous book, but it does read — in places — like a textbook. Some readers may be deterred by the complexity of his arguments and his regular use of mathematical examples. Nonetheless, it is worth persevering, and the kind of book to be sampled periodically and mined for its incredibly worthwhile insights.
A few examples that he cites jump out at you as worth remembering, notably those used to illustrate factors such as framing, the sunk-cost fallacy and loss aversion. All of us will be familiar with the well-chosen examples of doctors recommending surgery based upon "survival rates," businessmen sinking fortunes into lost causes, taking a "sure bet" rather than rolling the dice and staying married for fear of the consequences.
Kahneman does sound a note of warning about our fast-paced, impulse-driven world. He sees signs that policy-makers and corporate decision-makers are beginning to design processes and strategies to "nudge" us toward making better choices. Today’s consumers, he concedes, are inclined toward following the unambiguous voice of intuition. There is more hope for organizations because they tend to think and react more slowly, and — when they do — to rely more upon demonstrated best practice or matrices to minimize the risk of error.
Kahneman’s book has an attractive, stylized pencil illustration cover that bears an uncanny resemblance to Malcolm Gladwell’s ubiquitous bestsellers. Yet his message is distinctly different because he warns us to guard against voicing opinions that merely give expression to our automatic impulses. In stark contrast to Gladwell, he is telling us not to blink.
The book has been almost universally praised as a must-read title in early 2012. Among the chorus of hosannahs, the only hint of criticism has come from the business world. Business leaders still spouting familiar clichés from Jim Collins and Tom Peters will not take kindly to Thinking, Fast and Slow. One business journalist, Roger Lowenstein of Bloomberg News, had the temerity to question Kahneman for tilting in the direction of "an overly Cartesian world, barren of human intuition" and for "using formulae even for predicting the future value of wines."
Thinking, Fast and Slow is a book for thoughtful people aware of the exciting possibilities afforded in leading an examined life. Snap decision-makers and gut politicians will undoubtedly find it exasperating and perhaps irritating to read because it plants doubts in people’s minds about supposed certainties and decisive actions.
Calm deliberators, second-guessers, and cerebral types will likely eat the book up and feel somewhat vindicated with respect to past and possible future decisions. That is probably why I and others like me found the book so comforting. There may yet be hope for the tortoise.
Paul W. Bennett is director of Schoolhouse Consulting.
