Enhance Cognitive Awareness - A Leader’s Guide for Better Thinking from 'Thinking Fast and Slow'
Welcome to the 9th edition of ‘The Leadership Wellspring’ newsletter. My sincere gratitude to all subscribers.
Leaders are always readers. Reading makes one a better leader, teacher, parent, and curious learner. Reading triggers our brain neurons and opens up certain parts of our brains responsible for developing empathy & compassion.
Effective thinking and decision-making are of paramount importance for being a successful leader. By improving self-awareness and using strategies to avoid biases, leaders can enhance their decision-making capabilities and lead their organizations toward sustainable growth and innovation.
In this edition, we will discuss about the book, “Thinking Fast and Slow” by Daniel Kahneman, a must read for leaders looking to enhance their thinking style and make more effective decisions. The book uses behavioral economics principles to explain how we generally think and why we shouldn’t believe everything that comes to our mind. This book helps in uncovering blindspots in our thinking style. It will make us more conscious about our thinking style and help us rationalize our thoughts with control and take right decisions.
I had several ‘bulb-on’ moments throughout this psychology book that fueled me to complete the book with patience. This book will understand how our mind works, makes judgements and solves problems.
Key Message from the Book
Our human brain works through two distinct modes, System 1 & System 2.
System 1 is intuitive, automatic, emotional and effortless with ‘fast’ thinking style whereas System 2 is deliberate, mature, requires mental effort for its functioning and engages in logical analysis offering a ‘slow’ thinking style.
How we use these two systems effectively decides our ability to analyze the situation rightly and make correct decisions. The key here is to become aware of how we think and all the biases that influences our System1 so we can avoid significant mistakes while taking decisions.
Recognize two modes of our mind (System 1 & 2)
While System 1 generates instant ideas, System 2 is responsible for crucial thinking. If we don’t use System 2, our mind gets limited to its intelligence level.
System 1 has the ability to make quick decisions and judgments based on its intuitions from past experiences in life. For instance, while playing games where decision making has to happen in next few seconds or during emergencies, System 1 is used. For any mindful work, say you must solve a mathematical problem or involve in money calculation, System 2 is used. It is the part of the brain that is responsible for an individual's decision-making & logical reasoning.
System 1 is instant and picks up every task and only if it feels unclear on giving right answer, it calls System 2 to solve the problem. And System 2 is generally lazy & it needs a trigger from System 1 to start functioning. But we need both thinking styles, System 1 for making instant quick decisions and System 2 for slow logical decision making based on detailed analysis.
Law of Least Effort
Our brain generally tries to use minimum amount of energy to accomplish its tasks.
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Upon presenting a task, one and only if our System 1 realizes it can’t handle it, it will pass it on to System 2 to take over. System 2 uses logical thinking skills to solve the problem. It pays lot of attention to details and requires mental effort & critical thinking for problem solving.
Because using System 2 uses more mental energy, our mind won't call System 2 directly. System 1 (involuntarily) picks up every task by default since it is effortless. But unfortunately, System 1 is biased and prone to errors whereas System 2 requires mental effort and has the ability to overcome the impulses of System 1.
Remember, if System 1 is confident sharing its perspectives (often biased due to intuitions), it will not trigger System 2 to work on the task. That’s why, we heard pioneers saying, “Don’t Judge a Book by its Cover’
Heuristics, biases & illusions that influence our System 1 thinking
Generally, our system 1 gets influenced by various illusions or biases. This leads to wrong decisions. The scariest part is we are totally unconscious about all these illusions happenings within ourselves when our System 1 is functioning. By becoming aware of them, we can become highly conscious of our decisions reducing the probability of errors.
Kahneman shares about 40+ various heuristics in this book though I'll share about only 5 heuristics that influences our thinking. Do read this book and choose your top 5 priority items that you want to work on to improve your self-awareness.
- Priming Effect - Our human mind when exposed to an idea, it gets primed to it. Both at conscious & subconscious level, lot more things happen within us. For example, when people read about the elderly folks, they will unconsciously walk slower. The key here is many things are happening at subconscious level. How we can go wrong is, we are not objective rational thinkers. We get easily influenced by our environment, what we hear & see and accordingly we change our behavior unconsciously.
- Cognitive Ease - We feel comfortable & accept the fact presented in clear fonts or easy to understand fashion or that we feel familiar. If there is a cognitive strain, then we might tend to ignore it. This is the fact used by advertising agencies to market their products using simple & easy to understand appealing stories & we hearing it repeatedly, often we start believing it. How we can go wrong here is, if we hear a lie often, we tend to believe it.
- Halo Effect - This is the tendency to like or dislike everything about a person, including things you have not observed. That's why people insist on making good first impression. If the first impression is great, then we tend to take any later negative impressions positively and vice versa. How we can go wrong here, System 1 easily jumps in and concludes based on its first impression be it positive of negative. Author recommends readers to remember this phrase, WYSIATI (What You See Is All There Is). Do not lean on information based on impressions or intuitions, explore what you are seeing to take right decision.
- Endowment Effect - The things we own & use will seem more valuable than those objects we don’t own & use. Just because our car has a history with us, we get emotionally stuck to sell it. At the same time, say if you don’t like or use one of your new gadgets, you will be biased to sell it for lower price. How we can go wrong here is, we get sentimentally attached to things based on how we value high or low and this would lead to considerable financial loss.
- Ignoring our Experience self - We have 2 selves functioning within ourselves - Remembering self & Experience self. Remembering self always dominates and takes precedence. Say, you had a wonderful 15 days’ vacation & your experience self feels great about your vacation. But on the 15th day, if you face a car breakdown, your memory will claim that vacation as negative. It will remember peak emotion time or worst time to influence your thinking. Your Experience self will remain voiceless. How we can go wrong here is our intuitions could be based on past experiences that aren’t necessarily real.
It is in your moments of decision that your destiny is shaped - Tony Robbins
It requires consistent practice to build this awareness within ourselves. By applying the insights from this book, leaders can become more mindful and reduce the influence of biases and make rational decisions. Be aware of the various types of conscious & unconscious biases and relay on data and facts to make an effective, well-informed and rational decisions.
Whether you think you can, or you think you can't—you're right. - Henry Ford
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Assistant HRM at Turnipseed Accounting Pvt Ltd || Expert in Recruitment & Performance Management || Committed to Cultivating Growth and Nurturing Talent || Controller at Manayill Consulting
4moWell written Ramya. It was great reading this book summary with you. The book is an insightful guide to understanding decision-making and the limitations of human judgment. It reveals how our minds are prone to cognitive biases
A Curious Human being!
4moWell written Ramya Ramalinga Moorthy. It is important to develop self awareness to recognise the mode of thinking we are using and the unconscious biases that we are using in that moment along with it’s context is very powerful.