When Not To Trust Your Gut
Posted By Rob Millard - 0 Comments -
Now for something that will blow your mind! Even after measuring the sides of each myself, my intuition still cannot accept that the two tables in the article are the same shape. (Sorry, HBS Linking Policy specifically prohibits me from reproducing the picture that I'm rambling on about here, so you'll have to visit the original Harvard Working Knowledge article, When Not To Trust Your Gut, to see what I mean. We're talking about more than just the usual blindspots, though!) A sound-byte:
"Just as intuition biases your vision, it can sabotage your negotiations without your awareness. This article explores why we often think irrationally-and why, even when the stakes are high and mistakes are costly, we sometimes are unable to overcome our psychological biases."
The authors go on to talk about two kinds of thought that we apply during negotiations, which I would suggest are equally validly applied to strategy in its wider context.
The first kind is 'System 1' thinking which is automatic, effortless and influenced by emotion. Malcolm Gladwell immortalized this kind of thinking in his book: Blink.
'System 2' thinking is slower, more thoughtful and conciously more effortful. Obviously, this kind of thinking is not always necessary, but reverting to System 1 thinking where System 2 thinking is called for can lead to rash decisions. The authors offer four strategies for more rational negotiations:
Strategy 1: Make a System 2 list. Identify those situations in advance, where extra vigilence is called for.
Strategy 2: Don't let time pressure affect your decisions. Intuitive System 1 thought often takes over when negotiators are facing intense time pressure.
Strategy 3: Partition the negotiation across multiple sessions. Human beings have a natural desire for closure. As a result, most of us seek to reach an agreement or settlement as quickly as possible. But keep in mind that completing an entire negotiation in one session is typically unnecessary-and, in fact, sometimes impossible. Even when you're well prepared, a negotiation that is the slightest bit complex will raise new information, unforeseen issues, and tactics that you did not anticipate.
Strategy 4: Adopt an outsider lens. We make decisions using two different lenses: the insider lens and the outsider lens. An insider lens is used typically when deeply immersed in a particular context or situation; the insider relies on intuitive System 1 thinking. By contrast, an outsider lens is typical when removed or detached from a particular situation; the outsider uses rational, System 2 thinking.
To summarize:
"Together, these strategies should help you identify when to incorporate careful, reasoned analysis into your negotiation judgments. We realize that our recommendations run counter to the implicit trust and confidence that many of us have in our intuition. However, the data is clear: with the use of intuition comes the potential for significant psychological biases that lead to irrationality. By accepting this fact, you can learn to overcome bias and think more rationally during your most important negotiations."
Oh, by the way: The graphic that I used to illustrate this blog posting? Are the thin lines across the graphic horizontal, or not? If you think they're not, then read the article again!!!
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