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FCW : May 15, 2013
STEVE KELMAN is professor of public management at Harvard University s Kennedy School of Government and former administrator of the Of ce of Federal Procurement Policy. Commentary | STEVE KELMAN In 2011, Daniel Kahneman published a book called "Thinking, Fast and Slow," which was a non- ction bestseller. I write about it now because it just came out in paperback. It is a great read, and I guarantee it will teach you a great deal. Kahneman is an emeritus profes- sor at Princeton University s Wood- row Wilson School of Public and International Affairs and the rst non-economist by profession to win the Nobel Prize in Economics. In his book, he tells us that our minds have two systems for making deci- sions, which he straightforwardly calls System 1 and System 2. System 1 has arisen from mil- lennia of human evolution and from repeated experiences people have over the course of their lives. System 1 is fast. It provides intui- tive reactions to what we should do. System 2 is methodical and delibera- tive thinking, when we ponder evi- dence and weigh pros and cons. It is much slower, and it takes mental effort and energy. Often, Kahneman notes, System 2 acts as a check on System 1. Academics like me and Kahne- man are unsurprisingly (dare I say instinctively?) System 2 believers, though a minority of scholars who study decisions argue that such expertise has become largely intuitive. Here s what Kahneman says: For many situations in which our reac- tions are governed by System 1, speed is essential. We are extremely sensitive to danger, quickly noticing and reacting to it because a micro- second advantage could determine whether our pre-human ancestors were eaten or not. Furthermore, in situations in which people have fre- quent experience --- say, in playing basketball or diagnosing disease --- and where feedback about the result of a decision is quick and unambigu- ous, the mind eventually develops good intuition that often cannot be expressed in words. However, System 1 often does not provide an intuitive answer. To cite an example Kahneman provides, there is no System 1 answer to the question "How much is 49 times 27?" We need to develop and use System 2 to help us. Beyond that, though, System 1 answers are sometimes just wrong. Our instincts lead us in a direc- tion that generally makes sense but produces absurd results. These are the kinds of situations Kahneman became famous for studying. People will prefer being subjected to 10 minutes of severe pain followed by 5 minutes of mild pain rather than only 10 minutes of severe pain, though a moment s thought tells us this is irrational. Many experiments show that people are dramatically overcon dent about how much they know or how successful their efforts are likely to be. And in situa- tions in which there is not frequent, unambiguous feedback, expert intu- itions have a poor record of success. So, true to his status as a profes- sor, Kahneman wants to see more System 2 in our decisions. But Sys- tem 2 takes effort, and our minds prefer to be lazy. And often the times we most need System 2 as a check are those when we least real- ize we need it because System 1 s message is so unequivocal. At the end of the book, Kahne- man extends his analysis from the individual to the organization. "Organizations are better than indi- viduals when it comes to avoiding errors because they naturally think more slowly and have the power to impose orderly procedures.... What- ever else it produces, an organiza- tion is a factory that manufactures judgments and decisions. Every fac- tory must have ways to ensure the quality of its products in the initial design, in fabrication and in nal inspections." Sounds like a topic for another book. ■ The power of slow thinking A Nobel winner's research can help us determine when our decision-making should be methodical and when it should be instinctive Organizations are better than individuals when it comes to avoiding errors because they naturally think more slowly and have the power to impose orderly procedures. May 15, 2013 FCW.COM 13
April 30, 2013
May 30, 2013