What’s your judgement like?

One of the critical things about making a decision is to have enough information to make a proper judgement. To do this a person needs to be able to identify the gaps in their knowledge, to fill them, and then to come to a sensible conclusion.

Someone who does not see that there are gaps, or who jumps to a conclusion with too little (or inaccurate) information can blindly make decisions without realising what is missing or unclear. What this amounts to is that for judgement and decision making there are four basic types of people:

Over-confident: This is someone who has high confidence in their judgements even when their thinking is faulty. They believe that it’s better to make a decision, even if it’s the wrong one!

Development point: The positive side is that over-confident people take the initiative and get on with life. However they do need to ‘take five’ and learn to recognise when more information is needed. It’s all about thinking before acting!

Animal: The over-confident person is like a Cobra – quick and decisive, but not always hitting the right target.

Under-confident: This is the sort of person who generally has no confidence in their judgement and decision making, even when they’re right. They often find it difficult to get ‘off-the-fence’ because they believe they’re going to jump the wrong way.

Development point: The positive side is not ending up in tricky situations just because they haven’t thought things through properly. However this may end up in no action at all; so to move on someone needs to force themselves to make decisions in low-risk situations, just to recognise that the sky doesn’t necessarily always fall in!

Animal: The under-confident person is like a Gazelle – bouncing around trying to decide what to do, and never quite making their mind up.

Accurate: This is the sort of character who reads situations with confidence, and knows when they’re getting things right or wrong. They have the savvy to check the signs and know if they are taking a risk.

Development point: This person is on the button and has got decision making pretty well organised.

Animal: The accurate person is like a Fox – weighing up the situation, balancing the risks, and picking their battles.

Inaccurate: This is someone who charges at things and gets most decisions the wrong way round. They are not confident when they’re getting things right, and over-confident when they’re getting stuff wrong.

Development point: The good news is that this person wants to do things, it’s just that they have a habit of getting everything upside down. A bit like the Cobra this person really needs to think before acting, in fact they need to think, and think again before acting!

Animal: The inaccurate person is like a Bull – enthusiastically charging backwards and forwards, but tending to put their foot in it.

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What sort of an animal are you?

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1. How do you feel when you have to make a snap decision?

A Energised – It’s better to make a decision than no decision at all

B Decidedly queasy – I don’t like having to make a decision

C Confident – I’m pretty good at weighing things up quickly

D Resigned – I’m famous for making the wrong decision.

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2. When deciding between a number of options, do you…

A Pick one and stick with it, even if it turns out not to be the best

B Want more and more information (you can never have too much)

C Dispassionately check out the options and move on

D Home in on the wrong one like a guided missile?

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3. If you haven’t got enough information, how do you decide what to do?

A Gut instinct

B I can’t decide (you just said there isn’t enough information!)

C Go with what I calculate is the best bet

D Pick anything – it’ll all go pear shaped anyway.

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4. You’re going to make an expensive purchase in a shop, do you…

A Just go in and buy it

B Come over all uncertain

C Check that it’s what you want, and then buy it

D Feel like you’re about to make another costly mistake?

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5. It all goes horribly wrong, what do you do next time?

A Exactly the same!

B Nothing (there isn’t going to be a next time)

C Better research

D Take a lucky rabbit’s foot.

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6. What’s happening in your head when making a really BIG decision?

A Surprisingly little

B A Headache

C A meticulous balancing of the pros and cons

D A feeling of déjà vu (and not a pleasant one!)

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7. You have a number of things to do, how do you decide where to begin?

A First on the list

B Definitely look at the list, but it won’t be nearly long enough

C The most important thing on the list

D Gave up using lists years ago.

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8. How would your best friend describe your judgement?

A Shoots wildly from the hip

B Never gets his gun out

C Hits the target, every time

D Judgement, what judgement?

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Mostly A = Over-confident (Cobra)

Mostly B = Under-confident (Gazelle)

Mostly C = Accurate (Fox)

Mostly D = Inaccurate (Bull)

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Note: This is a fun questionnaire! However it is based on sound research and I wrote it for a magazine a couple of years ago.

Five tips for great presentations

Executives are the Simon Cowell of the business world: impatient, critical, often caustic. But they’re also desperately searching for talent. How do you make the right impression? Is the secret just to tell a good ‘story’? Here’s five hot tips to get you going:

5 Tips for Presenting to Executives from speakingppt

How the Internet is ruining your brain

 

Soccer brain

Swedish researchers have discovered that elite soccer players achieve higher scores on certain tests of cognitive ability than their lower division colleagues, and both sets of players do better than the general public!

Over the moon

It seems it’s all about ‘executive functions’ and working memory. Specifically that successful players are able to constantly assess the situation, compare what’s going on with past experiences, create new possibilities and make quick decisions. In short it’s all about making fast decisions under extreme time pressure. Sounds great! Do the England team know about this?

Sick as a parrot

Of course, there may be a physical explanation. Sports psychologists have known for a while that cognitive abilities are correlated with aerobic capacity. So it may just be that footballers, and other athletes, do better simply because they’re fitter. Mind you, if all this is true, it’s a good argument for getting out there and doing a bit more exercise…

Read the article here.

Paradox of choice

On why less is more… Psychologist Barry Schwartz (the one wearing the shorts) takes aim at a central tenet of western societies: freedom of choice. In Schwartz’s estimation, choice has made us not freer but more paralyzed, not happier but more dissatisfied. Try this great TED talk:

Let go of the anchor!

A thought experiment for you to try:

Below are a set of numbers. Give a friend five seconds to estimate the answer, without resorting to a calculator.

Set-A  8 x 7 x 6 x 5 x 4 x 3 x 2 x 1

Here’s another set of numbers. Find a second friend and give them the same instructions.

Set-B  1 x 2 x 3 x 4 x 5 x 6 x 7 x 8

You will find that the second person gives a smaller estimate than the first, and both will be way off the correct answer (which, rather startlingly, is 40,320).

Maybe you’re not surprised that people find it difficult to quickly multiply eight digits, but why the smaller estimate for Set-B? The answer is provided by the only psychologist to win a Nobel prize, Daniel Kahneman. Check out his ground-breaking 1974 article, written with Amos Tversky, in Science magazine.

A little clue: It’s all to do with ‘anchoring’ - a psychological effect that has a profound effect on our decision-making ability, and which in real life trips us up when we try to buy expensive things like houses or cars!

Photo credit: Scottchan/FreeDigitalPhotos.net

Stop being such a cow!

Picture the scene: you’re walking down the street trying to decide where to eat. But it’s early evening and all the restaurants are empty. So you pick what you consider to be the most appealing – you think it has the tastiest menu – and go in. After a while some more people come along and see you sitting at a table. They assume that if you’re in there it must be OK, and enter and sit at another table. Very soon there are lots of people in the restaurant and all the other possible eateries are lagging well behind. This process is called the information cascade.

Information cascades are important in economic psychology as they are used to explain the behaviour of financial markets. That’s because they feed the process of speculation, including frantic buying or selling: bubbles v crashes. Now of course all this starts at a vaguely rational level (remember the restaurant example) but rapidly moves into irrational herd-like behaviour. Thus maybe it’s no accident that we talk about confident or ‘bull’ markets! Although perhaps in reality it’s more cow-like: put your head down, eat the grass and stick with the herd.

The bigger point is that information cascades affect all manner of decision-making. And the movement of the ‘herd’ (group, team, board) can be very difficult to resist, even if you, the individual, recognise it as being irrational. People en masse are easily convinced they are moving in the right direction, and frequently do not stop to ask the obvious question: why are we doing this?

At work this is made worse by the fact that many managers do not know how to probe the thinking of their colleagues. They simply base their understanding on what they assume is going on, and assumptions, as we all know, are often vague and unpredictable beasts. The real trick is to return to the beginning and pose clearly framed questions about the logic of projects and plans, and also to ask questions about the organisation. Not just, ‘why are we doing this?’ but ‘why are we doing it this way?’ So maybe the competency lists that are so beloved of HR professionals should always include the ‘ability to ask good ‘why’ questions’ behaviour…

Photo: FreeDigitalPhotos.net

Twitter mood predicts the stock market

Does emotion operate at a societal level? Does mood influence the way in which we collectively make decisions? It would seem so. There’s all sorts of stuff out there now on ‘sentiment tracking’ and whether it’s linked to measures of economic activity like the stock market. Well, interestingly, it seems that global emotion and mood, as measured via something like Twitter, does predict stock market activity. Indeed trading seems to lag behind positive or negative Tweeting! Or, if you’re using the fancy stuff, tweets analysed in terms of the Google Profile of Mood States (Calm, Alert, Sure, Vital, Kind and Happy). And no, I’m not making this stuff up. And yes, you’re right, there’s money to be made here!

Read one of the original papers at:
http://www.battleofthequants.com/Research/sdarticle.pdf

Also, if you’re quick, you can listen to this BBC Radio 4 programme on the topic: Word of Mouth: Counting Word Incidences

How big is big?

A timely reminder from Richard Donkin on why it’s important to exercise caution when trying to measure things, especially in a management context:

http://donkinonwork.blogspot.com/2011/04/how-big-is-big.html

Make mine a mega skinny choco-macchiato with extra sprinkles!

Have you ever wondered why coffee shops use such weird names? Does it send you into something of a dither when you’re trying to make a choice? Bingo! That’s exactly what’s supposed to happen. Tall, grande, venti… they all sound quite big don’t they; and that’s no accident because it turns out that consumer psychologists have had their sticky paws all over the naming process.

And the bottom line?  If you don’t have a particular reason for picking something, you tend to go for the one in the middle. The result: if you’re selling coffee (pizzas, soft drinks, chips, anything) put the one you want to sell the most of in the… middle. So a three-way choice actually turns out to be a middle-way choice. I wonder if this applies to politics as well.

Picture credit: Surachai/freedigitalphotos.net