Letters live.
"We can be blind to the obvious, and we are also blind to our blindness."
-----Daniel Kahneman
Decision-making was one of the most frequent topics raised during my MBA study. We discussed questions such as, "Would you prefer a decisive leader or an indecisive one?" Which one do you trust the most, analysis or intuition?" There were no right or wrong answers, but they were not easy questions. Decision-making does not just exist in our works such as managing a company, doing research but also in every aspect of our lives.
A Food Marketing paper that had I dug even more profound into the decision-making process and how people could make decisions without realising it. We assumed that we would gather as much information as we could to plan, but in most cases, we jump to conclusions unconsciously, which probably lead to errors. "Heuristics" was the core terminology we discussed, which dominated the decision-making process when customers brought food products in the supermarket.
The key message is that: people make thousands of decisions every day, so we tend to make quick decisions based on our heuristics when the cost of gathering information is high or making an error is low.
In Daniel Kahneman's book "Thinking, Fast and Slow", the author highlighted cognitive thinking system (AKA "system 1") in our mind under a microscope. Then, you would find these small factors which have led us to wrong decisions being illustrated right in front of you. Such as Halo Effect, Mere Exposure Effect, Priming Effect, Cognitive Ease and Causal Reasoning, etc.
We would be amazed by how biased we genuinely were, and we had no idea how to avoid it. Even the most intelligent people in the world would fall into the spectrum. However, it was never too late to build awareness of our “naughty system 1". Apart from asking yourself: "What would I need to know before I formed an opinion about “as such” before jumping into the conclusion?" We also had decision-making tools to help us to see the information from proper perspectives.
For example, I would use a decision matrix to analyse the benefit of different scenarios. It applied to both complicated and straightforward decisions. It could be as simple as choosing a holiday destination for Christmas or as complicated as identifying which country your new products will be launched in. Most importantly, you always have the flexibility to make your criteria based on your circumstances.
Under this paragraph, I put an example of choosing which company will be the best fit for me. There were factors I valued the most in job-seeking listed in the criteria on the left, weight (-5 to 5) of each factor next to it, the potential companies' score of each factor (0 to 5) and their total score (factor score multiplies the factor weigh which could range from -25 to 25). You can make the decision much easier based on the final number at the bottom of the table.
Decision matrix for selecting company to work for
Of course, the examples were quite extreme that company B outperformed company A. Imagine we if changed the salary factor of company A from 2 to 5, and company B from 4 to 1. The decision matrix would give you the same inclination: go to company B. Nevertheless, you could not eliminate the possibility of excluding company B as an option at the front once you knew that it gave much lower compensation. This decision-making tool would help you to answer the right question: What would I need to know before I formed an opinion about something before concluding?"
Finally, keep in mind "What you see is all there is." It is good to be aware of our blindness.
Kun
Book to read: "Thinking, Fast and Slow" ------ Daniel Kahneman