November 16, 2009

How We Decide - Nashville Business Journal Review

My latest book review from the Nashville Business Journal:

Answer the following question as quickly as you can: "A bat and a ball cost $1.10 total. The bat costs a dollar more than the ball. How much does the ball cost?"

If your automatic brain, the seemingly unconscious part of your brain that doesn’t like deliberation, is alive and well, you answered $0.10. Since $1.10 +0.10 = $1.20, I think we can agree the automatic brain gets an F on this one.

The above question is from the book How We Decide by Jonah Lehrer, editor of Seed magazine, writer for Scientific American, and Rhodes Scholar.

The point Lehrer makes with the above question is that our automatic brains stink at crunching numbers. The bad news is we all have automatic brains that will, at times, trip us up. Like when we make calculations on the fly. The good news is this isn’t all the automatic brain does. When it comes to complex problem solving that involves a variety of factors, our automatic brains and emotional responses are spot on.

For example, Ap Dijksterhuis, a psychologist at the University of Amsterdam, conducted an experiment in which he presented two sets of car buyers with twelve categories of information about four different types of cars.

Based on the information provided, there was an objectively ideal car choice. The first set of buyers were given as much time as they wanted to contemplate the information and use their “rational” brains to pick the ideal car. The second set of car buyers were forced to make a snap decision after quickly reviewing the information. When the results were in, the first set of buyers chose the ideal car less than 25% of the time—far worse than random chance. The second set of buyers chose the ideal car nearly 60% of the time.

How We Decide is full of extremely interesting stories and experiments like this one. And, like this one, each anecdote teases out the nuances of how humans think, process information, and make decisions. The perfect blend of science and storytelling, this book offers readers insightful takeaways about human behavior.

In this book, you will learn why the conscious brain can only handle seven pieces of data at any one time, why ruthlessly rational people turn into sociopaths, how Deal or No Deal takes advantage of the emotional mind, how to create an effective argument between various parts of your brain, and why losing is always more important than winning.

Any accomplished businessman or woman will tell you that success starts with understanding human behavior. Before we can motivate investors to invest, employees to work, or consumers to purchase, we must first understand how people think. As the great advertising man David Ogilvy once said, “I believe it is more important for a leader in today’s world to be trained in psychiatry than in cybernetics.” Lehrer’s books offers great insights into the former.

Bill Robertie, the world’s greatest Backgammon player, became the greatest player in the world by focusing on his mistakes, not his successes. After Robertie plays a game, he painstakingly reviews every decision he made and every mistake he made. For Robertie, negative feedback is the best and only constructive kind of feedback. The reason computers have started beating the world’s greatest chess and Backgammon players is because computer software measures mistakes it makes, not successes it achieves. As Robertie says, “Here was a computer that did nothing but measure what it got wrong. That’s all it did. And it was as good as me.”

In the end, How We Decide makes you think about how you think. The book will challenge you, frustrate you, and sometimes annoy you, but it will focus your thoughts on your thoughts, and you will start to look at every decision your make or don’t make in a slightly different light.

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