21 Jan 2013

The human brain is an amazing organism, but it has a processing capacity weakness – we can only think about a relatively few items at once.

In a time of rapid change, habitual thinking has its dangers. Roger Marshall gives some pointers.

The human brain is an amazing organism, but it has a processing capacity weakness – we can only think about a relatively few items at once. One way nature compensates for this weakness is to lead us to rely on habitual thinking. Habitual decisions are known to academics as cognitive heuristics; mental shortcuts based upon either formal learning or experience. For instance, when an adult crosses the road no conscious thought to look right, look left, and then right again before crossing is required. This particular heuristic is very useful; it saves processing capacity and time.

The problem is that cognitive heuristics only guide you to a good decision if the context of the environment hasn’t changed. Your “crossing the road” heuristic could save your life in Singapore where cars keep to the left of the road but if you are crossing a road in the US it could result in your death!

Our business environment is changing with frightening speed. With this rapid change comes even greater pressure on business people (and other individuals in positions of authority) to make yet more decisions, sift through yet more data and do it all in a shorter and yet shorter time-span. What does the human brain do in response to this pressure? We rely more and more on our cognitive heuristics of course! But herein lies a trap. These heuristics become less accurate decision guides with the speedier environment changes.

What can we do? I offer four guides. The first is to keep learning. The body of technical knowledge is roughly doubling every two years, so our knowledge structures become outdated very swiftly. The first way to learn is from experience. In the same way that a company builds a customer database over the years of dealing with them, every executive should build their personal knowledge database by thinking through the day’s events and decisions and mentally cataloguing the experiences therein. Because it is very hard for modern professionals to take time out and think about what they do and how they could do it better, the second way of learning – through structured courses – is also often a good idea. Lifelong learning is not an abstract idea or even an optional extra, but a very necessary, fundamental practice. Universities have a vital role to play in this respect and must build capacity and skills to meet the burgeoning, and continuous, needs of decision makers of all ages.

The second guide is to remember that the basics of the professions do not change, even though the operational and delivery systems do. Thus we are still in the business of finding ways to engage our customers and to satisfy their needs in an efficient (and profitable) way. We know that a segmented, personalised, targeted market offering is more likely to satisfy our customer. We know that we must identify and develop a unique competitive advantage for our organisation, and that developing a positive culture within our organisation is critical to its health. The technologies we have to attain these ends are changing dramatically; the ends themselves are not. Keep focussed on the ends and don’t be blinded by the means.

The third is to dig out and polish off the old adage that you must “keep it simple.” A quick Internet search reveals the alarming facts that in 2006 there were 2.7 million Google searches, but currently they number 31 billion every month. Facebook has 800 million active users, adding more than 200 million in a single year. We are becoming swamped with information and the ability to pluck out the few salient facts that really count is critical to making sensible decisions. I am not suggesting that all managers need a degree in higher informatics or mathematics, but I am suggesting that managers who do not even develop simple analytical skills will inevitably make poor decisions. This point, of course, links back to the requirement of lifelong learning and the role our tertiary institutions play that was mentioned above.

It also has critical implications for the way in which universities teach decision makers, to ensure that students are tightly focussed on the decision itself, and are taught to reach for appropriate tools to help rather than focussing upon the tools themselves.

Finally, and almost counter-intuitively given that we are making more and not fewer decisions, we must learn to avoid knee-jerk responses in decision situations. Take the time to check that the decision environment is essentially the same as the last time a similar decision was made. In academic jargon we speak of “dropping your (inappropriate for the environment) tools.” Cognitive heuristics are a naturally efficient way to handle processing overload, but in a rapidly changing decision environment they can also mislead you to into trying to fit yesterday’s solutions onto today’s problems.

Roger Marshall is currently senior Professor of Marketing at the Auckland University of Technology. Prior to his current appointment, he had a successful business career for two decades, followed by a 13-year long academic position at the Nanyang Technological University, Singapore. He remains deeply involved in cognitive psychology, focusing on individual decision-making processes and behaviour. His email is