June 4, 2015
Book Short: Blink Part II
Years ago I wrote a post about Malcolm Gladwell’s excellent book, Blink (post, buy). While my post has lots of specifics in it for entrepreneurs, for VCs, and for marketers, my quick summary was this:
Where The Tipping Point theorizes about how humans relate to each other and how fads start and flourish in our society, Blink theorizes about how humans make decisions and about the interplay between the subconscious, learned expertise, and real-time inputs. But Gladwell does more than theorize — he has plenty of real world examples which seem quite plausible, and he peppers the book with evidence from some (though hardly a complete coverage of relevant) scientific and quasi-scientific studies.
I recently finished another book, Thinking Fast, and Slow, by Daniel Kahneman, which was very similar. I’d call it the academic version of Blink, or that Blink is the journalistic version of it. Kahneman breaks down our ability to think and process information into what he calls System 1 (quick and intuitive) and System 2 (slower, rational and logical). As he puts it:
In summary, most of what you (your System 2) think and do originates in your System 1, but System 2 takes over when things get difficult, and it normally has the last word.
The book is rich in examples, and while it’s a bit long and sometimes slow going, it is an excellent read if you want to learn more about how the brain works. The work applications are many – we do a lot of work at Return Path on understanding and avoiding Unconscious Bias at work – and this book gave me a bunch of good ideas around that. It’s clear that it’s impossible to become a true master of your intuition vs. logic, but you can design some systems, or at least insert some checks and balances into other systems, to blunt the impact of faulty intuition or lazy logic. The book also has an overwhelming number of labels it applies to common situations – great, but hard to keep them all straight (the priming effect, anchors, endowment effect, etc.).
Perhaps the most interesting thing for me to ponder as an entrepreneur, though, was the section on Loss Aversion (another great label). It turns out we humans are motivated more by fear of loss than by the prospect of gain. A poignant example in the book is that professional golfers make a higher percentage of putts (I forget the actual number, but a real one, like 3-5%) for par than for birdie, when the putts are like-for-like in terms of distance and difficulty. Saving par is more of a motivator than being under par. The application for work is interesting. As companies get larger, it can be difficult for founders and management teams to maintain the same level of bold risk-taking they did as smaller organizations. Having something to lose is harder than having nothing to lose. And yet, as they say, fortune favors the bold. Growth stage companies need to figure out how to institutionalize risk taking and experimentation, including putting enough resources into those activities that will generate future growth, rather than simply protecting what’s already running. (Of course, what’s already running needs investment, too.)
Thanks to my colleagues Dragana and Richard for recommending this book, and to Jamie for facilitating our office book club around it this month!