Tuesday, December 6, 2011

Kahneman and Tversky

Daniel Kahneman and Amos Tversky have written notable papers about the biases that infect and affect project estimates, the business case, and all communications with executives and stakeholders. These papers are simply nothing other than "must reading" for every project manager.

I've posted about these guys and their ideas before.

Kahneman won the Nobel prize for his contributions, and if Tversky had not died in 1996, four years before the Nobel award, he would have been in Stockholm with his colleague for a joint award.

Now, Kahneman is out with a new book, some 500 pages--perhaps best read (or sampled) on an e-reader--to explain another idea. This idea is about how we think and what drives decision-making. Entitled "Thinking, Fast and Slow ", it posits a System 1 process and a System 2 process. System 1 and 2 are not new inventions by Kahneman, but his tour-de-force through the concepts is a work worth reading.

The idea is simple on the outside: System 1 is nearly unconscious thinking--effectively nearly instant reactive thinking. Everything from survival to instant analysis, like finding an open receiver downfield. System 2 is conscious analysis, slower than System 1, though not necessarily slow. These two ideas inform the title of this tome: Thinking, fast and slow.

Kahnenman writes: "Much of the discussion in this book is about biases of intuition.... my aim ... is to improve the ability to identify and understand errors of judgmenet and choice ....by providing a richer and more precise language to describe them."

And, here's one we can all identify with: "Unfortunately, professionals' intuition does not arise from true experience", indeed, executive "... judgments and decisions are [often] guided by feelings of liking and disliking, with little deliberation or reasoning". For the quantitative manager, decision making driven by such intuitive thinking is the height of frustration!

Summary: it's a tome to be sure, but it's a good read, and worthy of scanning and sampling--highlighting and bookmarking in an e-reader (there are many free ones for laptops and tablets).