#tomorrow12: Prof. Kahneman talks decision-making and coaching leadership.

Panel: Learning from Mistakes on the Way to Tomorrow

The following are notes from a talk by Professor Daniel Kahneman, winner of Nobel prize in Economic Science, known for his work in psychology of judgment.

It is not always easy to know if a mistake has been made. In the most important situations, it’s extremely difficult to know if a mistake has been made. We know about mistakes in simple tasks – when we’re driving, reading, spelling. There’s a specific way to do things, and in general we learn from these.

The world is an uncertain place. In most consequential situations… it’s impossible to tell in advance, it’s also impossible to tell after the fact. Decisions are gambles. A good decision – the best decision – could have bad outcomes. The bad ones could have good outcomes.

Political forcasting is like playing the stock market. The world is too complicated, making it hard to speak about mistakes when you live in a word like that. Where forecasting is impossible and uncertainty is reality… we intuitively tend to think that when the outcome was good, the decision was good, and vice versa. You can’t incur with such certainty that a bad decision was a mistake.

We judge by outcomes. A very severe problem. There are few worse things than hindsight; it perpetuates the illusion that the world is understandable.

What’s the alternative? Focusing on process. Decision making is an activity.

But there’s no quality-control in decision-making processes, and governments are decision-making factories. Yet factories need to have quality control, and it’s something we should have.

There’s a lot that we know about the errors people make. There is very little ongoing critique of decision-making.

In order to learn from decision-making, we should be keeping track – of the decisions, the deliberations. It is very difficult to achieve in organizations. There’s a big resistance in organizations; people in authority do not like anybody looking over their shoulder.

What could we have? A coach for leaders: the coach doesn’t play better than the athlete their coaching; but s/he can look objectively at the athlete and help them improve.

Leaders need to have confidence to take on such a coach, without waiting for the outcome itself to determine – or not determine, as previously said – whether a mistake was made.

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