Re-read Saturday


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Last night severe thunderstorms rolled through northern Ohio.  There were lots of power outages and trees that were blown over.  This morning when I went to the grocery store, the store’s systems could not accept debit cards. I immediately made up a story that connected the storms to system failure. As we have seen before, System 1 thinking takes disparate facts and creates a coherent believable story.  No conclusion is too big a jump for System 1 thinking. My story and my belief that I had predicted the most probable cause is an illusion of validity.    (more…)

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Part 3 of Thinking, Fast and Slow is titled Overconfidence.  Chapter 19 begins by exploring several biases that affect overconfidence. Earlier in the book, we explored how System 1 thinking connects events to generate a coherent story.  This chapter begins by building on the attributes of fast thinking by stating that humans interpret behavior as a manifestation of general propensities and personal traits. One of the classic biases that cause this type of thinking is the halo effect. I overheard an example of a negative halo effect this week as I walked behind a group of people in Chicago. The group, tourists, pointed at a person sleeping rough along the river and exclaimed that the person was lazy.  One attribute of the person’s behavior was generalized into a larger narrative.   (more…)

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I know this is not Saturday however, I was not able to post week 18 last weekend because I was traveling to Canada to pick up a puppy and bring her home.  So I am trying to catch up!  Week 18 of our re-read of Thinking, Fast and Slow tackles Chapter 18, Taming Intuitive Predictions. (more…)

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Why does leadership bring a release home to great adulation only to have the next release crash and burn? Did the leader’s skill change between releases or were other random factors, such as luck, involved. Kahneman suggests a simple formula as a thought experiment.  Success = skill + luck. Chapter 17 of Thinking, Fast and Slow, Regression To The Mean, discusses correlation and causal interpretation.   (more…)

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Chapter 16, Causes Trump Statistics, was revelatory for me the first time I read  Thinking, Fast and Slow, and it was revelatory during this read. Over my career, I have been shocked many times to see a perfectly sane leader stand up and show a single statistic or estimate which promises delivery of a product at a cost or in a timeframe that is well outside of normal performance.  This chapter provides a rationale for what often seems to be less than rational. The content in this chapter helps me understand why statistical facts aren’t perceived to generate black and white answers, even when they do. Kahneman uses a story about taxi cabs to illustrate the difference between statistical base rates and causal base rates.  Statistical base rates are facts about the population but are not specific to any individual case. Causal base rates are effective because they are specific and are easily woven into a narrative about the case.   (more…)

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In Chapter 15 of Thinking, Fast and Slow we explore two types of fallacies. Logical and conjunction fallacies can impact any process improvement effort, typically in a manner that does not benefit change. 

The central plot device in this chapter is an experiment performed by Kahneman and Tversky that asked sets of respondents to rank attributes by representativeness and another group to rank by probability. The experiment begins with a description of the person, Linda,  (similar to the experiment at the center of Chapter 14). A set of statements about Linda’s potential profession is then listed. In this case (as compared to the experiment in Chapter 14), there are items in the list that require the application of logic to judge. For example, one item is “Linda is a bank teller” and a second is “Linda is a bank teller and is active in the feminist movement”. The lightbulb moment from the experiment was when there are two items that have a logical relationship, respondents distinguished between the two based on the story System 1 constructs.  (more…)

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Chapter 14 continues the discussion of cognitive biases and heuristics.  In Chapter 14 of Thinking, Fast and Slow we explore the representative heuristic.  

Tom W’s Specialty is an exercise/puzzle that Kahnamen uses throughout Chapter 14 to explore how the perception of representativeness impacts conclusions originally made from the base rate (the percentage of an attribute in the population). This might sound somewhat esoteric, but consider how many contracts are signed based on estimates that include representations of performance above and beyond the norm. Alternately how many agile teams pull more work items above their median performance based on representations of simplicity from stakeholders. The representative heuristic can negatively bias any intuitive decision.  (more…)

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