Economic behavior is your choice, good or bad, only the successful admit.
Daniel Kahneman who is an Israeli Psychologist and a professor of psychology and public affairs emeritus at Princeton University, won the Nobel memorial prize in economic sciences for applying psychological insights to economic theory. In his book, Thinking, Fast and Slow, Kahneman uses principles of behavioral economics to show how intuition and slow thinking shape our thinking and goes further to guide on how to tap into both.[1] The book provides the dichotomy between two modes of thought, the fast, instinctive and emotional “system 1”, and the slower, deliberative and more logical “system 2”. By using this dichotomy, he expertly delineates the rational and non-rational motivations or triggers that are associated with each type of thinking process, and how they compliment each other.
The system 1 thinking which is the fast, instinctive and emotional is subject to cognitive biases that may sometimes lead to irrational decisions.[2] There are situations where fast decisions are desirable when timeliness is of essence and is more valuable than accuracy, in these situations cognitive biases and heuristics can lead to more effective actions. The system 2 thinking is slow because it involves a process of weighing options thoughtfully and emphasizes the use of logic and reason and more rational decisions and actions are taken.[3] The two systems of thinking affect the kind of decisions we make on a daily basis and will also affect our research work. The assumption that most of the decisions are made with the system 1 thinking means that we make biased decisions because people tend to avoid complicated or complex questions to answer an easy question. This implies that most people will make irrational decisions by defaulting to intuition and emotions.
As leaders, its very insightful to understand these how system 1 and system 2 plays out among the people that we lead if we are achieve the set objectives of the organization. The research by Kahneman implies that many decisions are affected by our subconscious mind, and assuming that all decisions are made consciously is erroneous.[4] The awareness of the influence of the subconscious mind in people’s decisions will equip leaders to better understand the behavior of their followers and be better equipped to influence their behavior. This knowledge is also critical in research when designing the research to ensure that you collect sufficient data both from the conscious and subconscious behavior or the resultant data. Most of conventional research methods and decision-making models assume that most of brain activity is based on the conscious mind while recent research suggests that most brain activity takes place in the subconscious mind.[5] It is in the interest of leaders and their leaders to make the right decisions which are based on sufficient data and the Kahneman and other economic scientist in this areas are very critical. Economic decisions play a very critical role in our individual lives and in the organizations that we’re involved in.
As a leader in the church and in a parachurch organization, it occurred to me how easy it is to make wrong decisions by relying on insufficient data by assuming as I often do, that most brain activity is based on the conscious mind rather than the subconscious mind. I see how I often take responses from people at face value without paying to any biases from their intuition and emotions. I realize how valuable it would be intentionally come up with decision making processes that can sieve and reduce the impact of such biases, by ensuring that decisions are made through deliberative and logical processes. Leaders like me should go the extra mile of being equipped with this knowledge to make better decisions and build a culture that facilitates such good decision-making processes. Emotional intelligence comes to mind as such an important competence for leadership to make and influence decisions in an organization. This is a book that I will set aside as part of my library, so that I can reread it as often as possible and make necessary reference in future. I am very thankful for this doctorate program that I believe is part of the process of equipping me to be a better leader in the church and in any organization or forum that I serve as a leader. It is so easy to rely on insufficient data from the wrong assumptions, and how true it is that we do not take responsibility for bad decisions we make but are quick to take credit when good decisions lead to success. Leadership is about taking responsibility to learn from failure and use such lessons to make better decisions, there are great lesson that I have learnt from Kahneman’s work and I will trust God to improve my leadership.
As I prepare and continue with my research for my dissertation, it occurs to me that there will be a lot of biases that I will have to be aware of and take the necessary steps to reduce or eliminate such biases. My awareness of the system 1 and system 2 ways of thinking has equipped me to gather sufficient data for my research and I will put it to good use.
[1] Daniel Kahneman. Thinking, Fast and Slow. (New York, USA. Farrar, Straus and Giroux (FSG), 2011).
[2] Haselton MG, Nettle D, & Andrews PW. “The Evolution of Cognitive Biases.” In Buss DM (ed.), The Handbook of Evolutionary Psychology. (Hoboken, NJ, USA. John Wiley & Sons Inc., 2005) pp 724-746.
[3] Purcell, Molly. “Thinking, Fast & Slow: System 1 vs System 2 | GreenBook,” August 1, 2020. https://www.greenbook.org/mr/market-research-news/lessons-from-thinking-fast-slow-system-1-and-system-2/.
[4] Tilleuil, Olivier. “Do We Need a Copernican Revolution in Market Research? | GreenBook.” SIS International Research, February 5, 2018. https://www.greenbook.org/mr/market-research-methodology/do-we-need-a-copernican-revolution-in-market-research/.
[5] Ibid.
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