We often make decisions based on “good enough” information. Our brain is configured to make us act fast and without definite proof. Intuition uses what we call rules of thumb to select an item. The best experiences use this gut instinct to help us do the right thing easily.
For example, the roundabout in many cities in Europe is designed to keep traffic moving, instead of stopping it. It works based on a simple rule of thumb — if anything comes from the right, you stop. Another example of a rule of thumb we use — if something feels too good to be true, it probably is.
Nobel Memorial Prize in Economic Sciences Daniel Kahneman is notable for his work on the psychology of judgment and decision-making. He wrote about this phenomenon in Thinking Fast and Slow. “Good enough” is our System 1 at work, it can help us generate complex patterns of ideas quickly but may be too fast to draw good conclusions. Our slower System 2 gives us the ability to think things through.
An automatic response to information and situations often serves us just fine in many situations. Human behavior is not mathematical. Yet, in our strategy discussions we focus mostly on the things that we can represent numerically. Instinct is grossly undervalued.
Signaling
Science has demonstrated that people act based on things like signaling. Companies and brands spend money to build reputation to signal they will be around for a long time. It might not matter as much for products we consider based on convenience and price — we have our online convenience stores, open 24/7, and the algorithm knows what to recommend.
Individuals signal something with their purchases — we're environmentally conscious by buying an electric car or installing solar panels. Or we want to signal status with luxury purchases. Trying to appeal to reason with data is futile, we use data only to rationalize we made the right choice after the purchase.
Often the brand story stops with the transaction, a missed opportunity to reinforce the story. Brands are proxies that compress data into a story. Inversely, what is the message when organizations don't invest in signaling?
Experiences start with a story we tell, the why behind a product or service — vegan fast food, essential clothing without markup, designer eye-wear without breaking the bank, a modern day version of a roadside burger stand, ready to wear luxury, and so on.
We do make impulse purchases, and our constant connection with a limitless inventory of options online means that availability at the point of need — right place, right time — is also a signal. This includes the impact to perception based on the company brands keep#.
Focusing decision-making
Not all decisions involve purchasing a product or service, but an idea. In many of these decisions, “fine” (or good enough) can include a healthy dose of luck, which leads to overconfidence. We're all prone to an exaggerated sense of how well we understand the world, especially experts, says Kahneman.
Sometimes, good enough requires a slower thought. Tip to the wise: frowning is a simple way to engage our slower thinking System 2.
When we become more aware of the interplay of the fast System 1 and the slower System 2 in our thinking, we can improve our odds of making better decisions. We also don’t make our decisions in a vacuum. As our context changes, our decisions may need tweaking, if not rethinking.
Context is not just external, we also drive it. For example, what works for us in our twenties may not work so well in our mid-thirties. That’s also because we update what we think are our taste and ideas based on intervening experiences, as we learn (or so we hope.)
Three things must happen at once for us to do something — 1./ we want to do it; 2./ we're able to do it; 3./ we're prompted to do it. The story provides the priming, how fast or slow we act depends on the type of prompt.
B.J. Fogg#, founder and director of the Stanford Behavior Design Lab, says, “when motivation is high enough, or a task easy enough, people become responsive to triggers such as the vibration of a phone, Facebook’s red dot, the email from the fashion store featuring a time-limited offer.”
Willpower can go only so far, and we can answer the design of a system that could lead us down a rabbit hole in search of more, with a system of our own design optimized for better. This means using System 2 to help us focus decision-making.
Thinking in horizons
Our thinking also has horizons. We live in the here and now, enjoying our experiences, and also think about the future, even when it feels distant and abstract. Both ways of thinking are important to realizing what we want in life — our goals and our dreams.
Longer-term thinking tends to help us build a more flexible structure to absorb what life throws at us. Resilience is the ability to survive the shocks. Learning continuously and a longer horizon are ways to edge our bets.
“All civilizations suffer shocks; only the ones that absorb the shocks survive,” says humanist Stewart Brand[1]. In recent years a few scientists have been probing the same issue in ecological systems to understand how they manage change, absorbing and incorporating shocks.
“The answer appears to lie in the relationship between components in a system that have different change-rates and different scales of size. Instead of breaking under stress like something brittle, these systems yield as if they were soft. Some parts respond quickly to the shock, allowing slower parts to ignore the shock and maintain their steady duties of system continuity.”
Imagine a series of layers, like a cake, each somewhat independent and also interacting with the one closest to it. Stewart Brand says all durable dynamic systems have such a structure with interactions happening between faster layers and slower (more core) layers.
For example, “fast learns, slow remembers. Fast proposes, slow disposes. Fast is discontinuous, slow is continuous. […] Fast gets all our attention, slow has all the power.”
Mathematician and physicist Freeman Dyson makes a similar observation about human society. He talks about six time scales, with a twist — “the unit of survival is different at each of the six time scales.” According to Dyson, the individual is on a time scale of years, while culture is on a time scale of millennia.
To survive, we need to juggle the demand of different time scales, sometimes in conflict with each other.
“Every human being is the product of adaptation to the demands of all six time scales. That is why conflicting loyalties are deep in our nature. In order to survive, we have needed to be loyal to ourselves, to our families, to our tribes, to our cultures, to our species, to our planet.”
Acting fast and slow
Steward Brand proposes six significant levels of pace and size in the working structure of a robust and adaptable civilization, from fast to slow they are:
- Fashion/Art
- Commerce
- Infrastructure
- Governance
- Culture
- Nature
Like every dynamic system, it works based on feedback.
As we grow wiser, we tend to gravitate toward the slower layers, but we can continue to experiment and learn through the fast ones. Fashion is culture running around and trying new things. Hence fads, which come and go.
Commerce is fashion’s enabler. It helps sift trends from fads. Trends stay with us for a while, becoming part of the fabric of society. The farther from the surface, the longer the payback. Education and science are infrastructure in this model. Culture moves at the pace of language and religion.
Fast and slow are built into all life forms and human activities.
Things that are fast lead to things that are slow. To give examples close to my heart, high enjoyment comes from slow food, smart travel starts with fast reach, la dolce vita sits on the surface of work mastery. Italian style is art with brains.
Finding the answer of what works — the combination of fast and slow that works — happens with the help of time. A community of like minds and a network of connections do create a robust infrastructure to stay the course and absorb the shocks. Hence why we gravitate toward people who act like we think.
In many cases it's difficult to know what people actually think, even for the people themselves. We look at signaling through story and experience.
Thinking fast and slow, coupled with a “dynamic performance mindset,” as Dr. Constance Goodwin would say, creates the premise for the stuff that happens between thought and action — comprehension, synthesis, articulation, and conversation.
We create the system for living fast and slow one moment at a time.
[1] Source: Pace Layering: How Complex Systems Learn and Keep Learning