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“I know what you’re thinking. ‘Did he fire six shots or only five?’ Well, to tell you the truth, in all this excitement I kind of lost track myself. But being as this is a .44 Magnum, the most powerful handgun in the world, and would blow your head clean off, you’ve got to ask yourself one question: Do I feel lucky? Well, do ya, punk?”

[Harry Callaghan, from the film Dirty Harry (1971)]

How do you make organisational decisions? Do you make quick decisions using your ‘gut instinct’ or do you take your time, looking at the evidence, weighing up the options. Now you could say that taking your time is the best option because you can use that time to make sure you take all the important factors into account. On the other hand, if you spend too much time thinking about it, other events might overtake you. You might find, metaphorically speaking, you’ve had your head blown clean off.

These two different modes of thinking were defined by Stanovich and West (2000)

as System 1 and System 2 cognitive functioning. System 1 thinking is intuitive – typically automatic, effortless, implicit and emotional. This is in contrast to System 2 which is conscious, effortful, explicit, and logical. It turns out that System 1 thinking is probably how most of us function most of the time.

Within a high pressure organisational environment, paying attention to how you function, especially when making decisions, could have some pretty far reaching consequences. For example, even though the idea was properly debunked by Henry Mintzberg in his seminal article The Manager’s Job: Folklore and Fact

most people still have a mental image of managers as reflective systematic planners. In other words predominantly tending towards System 2 thinking. The reality, as Mintzberg pointed out, is that managers work at an unrelenting pace and “their activities are characterised by, brevity, variety and discontinuity” and they are “strongly oriented to action and dislike reflective activities”. This is most assuredly System 1 activity.

The far reaching consequences of making decisions based on System 1 or System 2 thinking were successfully and entertainingly explored by Nobel Laureate, Daniel Kahneman, in his book Thinking, Fast & Slow. The book had such an impact at the time that it is well worth reminding ourselves of  some of the key observations. What Kahneman was able to illustrate was that System 1 decision making, based on intuition, could be extremely helpful or disastrously damaging. This depends on, amongst other things, the experience of the decision maker. Many experts will say they often make decisions by ‘gut instinct’. Kahneman suggested that this so called gut instinct can be explained in different ways either leading to a positive or, potentially, a negative outcome.

One way in which this instinct or intuition can operate is through recognition. In other words the expert is familiar with this situation. Something in the circumstances sparks a memory which allows the expert to access their knowledge or expertise of this situation and they are able to act appropriately or make the right decision. This can happen extremely quickly – more or less instantaneously. Sometimes however the situation is not so familiar but the expert will nonetheless still make a rapid decision. In this case, even though the expert may not be conscious of it, the decision is based on something other than recognition. It could be based on what Kahneman called the affect heuristic, by which he seems to mean that the brain, not finding any familiarity in the situation, makes a quick decision based instead on feelings of liking or disliking. In other words the decision is not based on expertise at all but simply a subjective, possibly biased, set of feelings. In this situation, with no evidential basis for a particular course of action, a positive or negative outcome may be down to sheer dumb luck.

System 2 decisions, by their very nature, are much less prone to bias but of course may be a lot slower – in some situations perhaps a bit too slow. So the point here is not so much that we should replace System 1 thinking with System 2 thinking but that we should recognise the appropriateness of each mode of thinking for the circumstances. Additionally, since System 1 thinking is the mode we most habitually adopt, we need to look for organisational situations where System 2 thinking should be consciously and deliberately deployed, especially where the impact of the decision has significant long term effects.

It is interesting to observe that this viewpoint is also arrived at, though from a very different starting point, by Peter Senge in The Fifth Discipline, when he cites Bohm suggesting that decision making is improved by dialogue in which “all participants must suspend their assumptions, literally to hold them as if suspended before us”. This mode of operating allows everyone to perceive the influence behind your opinions, thereby using the group as a check on the worst excesses of System 1 thinking. At the same time you are promoting group learning, thereby widening experience and increasing expertise.

Of course there are some people who will instinctively recoil at taking a more laborious route to decision making, perhaps preferring the breakneck pace of making decisions on the hoof. But if you are tempted to sick with the familiar and always make decisions with your gut then you should be prepared to ask yourself one simple question: Do I feel lucky?

Well do ya punk?