Monthly Archives: June 2018

Book Notes : The Art of Thinking Clearly

The Art of Thinking Clearly by Rolf Dobelli
My rating: 4 of 5 stars

  • Survivorship Bias – The result is biased by the people who survived meaning people overestimate their chance of success
  • Swimmer’s Body Bias – There selection bias, not everyone is able to be a world class swimmer so you have to be realistic before you try to be
  • Clustering Illusion – People love to see patterns when none exist, in reality could be purely random
  • Social Proof – Just because something is popular does not mean it is the best/right
  • Sunk Cost Fallacy – You have to ignore what has already been invested and evaluate from where we are now if something is worth investing in
  • Reciprocity – People feel obliged to reciprocate and this is used in shops to get you to try their product then you feel obliged to buy some
    Confirmation Bias – We filter out any information which does not conflict with out existing belief. Actively try to disprove your opinion.
  • Authority Bias – The position of Consultants, CEOs etc might bias your own thoughts and where this happens you should challenge them
  • Contrast Effect – You make a decision because of your previous experience, not because of the current options outcomes
  • Availability Bias – People make decisions based on easy to get information rather than the right information
  • The It’ll-get-worse-before-it-gets-better Fallacy – aka the person has no idea and so this fallacy is win win for them
  • Story Bias – Stories give a false sense of understanding and omit or gloss over the actually important parts if they don’t fit a nice narrative
  • Hindsight Bias – People think they can remember the past but this is not the case, the only way to do this is to keep a diary not through recollection
  • Overconfidence Effect – People overestimate their own knowledge and sometimes underestimate to win a contract so be sceptical of predictions especially by experts
  • Chauffeur Knowledge – Where someone does not actually understand the content they are just presenting something like a news reader
  • Illusion of control – People think they can control more than they can, this is not the case so focus on the few areas you can actually influence
  • Incentive Super-Response Tendency – People are very responsive to incentives as such these can trump actually doing the right thing
  • Regression To The Mean – Where things return to average naturally over time, however people can attribute this to other factors which are just coincidental e.g. a consultant who came in
  • Outcome Bias – Disconnect the decision from the result. A bad decision can have a good outcome and a good decision can have a bad outcome. Record the decision and why for future reference
  • The Paradox of Choice – The more choices you have the more unsure and therefor dissatisfied you are afterwards. Decide on your criteria, stick to it, realise there is no perfect decision and that ‘good enough’ is the new optimum
  • Liking Bias – People buy more from people who think they like them. Always judge a product independently of who is selling it or pretend you did not like them.
  • Endowment Effect – People over-value their possessions more than the market does.
  • Coincidence – People read more into things than is actually there. “Never” does not exist, it just has a very small probability so on occasions it will happen.
  • Groupthink – If you find yourself in a unanimous group there is likely something wrong, consider appointing a devil’s advocate to ensure people feel safe to speak up
  • Neglect of Probability – People don’t naturally understand probabilities and overestimate their outcome meaning 1% and 100% appear very similar to people, the only exception being 0%
  • Scarcity Error – Either you want something or you done but people are motivated to buy things when they think they might loose the option to own it in the future e.g. “last few remaining” promotions
  • Base-Rate Neglect – People don’t take into account the actual likelihood of something happening
  • Gambler’s Fallacy – If a coin flip has been heads three times the next flip is still equally likely to be heads or tails, independent random events are independent
  • The Anchor – This sets peoples expectations and will draw you closer to it than you might have independently decided
  • Induction – As a result of history we predict the future, however this certainty is only provisional
  • Loss Aversion – People are more sensitive to loss and negativity so this will influence their decisions more
  • Social Loafing – Teams tend to take bigger decisions than their members would individually as blame is split if it goes wrong
  • Exponential Growth – People have no natural intuition for exponential growth
    Winner’s Curse – People want to win. As such people will over pay at auctions to “win” the prize
  • Fundamental Attribution Error – People over estimate peoples influence and underestimate external influences
  • False Causality – Correlation is not causality and its important to understand at a deeper level the link between effects
  • Halo Effect – Where one easy characteristic biases others, such as stock price on the performance of the CEO or beauty on the performance of a pianist
  • Alternative Paths – Your brain convinces you that you are on the best path and actively thinking about other paths is hard but needed
  • Forecast Illusion – Forecasts are rarely better than random but good forecasts get huge publicity and poor forecasts get quickly forgotten
  • Conjunction Fallacy – Humans feel that things which are more specific are more likely where as thing which are more specific are inherently less likely probabilistic
  • Framing – The ways you say things will impact how people think about things, e.g. saying the car has great millage will make people think of that not how good the engine is
  • Action Bias – People feel compelled to do something when they don’t have enough information to make a decision, even when doing nothing and learning more would be the better option
  • Omission Bias – This is where we don’t do something but we would not do the opposite e.g. we are less critical of companies which don’t release new products compared to companies which release bad ones, or building no emissions filter into a coal plant feels superior to removing one for cost reasons
  • Self-Serving Bias – You are biased in favour of yourself, if you do well it is all because of you if you do poorly it is because of the system or external factors
  • Hedonic Treadmill – We work hard, advance and are able to afford more and nicer things and yet this does not make us any happier
  • Self-Selection Bias – Where the result is influenced by the method. e.g. a telephone survey asking how many phone people have wont result in anyone without a phone
  • Association Bias – Read into the situation only what was there and nothing more. e.g. just because someone tells you some bad news don’t shoot the messenger
  • Beginner’s Luck – Things happen randomly and so its possible that you are lucky first time but don’t think you are a genius at at
  • Cognitive Dissonance – People convince themselves against their natural judgement e.g. if people do a boring task they don’t want to acknowledge that then they convince themselves it was better than they felt
  • Hyperbolic Discounting – People want instant rewards. If offered $1,000 in 12 months or $1,100 in 13 months most people would choose $1,100 but $1,000 today or $1,100 next month most people would choose the $1,000 today
  • “Because” justification – people feel better for knowing why. e.g. jumping to the front of the copier queue and saying “I need to use the copier because I need to copy some stuff” is perceived as better than “I need to use the copier” even though the content is the same
  • Decision Fatigue – Decision making is mentally exhausting and people would prefer to use instinct than conscious effort
  • Contagion Bias – People associate objects with people e.g. relics or photos of people
  • The Problem with Averages – Averages can be misleading, e.g. the wealth on a bus compared to the wealth on a bus with Bill Gates on it which does not change any of the previous passengers
  • Motivation Crowding – Where people are naturally motivated by something, e.g. collecting their children from day-care, adding a financial aspect to this can turn this from natural motivation to a purely financial transaction, e.g. the parent deciding that they will pay the extra $10 because then they can do something else in that time
  • Twaddle Tendency – Verbal expression is the mirror of the mind. Clear thoughts become clear statements, whereas ambiguous ideas transform into vacant ramblings.
  • Will Rogers Phenomenon/stage migration – this is where there are two groups, one out-performing another, and you move the worst performer from the higher performing group into the lower performing group then the average of both groups increase. e.g. sales rates of 1,2&3 in group A and 4,5&6 in group B, moving 4 to Group A will increase its average from 2 to 2.5 and Group B from 5 to 5.5 but in reality the total is the same
  • Information Bias – The idea that more information is better, in reality the facts in a sample of 100 people will likely be the same with 200 so the extra does not add any extra learning
  • Effort Justification – People feel that things they have put effort into are worth more, in reality this is not the case e.g. the value of your built Ikea Bookcase is the same as one someone else made
  • The Law of Small Numbers – If you measure the average theft rate per county then the best and the worst will be smaller counties because 0/100 or 1/100 are more extreme than 10/13,000. i.e. the small numbers make the averages more extreme
  • Expectations – People have expectations and when expectations are not met they are unhappy or will be punished (e.g. sacked). Randomly selected pupils who the teacher is told are better will perform better as the teacher will be more willing to help them
  • Simple Logic – People use the intuition part of their brain for logic but this does not regularly result in the correct answer
  • Forer Effect – Where people see what they want in things, given a generic text describing yourself you will agree with most of it and think the text is just about you
  • Volunteer’s Folly – People feel that by volunteering they are giving efficiently, in reality if you are paid $100 an hour it would be better for you to work an extra hour and donate the $100 for a specialist who can do the task better, quicker to a higher quality than an amateur
  • Affect Heuristic – People have a natural response which then impedes their decision making e.g. using the word luxury people will have an instant feeling about it
  • Introspection Illusion – People believe their predictions much more than they believe other peoples, it is difficult to be self critical
  • Inability to Close Doors – Deciding what not to do is hard but it is the key to focusing on what you are doing
  • Neomania – People believe in hype and project things in the future which are unlikely. Focusing on what has been will likely result in things which are around longer e.g. chairs
  • Sleepers Effect – propaganda, advertising, advice etc you can easily discount it in the moment but it seeps into you in the future without you realising it
  • Alternative Blindness – There are more alternatives than you realise, you will likely get offered two but in reality there are many more worth considering
  • Social Comparison Bias – People naturally feel scared about people who are better than them in some way, however supporting and developing them will be mutually beneficial in the future
  • Primacy And Recency Effects – People remember the initial impression and the final impression much more than the middle – remembering the middle is an active task which needs to be undertaken
  • Not-Invented-Here Syndrome – We prefer our own ideas where as some of the ideas externally were better we just did not want to admit it
    The Black Swan – If you want to ride a black swan you have to be open to it, you will never ride it if you don’t try
  • Domain Dependence – Transferring skills from one domain to another is not natural, but sitting back and identifying what professional experience you have and how you can apply it to your personal life could be beneficial
  • False-Consensus Effect – Most people extend their thoughts onto others e.g. overstating unanimity. In bussiness this could be the R&D department thinking their product is what people want where as in reality it is not
  • Falsification of History – Hindesite is not clear, we constantly re-interpret the past in our brain and as such it is not possible to know how we thought at a point in time or exactly why a decision was made – the only way to overcome it is with a diary.
  • In-Group Out-Group Bias – Prejudice and aversion are biological responses to anything foreign. As such there is a huge feeling of wanting to be in a group for safety.
  • Ambiguity Aversion – Dealing with ambiguity is needed, we will never have all of the information so we have to work with the information which we currently have
  • Default Effect – People stick with the default normally and rarely change from the status-quo, this is the simplest decision to make as effectively the decision has been made by someone else
  • Fear of Regret – People don’t like the closing of doors so when there are the “Last chance to buy” people will jump on it, where as in reality it is likely that the chance will come up again in the future
  • Salience Effect – People like a simple answer to everything and trivialise things down to one cause e.g. a book being on the best seller list because of its red colour, it is key to see past this and look at the other factors
  • House-Money Effect – People treat winning money differently to earning it, in reality the source of the money should have no effect on how you spend it
  • Procrastination – If you really need to get something done then tell people you are doing it, set public deadlines and focus.
  • Envy – In the past resources were scares so people were envious if someone had something they needed, these days resources are not scares but we still feel that if someone else has something we fear we can’t have it ourselves
  • Personification – People prefer stories compared to statistics, people are not moved by statistics but by faces and names
  • Illusion of Attention – People think they are paying more attention than they really are, sometimes you need to take a step back to see the whole picture such as the gorilla in the room
  • Strategic Misrepresentation – The best offer does not win, it is the one which looks best on paper. People over sell what they can do, it is key to see past performance and their successes or failures
  • Overthinking – Gut decisions are not meaningless e.g. which flavour of jelly do you prefer, if you try to rationalise it then you change the result which can give companies a stronger sense of reason but the wrong result
  • Planning Fallacy – The idea is that you can plan for every eventuality and that if things go wrong you could have mitigated it with more planning – planning can not be infinite else the project would never be delivered. Instead planning less and being sensitive to the changing environment is likely better
  • Deformation Professionnelle – People can only use their knowledge and experience to solve the problem and this might be there best solution but it is not the best solution for that you need to ensure you are asking the correct experts
  • Zeigarnik Effect – When people are thinking about things they can’t not think about them, there is no natural off switch. Instead noting them down or coming up with a next steps will give your brain the ability to move on
  • Illusion of Skill – Where chance is a significant factor people can appear to have more skill than they have, the outcome is just random and lucky for them
  • Feature-Positive Effect – People only think about the things which are happening and not the things which are not, war might be a big issue but the absence of war is rarely thought about
  • Cherry-Piking – People choose what to show and what not to show, it is this choosing which then amplifies the choice as people rarely look for what is not shown
  • Fallacy of the Single Cause – People like there to be a reason, a single reason, why something happened where as in reality there are likely multiple contributing factors
  • Intention-to-treat Error – Where the negative effects end up in the wrong category. e.g. Fast driver and slow drivers, the journey time for slow drivers is longer than that for fast drivers however if a fast driver has an accident they will end up in the slow drivers category skewing the numbers
  • News Illusion – We think news is very important but looking back how many have actually impacted our lives, in reality if something did we would know about it anyway so news is not very useful in the grand scheme of life

Book Notes : The Culture Code

The Culture Code: The secrets of Highly Sucessful Groups by Daniel Coyle
My rating: 4 of 5 stars

Safety is key for a team to be able to fuse.  If there is not safety then people are scared, blame others and can’t trust others.  Once people are safe they can feel that they belong to the team.

There are a couple of things with building belonging from the way you term feedback:

1. You are part of this team
2. This group is special, we have high standards
3. I believe you can reach these standards

and improving communication by reducing the distance between people.

  • Over communicate that you are listening
  • Spotlight your fallibility early
  • Embrace people who give feedback, specially that which you might not want to hear
  • Preview future connections – give people an idea of where they are going
  • Over do thank yous
  • Be painstaking in the hiring process
  • Eliminate bad apples
  • Create safe, collision rich spaces
  • Make sure everyone has a voice, e.g. one-to-ones
  • Picking up trash is everyone’s responsibility, including leaders
  • Embrace fun

Embrace vulnerability to build trust.  Retrospectives, candid feedback and trust are key. This builds a common brain for the team.

Some of the questions to build trust are the 36 Questions from Arthur and Elaine Aron which push people out of their comfort zone a bit which is unnerving but this helps build trust.

  • Make sure leaders are vulnerable often
  • Over-communicate expectations
  • Deliver negatives in person
  • The first vulnerability and the first disagreement in teams is key to making them
  • strong
  • Communicate in a way that people…
  1. Feel safe
  2. Feel cooperative
  3. Constructively have their assumptions challenged
  4. Sometimes suggest alternatives for consideration
  • Resist offering solutions or making suggestions
  • Candid-feedback is key to improving
  • Embrace discomfort to build trust
  • Align terminology with actions
  • Build a wall between performance and professional development
  • Flash mentoring
  • Make the leader occasionally disappear so the team can learn to work without them

Establish a common purpose and direction so that people know in which direction they should be heading.

  • Name and rank your priorities
  • Be ten times clearer with your priorities than you think you need to be
  • Identify where the team is proficient and where creative. Proficient in repeating the same solution, creative in coming up with a new solution
  • Embrace the use of catchphrases to embed values, priorities and direction
  • Measure what really matters
  • Use artefacts which so off what you do, both well or badly
  • Focus on bar-setting behaviours – this could be ensuring that a simple action is performed to excellence, reliably.