Think Twice: Harnessing the Power of Counterintuition
You can track your individual or group premortems in your decision journal. Watching for the possible sources of failure may also reveal early signs of trouble.
Michael J. Mauboussin • Think Twice: Harnessing the Power of Counterintuition
second mistake associated with reversion to the mean—a misinterpretation of what the data says.
Michael J. Mauboussin • Think Twice: Harnessing the Power of Counterintuition
In reality, their performance was simply reverting to the mean.
Michael J. Mauboussin • Think Twice: Harnessing the Power of Counterintuition
Repeated, good outcomes provide us with confirming evidence that our strategy is good and everything is fine. This illusion lulls us into an unwarranted sense of confidence and sets us up for a (usually negative) surprise.
Michael J. Mauboussin • Think Twice: Harnessing the Power of Counterintuition
10 Crowds tend to make accurate predictions when three conditions prevail—diversity, aggregation, and incentives. Diversity is about people having different ideas and different views of things. Aggregation means you can bring the group’s information together. Incentives are rewards for being right and penalties for being wrong that are often, but n
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One of the Kelly formula’s central lessons is that betting too much in a system with extreme outcomes leads to ruin.
Michael J. Mauboussin • Think Twice: Harnessing the Power of Counterintuition
Ask whether the theory behind your decision making accounts for circumstances. People frequently attempt to extrapolate successful choices from prior experiences to new situations, with predictably poor results. Flawed research that draws common attributes from organizations that have done well and offers those attributes as a general prescription
... See moreMichael J. Mauboussin • Think Twice: Harnessing the Power of Counterintuition
academic accomplishments did not always correlate with on-the-job performance.
Michael J. Mauboussin • Think Twice: Harnessing the Power of Counterintuition
Watch for tightly coupled systems.
Michael J. Mauboussin • Think Twice: Harnessing the Power of Counterintuition
Tightly coupled systems, as described by Michael Mauboussin, can be understood as systems where various parts or components are highly dependent on each other and operate in a closely interconnected manner. In these systems, the performance of one component directly affects the performance of others, and any changes or disruptions in one part can quickly propagate and impact the entire system.To illustrate this, let's consider a simple example of a tightly coupled system: a group of cyclists riding in a peloton. In a peloton, the riders are closely packed together, and their movements and actions are interconnected. If one rider suddenly slows down or swerves, it can cause a chain reaction, leading to other riders colliding or losing their balance. The riders' actions are tightly coupled because any change or disruption by one rider can quickly affect the whole group.
This idea introduces our third decision mistake, inappropriately relying on intuition. Intuition can play a clear and positive role in decision making. The goal is to recognize when your intuition will serve you well versus when it will lead you astray.