The Art of Thinking Clearly
This book lists, with just a page or two explanation for each, the main biases and prejudices and incorrect assumptions that stop us from making the best decisions and from thinking clearly.
Most of the thinking 'errors' Rolf Dobelli identifies draw from psychology - giving you more insight into how you think and decide so you can spot the biases and filter them out (as far as possible).
Some are drawn from economics and simple conceptual mistakes we make when looking at numbers.
There are 99 errors of thinking that the author spends a page or two each on; his theory being that if you eliminate as many of them as you can you will think more clearly and make better decisions as a leader.
I'm sure he's right. I found this to be a great 'skim read'.
99 is too many to work through, and a lot of them aren't relevant to your work as a leader. So, I've pulled out three samples, below, that are relevant.
You'll probably find yourself nodding along and saying "I do that" to some of these thinking errors, just like I did
1. The Overconfidence Effect
We systematically overestimate our knowledge and ability to predict - on a massive scale. The overconfidence effect does not deal with whether single estimates are correct or not. Rather, it measures the difference between what people really know and what they think they know.
What's surprising is this: experts suffer even more from overconfidence than laypeople do.
If asked to forecast oil prices in five years' time, an economics professor will be as wide of the mark as a zookeeper will. However, this professor will offer his forecast with certitude.
Overconfidence does not stop at economics: in surveys, 84% of Frenchmen estimate that they are above-average lovers.
2. Self-Serving Bias
We attribute success to ourselves and failure to external factors. This is the self-serving bias.
How can we dodge the self-serving bias? Do you have friends who tell you the truth - no holds barred? If so, consider yourself lucky.
If not, do you have at least one enemy? Good. Invite him or her over for coffee and ask for an honest opinion about your strengths and weaknesses.
You will be forever grateful you did.
3. The Sunk Cost Fallacy
The sunk cost fallacy is most dangerous when we have invested a lot of time, money, energy or love in something.
This investment becomes a reason to carry on, even if we are dealing with a lost cause.
The more we invest, the greater the sunk costs are, and the greater the urge to continue becomes.
This irrational behaviour is driven by a need for consistency.
After all, consistency signifies credibility. We find contradictions abominable.
If we decide to cancel a project halfway through, we create a contradiction: we admit that we once thought differently.
Carrying on with a meaningless project delays this painful realisation and keeps up appearances.
This is how your brain works
Recognize errors in your own thinking or your team's? If you don't, you're not being honest, as this stuff is the result of a lot of deep research into how we think.
Being aware of it in yourself is the first step to fixing it and becoming a better leader.