Judgments based on intuition seem mysterious because intuition doesn't involve explicit knowledge. It doesn't involve declarative knowledge about facts. Therefore, we can't explicitly trace the origins of our intuitive judgments. They come from other parts of our knowing. They come from our tacit knowledge and so they feel magical. Intuitions sometimes feel like we have ESP, but it isn't magical, it's really a consequence of the experience we've built up.INSIGHT
[GARY KLEIN:] What's the tradeoff between people using their experience (people using the knowledge they've gained, and the expertise that they've developed), versus being able to just follow steps and procedures?
We know from the literature that people sometimes make mistakes. A lot of organizations are worried about mistakes, and try to cut down on errors by introducing checklists, introducing procedures, and those are extremely valuable. I don't want to fly in an airplane with pilots who have forgot their checklists, and don't have any ways of going through formal procedures for getting the planes started, and handling malfunctions, standard malfunctions. Those procedures are extremely valuable, and I don't doubt any of that. The issue is how does that blend in with expertise? How do people make the tradeoffs when they start to become experts? And does it have to be one or the other? Do people either have to just follow procedures, or do they have to abandon all procedures and use their knowledge and their intuition? I'm asking whether it has to be a duality. I'm hoping that it doesn't and this gets us into the work on system one and system two thinking.
System one is really about intuition, people using the expertise and the experience they've gained. System two is a way of monitoring things, and we need both of those, and we need to blend them, and so it bothers me to see controversies about which is the right one, or are people fundamentally irrational, and therefore they can't be trusted? Obviously system one is marvelous. Danny Kahneman has put it this way, "system one is marvelous, intuition is marvelous but flawed." And system two isn't the replacement for our intuition and for our experience, it's a way of making sure we don't get ourselves in trouble.
If we eliminate system one, system two isn't going to get the job done because you can't live by system two. There are people who try, there are people who have had various kinds of brain lesions that create disconnects between their emotions and their decision-making process. Damasio has written about them. It can take them 30 minutes to figure out what restaurant they want to go to. Their performance on intelligence tests isn't impaired, but their performance in living their lives is greatly impaired; they can't function well, and their lives go downhill.
So we know that trying to do everything purely rationally, just following Bayesian statistics or anything like that isn't going to work. We need both system one and system two, and so my question is what are the effective ways of blending the two? What are the effective ways that allow people to develop expertise, and to use expertise while still being able to monitor their ideas, and monitor their actions?
Too often it's treated as a real dichotomy, and too many organizations that I study try to encourage people to just follow procedures, just follow the steps, and to be afraid to make any mistakes. The result is that they stamp out insights in their organization. They stamp out development of expertise in their organization, and they actually reduce the effectiveness and the performance of the organizations. So how do you blend those is an issue.
Knowledge grows through sharing! To be the best, learn from the best! May all your dreams come true! Collections of Value Investing articles, interviews and videos, especially on Warren Buffett and Charlie Munger and articles from various disciplines to build "Latticework of Mental Models"
Wednesday, July 06, 2011
Gary Klein: Insight
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