The Undoing Project or why you need to learn to tell a good story.

I have recently read “The Undoing Project: A Friendship That Changed Our Minds” by Michael Lewis. The book tells the fascinating story of the friendship between two Israeli psychologists, Daniel Kahneman and Amos Tversky. 

Carefully woven into the tale of their relationship, to the point you are not sure whether this is a book about two friends or a book about behavioral theories and their evolution, is a layman explanation of their complex work, which have wide influence in today’s world of economic studies and Big Data, to the point that have gained Danny the Nobel Prize in Economics.

For someone who has always taken the data, facts and science approach for granted or is sometime puzzled how people take decisions, it is refreshing to learn how the mind plays us tricks and influences our decision making process.

In business, as in life we choose different paths everyday, therefore I believe that understanding some of the pitfall and even a small appreciation of the mechanisms of the mind might be very helpful in business and in life when sometime we are too quick to come to decisions or we remain anchored to what we know.

Take a Thirty Second Break...

Are thirty seconds gone? If you plan to read the book you can stop here, happy reading.

If you prefer, you can briefly read my personal summary and I apologize in advance to Danny, Amos and the author of the book if I have poorly shrunk their work in 250 words. There are many other messages and learning to be found, beside the one I filtered through my experience and the nuances are too sophisticated for my original goal to entice you to read the book.

People are not stupid and decision are driven by the way they are framed. 

In the years and through the experiments described in the book, Amos and Danny concluded that people do not believe in statistics and I quote “this is pretty important”. They explain that our brains seek certainty therefore, when we calculate odds to come to conclusion and take decisions, we make judgement based on past experiences or similarities. Human judgement seems to be distorted by memories.

In addition, it seems that the more a person can recall anything negative, distressing or preoccupying that happened to her, the more the memory will be vivid and influence the judgement. The point is that people are not stupid, but when presented with situations in which the evidence they need to judge is foreigner to their experience and more familiar, but misleading memories or situations come to mind, we stop judging based on facts.

The further conclusion is that, while we do not know what we do not know, we usually do not bother to factor our ignorance in our decisions. Rather than accepting new evidence we prefer to use known information to fit the data to the conclusion we have already drawn.

In conclusion people, do not necessarily make decisions based on facts or data, but rather based on the description of the facts and data and usually the path of least resistance is preferred.

My two learnings are:

Tell a good story.

Having a narrative that speaks to your audience, their experience and being able to relate them to the story is fundamental to influence people, in business and in life, but make sure your data are sound.

Question yourself.

We do not know what we do not know, be open to listen to a new narrative or to find a new one, but make sure your storyteller and you have data to back the new claim.

Enrico Biscaro

References: “The Undoing Project: A Friendship That Changed Our Minds” by Michael Lewis