Do you remember those scenes from cartoons where Roadrunner and Wile E. Coyote do battle at the edge of a cliff, exchanging firm ground for in-air suspension in a comic duet?
Over 17 years of creating software products, it recurs to me as a metaphor. I've done business on the terra firma of empirically-based projections, and in the vacuum of intuition, where only smoke and mirrors keeps you aloft.
I've been thinking about this dynamic in a new light lately, as I read Daniel Kahneman's perception-altering opus, "Thinking Fast and Slow."
The book is a summary of 40-plus-year evolution of the cognitive psychology relating to how we make decisions. It ought to be required reading for every business person, but especially practitioners in social media, software development and process management.
To understand why, you need a quick synopsis of the book.
Kahneman breaks down cognition into two camps, which he calls System 1 and System 2.
System 1 can be boiled down to intuitive sense. It's the decision-making and recognition you do every waking moment, even though you are hardly aware of it. System 1 pilots your speeding car on the highway while your thoughts wander. It's how you recognize a friend's face from afar in a sidewalk crowd. And System 1 is effortless in its management of these tasks, which, if you think about it, are fantastically complex.
Did you think about it? If so, you used System 2. System 2 is what we use for everything that we consider real thinking. Math problems. Ikea furniture assembly. Novel circumstances of all kinds. The primary quality of System 2 is that it's effortful. That is why, being the lazy ne'er-do-wells we all are, we prefer to use it as little as possible.
Our distaste for using System 2 is enabled by System 1. When something "feels right," a delightful serenity descends, and we take that as a signal that we have solved our problem
But Kahneman relates dozens of experiments that illustrate what a bungler System 1 can be. Particularly at solving statistical problems, or where we are operating with incomplete or biased information.
In other words, in just about every business scenario.
I suspect the flaws of System 1 pose a particular risk to those who make their living online and in a social space when compared to more traditional businesses
To illustrate, consider the pizza parlor.
If you run a pizza place for a living, you are immersed in a sea of clues that System 1 is well-contrived to digest and interpret accurately. The satisfied expressions of customers when they eat. The density of the lunchtime crowd and exterior foot traffic. The arrival of a competing pizza place down the block.
Much of the same information derived from these cues by our pizza guy is available to we virtual laborers, but only via a concentrated application of System 2.
If we are smart, we will buckle down and push System 2 to the limit when we choose the tools that will stand in for our eyes and ears. We will vet the completeness of the data we're taking in, listen on networks to evaluate customer satisfaction, track traffic patterns, set up alerts for the presence of competitors and test all our assumptions against objective reference points in past experience. We need to not only pull together all the data we need to add a heavy dose of reality to our vaunted instincts, but also set up our dashboards and data sources so that drawing meaningful insight on an ongoing basis can leverage the quick visual scanning and anomaly-recognition that easy System 1 is so good at.
Because all that System 2 effort is going to have you so spent that you won't be able to think with anything but your gut for about a month.
The other key difference between the virtual work world and our pizza place can be summed up in a single word: velocity.
No disrespect to the pizzaria guy--I bet he works a hell of a lot harder than I do--but the changes that alter his business environment evolve much more slowly than those in the virtual space. Disruptive forces like a new highway bypass, changes in eating habits, and advances in topping technology can take years to materialize. Attempts to disintermediate the pizza pie over the last fifty years have, thank God, been largely unsuccessful.
That leisurely pace of change provides pizza makers with ample opportunity to correct course when intuition steers them initially astray.
Not so in the virtual world. Our landscape is in constant flux from competitive, cultural and technology changes that cannot be anticipated and are frequently fatal before they are even evident. Recall that statistical analysis is System 1's weakest suit. If the pizza parlor's future is determined by the coin tosses of a handful of chance events, the virtual business is the product of millions of coin tosses because of its global nature and minimal barriers to entry and non-physical playing field. It's a qualitatively distinct environment dominated by statistical uncertainty. Complete and unbiased data is unobtainable.
You might argue that such chaos leaves no alternative to making decisions by gut feel. You might take foolish heart from selective, fairy-tail narratives of entrepreneurs who followed a vision and succeeded (never mind the 10,000 others who thought they saw the future just as clearly but failed).
But that's just your lazy, intuitive side talking. The velocity and flux means it's more important than ever that you anchor your decision making in whatever reliable data you can find. Build objective rationales for multiple paths forward. Hedging is how you maximize your chance of success amidst uncertainty.
Remember Wile E. Coyote.. You have to keep your feet planted on the right side of the cliff's edge, on terra firma, where the data is. Maybe you can get away with strolling around on thin air for a minute or two. But most likely you'll end up a puff of dust on the desert floor.