Daniel Kahneman’s Favorite Approach For Making Better Decisions

Bob Sutton’s book, Scaling Up Excellence: Getting to More Without Settling for Less, contains an interesting section towards the end on looking back from the future, which talks about “a mind trick that goads and guides people to act on what they know and, in turn, amplifies their odds of success.”

We build on Nobel winner Daniel Kahneman’s favorite approach for making better decisions. This may sound weird, but it’s a form of imaginary time travel.

It’s called the premortem. And, while it may be Kahneman’s favorite, he didn’t come up with it. A fellow by the name of Gary Klein invented the premortem technique.

A premortem works something like this. When you’re on the verge of making a decision, not just any decision but a big decision, you call a meeting. At the meeting, you ask each member of your team to imagine that it’s a year later.

Split them into two groups. Have one group imagine that the effort was an unmitigated disaster. Have the other pretend it was a roaring success. Ask each member to work independently and generate reasons, or better yet, write a story, about why the success or failure occurred. Instruct them to be as detailed as possible, and, as Klein emphasizes, to identify causes that they wouldn’t usually mention “for fear of being impolite.” Next, have each person in the “failure” group read their list or story aloud, and record and collate the reasons. Repeat this process with the “success” group. Finally use the reasons from both groups to strengthen your … plan. If you uncover overwhelming and impassible roadblocks, then go back to the drawing board.

Premortems encourage people to use “prospective hindsight,” or, more accurately, to talk in “future perfect tense.” Instead of thinking, “we will devote the next six months to implementing a new HR software initiative,” for example, we travel to the future and think, “we have devoted six months to implementing a new HR software package.”

You imagine that a concrete success or failure has occurred and look “back from the future” to tell a story about the causes. […] Pretending that a success or failure has already occurred—and looking back and inventing the details of why it happened—seems almost absurdly simple. Yet renowned scholars including Kahneman, Klein, and Karl Weick supply compelling logic and evidence that this approach generates better decisions, predictions, and plans. Their work suggests several reasons why. …

1. This approach helps people overcome blind spots

As … upcoming events become more distant, people develop more grandiose and vague plans and overlook the nitty-gritty daily details required to achieve their long-term goals.

2. This approach helps people bridge short-term and long-term thinking

Weick argues that this shift is effective, in part, because it is far easier to imagine the detailed causes of a single outcome than to imagine multiple outcomes and try to explain why each may have occurred. Beyond that, analyzing a single event as if it has already occurred rather than pretending it might occur makes it seem more concrete and likely to actually happen, which motivates people to devote more attention to explaining it.

3. Looking back dampens excessive optimism

As Kahneman and other researchers show, most people overestimate the chances that good things will happen to them and underestimate the odds that they will face failures, delays, and setbacks. Kahneman adds that “in general, organizations really don’t like pessimists” and that when naysayers raise risks and drawbacks, they are viewed as “almost disloyal.”

Max Bazerman, a Harvard professor, believes that we’re less prone to irrational optimism when we predict the fate of projects that are not our own. For example, when it comes to friends’ home renovation projects, most people estimate the costs will run 25 to 50 percent over budget. When it comes to our projects; however, they will be “completed on time and near the project costs.”

4. A premortem challenges the illusion of consensus

Most times, not everyone on a team agrees with the course of action. Even when you have enough cognitive diversity in the room, people still keep their mouths shut because people in power tend to reward people who agree with them while punishing those who dare to speak up with a dissenting view.