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monday morning manager

Chess grandmasters are expert decision makers. They survey the board, often seeing patterns familiar to them from countless games they have played or studied. Their next move will usually be immediately apparent. But they are careful not to pounce on it. They know a dangerous error in thinking is always possible. So they check their thinking before making their next move toward checkmate.

Ted Cadsby, the former executive vice-president of retail distribution at Canadian Imperial Bank of Commerce and Toronto-based director of several companies, believes that leaders, like grandmasters, have to be alert to the thinking errors they are vulnerable to as they grapple with complex issues.

"Managers have to operate like grandmaster chess players. They use – but don't rely on – gut instinct. They step back and critically analyze the situation. That's necessary because 25 per cent of the time, initial instinct would be wrong. Rushing to conclude is antithetical to good strategic decision making, because our first intuitions can lead us astray," he said in an interview.

We get into trouble as every complex problem is unique. We may have developed expertise in solving routine problems, but each complex problem has its own special features. The two most likely and pernicious cognitive errors that can derail us flow from our addiction to certainty and our tendency to oversimplify everything.

We feel out of control when we are uncertain, so that pushes us toward embracing false certainty. "We are literally hardwired, physiologically and psychologically, to rush to conclude, because rushing to certainty is both survival-enhancing and a good way to preserve limited mental energy," he said. But it can land us in trouble. To counter this tendency, he recommends:

Be skeptical of initial conclusions: Like a grandmaster, we need to slow down, and rethink the situation. That sounds simple, but in his book, Closing the Mind Gap, he notes it goes against the grain. Education, for example, is based on getting the one right answer quickly, within the time allotted on a test. If we can suspend judgment for a while, we'll usually come to a conclusion as soon as we have considered a reasonable number of alternatives.

Think about conclusions in terms of probabilities: Don't fall into the trap of black-and-white thinking about choices – all good or all bad. Instead, we should ask what is the probability of this course of action being likely? Is it 40 per cent, 60 per cent, or 80 per cent? That forces us to be skeptical. On a practical basis, he usually finds it helpful to think of whether the odds of succeeding or something being true is greater or less than 50 per cent.

Engage others, since groups outperform individuals: We will never have all the information and ideas on our own and must work with others to have a better shot at being right. The difficulty is that we haven't been taught how to nurture or steer productive conversations and such discussions don't happen automatically. Managers have to learn to be adept facilitators of conversation, eliciting dissent and prodding people to address the issues that surface. It's not a matter of diversity of people in the discussion; it's a matter of the diversity of discussion. "This is a new skill set that managers need," he said.

The other major error to guard against is our tendency to simplify our thinking. The problem with simplifying is that it is based on excluding information. For straightforward problems, the information we ignore is irrelevant, but for complex problems, the disregarded information is usually crucial. To sidestep this trap:

Dig for the interconnection between things: We tend to focus on cause and effect in decision making, but often far too simply. Managers must probe the interrelationship between the factors they are studying and how all contribute to cause and effect. "This can require more formality [in decision-making]. But keep in mind that things are more complex than we believe," he said.

Interact with the problem to generate useful feedback: Feedback about complex problems lurks below the surface, so interaction with the system – your market and organization – is required, experimenting with ideas and learning from the results. Be flexible, adapting quickly as you learn, time and time again if necessary. "Technology firms are good with this. Long-standing industries like retail have to do this – launch solutions that you know are not perfect as you realize you can improve it later," he said.

Pay attention to randomness: When we oversimplify, we misunderstand randomness and how it can be influencing our perception of events or the marketplace. He notes that mutual funds outperforming the market for 15 years might only be benefitting from randomness. "We are inclined to attribute skill where randomness is, in fact, the reason," he said.

As business problems become more ambiguous, we can't rely on intuition or simplistic thinking. We need to critically address the issues, alert to the errors that can force us into checkmate.

Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter

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