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Nir’s Note: This book review is by Sam McNerney. Sam writes about cognitive psychology, business, and philosophy.

In Moneyball, Michael Lewis tells the story of Billy Bean, the general manager of the Oakland Athletics who transformed the A’s using sabermetrics, the data-driven approach to understanding baseball. Bean noticed that instead of using data to predict player performance, baseball professionals relied on faulty intuitions and anecdotes. Commentators debate how effective sabermetrics actually is, but Bean’s original insight—that we can’t learn that much about baseball just by watching—changed the game.

The essential theme of Max Bazerman’s new book The Power of Noticing: What the Best Leaders See is similar. Like Bean, the best leaders don’t make decisions based only on what they can see and what they can recall. Instead, they ask for more information, question the status quo, and are aware of common biases. Becoming a “first class noticer,” as Bazerman phrases it, isn’t necessarily about noticing things-in-the-world but becoming conscious of our systematic mistakes. Here are three suggestions from The Power of Noticing.

1. Widen Your Frame

The single best thing you can do to make better decisions is to ask for more information–that is, to “widen your frame”–and to know when you’re working with incomplete information.

This strategy might sound obvious but there are countless instances of smart people who ignore it. Take, for example, the fatal crash of Space Shuttle Challenger, which broke apart 73 seconds after liftoff when an O-ring on one of the rocket boosters began leaking gas. The cause of the leak was low pre-flight temperatures (it was 18 °F the night before launch) but the relationship between the temperature and the strength of the O-rings was not initially obvious. Here’s Bazerman describing the pre-launch debate:

“Technically trained engineers and managers from Morton Thiokol and NASA discussed the question of whether it was safe to launch at a low temperature. Morton Thiokol was the subcontractor that built the shuttle’s engine for NASA … in seven of the shuttle program’s twenty-four prior launches, O-ring failures had occurred. Morton Thiokol engineers initially recommended to their superiors and NASA executives that the shuttle not be launched at low temperatures; they believed there was an association between low temperature and the magnitude of O-ring problems in the seven prior problem launches. NASA personnel reacted to the engineers’ recommendation with hostility and argued that Morton Thiokol had provided no evidence that should change their plans to launch.”

At that point, NASA should have asked for more information. In order to determine how low temperatures could be affecting the O-rings, NASA needed to examine the temperatures during the 17 successful launches. If they had, NASA would have noticed a clear pattern: O-rings didn’t necessarily fail when it was cold, but they only failed when it was cold. Here’s Bazerman:

“… looking at all of the data shows a clear connection between temperature and O-ring failure and in fact predicts that the Challenger had a greater than 99 percent chance of failure. But, like so many of us, the engineers and managers limited themselves to the data in the room and never asked themselves what data would be needed to test the temperature hypothesis.”

An easy way to remember to ask for more information is to remember this phrase: “what you see is rarely all there is.”  Which brings us to the next section…

2. Remember The Dogs That Don’t Bark

Bazerman writes about Silver Blaze, a short story by Arthur Conan Doyle about how Sherlock Holmes solved a mystery by noticing something that did not happen. Holmes was investigating the murder of a horse trainer named John Starker and the disappearance of his horse, Silver Blaze. The evidence pointed toward Fitzroy Simpson, a London bookmaker who had bet against Silver Blaze in an upcoming high stakes race. Holmes ingeniously solves the case by focusing on a stable dog that didn’t bark during the evening of the murder. “The midnight visitor,” Holmes writes, “was someone the dog knew well.”

Holmes correctly reasons that Starker was living a double life. He was deeply in debt, so he drugged the stable boy and led the horse “into the hollow” where he planned to cut him with a knife and frame Simpson. However, Silver Blaze lashed out and struck Starker in the forehead–killing him instantly.

Noticing what didn’t happen in a given situation is a critical skill not only in detective work but also in business and during negotiations. And Bazerman isn’t the only one giving this advice. Daniel Kahneman won a Nobel Prize in economics for his research about how people mistakenly believe that “What You See Is All There Is.” That is, when we decide, we tend to construct the most plausible story based almost exclusively on information that’s obvious and known. We must also focus on information that is not apparent–the dog that didn’t bark.

Nate Silver makes a similar point in his best seller The Signal and the Noise. He writes about “failures of imagination,” or mistakes that result from having enough information but ignoring and overlooking the most relevant information. (September 11 and Hurricane Katrina are two dramatic examples.) How can we distinguish helpful information from the irrelevant stuff? It helps to….

3. Keep a Decision-Making Journal

Recall a crisis that surprised you or your organization. What happened? Who was responsible for what? What was the result? Now imagine that you’ve answered these questions in front of a friend. He responds, “Why didn’t anyone see it coming?”

In the last chapter of The Power of Noticing, Bazerman asks readers to think through what their answer would be. (He recommends writing answers on a piece of paper.)

Here’s the question:

Was your response something like one of the following:

  • No one could have predicted what happened.
  • The odds of it happening were so low that it didn’t seem worth of consideration.

Or did it sound something like this:

  • I didn’t examine what threats were confronting our organizations.
  • I didn’t ask others about what data were missing.

You might have noticed a difference between the two lists. The first consists of external attributions; the second of internal attributions. There is not a huge list of psychological findings that have withstood fifty years of research, but our tendency to attribute our successes to internal forces and outsource our failures to external forces is one. Most crises result from a combination of internal and external reasons. We could have done a better job anticipating and managing the crisis–but our organization was ill-prepared to begin with.

Bazerman’s point is that even if the reasons for a crisis rest with the organization, we should always focus on internal attributions.

“Even when failures occur, [first class noticers] focus on what they did and, more important, on what they could do differently in the future. As a result, they avoid repeating their mistakes. It is this focus on self-improvement that allows us to learn from experience and develop the tendencies needed to become first-class noticers.”

A helpful method to adopt an “internal locus of control” is to maintain a decision-making journal. Use it to write down the reasons for your decisions, how confident you were when you made them, and the results. It will not only help you recognize where you went wrong but also how lucky you might have been. Most importantly, decision-making journals help us remove hindsight biases that make evaluating our previous decisions so hard.

Conclusion

In Moneyball Michael Lewis explains that “The market for baseball players was so inefficient, and the general grasp of sound baseball strategy so weak, that superior management could run circles around taller piles of cash.” Bazerman wonders: “Why didn’t anyone else in baseball (or basketball or football or hockey or soccer) notice the obvious flaws in the system?”

It’s a great question because just about everyone from every industry has asked a version of it. And like baseball professionals before the sabermetric era, the problem is not a lack of intelligence but a lack of tools. The Power of Noticing provides a number of practical tools grounded by smart psychological science. The ones mentioned here are just a few.

The best part of the book is its perspective. Instead of questioning the status quo, we tend to rely on it. “To become the Billy Beane of your industry,” Bazerman concludes, “the question you should be asking yourself is this: What conventional wisdom prevails in my industry that deserves to be questioned?”

Here’s the Gist

  • Harvard Professor Max Bazerman’s new book is The Power of Noticing: What the Best Leaders See.
  • When you decide, always ask for more information.
  • Don’t forget errors of omission—the so-called “dog that didn’t bark.”
  • If you want to decide better, keep a decision making journal!

Note: This book review is by Sam McNerney.

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