The world is complicated, and difficult to understand. Making things more challenging is the human propensity to make mistakes, over or underweight the significance of events, fall prey to biases and generally operate in a less than optimal fashion. Identifying these weaknesses, and in some cases presenting solutions to them, is the aim of three major books that have in recent years proven to be highly influential in business, politics and society at large: The Black Swan: The Impact of the Highly Improbable (Nassim Nicholas Taleb, 2007), Nudge: Improving Decisions About Health, Wealth and Happiness (Cass R Sunstein and Richard H Thaler, 2008) and Thinking, Fast and Slow (Daniel Kahneman, 2011).
Of the three, it is perhaps Nudge that has been the most widely discussed, since it has informed public policy on both sides of the Atlantic. Many of the ideas presented in Nudge are fairly well known today and it is a key text for those working in the field of behavioural economics including the Ogilvy Change team led by Rory Sutherland, whose annual Nudgestock conference brings together thinkers in the realm of behavioural science to consider how the insights of the field can contribute to better marketing. The book’s central concept is that complexity can lead people to make errors, and that small interventions (nudges) can be used to help people make better decisions and avoid these mistakes. Among the most helpful nudges discussed is the optimised default: since most people won’t change the things they buy (such as insurance policies) from their default states, it is important to make sure that default is the most beneficial it can be. People can’t be relied upon to correctly configure complex systems by themselves, and taking account of this “weakness” allows us to build better systems.
The Black Swan also considers psychological weaknesses, albeit in a rather more challenging fashion, through the concept that gives the book its title. A Black Swan event, Taleb suggests, is one that requires us to radically rethink our existing knowledge on a subject, and cannot be predicted based on previous experience but can be explained after it has happened. The term comes from the first explorers to visit Australia and see black swans, which had no precedent in their experience, required them to rethink what a swan was (since whiteness was previously an essential element of being a swan) and could be explained afterwards as an example of variety among a species. For Taleb, such events are fundamental challenges to psychology and society, both of which draw heavily on previous experience to predict what will happen in future but which are therefore vulnerable to highly improbable events. Yet as Taleb shows, there are ways in which people and groups can protect themselves from Black Swans, and even turn them to their advantage. These strategies are too complex to summarise here, but they make the book a highly recommended read for business and beyond.
In some respects it is surprising that Thinking, Fast and Slow was the last of the three books to be published, since the research it presents underpins aspects of both Nudge and The Black Swan. The book presents a summary of decades of work undertaken by the Nobel prize winning Daniel Kahneman and his research partner Amos Tversky, and though it comes in at over 500 pages it’s a consistently engaging read that actually manages to be remarkably concise. At its heart the book is about two systems of thought: the eponymous ‘fast’ (system 1) and ‘slow’ (system 2). Each is necessary for certain situations, but mistakes often arise when we use the wrong system, thinking fast when we should be taking the time to work things out, or doing too much analytical thinking when a quicker response is needed. Over the course of the book Kahneman outlines a wide range of ways in which these types of confusion, along with biases and heuristics and other phenomena, can prevent us from acting effectively. Although the book is less clearly solution focused than Nudge and The Black Swan, it does also offer some useful ways of thinking about thinking with a view to enacting change, and outlines strategies for recognising and dealing with confused thinking when it appears.
All three of these books offer valuable insights into human psychology that can help you to rethink your thinking, and to be more effective at work and play. If you only have time to read one, Thinking, Fast and Slow offers such richness and variety that it’s an easy pick, but reading the others alongside it will give you a powerful set of tools to improve processes and enrich your mental life.