Why it’s what you know, and not what you don’t, that’s likely to cause your demise.

Gavrilo Bozovic
Jan 18, 2018 · 4 min read

This is a joke my father used to tell:

General Custer is marching across Montana, knowing that a major Indian army is in the area. They send a scout ahead to spy on the enemy forces. A couple of days later, the scout comes back.

“I’ve seen the Indian army”, he says, “they are in the plain behind these hills, and there are 10'002 of them”

“10'002? How can you be so precise?”

“Well, I saw that they have two sentries placed on two hills outside of their camp. And in the plain between them, there are around ten thousand Indians”.

The logical fallacy in the joke is obvious ; it’s what scientists call false precision. The imprecision of the estimation of the number of Indians in the plain is such that the two individual Indians identified on the hills should not be counted.

Yet, this same fallacy is the source of many wrong decisions made both by individuals and large companies, and especially on important matters.

Don’t think too much

Think about an important decision you recently had to make: where to live, whether to make an investment… who to marry, maybe? Except for the last example (I hope), it’s likely that you made at some point a mental or physical pros-cons list for the various options at hand. It seems like the right thing to do, doesn’t it? So much will depend on that decision that you wouldn’t want to screw up. Spending some time thinking about it is probably the correct thing to do. Right? Well, maybe not.

Thinking too much can be dangerous precisely due to the false precision fallacy: when you fire up Excel and start listing pros and cons, you are focusing your attention on the two Indians on the peaks: on the comfortable topics about which you know most. When you are done listing, what you have written down will further consolidate the idea that you actually know a lot, and may definitively skew your appreciation of the problem. What you will have lost in the process is the big picture, and any awareness of your gaps.

You should think twice about those kitchen accessories, though

This behaviour has been confirmed in experiments. Ap Dijksterhuis, a great Dutch social psychologist, spent much of his career studying how people make decisions. My favourite result of his was obtained when studying the correlation between time spent evaluating purchases and the satisfaction of the buyers with their purchase.

Shoppers were surveyed in two cases: when buying kitchen accessories in a department store, and when buying furniture at IKEA — respectively a simple and a complex decision. In the department store, satisfaction was found to correlate positively with consideration time. So far so good.

What about IKEA? The correlation is reversed. The more the people spend evaluating their purchase, the less they are satisfied. Why? Because conscious thought has a relatively low capacity, so when engaging in it we’ll drop as many characteristics of the things we’re comparing as required to be able to process the information. We’ll focus exclusively on the Indians on the hills.

And this has been known for centuries, as attested by folk wisdom. Nabeshima Naoshige, a 16th century Japanese lord, had among the maxims written on his wall “Matters of great concern should be treated lightly.” However, this is such a counterintuitive advice that most will find it very hard to follow.

Matters of great concern should be treated lightly.

How to mitigate this problem

There isn’t a clear-cut solution to this problem since it’s rooted in a fundamental flaw in our poor ape’s brain. Treating matters of great concern lightly seems to be a good idea, but a hard one to implement — or convince a board to implement.

What I’ve found to work is exercises where a holistic vision is required, such as storytelling. Psychologist Gary Klein proposed the method of the pre-mortem (described below by Daniel Kahnemann): when you are about to make an important decision, gather a group of people in the know and give them the following task: assume we approve this decision, and we’re now one year later. It has been a complete disaster. Write the history of that disaster.

Why you should do a pre-mortem before any major decision

Daniel Kahnemann thinks this exercise removes some bias of optimism since it encourages negative views. I also think that when asking people to tell stories, it forces them to have a more holistic view than what Excel allows. You’ll get out of that box-filling paradigm and something might just come to your mind which wouldn’t have otherwise.

The most important I think is to recognize as a fact that it’s comfortable to be on familiar ground, and we have a tendency of taking refuge there. You’re in control, you know what it’s about. And you should get the hell out of there or you’ll die on that particular, familiar little hill.

About me

I’m an engineer and entrepreneur, 500 Startups alumnus and consultant.

I work with large companies in early stage development projects, and coach some start-ups in my spare time.

In my spare spare time, I read random books and cook vast amounts of food.

Connect with me through my website, Facebook, LinkedIn.

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Thoughts about innovation and the conditions in which it happens.

Gavrilo Bozovic

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I design products and the teams that make them. Passionate about interdisciplinarity, early stage product development, and conditions where innovation happens

Spanking new

Thoughts about innovation and the conditions in which it happens.

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