Decision making: Nothing esoteric, please!

THE ART OF THINKING CLEARLY
Rolf Dobelli
Sceptre
326 pages; Rs 299

THE PROACTIVE LEADER

David De Cremer
Palgrave Macmillan
134 pages; Rs 2,020

What do Prime Minister Manmohan Singh, a serial entrepreneur, a CEO of a Fortune 500 company and a homemaker have in common? All of them have to make big and small decisions on a daily basis. Now, one may argue the importance of doing things differently for effective decision making. But the trick is to see things differently and for what they really are. The Art of Thinking Clearly by Rolf Dobelli and The Proactive Leader by David De Cremer recommend this approach by examining the intricacies of various decision-making moments. What's interesting is how both authors have addressed different target groups. While Mr Cremer talks about the problem of "procrastination" in leaders, Mr Dobelli deals with fallacies made by people.

The Proactive Leader belongs to the "how to" genre of leadership books. The author offers prescriptive methods to grapple with leadership challenges; he aggregates the solutions in a table after explaining each challenge. This gets boring once you are halfway through the book. That said, the author has convincingly managed to establish that if procrastination in leaders is ignored for long, it can turn into an addiction. He describes how the ability to regulate one's emotions can encourage positive and timely decision making.

One of the more absorbing pages in the book is where he shows how "inaction inertia" (not taking a decision when you have missed a similar but better opportunity in the past) can lead to procrastination. Interestingly, Mr Cremer has made an unusual effort to explain how power distance in various cultures can lead to procrastination. Since societies are not entirely equal, power gaps exist between people, groups and companies. Additionally, cultures differ in terms of the extent to which individuals pursue their own interests. All this, he says, contributes to acts of procrastination.

In the chapter titled "The consequences of delaying decisions", the author paints somewhat lurid scenarios of how procrastination can trigger or aggravate physical and mental health problems such as stress, alcoholism and depression. We have not seen something similar in India, not even with our elderly politicians who seem to thrive on procrastinating in policy-related matters. In the last few pages, Mr Cremer challenges his own thinking by examining the proposition that procrastination can be a good thing. After toying with the idea in a few lines, he gives up.

Although the book follows the simplistic problem-solving template so beloved by business book authors, interesting observations and a tight narrative structure make this book worth reading.

The Art of Thinking Clearly consists of 100 two-page chapters. You can open any of these chapters without paying heed to page sequence and start reading. Such smart narrative creates the right hook for modern readers, many of whom have low attention spans.

Interestingly, Mr Dobelli has reconstructed familiar concepts from sociology and applied these to the contemporary business environment. For instance, the "herd instinct", which makes an individual feel he is behaving correctly when he apes others, has become "social proof". Next, in a chapter titled "Story bias", the author criticises our overdependence on stories. He explains this with examples such as how journalists prioritise entertaining side issues and background stories while reporting. Readers fall for this because they like patterns that can be easily followed. In one of the chapters, the author introduces "neglect of probability". He establishes that we respond to the expected magnitude of an event, but not to its likelihood. The 1958 amendment to the US food law prohibits food that contains carcinogenic substances. Now, such a law can never be fully enforced since it is impossible to remove the last cancer-causing molecule from food. Mr Dobelli recalls studies that show how people are as afraid of a 99 per cent chance of food contamination as they are of a one per cent chance - irrational but true.

Another fallacy the author elaborates is "loss aversion", which shows that, emotionally, a loss weighs about twice a similar gain. In fact, what Mr Dobelli says can work wonders as advertising strategy. In one of its TV commercials, HUL's water purifier brand Pureit claims that three LPG cylinders are wasted in many Indian households to meet a year's supply of drinking water.

The author has also attacked economists, journalists and doctors for fuelling fallacies like "base-rate neglect" and "halo effect". On a light-hearted note, he has talked about a "forecast fund" to prevent enthusiastic economists from making incorrect predictions. According to Mr Dobelli, understanding all these fallacies can lead to informed decision making. This can happen only when one is willing to shift frameworks handed down by various institutions. Since "thinking is tiring", according to the author, the best way forward is to get the right mix of intuitive decisions and rational thinking.