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Friday, January 13, 2012

Why intelligence is not enough to build talent

Many professionals confuse intelligent mind with rational mind. So here is a short summary of how our mind works. We have two minds: Type 1 and Type 2.** 

Type 1 is fast, automatic, and subconscious. It is quick, dirty and parallel, and requires little energy.  Type 1 uses all kind of rough heuristics (thumb rules) to come to conclusions and solve problems, even if they are imprecise. It is prone to all kind of biases. When you want to leave company because of a bad boss, it is your Type 1 mind taking the quick decision for you. When you chose a job on a impulse which turns out to be good, it is your hindsight bias that tells you that you have taken a good decision, even though you had taken the decision on impulse. 

Type 2 is slow, deliberate and conscious. It is therefore energy-consuming, slow and serial. Type 2 consists of algorithmic and reflective mind. While Algorithmic mind is linked to intelligence (measured by IQ) which helps us represent the world 'cognitively' and therefore help us manipulate it for our purpose, Reflective mind is the rational mind which uses  thinking skills such as logical, scientific and normative thinking. The division of reflective and algorithmic mind explains why intelligent people can behave irrationally and can fall prey to Ponzi schemes.

Ideally, one has to achieve the right balance between Type 1 and Type 2. Type 2 is the mind that helps solve problems, set goals, reflect on our experience and learn, but it also requires effort and energy. As the Noble Laureate Daniel Kahneman says, we are 'cognitive misers'. We avoid taking any mental effort as far and as long as we can. That is our natural tendency, so to say. So we rely on Type 1 processing even when it is harmful to us and even when the evidence against using it is infront of us.

Because of overuse of Type 1, we tend to take 'instinctual easy decisions', instead of 'right decisions'. Because of Type 1, we copy the decisions of friends and colleagues and then spend time in damage control. We blindly follow the logic of Type 1 mind and then waste huge effort in clearing the mess. Here are some of my examples that I have seen of Type 1 overreliance: 

  1. Asit jumped from one company to another, even when everything was going right in his first job: his boss was right, his 'area' of work is right. But he changed the company because he believed in the thumb rule that 'one must change job after 3 years, if one has to grow quickly'.  He landed a job with 50% hike, but also landed with a wrong company. And then he approached me for damage control ! 
  2. Parag left a job in US after 8 years, came to India with the hope that he will be 'grabbed' by the companies. Only when he started looking for the job, he was shocked to see, as he said, 'how the companies were exploiting his job-less situation'. A typical trait of Type 1 is overconfidence and therefore being unaware of market realities.
  3. Jeevan, a CA, joined a software company, because he got a very 'big starting salary in 2005. In 2011, he met me because he was dissatisfied that 'he was not using even 10% of what he learnt in his chartered accountancy'. He was unable to leave his job, because he was handcuffed in the 'golden chain'. On the one hand, companies could not offer him higher salary because he had no relevant experience of accountancy. On the other hand, he was unable to start from 'scratch' in accounting. Another case of wasting time to clear the mess ! 

What can you do?

When I coach individuals, I ensure that they learn at least two skills to stop overuse of Type 1.

One is the skill of sensing a situation to override Type 1Type 1 is always in a hurry and gives you the necessary confidence to negotiate daily situations with grace and ease. One therefore has to develop a 'sense' to detect situations that should be processed by Type 2. Unless this 'sense' is developed, one tends to 'follow' the Type 1 mind recklessly. One of the way to increase our 'sensitiveness' is to check the heuristics (thumb rules) that one is employing unconsciously. For instance, Asit should have checked his heuristic of "changing job in 3 years' before acting on it. 

Second skill is to enhance the 'logical skill' of Type 2. For instance, when one appreciates the unintended and ancillary consequences of taking various decisions and actions, one is able to compensate for the logical consequences of an action proactively. This skill simultaneously enables the 'sensing and detection ability'.
For instance, if Jeevan had understood the consequences of taking up a software job after doing CA, he could have simultaneously taken 'proactive steps' such as 'taking finance assignments in software company', or finding products like SAP finance to use his CA skills. On the one hand, this would have helped him 'polish' his finance skills ( keeping his other options open)  and also helped him find 'satisfaction' in the software job itself.  And if he found his 'satisfaction' in software job itself, why would he need to find another job to use his CA skills? ( The problem is dealt at the root level!) 

** Read any of the Daniel Kahneman's book on psychology. He is Noble Prize winner of 2002.  His latest book, Thinking Fast and slow, is worth a read. 

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