We all try to make smart business and career decisions, but we have so much working against us as we plan for the future. Our cognitive biases, a lack of data, overwhelming choice, and the inherent unpredictability of life make it hard to make robust choices. Here are a few books that offer useful lenses and tools for making wise decisions in a complex world.
If you’re pressed for time, this Harvard Business Review compilation offers a good return on the hours you invest in reading it. It features 10 of the best articles on making business decisions the esteemed journal has carried over the years, including contributions from Ram Charan, Michael Mankins, and Thomas Davenport. Topics covered include supporting your decisions with data, evaluating risks and benefits, and testing your decisions with experiments.
In this entertaining interdisciplinary work, authors Brian Christian and Tom Griffiths explore how we can use algorithms developed for computers to answer human questions. They offer advice about how to improve your ability to make intuitive decisions, how to make wise decisions in the face of overwhelming choices, and how to connect with other people. Despite the mathematics, it’s an easy and enjoyable read that makes computer science and game theory more accessible.
Companies and people alike struggle to make accurate forecasts about the probability of uncertain events. That’s because our predictions are often tainted by a lack of understanding about statistics, our susceptibility to cognitive biases and our need to impress or influence others. Based on research involving 25,000 forecasters and a million predictions, Philip E. Tetlock looks at some practices companies can use to sharpen their ability to make good predictions based on sound statistical principles. The book illustrates the importance of gathering evidence from a variety of sources, thinking probabilistically, working in teams, keeping score, and being willing to admit error and change course.
Daniel Kahneman’s 2011 book has become a classic of modern psychology and an essential guide to how we and our customers make decisions. Kahneman proposes that human beings have two contrasting modes of thinking. System 1 is fast, instinctive and emotional, while System 2 is slower, more deliberative, and more logical. In the book, Kahneman looks at the rational and non-rational factors associated with each of these modes of thinking. He also goes into how different cognitive biases such as loss aversion (an overwhelming fear of loss) and anchoring (an irrational bias towards an arbitrary benchmark figure) colour our thinking.
Thomas H. Davenport’s seminal book about big data offers an accessible explanation about what big data really is and why each manager or business owner should care. The book is a practical guide to what the opportunities and costs of big data are; which elements are overhyped; and where you can put it to work to achieve real business impact.