Eyes Wide Open: How to Make Smart Decisions in a Confusing World

It’s not just bad news that we have a tendency to unwittingly dismiss.

Take what happened to Dr Harrison J. Alter, then an emergency-room physician in Tuba City, Arizona, a small town in the Painted Desert just a sixty-mile drive from the Grand Canyon National Park.33 (#litres_trial_promo)

Alter isn’t your usual medical-school type. Born in Chicago, he attended the prestigious Francis Parker prep school before heading off to Brown to get an undergraduate degree in comparative literature and art history.34 (#litres_trial_promo) He still lists reading among his interests, along with his children,35 (#litres_trial_promo) but his area of professional expertise is medical, and in particular the hullabaloo of the emergency room.

Alter’s emergency room was a focal point of medical care for the Navajo Nation, and during the winter of 2003 he took a routine admission in: Blanche Begaye, a Navajo woman in her sixties. Blanche explained that she was having trouble breathing. At first she just thought she just had ‘a bad head cold’, and did what most of us would do: she drank lots of orange juice and tea, popped a few aspirin, and expected that to be the end of it. But it wasn’t. She got worse.

Dr Alter knew that Blanche worked in a grocery store on the reservation. He also knew that something was amiss within her community. Lately, his emergency room had been full of people with similar symptoms to Blanche’s. He’d diagnosed them all with viral pneumonia, a nasty lung infection that can knock you out for weeks. Alter couldn’t help noticing that Blanche had quite similar symptoms.

After Blanche was admitted, Alter went through the normal procedures. First came the observations. He noticed that her respiratory rate was almost twice normal. On top of that, she had a low-grade fever – her temperature was up, but it wasn’t through the roof. Next came the tests – in particular, the bloods. The first thing he checked was the white-blood-cell count, a typical marker of infection. It wasn’t actually raised, but her blood chemistry showed that the acid-base balance of her blood was now weighted towards acid, a red flag for a major infection.

Alter totted up the signs, and plumped for a diagnosis of ‘subclinical viral pneumonia’. Mrs Begaye’s X-ray showed that she didn’t have the classic white streaks across her lungs, but he reasoned that this was because her illness was in its early stages. From here on it was routine: admit her, work on getting that fever down, and keep an eye on her heart rate. He had her hooked up to some intravenous fluids and medicine, and put her under observation. Then he moved on to the next bed.

Case closed.

Or so he thought.

A few minutes after Alter had begun evaluating his next patient, the junior doctor to whom he had passed Mrs Begaye’s case attracted his attention. Thankfully for Mrs Begaye, this wasn’t the type of subordinate who was too scared to speak up when he disagreed with his boss. ‘That’s not a case of viral pneumonia,’ he told Alter. ‘She has aspirin toxicity.’

How could Dr Alter, who had not only studied medicine at the prestigious University of California at Berkeley, but following his residency had gone to the University of Washington in Seattle to study medical decision-making, have got his diagnosis so wrong? As the always open-to-learning doctor later reflected, ‘Aspirin poisoning, bread-and-butter toxicology … She was an absolutely classic case – the rapid breathing, the shift in her blood electrolytes … and I missed it.’

It wasn’t that he hadn’t been asking the right questions, or conducting the right tests to get to this diagnosis. He had.

Dr Alter had all the information he needed to make the correct diagnosis right in front of him. The trouble was that even though the information had been plain to see, he hadn’t taken it in. And he hadn’t taken it in because when he saw Mrs Begaye, what came to mind were all the recent cases of pneumonia he’d been seeing.

This meant that instead of treating her story as an independent one, and focusing on all the information she gave him, he had zoomed in on the symptoms that fitted the pneumonia diagnosis, and ignored or reasoned away the information that didn’t.

This is a common thinking error we are all prone to. In fact, it turns out that we actually get a dopamine rush when we find confirming data, similar to the one we get if we eat chocolate, have sex, or fall in love.36 (#litres_trial_promo) Having jumped to a particular conclusion, we focus on information that supports it, and ignore everything that contradicts or doesn’t conform to our initial analysis. We’re especially prone to being overly swayed by what we’ve most recently seen. It’s as if once we’ve decided that the only danger we can face is tigers, even if we see a snake in the grass we don’t process that it could be a danger to us too.

That is what famously happened in 1940 when French intelligence, arguably the best service of its kind in the world at that time, made a catastrophic error. Having undertaken sophisticated analysis of German blitzkrieg tactics earlier that year, the intelligence service came to the conclusion that the brunt of the German attack would come through the plains of Belgium. Growing evidence that the Nazis were planning to invade through the Ardennes Forest instead was ignored, despite information gleaned on the pattern of German reconnaissance flights (which closely mirrored the later invasion route) and aerial photography of German pontoon-bridge construction in the area. Even ‘hard information’, it seems, will be sidelined unless it is received by open eyes and open minds.37 (#litres_trial_promo)

What should we take from all of this, from these stories and insights?

Well, if we are to make smarter decisions, we need to make sure that we are not overly swayed by what we’ve seen most recently, or by the information that’s most easily available, or by our initial assessment, or by what it is we most want to hear.

We should consciously practise being more observant. Take a raisin. Rub it between your hands. How does it feel? Look at it, examine its contours. Smell it. Lick it – how does it feel against your tongue?38 (#litres_trial_promo) Practising mindfulness techniques like this helps us to get better at opening our eyes to what we might otherwise overlook.

We must also force ourselves to actively search for information that challenges our preconceived ideas.

We have to treat each new situation as independent, and each new piece of information as potentially game-changing.

And when making assessments, we must question not only whether things are as we think, but also what else they could possibly be.

We can do this on our own, but it’s often easier if we have someone who can help. Who could you deploy to help you interrogate your own ways of thinking, help force you to see everything in the jungle, not just what you’re most drawn to? So you don’t make the same kind of cognitive mistakes as Dr Alter, or Tali Sharot’s volunteers, or the French intelligence services. So you don’t get consumed by your confirmation dopamine buzz.

The head of one of Europe’s leading hedge funds – a fund that succeeds or fails on the basis of its analysts’ assessments of the industries and companies they decide to invest in – tells me that he sees one of his primary roles as that of ‘Challenger in Chief’, as the person who niggles his staff to focus not only on the evidence that confirms their initial assessment or that they want to hear, but also to actively look for data that will contradict or refute it. He believes he must challenge his staff to consider how they could be wrong, and then assess how this might impact on their decision-making.39 (#litres_trial_promo)

Who, at work or at home, can serve as Challenger in Chief for you?

Detach from the Past – Lessons from Hollywood and Helsinki

As well as challenging what it is we see before us right now, we also need to consider how the past might be affecting our present-day choices.

For although our past experiences, good or bad, provide us with split-second cues which can often be very useful – I don’t put my hand on the gas hob if it’s switched on, because I know, having burnt my finger in the past, that it would be the wrong decision – experience, as we will see, can be a double-edged sword.

Richard Zanuck was one of the most successful film producers of recent times. His hits included such classics and box-office juggernauts as Jaws, Cocoon, Driving Miss Daisy and, more recently, Tim Burton’s Alice in Wonderland, which grossed more than $1 billion.40 (#litres_trial_promo) Hollywood royalty who spoke at his funeral and memorial services included Clint Eastwood and Steven Spielberg, who called him a ‘cornerstone of the film industry’.41 (#litres_trial_promo)

But when I had lunch with Dick Zanuck at his usual table at George in Mayfair’s Mount Street, just days before he died in July 2012, we discussed one of the rare moments when his decision-making had gone very wrong.

In 1965 a movie produced by Zanuck broke all box-office records. A musical about an errant trainee nun in the Austrian Alps, starring Julie Andrews, The Sound of Music was a gargantuan commercial success, rescuing Twentieth Century-Fox from the $40 million wounds inflicted two years earlier by Richard Burton and Elizabeth Taylor’s Cleopatra. It remains, in inflation-adjusted dollars, the third-biggest-grossing film of all time.42 (#litres_trial_promo)

Zanuck was thirty years old, and this was his first big hit. So what did he do next?

Understandably, he tried to repeat what he’d just done.

‘I was convinced that the musical was back, and a lot of people, a lot of other studio heads, were convinced that this was the way to go,’ he told me. He commissioned three more musicals, all in a similar sugary vein.

All three were box-office flops.43 (#litres_trial_promo)

Doctor Dolittle, an adaptation of the children’s books by Hugh Lofting, contributed to Twentieth Century-Fox posting a staggering $37 million loss in 1967.44 (#litres_trial_promo) The next, Star!, released in 1968, which starred Julie Andrews and had the same director, producer and choreographer as The Sound of Music, also bombed: box-office receipts in the US were just $4 million, and losses were pegged at $15 million.45 (#litres_trial_promo) The third, Hello, Dolly!, released in 1969 and starring Barbra Streisand, did equally badly, losing $16 million, bringing to a close a disastrous few years for Twentieth Century-Fox, and leading to Zanuck unceremoniously losing his job as production chief.46 (#litres_trial_promo)

It’s not that the past is never a good predictor of what lies ahead. There are of course many examples we could cite of times when looking backwards, consciously or not, has helped people reach the right decisions. The key, though, is not to be overly wedded to our past successes and failures, or our experience-based instincts, so that shifting tides or new information are ignored.

Nor should we assume a linear trajectory – more so now than ever, as we attempt to navigate today’s uncertain and unpredictable digital world, in which things are changing with an ever greater rapidity.

Dick Zanuck explained to me that his movie strategy immediately after The Sound of Music fell victim to a fast-changing world, and a shift in cultural mores. When The Sound of Music hit movie screens, the appeal of singing nuns and the lush Technicolor greenery of the Austrian hills made sense against the backdrop of the early 1960s. But by the time the back-to-back movie flops were released, things had moved on. The Vietnam War and the Civil Rights movement had politicised the American public, Martin Luther King had been assassinated, pop and rock music were dominant, and saccharine-sweet family productions had lost their appeal.47 (#litres_trial_promo)

Success does not necessarily breed success. Just because we haven’t seen a snake today or yesterday, it doesn’t mean that we won’t see one tomorrow. And just because a certain set of ingredients once worked, it doesn’t mean they always will.

This was a tough lesson learnt by Finnish communications giant Nokia in 2007. From the 1990s onwards, Nokia dominated the mobile-phone industry. At its peak the company had a market value of $303 billion, and by 2007 around four in ten handsets bought worldwide were manufactured by Nokia.48 (#litres_trial_promo) But when Apple introduced its game-changing iPhone in 2007, Nokia was caught sleeping on the job. Hoping to keep its edge on the market, it had piled $40 billion into research, secretly developing an iPhone-style device – complete with a colour touchscreen, maps, online shopping, the lot – some seven years earlier. But the product never hit the shelves. In spite of all the research (which ended up generating about $6 billion-worth of patents), Nokia decided to stick with what it knew: good, solid, reliable mobile phones. As a former employee working in the development team at the time said of that decision, ‘Management did the usual. They killed it.’49 (#litres_trial_promo) In fact, when the iPhone was introduced, Nokia engineers sneered at the Apple device’s inability to pass their ‘drop test’, where a phone is dropped onto concrete from a five-foot height.50 (#litres_trial_promo)

They believed that the past could provide a reliable guide to the future, but as we now know, it didn’t. In the five years since the iPhone was introduced, Nokia has lost 90 per cent of its market value.51 (#litres_trial_promo) Meanwhile, Apple has sold over a quarter of a billion iPhones.52 (#litres_trial_promo) Indeed, in August 2012, at the same time as Nokia’s bonds were rated as worse than ‘junk’, Apple’s share price peaked at $664.74, making it the most valuable company in history, with the iPhone generating 55 per cent of that value.53 (#litres_trial_promo)

What can we learn from these two stories to help us with decision-making? That there is no such thing as a trend? Clearly not that – just ask the erotic fiction writers now bringing home the bacon thanks to E.L. James. Or those who’ve made their millions off the back of the Twilight franchise.

Never to make a musical? Not that either, although with a twinkle in his eye Dick Zanuck joked with me that that was the lesson he’d learnt.

How about that failure is the death knell for future success? Not necessarily. Zanuck went on to make many more blockbusters and critically acclaimed movies. And there are a number of examples of entrepreneurs who’ve gone on to make fortunes after losing it all.54 (#litres_trial_promo)

But what we can take away is this: do not get so attached to past successes or failures that they inhibit your ability to think cogently, and to assess the present challenges with an open and objective mind.

Be acutely aware that the interplay between our environment and its outcomes is ever-changing.

Understand that all trends will come to an end at some point.

Consider the possibility that the same ingredients at another time may not make a tasty cake or a hit movie.

Don’t allow success to breed either arrogance or complacency.