The Art and Science of Timing Decisions

d2d07a1b-21c1-4e02-8648-93576a80ebafRemember Malcolm Gladwell’s book called Blink?

Gladwell argued that we should trust our snap judgments, using examples from science, advertising, medicine and music.  These examples showed that spontaneous decisions were as good as, and usually better than, carefully considered ones.

In Wait: The Art and Science of Delay, Frank Partnoy takes the exact opposite point of view.  After interviewing more than 100 experts from different fields and examining several hundred studies, Partnoy claims that most people don’t take enough time to make decisions.  Using a Gladwell-esque style, Partnoy argues that the best decision makers – premier athletes, expert investors, and even popular comedians – hone the ability to wait as long as possible before deciding or acting.

I’m writing this blog  while watching a professional baseball game and the game itself reinforces Partnoy’s claim.  The best hitters are the ones who wait the longest time to make a decision about whether to swing at a pitch.  The swing has been practiced so often it’s mechanical and not the important differentiator. The key to being a good hitter is to gather information about the ball as quickly as possible, so as to leave time to process this information and make a decision on how to swing.  “Ball identification” is analogous to sizing up a situation in business.

In a recent Financial Times article, Partnoy uses a nearly identical example from Wimbledon to explain a parallel situation in the business world.  As he writes:

One of the most surprising aspects of Lehman’s collapse was that the firm’s leaders had tried so hard to understand the problems associated with their own decision-making. In autumn 2005, Lehman’s senior managers hired a group of experts to teach four dozen top executives how to make better decisions. Malcolm Gladwell, who had just published Blink, gave the capstone lecture.

These managers sat for a cutting-edge course on the timing of decisions. Then, they rushed back to their offices and made some of the worst decisions in the history of financial markets. Three years later, their firm was gone.

If Lehman had lived until today, its decision-making course would look radically different. The core message of recent research is the opposite of the one Lehman’s executives learnt in 2005: the longer we can wait, the better. And once we have a sense of how long a decision should take, we generally should delay the moment of decision until the last possible instant. If we have an hour, we should wait 59 minutes before responding. If we have a year, we should wait 364 days. Even if we have just half a second, we should wait as long as we possibly can. As the matches at Wimbledon will illustrate, even milliseconds matter.

Scientific research supports both Gladwell’s claim we should trust our gut assessments and also Partnoy’s claim we should wait until the last possible moment to make a decision. So which one should you do?  The answer, of course, depends on the situation you are in — this is the art of decision making.

But, if you can’t make up your own mind on how quickly to make decisions, my advice can be captured in one word: Wait.

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12 Responses to The Art and Science of Timing Decisions

  1. Anonymous July 1, 2012 at 3:50 pm #

    Hi Jonathan,

    While I agree that when one isn’t sure one should wait, I think what one does during the wating is what becomes important. Even a highly trained athlete watches and reflects when they wait. Waiting by itself doesn’t change the input into the decision.

    Like the great hitters it is about assesment right now given all factors. Sometimes you have .03 seconds and sometimes 30 days.

    I enjoy the insights you provide.

    BR,

    jeff

    • Jonathan July 2, 2012 at 5:49 pm #

      Thank Jeff, I agree that you can’t just wait and do nothing. “The key to being a good hitter is to gather information about the ball as quickly as possible, so as to leave time to process this information and make a decision on how to swing.”

  2. Christopher Powell July 1, 2012 at 6:06 pm #

    Interesting points. It makes me curious about the concept of “Fast Failure” and how it relates to these two diametrically opposed positions. Perhaps quick decisions are what works best when the ability to course correct is feasible without dire consiquenses.

  3. cylkowski July 2, 2012 at 8:15 am #

    Good info. Daniel Kahneman, a psychologist who won the Nobel Prize for behavioral economics, wrote “Thinking, Fast and Slow”. In this book Kahneman indirectly debunks Gladwell’s assertions in his book “Blink”. Gladwell is a pop New Yorker columnist, not a scientist, who homogenized and mis-interpreted a lot of neuroscience phenomena to fit his theories.

    • Jonathan July 2, 2012 at 5:53 pm #

      Even since I read “Judgement Under Uncertainty” in school, Kahneman has been one of my favorite authors. “Choices, Values, and Frames” is also a good read.

  4. Arun Krishnaswamy July 4, 2012 at 12:03 am #

    Great points. I was coming from the commonly held viewpoints of ‘ no analysis paralysis’ and ‘some decision in time is better than no decision’ and walk away with these takeaways:
    – while respecting gut, look for infomation that support or contradicts within the decision timeframe
    – When you have to decide, STOP analysing, decide and move ahead.
    Thanks Jonathan for a terrific post.

  5. Mukesh Gupta July 4, 2012 at 7:27 pm #

    Reblogged this on Mukesh Gupta and commented:
    This is a very interesting post by Jonathan. He talks about the two differing points of view on decision making – Instintive decisions (as argued by Malcolm Gladwell in his book “Blink” and taking time to make your decisions (as argued by Frank Partnoy in his book “Wait: The art and science of Delay”.

    In my opinion, what style you use to make decisions is mainly a function of your personality. For example, I prefer instinctive decision making and that has worked really well for me.

    So, we should reflect about our own personality and use what works best for us. Though knowing more about both styles does provide some food for thought on why a specific style works for one.

  6. Kichi_bichi July 5, 2012 at 3:12 pm #

    Agrees with my phylosophy Neverdo today what you can do tomorrow (and getaway)

  7. Mark Yolton (@MarkYolton) July 5, 2012 at 3:54 pm #

    Two things:

    1) What sometimes seems to be a quickly made snap judgement is actually carefully considered based on past experience, data at hand, and other factors. It may seem off-hand or “random” by the casual observer but is actually carefully considered. Think: doctors in the emergency room. I had a boss call me on this once where he thought I just blurted out a preference, so I spent 10 minutes explaining the thought process of a 30-second response. He wanted me to “show the math” (explain the reasoning process) and once I did he trusted my judgment more readily as it usually matched his logic and reasoning as well.

    2) Personal styles and brain wiring also play in to this. My own preference when I have the luxury of some time is to think, ponder, and weigh options and pros/cons overnight (at least) or longer. I recognize that I’m usually not very good at snap judgments and need a little quiet thinking space to make good decisions out of the heat of the moment. Perhaps like George on Seinfeld (“The jerk store called…”) my first quick reaction isn’t usually the best, and can be improved with just a little bit space and quiet but active consideration.

    Regards,
    Mark Y.

  8. caroljacoby July 6, 2012 at 2:08 pm #

    A really effective decision makers uses both skills. Listen to your gut. Then analyze the question to confirm. Refine your analysis by asking yourself whether the answer feels right. You need creative, divergent thinking to frame the question and come up with alternatives and critical, convergent thinking to choose among them. Set a deadline for yourself up front to prevent paralysis of analysis.

  9. The Flaneur July 8, 2012 at 10:48 pm #

    I do agree with you. As a softball player, as in any sport, you train so much that all your movement and actions become second nature, to the point where you need not think about your actions any more and all is left is the bare minimum: to hit or not to hit?
    Furthermore, I think the idea of snap decision making really depends on what is at stake. Impulse actions have become a product of our society, where instant gratification fuels us in every aspect. We cannot wait in queues any more, so we shop online. We get annoyed at our internet lagging for perhaps, half a minute, when we used to live on dial-up. All of these modifications to society to enhance our experience, has just sped up the rate of everything, which in turn, leads to the need for instant gratification. However, as you said, premier athletes, or people in significant positions are required to think through their decision, because there are more variable, more at stake which cannot be overlooked.

  10. 50kto50k July 9, 2012 at 5:51 am #

    Nice blog. I have to say I’m torn between the two ideologies. I usually default to making gut judgments because I’m lazy…then spend the rest of my time justifying my decision. My fear is that in waiting…I may end up making no decision at all.

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