15 Decision-Making Tips from Nobel Prize Winner Daniel Kahneman

Daniel Kahneman is an expert in human judgment and decision making. He won the 2002 Nobel Prize for challenging the assumption of human rationality prevailing in modern economic theory. I had the privilege of attending the World Business Forum by the World of Business Ideas (WOBI) in New York last November 14, 2018 and would like to share 15 lessons that I have learned from Daniel in improving our decision choices as marketers and entrepreneurs, especially this marketing planning season.

On Intuition
1. Confidence is a very poor cue to accuracy.
2. Intuition comes with much confidence.
3. Trust intuition only in well-understood and very specific situations where one has practiced regularly with feedback if previous intuitions have been right or wrong.
4. Delay intuition, as intuition becomes more accurate if information are organized.
5. Algorithms are noise-free, has disciplined uniformity, so people should think like an algorithm.

On Choices
1. Evaluating options can improve decision-making.
2. People take risks because they do not know the odds against them.
3. Pre-mortem can improve quality of decision-making by giving incentives for people to be pessimistic.
4. Vote before a major discussion to ensure people come prepared in meetings.
5. Happiness tends to yield a biased decision in favor of what is being proposed.

On Outlook
1. The most highly optimistic plan fails. Paradoxically, extreme success is impossible without optimism.
2. Pessimists should be treasured, not suppressed in organizations.
3. Optimism is genetic, largely like intelligence.
4. Good result can be because of luck, not good decision.
5. Evaluate process, not result or outcome.

When people use judgment where financial risk is high, variance can be too wide. Both underestimation and exaggeration can be costly to the company. When planning, it is best to seek the perspective of another party where they can offer cases similar to your planned case to determine if there is reason to believe.

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Josiah Go is Chairman and Chief Innovation Strategist of Mansmith and Fielders Inc. The next World Business Forum in New York will be on November 20-21, 2019.

Josiah Go

Josiah Go is the Chairman and Chief Innovation Strategist of Mansmith and Fielders, Inc., and Chairman of Waters Philippines (the market leader in the direct selling of premium home water purifiers in the Philippines). He is Chairman / Vice Chairman / Director of over a dozen companies. Known as one of the Philippines’ most respected marketing gurus, he is the most awarded business educator of the Philippines having been recognized as one of the Agora Awardees in 1994, one of the Ten Outstanding Young Men (TOYM) of the Philippines in 2001, one of the Ten Outstanding Young Persons (TOYP) of the World in 2002 (the 1st and only Filipino in Business Education given by World JCI in a competition of over 1,000 TOYMs), and one of only two Lifetime Achievement Awardees by the Association of Marketing Educators (2007), the youngest marketing educator to be bestowed this honor. He was also given the Brand Leadership Award during the World Brand Congress in India (2009). His accomplishments was recognized by the international community where he has been included in the 10th edition of the International Who’s Who of Intellectuals (England). He is also the first Filipino to have completed the Blue Ocean Strategy qualification process in Blue Ocean Institute in INSEAD, France and is the first in Southeast Asia to have taught this as a 3-unit, full semester course in a university. He specializes in the fusion of marketing and innovation using the lenses of data-driven entrepreneurship and teaches advanced marketing subjects like Market-Driving Strategies, Business Model Innovation, 5 Skills of Master Strategists, Marketing Innovation, Mastering Innovation and Defense Strategy. He has given talks and facilitated over 1,000 marketing seminars in the Philippines and internationally to teams in diverse industries, in different situations and contexts. A thought leader with 18 bestselling and recordbreaking marketing and entrepreneurship books, Josiah has taught at the De La Salle and Ateneo Universities. He is an Executive Scholar of the Kellogg Business School (in Marketing and Sales Management) as well as the MIT Sloan (in Strategy and Innovation). He also took advance marketing programs at Harvard, Wharton and at the London Business School. His industry affiliations include being National President of the Philippine Marketing Association (1991), Chairman of the Direct Selling Association of the Philippines (2002), National President of the Association of Marketing Educators (2004-2005). He continues to be involved in various advocacies aimed at youth empowerment and entrepreneurship namely, the Young Market Masters Awards (YMMA), Mansmith Innovation Awards, Day 8 Business Academy for SMEs, and the MarkProf Foundation.

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