Episode #249

Maria Franzoni (00:15): Hello and welcome to the back to The Speaker Show with me your host, Maria Franzoni. In today’s show we will be talking about how to make better decisions. The Speaker Show is brought to you by Speakers Associates, the global speaker bureau for the world’s most successful organizations, providing keynote speakers for events, conferences, and summits. My guest is an Oxford professor, author of multiple bestsellers and expert on data, AI and decision-making who offers insights on making better decisions. According to my guest it’s a cognitive muscle we all possess, but rarely use. And in combination with data, it turns into a superpower for decision-making. So please give a warm welcome to Viktor Mayer-Schönberger.

Maria Franzoni (01:00): Victor. Thank you so much for joining me. Where are you in the world today?

Viktor Mayer-Schönberger (01:05): Well, I’m mostly in Oxford, but on weekends and during vacation time, I tried to go through the Austrian Alps to enjoy a little bit the mountainside. Climbing, trying to figure out, challenges that I can do.

Maria Franzoni (01:18): Fantastic. What a great place to go and figure out challenges. Lots more oxygen. I imagine there, yes? Cleaner air

Viktor Mayer-Schönberger (01:24): Yes. And rocks. Really hard rocks to write your ideas on.

Maria Franzoni (01:30): Fantastic. So here’s a question for you because I’m curious. Why did you decide to focus specifically on decision-making?

Viktor Mayer-Schönberger (01:39): Well, you know, Kenneth Cukier, my co-author and I, about 10 years ago, we wrote a book called Big Data. And Big Data became an international bestseller sold 2 million copies was a real phenomenon around the world, because people wanted to understand how they can improve their decisions, looking at data, looking at facts and evidence. I mean, if anything, what we have learned through the pandemic is that if we have facts and evidence, we can make better decisions, rather than drinking bleach and hoping that the virus goes away. And, and so we wrote this book and we were really enormous. We were, we were excited about the opportunity that data offered to improve human decisions, because at the end of the day, that’s what matters. The decisions that we take every day. And five years in or so, we looked at more and more situations where organizations, companies, people had exactly the same data, but came up with different solutions, different decisions. And so we said, Ooh, that’s really interesting. That’s intriguing. You know, why is it data alone apparently isn’t sufficient for a good decision? There is some other magic ingredients missing. And that was the beginning of our quest to really uncover that missing element so that we can improve decision making.

Maria Franzoni (03:09): That is fascinating, isn’t it? Because everybody thinks data is the solution. And once you have the data, you will make the right decisions, but you’ve just proved that may well not be the case. Okay. So you are recognized as an expert in this area, data, digital transformation. So I’m imagining that the reason you’re focusing now on the human side and the mental models is because of this discovery, is that why you’re focusing in this area now?

Viktor Mayer-Schönberger (03:33): Absolutely. You know, the starting point, one of the starting points for us was that a couple of years ago there was an Ebola virus outbreak in west Africa. And the, there was very good data about where the individual cases were and when the individual cases happened. And there were two organizations on the ground the World Health Organization, WHO and the Médecins Sans Frontières, the NGO. So they had exactly the same data, but they came to absolutely different conclusions. WHO said, and it’s gonna die down. We don’t have to do anything. And Médecins Sans Frontières said, Ooh, this is gonna be an epidemic. This is dangerous. We need to have a lockdown, you know, mind you, that was way before COVID. And the, in this particular case Médecins Sans Frontières was right, but what is more interesting, not is who was right and who wasn’t, but why they came to the conclusion and WHO came to the conclusion because they used the data and they interpreted the data, analyzed it in a temporal fashion.

Viktor Mayer-Schönberger (04:45): They looked at previous outbreaks and they said the data, like, you know, the number of cases and so forth, looks like previous outbreaks. And, so it’s gonna die down. Médecins Sans Frontières didn’t look at the data over time, but the data spread out geographically and said, there are many cases dispersed geographically, before that it was all concentrated in one place. And so this can’t be dying down that easily. And this gave us the sort of starting point, because we said there are mental models. There are frames in our minds through which we interpret data and make decisions. And what frame we use has a huge impact on what decision options we see and how we decide. And so for us, it was the starting point to say, now we need to dig into that, and we need to see what this, these frames, these mental models can do. And interestingly enough, we discovered that very, very recent research has shown that this isn’t just a fact of life, that all humans think in mental models, whether we like it or not, but those that understand it as a tool can actually hone and practice their decision making and get better at it. And that’s a huge cognitive superpower that all humans potentially possess, but very human, very few humans are using. And so we said, boy, we need to tell people about it.

Maria Franzoni (06:13): Goodness, that’s really exciting. And I’m just gonna digress a little bit, cause I’m curious, seeing, as you know about this, and this is your area. Is it true that we get to a point where we get tired and we can only make a certain number of decisions in a day because Steve jobs famously would always wear the same clothes so that it was a decision he didn’t have to make. Is that also true? Do we mentally get tired?

Viktor Mayer-Schönberger (06:35): So, we hate making decisions because it’s basically consuming mental energy, and we are very lazy beings. So we are trying to always pick the conventional option, the conventional solution, leaving a trotted path is really hard for us. Switching from one frame to the other is really hard. And even those that successfully switched from one frame to the other, can’t do it successfully again very often. So what can we do? It turns out that the frame that we are in the mental model is actually much more flexible. We can push it in all kinds of directions, and that is not very energetically tedious. It doesn’t consume that much energy and the secret power in a way is for us to dream to imagine. To imagine a world that doesn’t yet exist, but could exist.

Viktor Mayer-Schönberger (07:39): It’s not a crazy dream, or it’s not crazy dreams that we imagine, but it’s very carefully crafted dreams. It’s kind of the what if questions, the counterfactuals that we always ask ourselves, you know, you’re running late for meeting and you ask yourself, should I take a cab? Should I take the subway? And as you ponder the options you ask in your brain, you know, it’s, what if, what if I do this, what would happen then? When would I arrive? Would I be totally sweaty, all these kind of things play out in your mind, and that let us play the game of life, just a few steps ahead. We hone that skill from very early childhood on, but then we kind of forget about it and don’t use it very much. And that is why one of the world leaders in this field has called the toddlers, the research and development department of humanity and us, older folks, more like marketing and sales.

Maria Franzoni (08:38): Good, dear. I dunno if I want to be marketing in sales. I think I want to be, I want to be a toddler again. That’s interesting. That’s really interesting how many mental frames are there.

Viktor Mayer-Schönberger (08:48): You can have any number of mental frames. There is no limit to that. And so some people are really excited when they hear this and say, oh, I’m gonna build up a repertoire frames. And that’s helpful, you know, that’s what people do in business school. Every case that they go through, through the case method and business school that just introduces a mental frame to them, a way of looking at things. But the problem is we don’t know at the beginning of life, what kind of frames we’re gonna use and need, as we go through our years. And so rather than just building up a repertoire, perhaps what’s even more important is to foster serendipity and a curiosity in us. A desire to explore and go beyond what we already know, even though it is hard and to accustomized ourselves with that kind of jump into the unknown so that when we actually have to do it and a lot depends on it, we are ready.

Maria Franzoni (09:51): You know what I wish I had had this chat with you, in probably February, 2020 when we were going into incredible uncertainty, I think that would’ve because I struggled to make decisions and we constantly having to go into the unknown aren’t we? So this is wonderful, but how can we actually use, so once we’re aware that we have this superpower, how can we use it?

Viktor Mayer-Schönberger (10:13): So, as I said, these counterfactuals, this imagination, this sort of, thinking about a world that doesn’t yet exist, but could that’s really the key point. And what we need to concentrate on is less to pick one of two solutions that we already know, but to generate better additional options for our decisions, broadening the decision space, in other words, is where the magic lies. You know, if you have two mediocre solutions already on the table, doesn’t really matter, which of the two you take far better is to come up with a third or a fourth alternative that is far better. And that’s the one that you should then use. So how can we generate those options? By imagining with constraints that is by imagining, but using the data, using what we already know, you know, give you an example.

Viktor Mayer-Schönberger (11:16): In 1969, the Apollo spaceship landed on the moon famously. Now NASA had gone through simulations and everything before, but never, ever had anybody before been on the moon. So they didn’t know what to expect. They didn’t know what to expect for lunar space flight or anything like that. They had to imagine, but as they were, imagine it, they used the laws of physics. They lost everything that they knew about engineering and material sciences and so forth in order to constrain their imagination so that their imagined realities or their counterfactuals were really useful and played out. And then at the end, they had answers to a lot of contingencies that helped Apollo 13 to survive, even though, an oxygen tank exploded. If I can, if you permit me, I’ll take this example and I’ll translate it into our world today.

Viktor Mayer-Schönberger (12:19): You know, we are all an armored with space X and these rockets that roar into space and then land back and can be reused because it drives costs down, more than 60% of all launches today are with SpaceX worldwide. It’s amazing. Elon Musk gives us superstar, an entrepreneurial superstar, but when we look more closely, we find out he isn’t that much of an innovator. He’s just a good framer because the idea to land the rockets back on earth was first tried in the 1960s by NASA. But at that time, the computers and the sensors just weren’t good enough. And so NASA Zeta, we have to put wings on it and they created the space shuttle. Fast forward, 40 years later, the computers and the sensors are good enough. And at that moment, Elon Musk said, why don’t we dust off that idea from the 1960s and land the rockets back. NASA couldn’t think about it because they were path dependent in their thinking. Space X wasn’t. They could imagine something that didn’t exist, but could because a sense of technology and computers, and then they built it.

Maria Franzoni (13:34): I’m really excited about this. My concern is though, I’ve got to, you know, I’m now sales and marketing. I’m not now one of the toddlers. I’m not sure my imagination is as good anymore. How do I reignite my imagination?

Viktor Mayer-Schönberger (13:45): Can you reading a novel reading, a novel, go to the theaters, go to the movies, play a good video game, all of that, you know, be a couch potato in the, in some way, because all of that kind of triggers our mind. It’s cognitive training for our mind, because as we watch a detective movie, we’re asking ourselves who has done it, who has done it. So in our mind, we are creating counterfactuals. Much like toddlers do when they play doctor or when they play shopkeeper. And that’s what’s honing our skills. And then of course, we need to look at the constraints that we have and much like Elon Musk looked at the constraint and say, one constraint with was there is no longer valid because, our capabilities changed. And so that creates new decision options.

Viktor Mayer-Schönberger (14:39): That’s what many others have done, Martha Graham, the famous modern dance icon. She said to her dancers throw the corset away. You know, let’s get rid of that constraint. And then she said, but we cannot dance without constraints because our imagination needs boundaries. And so she came up with artificial constraints that then became the Martha Graham style and made her famous. Same with Spotify and streamed music. Before that, we thought that music was all about purchasing a song or a CD, but actually we don’t need to possess something to listen to it. Music is about experiencing rather than possessing. And that’s what Spotify realized, you know, the constraint isn’t that I need to download a file. The constraint is that people wanna actually listen to music. And that’s what I have to fulfill as a company. And the rest is history. And so often when you go through innovation, when go through great ideas, in business, in science with the fine arts, what these people are, aren’t necessarily breakthrough innovators, but they’re really good framers.

Maria Franzoni (16:02): I like that. I like that. And I also like the fact you’ve given me permission to be a couch potato. So when I am being a couch potato, and my man is looking at me and saying, you know, why aren’t you do? So I said, actually now, you know, the professor who is the expert on the subject has says, I’ve got to be a couch potato. So thank you for that. I’ll just play him this podcast. So let’s talk about organizations and companies then. So how do they tap into that within their organizations? What do they need to be asking?

Viktor Mayer-Schönberger (16:28): Well, if what matters is coming up with a broad range of decision options, rather than just the two conventional solutions that everybody already knows, then of course, what helps is cognitive diversity. Diversity in of the mind. And one good way of creating cognitive diversity is of course, through physical diversity. So, socioeconomic diversity, that’s why organizations and companies have diverse teams. It’s not just the ethically right thing to do, but actually it produces better results, not when the answer is already known, but when we all bang our heads together, in order to come up with a better solution, with a better widget then, cognitive diversity, really shines. But here is a kind of insight that I’m only kind of tell you now. And that insight is that if you have a diverse team and you give them a really difficult challenge, first have each individual team member think about it individually for an hour or two, and only then put the team together.

Viktor Mayer-Schönberger (17:44): Why? Because if you put the team together immediately, people quickly coalesce around an emerging consensus. You know, the alpha animal in the team will kind of push for whatever solution. But if you have all team members think about it for an hour or two beforehand, they have already their solution in their mind, and they’re gonna fight for their solution. And that’s that clash, that conflict, that fighting it out is exactly what you need, because it generates options. It generates decision possibilities that you then can evaluate the broader, the more interesting, the more creative and original within the constraints. These options are the better the solutions and the better the outcome.

Maria Franzoni (18:30): I like that. I like that. I’ve made notes. I’m making lots of notes here. That’s really cool. I want to go onto digital again, actually talk about a little bit about that. So if the, an organization or a business is embarking on a digital transformation, what should they be on? Should they be concentrating on the decisions? Is that what they should be concentrating on?

Viktor Mayer-Schönberger (18:53): Every business should focus on decisions because that’s where action is being planned for and turned into reality. But, as we look at digital transformation, there’s a lot of organizations who hope, perhaps that as they put in technology, they gather the data and they do the data analysis. The rest is going to be easy. That’s not the case. Yes, we need the data. Yes, we need the technologically infrastructure, but then the hard work only begins because that is when we need to wed the data with the frames, with the mental models that we have and generate those decision options in a way it’s a little bit of a division of labor that we need to think about. You know, the machines are good in collecting and analyzing data. We, humans are superb in imagining what isn’t there. With both of them together.

Viktor Mayer-Schönberger (19:46): You can use the machine to point you in the right direction. You can then imagine something and then use the machine to sort of calculate it through. That’s the kind of combination, the symbiosis, if you want that we need. Now a lot of digital transformation doesn’t factor that in. They think sometimes that they have a silver bullet, they throw money or technology at a problem, which really oftentimes is organizational is a people problem, is a human problem. And only when we understand this, we can not only utilize our cognitive superpower, but also the power inherent and data and technology.

Maria Franzoni (20:25): Fantastic. Fantastic. And who do you think is going to win in this current sort of data and digital age, who are the winners?

Viktor Mayer-Schönberger (20:35): Those that are curious, those that embrace serendipity, those that are a little more experimenting, perhaps slightly more risk taking, willing to leave the path, be a little more flexible and agile. The fundamental difference, I guess, today from maybe two decades ago, or three decades ago, is that, then things were relatively easy going, yes, there was change and so forth, but tomorrow was always better than yesterday. And that’s incredibly comforting because whatever you do at the end of the day, you may earn more money or you are better off. The generation of, you know, of my parents in the sixties, the seventies, the eighties, that’s what they live by. Today, when I look at the younger generation, my children, when I look at them, what I see is a lot of challenges ahead for them.

Viktor Mayer-Schönberger (21:36): And these challenges cannot be met with conventional solutions of the past of the 20th century. We need to come up with very new answers, new decision options. We need to broaden our decision space, whether it’s sustainability, whether it’s social inequality, whether it’s the fundamental rewiring of the economic and business community, thanks to digital transformation and so forth. And so what we really need then is to hone and to bank on the human ability to see what isn’t there to imagine that is to dream and then to make it happen.

Maria Franzoni (22:16): Well, let’s hope there are a lot of people imagining a better future for us, for sure. And certainly a better future for our planet. There’s a lot that we need to do. And let’s hope that, our decision making gets better in that regard. Is there anything you would like to leave our audience to think about last thoughts from you?

Viktor Mayer-Schönberger (22:35): Well, my little insight perhaps is that, as we enter this time of change, that will challenge us in so many ways. What we really need to look at, is, not the outside, not the material things, the technological infrastructure that we have, but we really need to focus within, what is necessary and important is an agility of mind. And the good news is that’s what every one of us has.

Maria Franzoni (23:18): That is very good news. That’s a wonderful place to leave us. Thank you so much. I hope you’ve enjoyed yourself. I’ve very much enjoyed talking to you.

Viktor Mayer-Schönberger (23:25): Thank you so much for having me, Maria,

Maria Franzoni (23:29): Absolute pleasure. And if you have enjoyed listening to The Speaker Show, please make sure that you leave a rating on Apple Podcasts and keep up with future episodes on the Speakers Associates website. Now that is speakersassociates.com or your favorite podcast app. And if you would like to invite Viktor to speak at your next conference or event, and if you do, please invite me along. I’d like to be in the audience, please contact Speakers Associates in plenty of time to book him. So you won’t be disappointed because I know he’s a very busy man. I will see you all next week. Thank you for listening.