AND YOU THINK YOU MAKE YOUR OWN MIND UP!
Monday, 25th July 2022
I was so happy that I attended the recent Timoney and IESE Alumni session at WORKDAY in Smithfield, Dublin, where Richa Pathak was so kind as to host us for a really entertaining and inspiring evening.
Ines Alegre, Assistant Professor of Managerial Decision Sciences at IESE, stimulated the room with her talk, entitled ‘Biases and Intuition in Decision-making’.
Do you know that you make around 35,000 decisions EVERY DAY of your life? This figure was staggering to me. Our minds are constantly working away as we go through our daily lives, but we are not aware that many of these decisions are actually happening as we proceed.
Many of these decisions are deemed rational. This is the stuff we know and understand. Will I do this now? What is the best outcome for me? Rational decisions are designed to get the optimal level or best result for us as individuals. We will do whatever rewards us with the biggest benefit. That is the easy part. But what about irrational decisions? We all make lots of these, but what lies behind the ‘why’ is fascinating.
Factors such as our emotional condition at the time, the people we are surrounded by, and the environment we are in, often steer our decision-making down a path that makes no sense. We make decisions in the heat of a moment that we would never make if the conditions were different.
Professor Alegre helped us take a close look at this, focussing on the irrational side of things. We ALL do it, so you will relate easily to the everyday examples I mention.
Let me start with an example that lead me to a realisation that I have been fooled all these years by marketeers. Our biases often lead us to make decisions in certain directions. Marketeers use a method called ANCHORING to manipulate our minds and lead us to make decisions that THEY benefit from.
Like me, you may relate to the example Professor Alegre gave us. A bottle of wine in your local supermarket costs a certain price. That in itself is fine, but I bet you may have seen that bottle with a tag attached, saying ‘Was €24, NOW €12’. It is sitting beside a bottle costing €8, which was your budget. All of a sudden, the ‘value’ staring you in the face is hard to ignore. More often than not, you will pay the extra amount and jump at the ‘bargain’ bottle with the 50% discount. The marketeers have persuaded you to spend 50% more than you had envisaged as you innocently entered the shop. Staying with the wine example, another trick is to have 3 bottles of wine side by side, priced €8, €10 and €14 respectively. More often than not, we will pick the middle-priced bottle, as we opt for a bit more quality. But they then add another bottle alongside for €22 and what happens? You buy the bottle for €14. It’s clever BUT it works.
NUDGING is another subtle method used to get people to make certain decisions. A local council was having issues with people throwing cigarette butts on the ground in a park. They cleverly came up with two small receptacles to hold cigarette butts placed in a prominent position. Each had a title ‘WHO IS THE BEST PLAYER IN THE WORLD’, with one ‘MESSI’ and the other ‘RONALDO’. You can guess what happened over the coming weeks. Let’s just say the litter problem resolved itself.
The evening was very entertaining. So many more examples were given to show us how and why we can end up making decisions we really wouldn’t make in other circumstances. Professor Alegre’s style was so easy and entertaining that it made the whole experience a very pleasant one. Her obvious knowledge of the subject, to me, was hugely impressive and the audience interacted with her throughout the presentation.
The venue, WORKDAY in Smithfield, was stunning, with panoramic views of Dublin City and the Dublin Mountains, housed in an older building with an ultra-modern interior. Our host, Richa Pathak, who did her MBA in IESE and sits on the Timoney Board of Management, was charming and welcoming, most happy to show us around. All made up for a wonderful Timoney /IESE Alumni event and, YES, there was lots of tasty food, refreshments and chat after the formalities!
For me, it was fantastic to be back meeting people again, so I was really happy that I had made the effort to come along. We have a fantastic community here with the Timoney Alumni. It is enriching, interesting, vibrant and exciting, but we need people to be a real part of it all. At the end of the day, everything meaningful in life revolves around people. The diversity of origin, the diversity of opinion, the diversity of knowledge is what makes me crave the company of others and in particular the company of my Timoney Teammates.
I hope you enjoyed reading this short recollection of a lovely evening, and I look forward to meeting you all at the next event. Please be sure to join the ‘Timoney and IESE Alumni in Ireland’ LinkedIn group where you can stay in touch with everything that is happening.
Until we meet again, let’s continue to strive to be better leaders, improve our values, attitudes and behaviours by putting others first and leading with a spirit of service.
Please feel free to contact me about any of the above at firstname.lastname@example.org.