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Culture

Premortem and taming overconfidence

Thinking Fast and Slow by Daniel Kahneman is probably the most impactful book I’ve read in the last decade. One of the topics Daniel Kahneman covers in the book is overconfidence. As humans, we tend to have an illusion of control, we believe that we know more than we actually do. We also tend to overestimate our ability to forecast the future. This happens a lot more as you climb up the corporate ladder. All of this leads to overconfidence and that can have a huge impact on the accuracy of our decision making.

Kahneman believes that organisations may be in a better position to manage overconfidence than us individuals. He proposes (via his colleague Gary Kelin) a technique called “premortem”.

The procedure is simple: when the organization has almost come to an important decision but has not formally committed itself, Klein proposes gathering for a brief session a group of individuals who are knowledgeable about the decision. The premise of the session is a short speech: “Imagine that we are a year in the future. We implemented the plan as it now exists. The outcome was a disaster. Please take 5 to 10 minutes to write a brief history of that disaster”.

I’ve found this technique very useful. If done right, it’ll surface diverse perspectives and suppress groupthink. Often, when a decision is being made, team members who are very sceptical of a decision don’t speak up if it goes against the mood in the room. With pre-mortem, team members who disagree with a decision can freely share their perspectives. Organisations can also address any threats/risks that might arise due to a decision proactively.

I would highly recommend this for high impact, irreversible decisions.