Politicians – Personality and Problems, Part 2

What kind of person becomes a successful politician? How does that personality type affect performance in office? Last time I discussed how being an extrovert gets people leadership positions but militates against good decision-making. However there are worse problems with the personality type that often acquires political power.

Too often politicians are power seekers, seeking that power because they like to control others. That is often combined with a tendency to listen to people who tell them how wonderful they are.

If we think about it this should be no surprise. Where else but politics can a control freak acquire the power to take people's money to spend on pet projects, to order people to do or not do things etc? Even the corporate CEO cannot force people to buy his product if they don't want to – but a politician can often do just that. Don't like General Motors cars? You're free to buy from Ford, Chrysler, Toyota, or even not buy a car at all. Don't like the public school system? Sorry you have to pay for it anyway, even if you send your kids to private school.

Of course not all politicians are of that type, but a political career has to be enticing to control freaks. That type of person is unlikely to seek a career in retail sales or engineering. Instead he is likely to try to either get into management or more likely into something like politics where he has the possibility of being able to tell others what to do. That means that initially those who enter politics are disproportionately of the type of individual who want to control others.

Even those who get into politics for other reasons find themselves tempted. Power is heady stuff and such people can get caught up in the ability to control others and spend huge amounts of other people's money. Political power becomes addictive. That addiction often includes a belief that those in power know what is best for others. They often have or acquire what Sowell calls the “unconstrained vision” in that they believe they can and should fix all the world's problems. This intellectual arrogance helps them justify the belief that they can and should control everything.*

That gets exacerbated by the fact that sycophants tend to cluster around the powerful. Anyone in a position of political power will attract a following of “yes men” who attempt to advance their own ends by flattery. Such people tend to infest the staffs of congressmen, presidents, governors etc. They tell their boss or friend what he wants to hear, reinforcing his already great tendency to think of himself as all-knowledgeable. As a result we have too many politicians who want to control all aspects of our lives, being encouraged by their employees and acquaintances. That is bad for the country, and for each of us individually.

Once again a good solution to this problem is to return to the constitional principle of limited government. We must stop congress from overstepping its bounds. We should become the control freaks, controlling and limiting congress instead of allowing congress to control us.

*See for example my review of Sowell's book, “The Vision of the Anointed” posted here September 4, 2009.

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Politicians – Personality and Problems, Part 1

What kind of person becomes a successful politician? How does that personality type affect performance in office? I'm afraid the answers to those questions do not bode well for the country. The fact is that the requirements to get elected have almost nothing to do with the ability to do a good job and in fact often militate against good decision-making.

Consider for example two people. Joe is an extrovert, a real people person who knows how to get people to like him. Bill on the other hand is a contemplative type, given to thinking seriously about any significant decision, weighing the pros and cons and making careful decisions. Which is more likely to be attracted to politics? The answer of course is Joe. He will thrive on the glad-handing and other aspects of political life. His outgoing personality will attract supporters and voters who think they have a real connection with him.

However in the unlikely event that Bill tries to get into politics he will have a hard time inspiring supporters. Regardless of how correct and well-thought-out his positions, people will think of him as dull compared to Joe. Without the excitement that a more charismatic candidate can inspire, Bill will have a difficult time getting volunteers and campaign donations. Worse, voters may regard him as lacking in leadership. Barring something like a major scandal on Joe's part, Bill has almost no chance of winning an election against him. An outgoing personality is a big advantage in politics.

In fact Timothy Judge of the University of Florida business school says that being an extrovert is correlated with being chosen as a leader, but not with being a good leader. “We go for these effervescent leaders when what's really needed is a dull, focused, plodding [type] building effective groups and organizations.”*

As a decision-making consultant I'm convinced that Dr. Judge is correct, not only in politics but also in business and other aspects of life. The charismatic extrovert attracts followers and gets them excited. However that excitement is often directed at the wrong goal or the wrong means to that goal. This personality type frequently fails to adequately evaluate what he is doing. Furthermore, his charisma often causes his followers to act unthinkingly as well. Too often the result is disaster. Jim Jones, David Koresh, and Adolf Hitler come to mind as examples of this type of personality-driven leadership.

On the other hand, Dwight Eisenhower lacked a charismatic personality. Yet he successfully led the battle against Germany in World War II and later accomplished much as president of the United States. His style was to listen to his advisers, then make the best decision he could. While not all his decisions worked out perfectly that style was much more effective than was that of Montgomery, the flamboyant British field marshal. Eisenhower's more collaborative style led to better decisions than did Montgomery's self-aggrandizing personality.

In most cases, that is what good leadership requires: making good decisions and getting subordinates to carry out those decisions. The extroverted personality militates against those good decisions, though it does inspire followers to act. However enthusiastic action on a bad decision is usually counterproductive, often worse than no action at all. On the other hand, even half-hearted work on a good decision seldom causes harm and usually does at least some good. Furthermore, once followers see the effectiveness of the good decision, their enthusiasm is likely to increase and they are likely to work harder to implement that decision.

The solution is obvious, whether for the voters or the search committee seeking a new CEO or other leader. Seek first wise and collaborative decision-making skills and ignore the charisma and personality of the candidates.

However there are worse problems with the political personality. I plan to discuss a couple of them next time.

*U.S. News and World Report, November 2009, p26

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Congressional Problems, Our Problems (Part 2)

Congressional Problems, Our Problems (Part 2)

Last time I discussed pressure to do something even if it’s wrong, and stage one thinking. Those problems affect all of us but especially congress. Now let’s move on to a couple of other problems.

A third congressional problem is that there is seldom any motivation for congress to fix the problems it creates. Just look at the mortgage issue for example. People who should never have qualified for mortgages were able to do so because of pressure on lenders and because of programs to allow them to get loans with no down payment. It should have been no surprise that many subsequently defaulted on those mortgages. So has congress cracked down on the problem? Of course not, that might cost votes. Instead we now have a program of mortgage subsidies that allows the subsidy to be used for the down payment. I'm afraid the results will be predictable.

In our own lives we are also tempted to stick with bad decisions long after we should recognize that they are bad. This is a natural human tendency, based on something that has benefited the race for eons. When a child misbehaves we usually do not immediately decide that having a child was a mistake and abandon that child. That is a good thing when it comes to children, but not with investments or most other bad decisions.

We all make mistakes. The wise learn from those mistakes and correct their problems. The unwise persist with their bad decisions, to their detriment. (In fact the truly wise learn from the mistakes of others.)

A forth problem is accessibility bias, the tendency to be unduly influenced by most recent or most noticeable events. The cognitive psychologists have done experiments demonstrating that what we have recently seen, or what is spectacular, tends to overwhelm the less spectacular things or those in the distant past. In one experiment, subjects spun a wheel giving numbers up to 100. Then they were asked to guess how many African countries were in the UN. There was an amazing correlation between the number they saw on that wheel and their guesses about UN countries. The number accessible in their minds unduly influenced their guesses on an unrelated topic.

Think of how this affects congress. Who gets most of their attention? Clearly not the guy working in a factory or on a farm trying to keep up with the needs of his family. No, there are union and business lobbyists, “public interest” groups with an ax to grind, and others twisting their arms or convincing representatives of their viewpoints. All that attention provides accessibility bias toward meeting the demands of those groups at the expense of good citizens who haven't time to camp on the representative's doorstep. The result is that congress has a distorted, one-sided view of reality.

Of course accessibility bias affects us all. The memorable advertisement, the spectacular and bloody news story etc. all cause us to view the world differently than we would otherwise. Without conscious effort to avoid distortion we will not have a good picture of the world.

I’ve mentioned four problems here:

Pressure to do something, even if it’s wrong,
Stage one thinking,
Failure to learn from and correct previous mistakes, and
Accessibility bias

Those four problems affect us all. However the nature of congress causes them to have more effect on that body than on most of us. We see the reason every time we look in a mirror. As Pogo said, “we have met the enemy and he is us.” Voters continue to demand action, even if wrong. Voters demand superficial solutions and fail to demand evaluation beyond stage one. Voters fail to demand that congress correct past errors or look beyond the lobbyists when making decisions. Until that changes, congress will not change.

What can we do? As voters we can demand that congress do better in these areas. More importantly, we can look at ourselves, how we vote and the things we ask of our representatives. However, beyond that we should encourage a return to a limited, constitutional government. We need to get away from the whole idea of government as a paternalistic solution to all our problems. The power to solve those problems is also the power to take our freedoms and create new problems.

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Congressional Problems, Our Problems (Part 1)

About a week ago I wrote about how congressional obfuscation is going to cause problems with health care and elsewhere. Those obfuscations seem to be the work of a few congressional leaders and may be deliberately caused. However even beyond that, congress operates under some serious disadvantages. Those disadvantages also apply to much of what the rest of us do, though not to the extent that they apply to congress.

First, congress is under pressure to do something about any perceived problem. Sadly, our representatives will get lots of bad publicity if they refuse to act and almost no positive reaction if they fail to move, even if the proposed action is damaging to the country. That publicity swings elections, putting pressure on our representatives to do something, even if it's wrong. I posted an entire blog on this subject back on June 15, 2009. (http://hallillywhite.blogspot.com/search?q=something%2C+stand+there)

A second disadvantage is that congress by nature engages in stage one thinking. What that means is that they look only at the initially expected results and do not ask things like, “and then what?” Political pressure is always for the quick fix, Adverse results usually come later, on someone else’s watch. Congress will authorize bailout funds for all sorts of businesses but fails to ask, “Then what?” What will happen when the money is spent? What will the massive borrowing or taxation do to the economy?”

How about when congress voted to pressure banks to make mortgage loans more “equal opportunity” by loaning to minorities? Did the representatives ask, “What then? Will those marginal mortgages have a high default rate?” If they did they must not have cared about the answer, which was obvious. We now have economic problems caused in large part by the defaults on those marginal mortgages. Furthermore, those who borrowed and were forced into default have their credit damaged. They were harmed by the “help” congress gave them.

This of course applies also to our personal and work lives. It is easy to make a decision based only on the obvious. We can buy that TV or new car we want, even on credit. However it is more difficult to think about “what then?” What happens when the bills start coming in? What happens if our employer has to cut back and our income drops?

This also applies to our love lives. A friend was recently married after a rather rushed courtship. She is older than most and perhaps a bit set in her ways. Her husband likewise has previous life experiences that gave him certain expectations. My wife and I tried to warn her that she should look at things carefully, especially the “big three” marriage problems: children, money, and in-laws. She did not do that, and the marriage may not survive. She and her husband now have problems in all three of those areas. She could have asked herself (and her intended husband) things like, “How will we deal with your children? Any children we have? How will we act if your parents interfere with our family decisions? How will we manage our money?”

Some have the idea that love conquers all. Well nearly all marriages start with two people in love – but have you checked the divorce rate in this country? Stage one thinking contributes heavily to that problem. However if couples would just look a little deeper many would either not marry or would go into marriage with a better idea of how to stay happy with each other.

Stage one thinking is a recipe for trouble, in personal, work and national life.

To be continued next time with a couple of other such problems.

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Lessons from Fort Hood

By now nearly everyone in the U.S. knows that Major Nidal Hasan killed 13 people and wounded over 30 others at Fort Hood. This tragic event almost certainly could have been prevented and we should learn from it. However we should be careful that we learn the right lessons. One thing we should not do is blame all Muslims. Most Muslims in the country have condemned this act as anti-Islamic. They point out that the Koran prohibits such murder of non-combatants. Hasan was clearly an extremist, out of the mainstream of U.S. Islam.

Nor should we blame “quiet loners,” another group often implicated after the fact. The great majority of loners in this country are upstanding citizens and never commit any serious crime.

No, the lesson we should learn from the Fort Hood killings is that we should look at the facts, regardless of what they say. In the case of Hasan, the facts were plentiful and pointed to an officer who could not be trusted. He had posted his anti-American views quite openly on the Internet. It now appears that he had attempted to contact al Qaeda. Why trust someone like that? Would a football team hire a trainer who wanted that team to lose? Would a business hire an employee who was loyal to a competitor?

While nobody could have predicted that Hasan would “go postal” and commit mass murder, there was plenty of evidence that he was not to be trusted. Even had he not committed murder, he would probably have been an ineffective in a combat area and quite likely would have worked against the cause he was paid to support.

In such cases we must reject the temptation to treat employment and similar decisions as though we were in a court of law. There is no automatic presumption of innocence in the employment arena. Instead, employers must do what is likely to be best for the organization. In cases such as that of Nidal Hasan, that means looking at if he was likely to be an effective therapist to the soldiers he was supposed to serve and to help them function effectively in their jobs. Decision makers must look for positive evidence of ability and willingness to do that job, and do it right. Lacking such evidence they should not assign him to the task.

In Hasan's case, the ability was probably there but there was reason for serious doubts about the willingness. In fact, there was reason to suspect that he would work against U.S. interests. He should have been placed in some non-critical assignment or even suspended from duty until all relevant questions were answered. Of course we cannot know what would have happened had that been done. However it is possible that he would never have committed those murders.

The lesson applies elsewhere. Except as required by such things as union contracts, employers need not give employees the benefit of a doubt. If there is reason to suspect that an employee is damaging the company, the employer can and should investigate. And there is no requirement of “proof beyond reasonable doubt.” If there is no evidence that the employee is doing the job as it should be done, that employee has no right to a presumption of effectiveness.

Likewise, we as consumers are in the position of employers when we decide whom we will employ by purchasing their products or services. We need not assume that advertisers or sales people are totally honest. It is up to us to evaluate their claims and refuse to “hire” them if we find the evidence insufficient.

We must all learn to investigate pertinent evidence for cases that affect our lives.

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Adrenaline Junkies

OK, I admit it. I get excited about such things as climbing mountains and even more excited about rescuing someone there. As I get older I'm doing more of the in-town stuff on rescues but my wife complains that in my excitement I talk rather loudly on the phone. It doesn't help her sleep when that happens at 2AM. I'm not sure I'm ready to admit to being an adrenaline junkie but some might accuse me of that.

In fact the desire for excitement is rampant in our society. If it weren't, most movies would flop at the box office and most TV shows, including the news, would fail. One of the worst things we can call a show or a party is “boring.” That attitude has its up side; we all need the stimulus that comes from adventure, suspense etc. However it can also distract us from some real issues. We worship the hero but ignore the person who prevents problems. We even heap honors on people who survived situations they got themselves into by their own mistakes, all the while paying no attention to myriads of others who wisely avoided such problems.

One Wednesday several years ago a young snowboarder on Mount Hood made the mistake of leaving the developed ski area and trying to ride his board out of bounds. He spent a very cold night out before being rescued. While he did act reasonably after he was lost, it was his own bad decision that caused the problem. The news made him out to be a hero, which he was not. As a result several businesses gave him some nice clothing and gear. The mountain rescue people cringed, we were afraid that the unmerited reward would encourage others to take similar chances.

Did the gifts that young man received have an effect on others? I cannot say for certain but what I do know is that on the next two Wednesdays other young men from the same home town got lost snowboarding in the same area. Fortunately those two were not rewarded for their bad decisions. I'm sure they got all the adventure they wanted, but at least they received no new clothes or equipment for their trouble. Nobody else was encouraged to create his own personal crisis.

A crisis, self-generated or not, gets us moving. That can be good for us but it can also cause problems. The health problems from too much stress are well known, but there are other issues as well. Crises and other exciting events focus our minds on the crisis. That can divert attention from other issues, or even from the problems generated by proposed solutions to the crisis. Usually this is accidental, a side effect of a natural reaction to danger. However some people can deliberately use this effect to get what they want.

White House chief of staff Rahm Emanuel was unusually candid when he said, “You never want a serious crisis to go to waste – and what I mean by that is an opportunity to do things that you didn't think you could do before.” He then proceeded to rush several measures through congress in such a hurry that nobody even had time to read them, much less adequately consider and discuss them. That included an expensive stimulus package that the Congressional Budget Office said was not needed. With the economic “crisis” underway people were willing to grab at the supposed solution without the necessary critical thinking.

The crises needed to do a rush job need not even be real. There is no reason to believe that people have a harder time getting medical care now than they did a few years ago. Yet the Obama administration is pushing its national health care plan as a solution to the “health care crisis” – again as an urgent need which must be dealt with without time to read the 1000 plus pages in the bill. At this writing it is uncertain if that plan will pass or if cooler heads will prevail.

Nor is the current administration the first to create a crisis and use it to pass unneeded legislation. The “War on Poverty” of the Kennedy and Johnson era was hyped as the solution to the “crisis” of poverty, even though poverty had been declining for decades. The plan's proponents promised a reduction in welfare needs as their plan put the poor to work. Anybody who opposed it was painted as uncaring. What happened was the opposite of what was promised. The War on Poverty created more poor people by encouraging some to take advantage of government largess.

The fact is that a crisis, either real or contrived, causes people to try to act without critical thinking. It has the effect of an adrenaline rush, focusing minds on the obvious to the exclusion of less apparent but sometimes greater dangers.

The solution to this problem is to think carefully about how serious a crisis really is, and what other dangers it may be hiding. The natural tendency in a crisis is to react without thinking. That may work if the danger is an animal attack but it is counterproductive for most of the crises we face today. For those we must first think carefully and critically before we act.

Personal note: I’ll be busy with other things for a few days so won’t be posting here during that time. Back about mid next week.

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Confusion of Means and Ends, Part 2

Back when I was in the army we were inspected regularly, especially at one big Annual General Inspection. An officer would not only look at things like how neatly the soldier dressed but he might ask questions. The most important question was, “What is your mission?” If a soldier got that one wrong his commander was in trouble; it was the commander’s job to make sure that his people knew such things. (In fact the soldier was also in trouble since his commander would know who couldn’t answer.)

That was a good start to the problem of confusion of means and ends. If every member of an organization knows what the goals are, they are more likely to contribute to reaching those goals. However it takes more than just an occasional question to create that awareness and an understanding of its importance. In fact the army training in general failed to emphasize the mission. The officers paid a lot of attention to ceremony, spit and polish, how we rolled our socks in our footlockers etc. We usually could have passed the visual part of the inspection and answered the questions, but few if any soldiers really gave much thought to the mission. In fact I was tempted to say that our mission was standing inspections.

How do we solve the problem of confusion of means and ends? Awareness is the first step; we must keep our goals in mind and think about how our actions relate to those goals. This should be in our minds whenever we make a decision or take some action. . However that is only a start. People have to make wise decisions that put the goals first, before such things as their individual status. It is the people making the decisions and taking action that determine how effectively we advance toward our goals.

How do we get those people to decide and act wisely? One obvious measure is to push decisions down to the lowest level feasible in any organization. If people close to the issue are empowered to decide, they will usually make better decisions than someone way up in the hierarchy. In a chain of stores, local managers should be able to decide on how much of which products to keep on hand. Yes, some will make mistakes but almost certainly not as many mistakes as if someone remote from the area makes those decisions. It is the local employees who know that people in one town prefer grits while in another oatmeal will sell well.

This extends to families as well. Parents may think their little ones look just darling in certain clothes. However those clothes are likely to collect dust in the closet if the children hate them. The goal should be responsible children, not fashion statements. Of course parents can and should place limits on their children, for example not allowing their daughters to dress like whores. However children should have reasonable discretion according to their maturity, they know what they like to wear better than their parents do.

This decision-making power should be attached to responsibility of course. The local store manager is responsible for profits and if he what he buys sits on the shelf he may find himself demoted to a position where his mistakes don’t cost so much. Children should not be given unlimited clothing budgets but should know that they have only so much to spend. If they blow it all on the latest fads, they will not have money to buy the new fad that comes along next month. They will be out of style and will quickly learn the benefits of buying things of lasting value.

This is one reason to devolve government responsibility to the smallest jurisdictions feasible. The local town council or county commission is likely to know how much they need to spend on police, jails, road maintenance etc. Edicts from Washington, D.C. are likely to overfund some areas while leaving other needs starved for money. One example was the federal effort a few years ago to fund more local police. It was well-intended but the objective was not more police. The objective was to keep criminals off the street. More police were only a means to that end. Many jurisdictions already had a “revolving door” problem with their jails; they had to release criminals for lack of space. More police simply spun those revolving doors faster.

In government, business, family and personal life we have to keep the goal in mind. Every manager or parent should make sure that people understand the goal and why their own actions are important to that goal. If some activity does not help reach the goal, it should be re-evaluated. Each employee or family member should also be assertive in asking why his work is important. It is up to each one of us to know what to do and how that contributes to the overall goals of the organization.

As our actions move us toward our goals instead of simply concentrating on means, our lives, our businesses, and our government will improve.


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Facts? What Facts?

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"It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." (Attributed to Mark Twain)

Your neighbor tells you how a certain over-the-counter product greatly improved his health. He had only a couple of mild colds last winter instead of the four or five bad ones he usually gets. Or you read a similar recommendation in somebody’s blog. They claim it’s wonderful and you really should try it. Do you rush right out and buy the stuff? I would wary, for several reasons:

a. The proponents of the product might be seeing just the placebo effect. People tend to get better when they think a medication is helping, even if that medication was in fact just a sugar pill.

b. Some bloggers are being paid to push certain products – and at present they are not required disclose that fact. This can even enhance the placebo effect since the blogger wants it to work so that he can legitimately get paid. He may not be deliberately dishonest, but he can easily fool himself.

c. Your informant may occasionally be deliberately dishonest. That is especially true if he is being paid to advertise that product.

d. People recover from most diseases on their own. The medication may have had nothing to do with the recovery.

e. Random chance plays a big part in things like sickness, as do changes in our bodies. Your neighbor may have just not been exposed to as many colds as usual, or his aging, more experienced body may have already learned to deal with the viruses he happened to meet last winter.

So how do you decide if you should try the medication or not? Or if you should accept some other product recommendation? There is no easy way, but some things can help. The first step is gathering information, that’s kind of obvious. The problem is, what information do you need and how do you know what to trust? The following questions are helpful. They are based on suggestions from the Center for Evaluative Clinical Studies (CECS) of the Dartmouth Medical School:

First, exactly what is the assertion? What does it claim and not claim? It is all too easy to unconsciously extrapolate to other situations where that assertion does not necessarily apply.

Second, would you care if the assertion were true? If you live in Hawaii you probably won’t care much about a product claiming to make a home heating system more efficient.

Third, who stands to benefit? The blogger or other advertiser is likely to be biased in favor of the product, consciously or unconsciously. Likewise the manufacturer or salesperson.

Forth, how good is the evidence? Does it come from multiple, independent studies? How good are those studies?

Now that last question can be difficult for a layperson to answer. Most people lack the background and training to evaluate such studies. However again we can build on CECS suggestions. We should ask ourselves:

What are the key elements of any study? What population? (A study showing a medication safe and effective in adults may not be meaningful to children, for example.) What exposure? What was the outcome in terms of both nature of effect and size of that effect?

Are the data relevant? Did researchers use the right study population and exposure? (Studies exposing rats to many times the equivalent dose human users might take should be considered suspect.) Is the effect large enough to be both statistically significant and meaningful to you?

Are the data valid? Is there a properly chosen comparison group? Were measurements done properly? Might the effect be due to chance?

Finally, are there other studies with similar findings to support the assertion? Are there studies that contradict the assertion?

That’s a lot of questions but they are all useful. If the stakes are low you might not want to pursue answers to all of them. However it is worthwhile to understand each question and know how it applies.

Of course most people don’t know how to evaluate statistical significance. That’s a big subject but I’ll try to make a start on it next time.

Who Pays, Who Uses, Who Decides?

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Yesterday I introduced the concept of utility, what something is worth to a particular person or company. Utility represents the importance of money, time etc. and can be relatively independent of such things as calculations of expectation. Let’s take it a bit farther today.

Suppose you’re the owner of a small business in need of new equipment. The equipment will cost about $100,000. Your gross income is about two million dollars per year. Of that, 1.8 million is committed to rent, supplies, and payroll. That equipment will cost half of what’s left. In addition you have to live with the equipment for years to come. How much attention will you pay to getting good equipment at the best price you can?

Now let’s change the scene a bit. Instead of a small business owner you’re a purchasing agent in a large company. On your desk at the moment are twenty requisitions for purchases that will cost between ten thousand and a million dollars each. Among those is a requisition for the same equipment needed by the small business above. How much time and effort will you spend getting the best price and making sure the equipment is the best you can get for the money?

Almost certainly the small business owner will pay a lot more attention to this purchase than will the agent in the large company. In the small business $100,000 represents half of the available monetary utility. To the purchasing agent it is a miniscule fraction of what he spends every year. Furthermore, the agent won’t have to live with that equipment. In fact he probably won’t even know how well it works once it’s installed. For the purchasing agent, the actual use of the equipment probably has no utility whatever. However for the business owner the use of the equipment has a high utility, in fact the very existence of his business may depend on it.

Does this mean that large companies are doomed to pay inflated prices for inferior equipment? Not at all. Those large companies that move decisions to the lowest level feasible can get the advantages of good decisions made by people motivated by high utility of the outcome. The wise company will shift most of the purchasing decision to the manager of the department where it is to be used. A purchasing agent can help by using his industry contacts and knowledge to get the best price, but the department that actually uses the equipment should have the biggest say in the matter.

The above illustrates some of the different stakeholders involved in almost any decision. For simplicity let’s concentrate on purchasing decisions, though this applies to decisions ranging from where to go on vacation to if we should invade Afghanistan.

First, there is whoever is going to use the purchase. This person or department derives utility from how well the purchase does its job and therefore has a high interest in getting something that works well.

Second, there is the person or company paying the bill. That person or group of people will have an interest in keeping the cost down.

Third, there is whoever is making the decision. Decision-making power alone, however, does not motivate to either keep costs down or to acquire something that works well. In fact if the decision-maker is neither paying the bill nor using the purchase he may well not care very much about either cost or effectiveness.

We can make a table of this as follows:


Decision-maker pays for purchase and uses equipment - Will be motivated to save money and get good equipment.

Decision-maker uses equipment but does not pay for purchase -Will be motivated to get good equipment but not to save money.

Decision-maker pays for purchase but does not use equipment - Will be motivated to save money but not to get good equipment.

Decision-maker neither pays for purchase nor uses equipment - Will not be motivated to either save money or get good equipment.


Clearly the person or group that both uses and pays for the equipment has the greatest motivation to both keep down costs and buy something that will work well. In fact, if it comes to a trade-off between cost and performance, they are also in the best position to evaluate that trade-off

It should come as no surprise that the best decisions are made when decision-makers, users, and payers are all the same person or small group of people. And of course the worst decisions are likely to be made when the decision-makers neither use nor pay for the purchase. Care in decision-making tends to be a direct result of how much utility the decision-maker has at stake. That is an important reason that decisions should usually be made at the lowest organizational level feasible, and made by someone with a vested interest in both cost and performance.

The astute reader will have already thought of an important area in which decision-makers neither use nor pay for what they spend money on - government. That is one reason government can be so inefficient. Its employees who make spending decisions seldom have much investment in the money they spend; after all it’s not their money. Neither do they derive much utility from the use of what they buy with that money. The government employee who buys anything from a gross of paper to an army tank is not spending his own money and is unlikely to use either the tank or the paper. His utility comes not from the money he spends or the purchase he makes, but from the raise or promotion he gets for following procedures. If he has an opportunity to get a better product or a lower price, he may do so, but only if he can do it within the rules imposed on him.

“But how about local governments?” you ask. “Surely their employees have more motivation to spend wisely. After all, their neighbors see the results and don’t want their local taxes wasted.” That was the case years ago, when local governments spent mostly local tax money. It is not the case today. Local governments get much of their financing from state and even federal funds. They tend to see it as free money, money that costs them nothing in terms of utility. In fact I remember a county commissioner telling me that he thought it was his duty to get as much federal money spent in the county as he could, regardless of how efficiently it was spent. That man was reputed to be a fiscally conservative republican!

We have a similar problem with government regulation. Some regulation is necessary of course, but it is easy for regulators to go overboard. They do not spend their own money to hire enforcement officers, and the burden of following those regulations falls on someone else, not them. They are able to impose loss of utility on others at no loss to themselves.

As long as decision-makers in government and business have little interest in saving money or getting a good return for what they spend, we will have waste. The only way to get better decisions is for the decision-makers to have a stake in both the cost and the outcome of their decisions. They must put their own utility at on the line.

What’s it to Ya’?

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Let’s return to Bill, our would-be investor from yesterday? We figured out that his expectation was a gain of two bucks a share if he buys stock in that mining company. However in that greatly simplified example, he will not gain two dollars a share. Either he will lose $10 per share or he will gain $20 per share. Should he buy the stock and if so, how much? Obviously that depends on his situation. In fact it depends on both his financial status and his emotional make-up. Beyond the calculation of expectation he should ask himself two questions:

First, “Can I afford to lose that money if the stock goes down?”

Second, “How much will I worry about losing money?”

Now if his last name is Gates (assuming of course that he is the Bill Gates), he could buy thousands of shares and not lose sleep over it. If he loses, it will hardly dent his resources. However most of us don’t have such deep pockets and the loss of a few thousand dollars would take a major bite out of our budgets. That is one reason such investments may be wise or unwise, depending on the person. While such things as gains or losses can be calculated in isolation, that simple math doesn’t tell the whole story. The effect those gains or losses is very personal. This brings us to another technical term, “Utility.”

In the technical definition, utility is what something means to a particular person or company. For Bill Gates, the utility of $30,000, or even $300,000 is minimal, probably not even measurable. If he loses that much it will not affect the food he eats, the clothes he wears, or his lifestyle. Of course that also means that a gain of that much likewise has minimal utility to him. It would make no difference in his life. Not so for most of us. A loss of $30,000 would force us to modify our way of living while a gain of that much would allow a change of lifestyle. A gain or loss of $300,000 would have an even greater effect. That money has a much greater utility to us than it would to Bill Gates, even though the dollar amount is the same.

Utility, how much a gain or loss really means, depends on the individual at least much as it depends on what is actually gained or lost.

The other side of the utility coin is the emotional part. We tend to remain aware that we could lose, and that can be worrisome. A friend once said to J.P. Morgan, “Worry about my stocks is keeping me awake nights. What should I do?”

Morgan’s reply was simple and profound. “Sell down to the sleeping point.”

That was good advice, and Morgan didn’t even need to know how much his friend had invested. He just knew that it was more than that particular person was comfortable with.

How able are we to tolerate risk and uncertainty? This varies from person to person. Some of us are able to sleep soundly while a major part of our resources are at risk. Others are greatly bothered by much lower risks. Many stockbrokers have tests to help them evaluate how risk-adverse a client is. However we don’t necessarily need “official” confirmation of our own tolerance. If an investment or other action makes us uncomfortable and disturbs our sleep, we are beyond our risk tolerance level. If feasible, we should reduce our exposure to whatever is bothering us. The utility to us of what we’re doing does not justify the emotional price we are paying.

Another important aspect of this is that utility of a gain tends to be less than the utility of an equivalent loss. Part of this is the psychological effect I mentioned before that emotionally we feel a loss more than a gain. However there is also a very real non-psychological effect.

Suppose you have retirement savings of $500,000. You invest some of it and it pays off, big-time. You gain $250,000. You’re delighted, you now have $750,000 and that gain represents one third of your savings. You may retire a bit earlier than you planned or decide on a different retirement lifestyle.

Now suppose that several investments went terribly wrong. Instead of gaining you lose that $250,000 leaving you with only $250,000 for retirement. Now what you lost represents 100% of what you have left! You will have to make a big change in your expectations, maybe delay your retirement and not be able to do what you planned after you finally do retire. The utility of that loss is greater than the utility of the equivalent gain. The amount you can reasonably improve your lifestyle with an extra $250,000 is less than the amount of cutting back you will have to do if you lose that much. In addition, it is psychologically more difficult to adjust to a lower standard of living that to move up the economic scale.

Utility is one more thing we should think about when deciding on anything risky. We may or may not do some mathematical calculations, but we should think about it. We can think of how likely a loss is and what it will mean to us if we do lose (or gain). With a sound understanding of that, we are more likely to make good decisions.

Of course there are ways to help reduce risk while still getting many of the benefits from the “Nothing ventured, nothing gained” approach. I plan to discuss some soon. However there is another aspect of utility I want to talk about first so I’ll do that next.

What Do You Expect?

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Bill is considering investing in a mining company whose stock is selling at $80 per share. After careful research he determines that there is a 60% chance the stock price will drop and only a 40% chance it will go up. He decides to buy it anyway. Should we lock him up where he cannot hurt himself?

If you said, “we don’t have enough information to answer the question,” go to the head of the class. In fact it may make perfect sense to make such an investment if:

a. The investor can afford the loss, and

b. The likely loss is small but the possible gain is large.

Suppose for example that the stock has a 60% probability of dropping by $10 per share and a 40% probability of rising by $20 per share. Bill may find it worth taking the risk of a $10 loss in order to have a chance at a $20 gain.

This brings us to a concept described by the technical term, “expectation.” Expectation includes probabilities of gain or loss and the likely result in each case. To calculate expectation we simply take the probability of each possible outcome and multiply it by the result of that outcome. Then we add up all those values to get the total expectation. In the case of Bill’s stock purchase, we have a 60% probability of losing $10 per share and a 40% probability of gaining $20 per share. Total expectation is then:

0.6 X (-$10/share) + 0.4 X (+ $20/share) = -$6/share + $8/share = +$2/share
(Note the minus signs in there.)

Bill’s expectation is a gain of two bucks a share. If he can afford the loss, he may decide that the risk is worth taking.

This adds more science to the question of when we should take a risk and when we should avoid the hazard. We’re seldom 100% confident of the outcome of any decision. However by considering both the likelihood of each outcome and the effects of that outcome we can give ourselves a better chance to get what we want. If you’re considering a new job you might think about how likely it is to work out the way you want it to. Then you can think about what you will gain if it does work out and what you will lose if it doesn’t.

If you’re mathematically inclined you might even put some numbers on those probabilities and outcomes. If not, you can make better decisions by just thinking about the different possibilities. How likely is each outcome and how desirable is it? You can do the same with many decisions such as buying a new home or car, where to go on your vacation etc.

Now returning to our mining stock example, that was oversimplified of course. Stock prices can change by almost any amount, not just $10 or $20. It might lose $2.13, gain $5.84, or lose or gain most any other amount. If Bill does a good analysis he will consider the probabilities of all possible changes in the price of that stock. Such an analysis is quite mathematical and beyond the scope of this blog, so I’ll let it rest there.

However the multiple possible outcome issue does have similarities with other types of decisions. Most have lots of possibilities to consider. The new job may not work out exactly as you expected, but it may still provide enough satisfaction and income to make it worth the change. Or the job may be bad enough to make you wish you had not made the change but still might provide enough income to support your family. You just need to be careful enough to consider the possibilities.

Such decisions may be about your work life, investing money, or supporting a government bailout plan for the economy. In almost all cases there are many possible outcomes, some good, some bad, some great and some terrible. For major decisions it can be valuable to actually calculate the expectations. Even if we don’t do the math, just thinking about it will help us make better decisions. That will help in our personal lives, our family lives, our work lives and our effectiveness as citizens.

“But wait!” you say. “It can’t be that cut and dried. Get out the calculator and determine which way to decide? I don’t think so.”

You’re right. There is another important aspect of this which I’ll discuss next time, one that depends heavily on individual situations, personalities, and temperaments. However the above is enough for today.

To Risk or Not to Risk

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“Do no harm.” As discussed yesterday that is the first rule of rescue. However that rule does need some moderation, the most obvious exception being if the risk of inaction is extreme. For example if a car is on fire, it makes sense to do whatever is feasible to get the occupants out. In that case, the risk of spinal injury is preferable to the certainty of a painful death. By doing nothing potential rescuers would do no harm, but they wouldn’t do any good either. The problem of course is how to decide when to take a risky action and when doing nothing is appropriate.

That question faces us in many of life’s situations. Should we take a new job, perhaps in a different location? Invest in the stock market? Marry? Have children? All have risks and the “Do no harm” motto would imply that we should avoid the risk. The job might not work out, leaving us worse off than before. Our investments might lose money. A marriage may end in early death or disability of a spouse or in divorce. Children might turn out to be expensive delinquents.

However all those risks have their positive sides as well. We face a situation of “Nothing ventured, nothing gained. The new job might be rewarding, both financially and in terms of satisfaction. The investment might pay off handsomely. Marriage and children might increase our happiness.

That gives us two incompatible mottos, “Do no harm,” and “Nothing ventured, nothing gained.” Each has its uses but how do we reconcile them? Clearly there are risks to avoid and risks worth taking. How do we decide? One way is to consider what are technically known as “alpha” and “beta” risk (also known as type 1 and type 2 risk).

Alpha (type 1) risk is what we usually think of as risk. It is the risk that something we do will cause a problem. We pull the accident victim from her car at the risk of causing paralysis. When we make an investment, alpha risk is the risk that we will lose some or all of the money invested. “Do no harm” pays a lot of attention to alpha risks.

Beta (type 2) risk is a bit subtler. It is the risk that we will forego some good by not taking action. If we do not pull the accident victim from her car we may not save her from the fire. It is the risk that if we do not invest, we will forego the profit we might have had. If we don’t take the new job, marry or have children we forego the benefits they might have brought us. “Nothing ventured, nothing gained” considers the beta risks.

Now a blog is not the place for a mathematical treatise on the probabilities involved in alpha and beta risks. However it is a good way to communicate the concepts of these risks. We’ve already mentioned some examples but a couple of other situations may be instructive.

Consider a search and rescue team about to head into the wilderness to look for a lost hiker. Until they find him they won’t know if or how seriously he is injured. They don’t know what medical equipment they will need. Now they could consider only the alpha risk that if they find him they won’t have the needed gear. They could go equipped to deal with bleeding, back injury, fractured limbs etc. By carrying all that stuff they have a low alpha risk of not being able to provide proper care once they find their subject. The problem: that equipment will add weight to their packs and slow them down.

On the other hand, that team may look at the beta risk. If they do not move fast they will not be able to find the subject quickly. By carrying only what they need for their own safety they can move faster. They might even find that the subject is not injured and needs only someone to show him the way back. By going lighter they lower their beta risk of not finding the subject quickly. That however comes at the expense of a higher alpha risk of not being able to treat a seriously injured subject. Most rescue teams lean toward reducing beta risk, carrying some basic first aid gear, but not enough to slow them significantly. By so doing they accept the alpha risk that they will find the subject and not have the right gear to treat his injuries.

An example of something more likely to affect large numbers of people is that of a company that has developed a treatment for some disease. The alpha risk to the public is the risk that releasing that treatment will cause harm to patients. The beta risk of not releasing it is the risk that patients who might have benefited will not be helped.

Of course there are also risks to the company. If they release the treatment and it has previously unknown bad effects, the company will have to pay reparations for the harm done. Those reparations might even bankrupt the company. Bad medical treatments tend to get lots of publicity as well. Even if the company survives, that publicity will cause financial damage. The company’s beta risk, on the other hand, is limited to the risk of loss of income if the treatment were released and worked well.

“But wait,” you ask. “Why not just test the medication until they know if it is safe?” That would be nice, but such testing takes time. What about the patients who might have benefited during that time? If the medication treats some minor malady, such as the common cold, that would not be much of a problem. But what if the treatment is for cancer, AIDS or some other potentially deadly disease? How many people might die during the testing process? By not releasing the treatment, that company has accepted the beta risk that people who might have been cured will die.

In our society we tend mostly to pay attention to alpha risk. If you lose money in the stock market you will feel terrible about it. In fact psychological studies have shown that the bad feelings from loss exceed the good feelings that might have come from a gain. In the medical field, companies get sued for treatments gone wrong. However nobody ever got sued for failure to release a medication that might have cured someone. In fact, the treatment not released is invisible to the public and we never know who it might have helped.

Fortunately, most of us do not have to decide on such things as release of medical treatments. Our decisions are usually less momentous, at least for the country as a whole. However they are important to our own lives. Investment is one example, but we also face alpha and beta risks in other cases. A new job, especially in a different location? Marriage? Children? Those decisions come with alpha and beta risks.

This life is risky and we can never be 100% sure most decisions will work out. However by thinking carefully about what we stand to gain or lose and how likely those gains or losses are, we can improve our decisions and live better lives. In my next blog I intend to expand on this somewhat, adding more tricks from the decision-making consultant’s toolbox.

Don't Just Do Something, Stand There!

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“Get me out of here! Get me out of here!” The young woman was trapped in her smashed car, screaming from panic and the pain of a broken leg. Two burley bystanders forced the door open and extricated her. The panic subsided and she no longer felt the pain of her broken leg. That “improvement” was terrible. Her lower spinal cord was damaged by the twisting required to get her out of the smashed car and she would never use her legs again. Her “benefactors” were fortunate that a Good Samaritan law protected them from lawsuits. However they had to live with the knowledge that a fellow human was paralyzed because of their actions. Had they waited two minutes, a fire truck would have arrived with equipment and trained people. The woman would have been rescued correctly and would have retained the use of her legs.

In many human affairs the most difficult task is to do nothing. Watching a fellow human scream in pain or fear. Standing by as a child suffers the consequences of his actions. Refusing to use the force of government to provide a quick fix to economic problems. All such inactions expose us to the charge of being heartless do-nothings. The temptation, often nearly irresistible, is to do something, even if it's wrong. It is a temptation we must learn to resist. As a search and rescue volunteer I've learned that the first rule of rescue is “Do no harm.” That rule is not limited to search and rescue but also applies to medicine and many other human activities, including parenting and government.

In parenting, it's easy to feel sorry for our children. Suppose a son's ball breaks a neighbor's window. It is tempting to think that we are showing love to the child by paying for the repair instead of demanding that the son pay. After all, it may take the son weeks or even months to earn the required amount of money, while that money may be only a fraction of a parent's income. But what has that child learned from the experience? “No need to be careful, Mommy or Daddy will take care of me. I'm not responsible for the fact that I disobeyed and played ball near that window.” If not corrected, that attitude can grow with the child to such thoughts as “I'm not responsible for losing my job, that mean boss just doesn't understand that I'm not a morning person and can't be expected to be at work on time.” The child may end up crippled in attitude and emotions, quite as effectively as the woman in the car wreck was crippled by her misguided rescuers.

In medicine, physicians regularly face patients who demand antibiotics for viral infections. If the doctor refuses, the patient, or patient's parent, is likely to complain to everybody he knows and take his business elsewhere. The easy way out is to just prescribe those antibiotics, even though they have no effect on a virus. However by so doing the doctor becomes complicit in the creation of resistant strains of bacteria.

The temptation to take inappropriate action is perhaps nowhere stronger than in government and politics. Any national leader who stands by in the face of what appears to be a serious problem will almost certainly be called a do-nothing and is not likely to be re-elected. If he takes action people may hail him as a decisive leader, counterproductive though that action may turn out to be. In fact it is often easier for a leader to take credit for the supposed benefit of an ineffective program than it would be to explain why it was better to take no action at all.

This is especially true of economic problems, though it was not always so. In times past we lacked the quick transmission of news that we have today. Lacking such instant information, voters did not instantly know about national economic issues and hence were much less likely to pressure government officials to solve them. For example in 1907 the country faced a recession which included a run on the Knickerbocker Trust Company. That bank was forced to close, then banks throughout the country reacted to the “panic” by restriction of payments. That imposed a serious inconvenience on depositors and borrowers. However the government did not intervene and the whole recession only lasted 13 months, with the severe phase lasting only half that long. Knickerbocker Trust re-opened in March of 1908.

Contrast that to the “Great Depression” which which started with many similarities to the recession of 1907. Franklin Roosevelt and his administration responded with all the power of the federal government. That one lasted over ten years and ended only with the start of World War II. Though Roosevelt claimed credit for getting the country out of that depression, many economists (including at least one Nobel winner) are convinced that government action prolonged and worsened the problem. That action moved responsibility from individuals and families to a growing government. It also diverted resources from individuals and companies to the government for the benefit of those in need. While the intent was good, the results were at least questionable.

Today we face a similar situation. We have serious economic problems, created in part by government pressure on banks to provide mortgages to people who didn't qualify for them, and in part by business people and others who made dumb decisions. As a “solution” the federal government is directing tremendous resources to various programs to bail out the foolish and the unfortunate. Those resources are not being created by magic, government cannot do that. Instead government is diverting citizen income and borrowing against future generations in an attempt to solve this problem. I for one am convinced that those measures will prolong and worsen the problem. In fact this recession has already lasted longer than the one of 1907 which resolved itself without government intervention.

Indeed, there are similarities between the current government action and the precipitous acts of bystanders “rescuing” an accident victim. We've had action without adequate analysis as for example when the president managed to get a bailout proposal passed before our representatives even had time to read it. Many, even some in his own party, are now realizing that the program is not working. That should be no surprise; action without adequate thinking almost always causes problems instead of solving them.

Sadly, the president is now urging more government action without taking time to evaluate all aspects of the program. He is claiming that health care reform is urgent and must be done immediately. That sounds again like a rush to judgment, almost a panic mode of decision-making. Yet he has not explained just why it is so urgent now. Why cannot we take a few more months with the current situation to make sure we do things right?

Can our economy survive the assault of our well-intentioned government? I hope so. We do have great resources in this country, especially our entrepreneurial people if they are unleashed. Adam Smith's comparison may be apt. He likened the economy to a body that recovers “in spite, not only of the disease, but of the absurd prescriptions of the doctor.” Remember that Smith lived in the 1700's when a typical doctor's prescription included bleeding the patient. I rather suspect that many of our government remedies today are the economic equivalent of taking a pint or two of valuable blood from a sick person.

As citizens we need to ask for restraint and thought, not precipitous action.

Groupthink

At the risk of boring my readers (if I have any), today I'll re-emphasize and add a bit to the “Charisma” article from yesterday. This time I'll talk particularly about groupthink. Some of this will be repetition but, at least in my opinion, the problem of charisma and group think is big enough to justify repitition.

The causes of groupthink are many and diverse. The results, unfortunately, are more uniform - and nearly all bad. Groupthink is decision-making poison. It excludes consideration of useful information and analysis required for making good decisions. This can lead to disaster. For example one study showed that in 80% of helicopter accidents, someone aboard saw a problem but thought it wasn't his place to say anything about it!*

Two events from the Kennedy administration in the U.S. provide an excellent study of both the causes of groupthink and how to avoid it.** The Bay of Pigs invasion was largely the result of groupthink and turned into one of the worst foreign policy disasters in U.S. history. On the other hand, the Cuban missile crisis was treated much better, with specific attention to avoidance of groupthink. As a result, the missile crisis was settled with no shots fired.

Groupthink appeared in the run-up to the Bay of Pigs invasion in the following manners:

1. The president was so charismatic that his staff wanted to follow him. Staff members did not feel free to express opinions perceived as contrary to what Kennedy wanted. Of course they weren't always sure exactly what he wanted so at times they were really supporting their own best guesses about what he wanted.

2. Outside experts were excluded, ostensibly to protect secrecy (which was already compromised). No independent viewpoints sought or allowed. Intelligence contradicting the beliefs on which the decisions were based was available, but that information never made it to the decision-makers.

3. Limited purviews: Schlesinger, for example, felt that as an academic he would be presumptuous to bring up his concerns.

4. Illusion of invulnerability. The feeling was, "We are smart and we are automatically moral. Therefore we will succeed."

5. Illusion of unanimity. "Let's all support the president!" Staff members regarded it as important to be unanimous, to the point that they supressed their thoughts to achieve that unanimity.

6. Self-appointed mindguards. For example, Robert Kennedy told Schlesinger that everyone should get behind the president.

All that together added up to an apparently unanimous decision to carry out an action that failed miserably. And contrary to the working assumption, there was no way to blame it on renegade Cuban exiles, the whole world knew that the U.S. was behind the invasion.

It is impossible to know what would have happened had the administration sought and paid attention to other information or analysis, but it is highly probable that decision-makers would have seen the potential problems and called off the invasion.
The Bay of Pigs provided a painful lesson, but thankfully Kennedy and his staff members learned that lesson well. When the Cuban missile crisis arose, they took deliberate action to avoid groupthink.

Among the ways they did this were:

1. Kennedy deliberately absented himself from many meetings in order to avoid exerting undue influence over discussions.

2. Committee members themselves resisted pressure for unanimity and freely expressed their disagreements. Rules of protocol were suspended to allow frank and free-wheeling discussion.

3. Group member roles were defined to include being skeptical "generalists," charged with examining the problem as a whole. Purviews were not limited.

4. Subgroups examined the issues and were later cross-examined by other groups.

5. No opinion was regarded as gospel, either a group or an individual opinion. Nor was any opinion automatically dismissed.

6. Decision makers deliberately sought and considered all pertinent information, even information that went contrary to their preferred course of action.

7. The entire attitude was one of vigilant appraisal rather than groupthink.
The decision was still difficult and the outcome uncertain. In fact, Kennedy said that the people whose ideas were rejected were the lucky ones because they would be able to say, "I told you so." Thankfully that was not the case, the action taken (a blockade) solved the problem.

We can all learn from both the mistakes in the Bay of Pigs decision and the much better way the Kennedy administration handled the missile crisis. Groupthink seems to be a human tendency but we can fight it and win that fight. It is worth the effort, getting all reasonable information and using it will make for better decisions which in turn will make for better lives. We can ask ourselves if we are just following the crowd or if we have really properly considered major decisions in our lives.

*Charley Shimanski, "Risks in Mountain Rescue Operations: Part 3", _Advanced Rescue Technology_, April/May 2003, p47

**These two events and how the decisions were made are well described in Irving Janis's book, _Victims of Groupthink_.

The Powers and Perils of Charisma

Today’s blog returns, at least partly, to the political arena though this applies in many aspects of life.

John Kennedy, Adolph Hitler, Barak Obama, Jim Jones, Bill Clinton, David Koresh. What do all those people have in common? Charisma. Each and every one attracted a following of dedicated supporters. However, some of those supporters can be more involved with a personality cult than with critical thinking. Too often they don't look at where their leader is taking them.

Charismatic leaders need to be careful lest they mislead their followers. The rest of us must be equally careful to avoid being misled. If we understand the problem and remain aware of it, that will help both leaders and the rest of us.

Charisma is a very powerful personality trait and can be used for good or ill. Sports coaches, military leaders, motivational speakers and similar people can use charisma to get people to perform beyond their normal capability. However charisma can also be dangerous. Jim Jones convinced his followers that they should drink poison. Hitler created one of the worst regimes in the history of the world. David Koresh led his followers into a fiery disaster. In each of these cases, people followed a charismatic leader. This unthinking followership leads to groupthink, a condition in which agreement becomes more important that what is right or true.

I saw a good example of this while I was at the army's jump school in Georgia. The commander of that school was a colonel who was a great leader and teacher. His charisma got everybody fired up to learn and to perform the unnatural act of jumping out of a perfectly good airplane. It was the best training I got during my entire time in the army. However that commander was never going to get another promotion because of previous misuse of his charisma. He got a group of paratroopers fired up to jump even though the wind was high enough that regulations prohibited a jump. Some were injured and a couple were killed, all because he led them to act without thinking.

One of the best-documented examples of this comes from the Bay of Pigs fiasco early in the Kennedy presidency. Irving Janis describes this in his two books about groupthink. (The second book is really just an expanded version of the first.)

One of the major reasons for the Bay of Pigs decision was that Kennedy's charisma made staff members want to agree with what they thought he wanted. The decision to go ahead with the invasion was made essentially in a vacuum with no contrary opinions or information allowed. Dissenters were silenced and no effort was made to obtain outside information. The decision-makers acted on the assumptions that the Cuban military was ineffectual and that the Cuban people would rise up and help the invaders. Both assumptions were seriously wrong and experts in the State Department knew they were wrong. Nobody consulted those experts.

A study of the meetings leading up to the Bay of Pigs invasion presents a picture of staff members enthralled with a charismatic leader. This caused them to tell him what they thought he wanted to hear. Robert Kennedy even functioned as a "mindguard," telling at least one staffer that he should not speak his mind, but instead should get behind the president on the decision. Such decision-making problems are obviously dangerous. Why hire smart people as advisers and then allow them to be silenced?

To Kennedy's credit, he and his staff learned from the Bay of Pigs. When the Cuban missile crisis arose, they corrected their previous problems. Kennedy even went so far as to deliberately absent himself from many meetings to avoid giving people any hint as to his own preferences. His staff also made an effort to question all information and decisions. No person or opinion was ignored, nor was any person or opinion automatically accepted. The result was no groupthink and a much better decision.

The above illustrates the dangers a charismatic leader presents. A leader must, absolutely must, make good decisions if he is to help his followers. However charisma tends to block critical thinking among subordinates. It also causes voters to vote on the basis of personality instead of selecting a politician for good decision-making skills. For those reasons, charisma is a dangerous characteristic. Rock stars and other entertainers may be charismatic, but we should be very careful about charismatic leaders.

Each of us should recognize when we are following someone because of charisma. Then we should mentally step back and evaluate where that leader is taking us. Are his positions well thought out? Realistic? Really what we want and should do? We should do our own critical thinking before putting ourselves in the care of such a person. Had the paratroopers mentioned above thought before just following the jump would probably have been canceled and the deaths avoided.

Charismatic people have a great responsibility as well. They need to recognize their power to mislead and make an extra effort to be sure people think critically before following. The methods used by Kennedy and his staff during the Cuban missile crisis provide a good example of how to do it right.

Charisma can be a useful tool to get things done after a good decision is made. However it can interfere with decision-making and lead us to charge off, enthusiastically, in the wrong direction. We must be careful to avoid that kind of decision-making.

Decision-Making, Intuitive or Rational

Today's blog is about an interesting aspect of decision-making, a subject on which I consult. I've met people who think that the way to decide is to rely on their intuition, “Just do what your inner self tells you to do.” Of course I've also met others who disagree and insist on a logical approach. The argument can get quite heated at times. Which is correct? Should you think rationally or intuitively? Well, if you were rowing a boat, which oar would you use? Rational and intuitive thought are like the left and right oars, in nearly all situations they are best used together.

If you are a normal human, you have not one but *two* wonderful minds. Your left brain is good at logical, rational tasks. It tends to be very analytic but its use takes deliberate effort. This sort of mental activity is slow and plodding, but can be very accurate if done correctly. Your right brain, on the other hand, is more creative and intuitive as well as emotional. It can reach conclusions quickly without you even knowing how it does it. This brain can produce some spectacular results, often providing the right solution to problems seemingly from out of nowhere. However it can also be spectacularly wrong, providing “solutions” that cause tremendous trouble.

Consider for example the statement made by a famous person, "I work through instinct, and instinct is my best counselor." Would you think that a person who lives that way is likely to make good decisions? Is instinct (or intuition) likely to help avoid danger? It that case it didn't. That statement was from the last interview given by Princess Dianna, shortly before instinct allowed her to go to her death. Intuition or Instinct can give us ideas, but it is usually best to cross-check those ideas with the rational part of our minds.

Another example of the bad effects of over-reliance on intuition is the number of people who "follow their heart" without rational checks and balances. Too many people fall for the idea that "love conquers all" or that they must follow their emotions in matters of romance. That sounds nice, but have you checked the divorce rate in this country? Obviously great numbers of people are being mislead by their emotions. Emotions are good but by themselves they are poor guides to living.

On the other hand, consider the actions of Jackie Larsen of Minnesota. As she was leaving a prayer group she encountered Christopher Bono, a clean-cut and well-mannered sixteen year old. He claimed that his car was broken down and he needed a ride to meet friends. She sensed that something was wrong and insisted that they talk on the sidewalk, in plain sight of other people. Larsen told him, "I am a mother and I have to talk to you like a mother...I can tell by your manners that you have a nice mother."

At the mention of his mother Bono claimed that he didn't know where she was. Larsen then sent him to talk to the pastor while she called the police.

Christopher's car was registered to his mother. When police went to her apartment they found her in the bathtub - murdered. Christopher was charged with the murder.*

Jackie Larsen's actions are a good example of how to combine the intuitive and the rational. Her intuition told her that something just wasn't right. However it could not tell her what the problem was, nor what to do about it. Using both her rational and logical minds she protected herself by not being alone with Bono. Then she initiated an investigation by contacting the police.

How did Larsen's intuition pick up on the problem? The complete process remains unknown. However research shows that the right brain collects experiences and makes connections between past events and current situations. As an experienced mother, Larsen had seen plenty of evasion by young people. She could not have told you exactly what aroused her suspicions, but she did recognize that something didn't seem right.

That is at least part of what the intuitive brain does. It recognizes patterns too complex for easy rational analysis. The right brain can match those patterns in a hurry. It may not explicitly say that this particular pattern is like a problem from 20 years ago, but it can send a message that something is just doesn't quite fit.
Once the right brain recognizes a possible problem we have a choice. In some situations, the fight or flight syndrome kicks in. However the problem is seldom that urgent, usually we have time to look at things rationally. We can gather more information and logically decide on the best course of action. By doing so we get the best of both sides of our brains.

Returning to the example of romance, what should a couple do if their emotions (and hormones) urge them to marry or otherwise pair up? My advice goes against the grain of popular belief, but they should use their analytic side to check to see that they are really compatible for the long term. They should, for example, talk seriously about children, finances and in-laws, the “three big” problems that wreck marriages. In fact it is a good idea to bring in a competent pre-marital counselor. Such a professional can provide information based on research and on the experiences of others. He can point out potential problems the couple will face. In many cases he can help them prepare so that their relationship remains strong in spite of the problems. In a few cases, they may decide that the kindest thing they can do for each other is to not marry.

Our right brain is the seat of intuition and emotion. Much of what it does is what makes life worth living. Without it we have no drive, no appetites or passions. However in making decisions we must remember that those intuitions, appetites and passions alone can lead us to trouble. They must be tempered by reason.

*The Jackie Larsen account is from pp31-32 of _Intuition, Its Powers and Perils_ by David G. Myers, Yale University Press, 2002. The Princess Diana account is from the same book.