In his best selling book, Daniel Kahneman creates the
framework for his insights by defining the two “systems” of human reasoning
that are employed to make decisions and judgments:
System 1 is sometimes referred to as intuition. It is fast and automatic and is usually associated with strong emotional bonds. It is based on
formed habits and is very difficult to change or manipulate.
System 2 is sometimes referred to as reasoning. It is slower and much more volatile, being
subject to conscious judgments and attitudes.
These framework definitions are a simple way of explaining how
a judgments can occur in two different ways.
In psychology, this is called a duel process theory. Obviously, I’m grossly over-simplifying these
concepts. There is much to read on this
topic if you care to learn more.
For our discussion, the following chart may be helpful in
understanding the concept of System 1 and System 2:
So, here’s a question:
When it comes to making judgments in the recruiting process, is System 1
or System 2 more reliable?
Before you put too much thought into this question, I’ll
share a quick story that contributed to some of Kahneman’s research. Early in his career, Kahneman and his
research partner, Amos Tversky, discovered they both had identical silly ideas
about the future professions of several toddlers they both knew.
“We could identify the argumentative three-year-old lawyer,
the nerdy professor, the empathetic and mildly intrusive psychotherapist. Or course, these predictions were absurd, but
we still found them appealing.It was also clear that our intuitions were governed by the
resemblance of each child to the cultural stereotype of a profession. The amusing exercise helped us develop a theory
that was emerging in our minds at the time, about the role of resemblance in
predictions. We went on to test and
elaborate that theory in dozens of experiments.”
In simple terms, these gentlemen were employing System 1 to
draw conclusions about a person’s fit for a particular profession. If a human’s mind is susceptible to quickly
draw conclusions under these ridiculous circumstances, could it also draw
wrong conclusions during a more traditional recruiting encounter?
Here is another example to consider. Let’s assume that Steve is selected at random
from a representative sample:
“An individual has been described by a neighbor as
follows: ‘Steve is very shy and
withdrawn, invariably helpful but with little interest in people or in the
world of reality. A meek and tidy soul,
he has a need for order and structure and a passion for detail.’Is Steve more likely a librarian or a farmer?
The resemblance of Steve’s personality to that of a
stereotypical librarian strikes everyone immediately, but equally relevant
statistical considerations are almost always ignored.Did it occur to you that there are more than 20 male farmers
for each male librarian in the United States?
Because there are so many more farmers, it almost certain that more ‘meek
and tidy’ souls will be found on tractors than at library information desks.”
During multiple research studies, Kahneman found that
participants ignored the relevant statistical facts and relied exclusively on
resemblance. More specifically, the experiments
demonstrated that humans tend to use resemblance to construct mental “rules of
thumb.” Once developed, they rely on
these mental rules to make difficult judgments—even to the point where it
defies reason and causes predictable biases (systematic errors) in their
predictions.
Conclusion: I think we'd all agree–systematic
errors in hiring are a bad thing.
Relying on intuition causes us to hire people we shouldn’t and
overlook potential high performers. According to Kahneman, System 1 reigns supreme
when making hiring decisions. By the
way–if you think you’re exempt from this type of reasoning, you’re
mistaken. It affects everyone who
evaluates candidates and conducts interviews.*
How do you keep from getting stuck in an endless cycle of
systematic errors?
First, recognize what is happening and make a conscious
attempt to resist being controlled by your mind’s System 1. Second, learn how to employ System 2.
In our company, we use assessment tools to help us overcome
the System 1 dominance. These tools do
help, but it is also important to structure interviews so that you’re collecting
data and not just allowing your System 2 to lazily disengage.
This means asking lots of open-ended
questions, formulating thoughtful follow-up questions, listening, taking notes,
drawing trial conclusions from your candidate’s answers, asking the candidate
to defend their positions, etc.
We’ll cover more on this topic in future discussions, but for
now, work to stay mentally sharp and engaged during your interviews. It will take more effort, but you’ll make
better hires.
*Note: After
evaluating the financials of many real estate companies over the last seven
years, I’ve noticed that most companies have 40% to 60% “D” performers in their
ranks at any point in time. Considering
that many “D” performers leave the organization soon after they’re hired, most
companies have a very poor track record at selecting high performers.
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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.
