Skeptical about Psychology
I was invited to deliver a presentation last year and received as a token of appreciation a book, Daniel Kahneman’s Thinking, Fast and Slow. If you are like me, you have been skeptical about what benefits social sciences, such as psychology, can bring to other activities. This book completely reversed my appreciation of the subject. Kahneman attempts to summarize in this book a career’s worth of investigation into how people think and, especially, how that thinking results in various types of decisions. If there is one thing organizations are not very good at, it’s deciding what they should do and how they should improve things. So any help in this area would be very welcome. I am not alone in appreciating Kahneman’s contributions. He was accorded the Nobel Memorial Prize in Economics in 2002.
Most of the discourse about improving decision-making centers around the discipline of knowledge management. The assumption is that by providing the right information to the right people at the right time, the right decisions will be made. But knowledge management does not answer two questions that are key to getting the right decisions. First, what constitutes the right information? Do we know that information is right even if it is right before our noses? The second question concerns how an individual mind processes that information. As a corollary, we might also ask how a group process that information.
There is also a considerable literature concerning how to turn decisions into sustained practices that provide sustained value. This is fundamentally a sociological issue that has been approached from many angles. The notion of leadership and the activities required to make that changes needed to implement decisions has become commonplace. Thus, John Kotter’s various publications about leadership are oft cited. While this leadership perspective is not quite a command and control approach and is not necessarily a top-down approach, it is nonetheless a way for an individual to influence and impose his or her will on a larger group.
Agility and Self-Organization
From a different perspective, some organizations have adopted so-called agile methods, whereby teams organize themselves and decide in a collegial way how to decide what is important and how to perform the work needed to implement those decisions.
The Missing Link
Whether decisions are made and implemented based on a vision derived from an individual or based on a more collegial approach, there is a missing link between these activities and the data and information presented to the deciders. Daniel Kahneman and his colleagues have provided a coherent analytical framework to help understand what is happening in our minds, based on what he calls “fast thinking” and “slow thinking”. Faced with the same data, whether we think fast or slow can have a radical impact on the conclusions we draw and the decisions we make.
Fast and Slow Management of Services
So what does this have to do with service management? Service management, like many of the activities performed in a service-oriented economy, is a form of knowledge work. That is to say, it is work heavily dependent on the ability to gather data, analyze it, make decisions and implement those decisions. In my experience with the management of services, many of the classic difficulties faced by service managers, many of the failures by organizations to manage services well, may be understood and mediated with the help of Kahneman’s fast and slow thinking framework.
In subsequent postings, I will analyze concrete examples from the service management discipline to articulate this hypothesis and, at the same time, explain in more detail the differences between fast and slow thinking.
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