Are we as smart as we think?

Like me, you are probably one of those people who are just too smart to be influenced by marketing or to be hoodwinked by brands. Other people may be drawn in but we’re far too smart! Unlike other people, surely we make logical decisions unclouded by emotion. Perhaps we alone make perfectly rational judgements based on objective criteria. We’re smart! Aren’t we?

The fact is we may be smart but it isn’t the smart part of our brain that is making most of our judgements or running our lives! The smart part of our brain is the neocortex and it evolved most recently in human beings. It is sometimes referred to as the front part of our head and deals with logic and deliberation. This may be the smart part of our brain but it isn’t where we make most of judgements and therefore our decisions.

Research shows we make judgements around our beliefs, our feelings and our emotions and these are in influenced by our subconscious or the “back of the head”. Logical justification and rationalisation happens at the front of our heads but usually only after the event – after the judgement has been made. We don’t think this is happening because we can explain the rationale of our decisions – but that’s because our brains are very good at this post decision rationalisation exercise.

Author Robert Wilson suggests there is a dual mechanism for making judgements. He calls this the “thinker” and the “prover”. Once the “thinker” in us has developed a belief about something, the “prover” will adjust the input from our senses to validate that belief. This explains a lot of human behaviour; from a football fan’s attitude towards a “bias” referee to an individual’s loyalty to a brand. It seems once we have developed a belief about something or somebody we go to great lengths to “prove” we are not wrong. We even make further judgements in support of our belief. So, if we like somebody or an organisation for one thing we are more likely to like them for other things. If we dislike that person or organisation, we will find more reasons to dislike them. So much for objectivity! It seems we are highly prone to prejudgement. We are wired for prejudice.

Rory Sutherland makes this point in the below video.

This propensity to extrapolate from a single judgement he calls “affirmation bias” and it is all around us. On our obk mba* course we refer to affirmation bias as the “Halo Effect” based on the idea described by Phil Rosenzweig in his book by the same name. In his fascinating book Rosenzweig argues that much of our business thinking is shaped by delusions and affirmation bias is just one of them.

Behavioural economists Robert Cialdini and Dan Ariely have further undermined our confidence in our objectivity and rationality. In his book “Predictably Irrational”, Dan Ariely points to lots of amusing examples of how we consistently behave in surprisingly irrational ways. Cialdini’s book “Influence – The Psychology Of Persuasion” brilliantly explains how easily we can be persuaded using simple ideas as this video neatly summarises.

The sad fact is our judgements in business and in life are made in the back of our heads. This part of our brain evolved before the logical part of our brain and is not so bright and is easily influenced. Our neocortex may be more logical and rational but it’s not in control, even if it thinks it is. It is constantly being hi-jacked by the subconscious brain who is calling all the shots. Not only does our rational and logical neocortex fail to challenge these decisions it actively covers up this rebellion with a post decision rationalisation!

In business we tend to assume our customers make perfectly rational judgements around perfect objective information. Too often we ignore the management of our customer perceptions. We assume that being “good” at what we do is good enough. Sadly being “good” is not nearly good enough.

So how smart are we? Perhaps we are at our smartest when we recognise we are not.

Apologies to all neuroscientists for the simplification above.

*The obk mba is not a real mba but a concise business course for business owners who want to run a better business – click here to find out more.

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