The Sharblog

What Were They Thinking?

I recently finished reading an interesting book called Deep Survival: Who Lives, Who Dies and Whyby Laurence Gonzales. Gonzales grew up in Houston and San Antonio, so he has a Texas connection. The book is quite fascinating. It is a scientific look at survival and how people deal with unique challenges. While most of the examples and stories concern physical survival (mountain climbing, white water rafting, flying jet aircraft, etc.) or health challenges (dealing with a deadly disease), there are also examples of surviving business challenges and dealing with risk during uncertain times. Gonzales details why people do the things they do from a psychological perspective, and he also discusses the science behind survival.

One of the things he discusses is that after a tragic accident, we are prone to ask “What were they thinking?” when people do something that on the surface looks pretty stupid. Problem is that the person caught up in the moment didn’t see what we in hindsight can easily see. Their brains may have been working on auto pilot or their perceptions did not properly sink up with their reality. 

Gonzales notes that while people tend to think in a logical, linear fashion, the world rarely works that way. He also points out that people see what they expect to see and therefore have a built-in bias that blinds them to what is really happening. One of his interesting points is that “rule followers” don’t do well in survival situations. The 10 percent of people who end up surviving are instead contrarians who do not like to follow rules. The key to surviving is adaptation and the ability to change your plan and your thinking to the reality of your current situation. Most people can’t do that and in the numerous life and death situations he describes, they often perish as a result.

The book got me to thinking about the recent financial crisis. While I am sure there are plenty of examples of greed and outright fraud that were contributing factors to this debacle, and we will continue to see details of that as more is revealed, I think that there were also cases where good people simply didn’t see the danger they were approaching, much like people in physically challenging survival situations. Some folks in positions of responsibility were pretty darn bright (Alan Greenspan, financial wizards on Wall Street, etc.), so it wasn’t a lack of gray matter but rather how they were using it and the perceptions they held in their own minds about the current reality and the future. I am guessing that some of these good meaning people actually believed that the real estate market could not collapse since it had never happened in their lifetime. It was not a reality that they had ever encountered. Their linear thinking did not work well when the world around them went non-linear. As a result, we are now all asking – “What were they thinking?”

It's Not What You Say - It's What You Signal!

Is it possible to predict which executives will win a business competition solely on the basis of social signals they send?  The answer, according to recent research, is yes.  In fact, when MIT professor, Alex (Sandy) Pentland, conducted the research he was able to accurately predict 87% of the time who would win a business plan competition without reading or hearing their presentations.

How did he do it?  Pentland and his colleagues outfitted executives at a party with devices that recorded data on their social signals.  Five days later, the same executives presented business plans to a panel of judges in a contest and without reading or hearing their pitches, Pentland correctly forecast the winners using only the data collected at the party.

Pentland has named the social cues he was recording, “honest signals”.  It’s a biological term and refers to nonverbal cues that social species use to coordinate themselves – gestures, expressions, tone of voice, proximity to others, etc.  Honest signals are unique because they cause changes in the receiver of the signal.  If we are spending time together, and I am happy, you’ll be happier too.  It almost literally rubs off on you.  If you are interested in learning more about it, you can buy Pentland’s book called, by no surprise, Honest Signals – How They Shape Our World.

Right about now, the CPA in you may be asking – why should I care about this?  Well, the answer is that you may be able to use this knowledge to improve your performance and the performance of your team, firm or organization.  Positive, energetic people have higher performance.  Attitude and positivity are attributes researchers (and many other people) knew mattered; they just didn’t want to deal with them because it was squishy, feel-good stuff.  But now they are quantifying it and basing it on scientific research.

And it applies to organizations too, not just individuals.  They have done research in call centers and have found that face time with colleagues is 2.5 times as important to success as additional access to information.  Productivity can be increased just by rearranging the environment to promote more employee interaction.  Something to consider in this age of technology.

When you think about it, these social signals make sense.  Human language is fairly new – as little as 50,000 years old.  Long before language, humans had the ability to hunt, move and survive as groups, as all social species do.  So, it’s logical that these social, non-verbal communication signals that we’ve used for thousands of years would still be powerful in our interactions with each other today.  And if we can harness this “network intelligence” theory of social signals, we can become better managers, workers and communicators.   Maybe even better husbands.  I think I now understand that look (signal) I get from my wife when I start flipping channels on the TV!