Is Heuristics misleading your Judgment?

I recollect a poem during my school days where the little girl finds it difficult to remember 6 multiplied by 9 while learning the table of 6. So she creates a mental shortcut and says 6 multiplied by 9 is ‘doll’. And assigns 54 to a doll. During exams she remembers ‘doll’ and forgets 54.

Misleading judgments

Does this happen to you and me? We try to use mental shortcuts basis our experience and some-times they go wrong.

Here is a small and interesting situation for you to solve. And you just have 10 seconds to solve it.

A bat & a ball costs Rs. 110


Bat costs Rs. 100 more than the ball


How much does the ball cost?

What answer did you give? Mostly it must have been Rs. 10/-.

So what happened when we were arriving at this answer?. There is some mental calculation we did, used some shortcuts basis our previous learning and experience and arrived at a solution, right?

An easy puzzle that evokes an answer that is intuitive, appealing and wrong.

Check again. The right answer is Rs. 5/-.

Note: I converted the original example into Indian rupees. The original example is $ 1.10 used by noble laureate (Economics) Dr. Daniel Kahneman & Shane Fredrick while working on theory of judgment.

Here are some more situations:

  • Wife gets a dress for her and asks her husband to guess the price. If the husband quotes the price that is higher than the purchase price, he had it. He needs to be smart enough to tell the price lower than the purchase price and get dumbed at a smart bargain the wife made while buying the dress. This by the way can be a good secret for a happy married life!!!
  • Do you feel purchasing more onions and tomatoes when their supply shortens and the prices go up?Pricing gimmick
  • If you invest in stock market, does it happen to you that when the prices of shares start moving up, you tend to buy more?
  • Have you splurged money in the mall due the irresistible offer(s) (never before; never after types) and got reprimanded even from your little daughter for the childish behaviour?

If all of it or some of it is true, welcome to Heuristics.

Heuristics are simple, efficient rules which people often use to form judgments and to make decisions. They are mental shortcuts that usually involve focusing on one aspect of a complex problem and ignoring others.

Put in other words Heuristics (Greek word meaning ‘to discover’) is an approach to problem solving that takes one’s personal Heuristics and biasesexperience into account.

Heuristic conclusions are faster and speedier since they are based on your experiences but they may not be accurate. These rules work well in most of the cases but can lead to systematic errors as we have seen with the bat & ball example earlier.

Heuristics has found applications in many fields. One of them is behavioural finance or behavioural economics.

Did you notice that Rs.799/- shirt or a she appeared costing much lesser than Rs. 800/-?  Many companies have since long used this method to draw attention and improve sales.

In 2008, researcBargain sale - 9.99hers at the University of Southern Brittany monitored a local pizza restaurant that was serving 5 types of pizzas at €8 each. When one of the pizzas was reduced to the price of € 7.99, its share of sales rose from one third of total sale to half of the total sale. Dropping the price by one cent, an insignificant amount in monetary terms, was enough to influence customers’ decisions dramatically.

The dilemma of slow versus fast:

It is exciting to use intuition while making decisions. It is exciting because it allows us to access the experience of the past and basis that jump to conclusions. It’s fast. It allows us eliminate steps. Thinking fast and slowThe other side of it is that it can also be misleading.

Hence classifying the activities is imperative. For some activities we can take faster decisions basis our experience but with a preparedness of margin of error. Dr. Daniel Kahneman calls this the system 1 thinking. For the other activities or decisions a slow, deliberate, thinking mode can be used. Even if it means more efforts and relatively longer time. Dr. Daniel Kahneman calls this as System 2 thinking.

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Are we victim of Dunning-Kruger effect?

“One of the painful things about our time is that those who feel certainty are stupid, and those with any imagination and understanding are filled with doubt and indecision”

– Bertrand Russell, The Triumph of Stupidity

Visualise this. You are in a meeting. You are well conversant with the subject of the meeting. The Bla bla bla 1meeting starts and you realize that someone who partially knows the subject or does not know the subject is speaking a lot on the subject. You wonder what’s happening and where the meeting is headed.

Sounds familiar?  Whether its Office meetings, society meetings or community meetings, we come across such situations.

Person with the knowledge of the subject is many a time in dilemma regarding the completeness and correctness of her information and hence prefers to remain silent. Someone who has lesser understanding or no knowledge goes on to speak, and quite confidently.

“Empty vessels make the greatest/loudest noise/sound”, is what we recall and solace ourselves during such moments.

Why does this happen?

This phenomenon is called the Dunning–Kruger effect. The phenomenon was first tested in a series of experiments by David Dunning and Justin Kruger of Cornell University. Hence the name.

This phenomenon occurs when people fail to adequately assess or recognise their level of competence or specifically their Incompetence. The inability to assess Dunning-Kruger effector recognise this incompetence deprives them from critically examining or analyzing their performance. This leads to people making significant overestimation about them.

Does the inverse of it true? According to Dunning and Kruger it is. Competent people tend to underestimate their ability compared to others. The duo calls this the imposter syndrome. The more knowledge or skill the person has the higher is the feeling she gets of how ignorant she is. While this may keep the person grounded and committed to the subject, sometimes this feeling does not allow making adequate and forceful representation at forums.

For the incompetently confident person, Dunning summarizes the effect as:

“What’s curious is that, in many cases, incompetence does not leave people disoriented, perplexed, or cautious. Instead, the incompetent are often blessed with an inappropriate confidence, buoyed by something that feels to them like knowledge.”

Dunning and Kruger proposed that, for a given skill, incompetent people will:Illustion of knowledge

  • fail to recognize their own lack of skill
  • fail to recognize genuine skill in others
  • fail to recognize the extremity of their inadequacy
  • recognize and acknowledge their own previous lack of skill, if they are exposed to training for that skill

What can we do as individuals?

Besides taking the professional certifications that may be the threshold requirement to do a particular job or a project, I have seen many of my friends and colleagues use an appropriate self-assessment method. They periodically use it to check if they are getting into the trap of less than adequate skills but an overestimated self-perception and vice versa.

Here are some of the methods they use that may help you and me.

  • They benchmark with someone who is very good at the skill they want to acquire and constantly check the progress against the benchmark.
  • They have trusted confidants who can show them the mirror.
  • They show openness to feedback (Formal and informal) from family, friends and colleagues and show agility to work upon the feedback.
  • They endeavor to build awareness about their strength and use it when required.

Do let me know if this information and awareness has helped you in your journey of personal effectiveness.

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Does training help you improve your business performance?

Training for growth

The world seems to be divided on this one. The other day, one of my ex colleagues Rasesh and I were chatting up. The topics ranged from families to Office to current affairs. During our conversation he said that he has to go for the ‘compulsory’ training and that he finds it to be a great holiday break from his work.

I wondered why? Why is it that Rasesh and many like him get the thought of holiday first than any other thing when it comes to attending training programs?

Come to think of it the part of the issue lies defining the effective outcomes of the learning intervention.

Global consulting firm Mckinsey & Co recently conducted a survey. The subject of the survey was ‘Do your training efforts drive performance?’ When asked about the biggest challenge about the training programs, most of the executives said it is the lack of effective measurement metric that is a growing concern for them.

So if I think of my conversation with Rasesh, he and many like him are not seeing tangible change like movement from X to Y and hence the feeling of a break.

Here are some thoughts that may help in changing the perception.

Defining a problem: Defining a problem

If you have seen the movie Moneyball, a movie that shows how a losing team goes onto create history of winning 19 consecutive matches, recall the conversation in the initial part of the movie when Billy Beane (played by Brad Pitt) who is the General Manager of Oakland A’s, challenges the conventional wisdom of the game. He asks the experts in the room to define the actual problem and we see them struggle defining it.

My experience has been that while designing the learning architecture or any specific program, identifying and defining a problem statement is very important. Now this may sound obvious and logical, however I have seen that identifying the real problem is often a challenge.

Learning culture not the training culture:       Learnig and training culture             

Is there a difference? I think there is. Training becomes givers agenda & responsibility whereas in a learning culture the onus of learning lies with the learner. It’s more pull than a push. The challenge for managers today is to ensure that they foster the learning culture in their teams.


One of the important deciding factors whether the program will succeed in terms of the desired impact or fail is the co-Co-ownershipownership. When the business team talks about ‘What’ part and the learning team integrates the ‘How’ part is when the participants draw immense value and are able to apply it to their actual business situations.

Methodology :70-20-10 model

The 70-20-10 model often gets discussed when it comes to learning and development of an individual. 70% experience – learning & development from day to day tasks, challenges and practice, 20% exposure-learning & development through others and 10% education – learning & development through structured modules, courses and programs. The model emerged after the publication of research by Morgan McCall and his colleagues at CCL (Centre for creative leadership) in the 1990s.

So in today’s context, do we design the learning interventions basis this model?

To conclude:

I have a slightly different view. These percentages may differ from industry to industry and from Organisation to Organisation. In my experience when we offer structured learning with job specific situations embedded in it is what gives better results for the participants and better ROI for the Organisation.

Such kind of designs and interventions will make Rasesh and the likes get more value from learning.

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Lee Kuan Yew : The legendary transformer

Lee Kuan YewSingapore lost its founding father last week. Lee Kuan Yew died on 23rd March 2015. Lee transformed the colonial backwater into one of Asia’s prominent countries.

Writing down some of the things I could understand on what led to this transformation and is there the other side as well.

In one of the interviews Lee had said “We don’t have the ingredients of a nation. The elementary factors like homogenous population, common language, common culture and common destiny”.

So how did such a transformation happen in 50 years of Country’s existence?

When this small city state was ejected from Malaysian union in 1965, it was threatened from within by race riots as well as communist insurgency. His autobiography wonderfully recounts the story of how he crafted success out of these challenges.

After taking charge of this small city state, Lee opted for pragmatism over ideology and social stability over civil rights. Lee believed that the record of any country should be judged against the backdrop of its historical, cultural and Institutional realities.

Lee’s leadership qualities :Leadership

Lee has been an exceptional leader.  His clarity of vision, conviction, honesty, discipline in the pursuit of the goal, blunt but not derogatory approach, taking firm decisions and foresightedness has made Singapore what it is today. History was instructive but not imprisoning for him. He prized opportunity, meritocracy, work ethics and education. His sharp intellect gave him an aura of an elder statesman in Asia and in the World. His free economic policy led to Singapore becoming headquarters to many multinational companies.

Lee’s perception about India :Perception about India

Lee’s perception of India changed over the years. Initially he pitted India to China and highlighted India’s obvious disadvantages over China. When the concept of East Asia Summit (EAS) to strengthen peace and security in the region was conceived, India wasn’t a part. However when the forum was launched in 2005, India was one of the founding members of EAS. This was largely because of Lee’s advocacy for India.

Singapore’s economic growth :  

Singapore stats expanded_Economist

Since beginning Lee has adopted a free market philosophy. This approach has helped them grow faster economically than their peers. The free market philosophy has also been balanced by a chain of successful companies that are owned by government, public housing projects to house most citizens and compulsory savings through public provident fund. Singapore has seen higher savings and investment rates. Growth happens on account of rapid capital formation for which savings are absolutely necessary.

Singapore’s per capita income rose from $2529 in 1960 to $36897 in 2013 in constant 2005 dollar terms according to World Bank indicators. This means Singapore’s per capita income rose by 14.5 times from 1960 to 2013 in real terms.

Over the same period, India’s per capita income grew from $228 to $1165, or five times.

Task discipline vs Thinking big : untitled

Under Lee, Singapore has seen towering skyscrapers, landscape gardens, spotless streets and a disciplined society. Singapore has also seen the other side. No cutting edge research, no global brands like Sony of Japan, Apple of US, Samsung of Korea and ICICI Bank, Infosys, Flipkart, Tata’s & Birla from India.

The unquestioned obedience makes Singapore run like a well-oiled machinery. This leaves little scope for developing an experimenting mindset, which could be limiting the citizens and the country in future.

Singaporeans make excellent managers and technocrats but there are very few entrepreneurs.

Can our country learn from Lee’s philosophy?

According to Infosys ex- chairman Mr. Narayan Mutrhy who met Lee multiple times, India can learn the following things from him.

  1. Integrity of thought and action by political leadership.
  2. Duties should come before rights.
  3. Selecting political candidates and the bureaucrats on the basis of their merit.
  4. Weeding out corruption through stricter laws.
  5. Removing friction and facilitating more business friendly environment.

India is different from Singapore in many ways. The size of our country, culture, demographics and socio-political setup. The world takes lessons from us on running a democratic set up.

So we may want to experiment with Lee’s model by taking the top 50 cities of our country or top two in each state and create a mini Singapore. This without compromising the ethos of our Country. Now, this may sound like an Oxymoron but what’s the harm in at least giving a thought and creating blue print?

Swachh Bharat Mission and Smart cities is a great starting point.

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Freezing while presenting? These 5 things can unfreeze you

Let’s face it. Whatever be your profession, at some point or the other you will have to face this situation. Standing in front of a group of people and speaking.Presentation skills

Have you faced or experienced this situation? Be it in your office, your business, your community get-together or alumni meets? What’s the feeling?

During my trainings or interactions with people, they have repeatedly told me that this is the most difficult situation to handle. They freeze, perspire, experience a thought jam and often go blank.

Is there a way out? Is there a method that can help unfreeze and win the moment?

First let me share the good news. Yes, there is a way out.

Now let me also share the not so good news. It requires some efforts that most people don’t put. This is for two reasons. One, even if they do not practice presentation skills, it does not hamper their routine and two we normally have a tendency of procrastinating the difficult things.

But if you are serious and want to take a step ahead in what is referred to as a ‘Life Skill’, here are 5 things that can help you.

Before we begin, please understand that freezing while giving presentation is not unusual. It happens to even the most seasoned presenters. This only indicates that our mind and body is preparing itself for the unusual situation.

Remember ‘TIPS’.

  1. Topic :  

Understand the topic so that you don’t miss the fundamental expectation of the presentation. After all your subsequent blocks are going to be built on this foundation. So getting this right is imperative.

2.  Information gathering :  

    Once you understand the topic, the next important step is to gather information about the topic that is relevant to the type of presentation. For example for the business presentation it could be data, business and activity updates. For non-business presentations it may be more experiences and issues. Please ensure that you gather more information than the time given to you for the presentation. This will give you choice of sequencing the points basis their importance and eliminate the non-important ones.

3. Presentation methodology :    Presentation methodology

Once you prioritize the points, check for the presentation methodology. Are you going to use power point or only reference notes? MS office 2013 allows you to see the next slide when the first slide is displayed to the audience. This can help you in structuring your thoughts. If you are going to use only notes, use cue cards. If you are using power point, please keep your slides simple and de-cluttered.

4.  Story :

Listening to stories is engaging. So your presentation must have stories. You may wonder how a business presentation can have stories. Do you recall one of the best business presentations you heard? What do you recollect? Do you recollect only numbers or stories associated with these numbers? Stories of how people achieved topline, bottom line, market share or dominant position in a territory.

So try and substantiate your presentation with real stories. It adds tremendous power to your presentation.

5.  Pep yourself :Rush hour

Remember the Rush Hour series by Jackie Chan? Chris Tucker who plays detective Jim Carter in the movie has portrayed an easy, jovial yet serious when required kind of character in the movie. Jim gives a high pitch pep talk to self and to inspector Lee (Jackie Chan) when requiring big fights with criminals.

My point is simple. Preparing yourself for presentations or talks is a big fight against your dis-empowering thoughts. Fight it like detective Jim and inspector Lee. Overcome the fear by regularly practicing the presentation skills. Give yourself a pep talk.

The first 4 points will give you the structure for preparing the presentation. The fifth point will give you energy and confidence to overcome the stage fright.

Let me know if these tips have helped you in your next presentation.

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MOOCS – An easy access to continuous learning, or is it?

Want to keep in touch with the subject of your liking? Want to do some formal course in the subject from some of the well- known universities and listening to some of the finest professors on the globe? Importantly want to do it sitting in your cozy couch sipping your favourite coffee?

If your answer to these questions is in affirmation, MOOCs can be the best option for you.

About MOOCs :MOOCs

For the un-initiated, MOOCs or massive open online courses are the courses offered by various universities over Web. The term MOOC was coined in 2008 by Dave Cormier of the University of Prince Edward Island in response to a course called Connectivism and Connective Knowledge (also known as CCK08).

In India, the idea was first proposed by IISc Bangalore in the year 1999. Following that, video-based teaching material, NPTEL was set up during 2003-2007. As of March 2014, approximately 750 video courses and web-based courses have been developed by the faculty members of IITs, IIMs and IISc.;; are some of the sites that aggregate various courses from universities. All of them offer free registration on their site. Some courses are free and some are paid.

Usually these courses range from eight to twelve weeks.

What is it like? :Course providers 1

One has to complete various stages to complete the course. Week wise video lectures, assessments, participation in online discussions, project submission, final test and peer review. After all this you get your final grades.

You search the subject that you are passionate about and the chances are you will find some course or the other that adds value to your current knowledge on the subject.

Self-directed learning, easy access, choice of subject, convenience, cost competitiveness (most of them are free) all these go in favour of MOOCs and all of us.

So do we see an increase in the number of courses being offered by various universities on these platforms?

According to the European Commission’s Open Education Europa initiative, as of January 2015 – there were over 3,842 MOOCs worldwide. The total Number of MOOCs grew 201% in 2014, and over the period 2013-2018, MOOCs are forecasted to grow at a CAGR of 56.61%.

The other view :The other view

The academic leaders however seem to be giving mixed signals.

Babson survey research group has some interesting findings in this regard. The group has been tracking opinions of academic leaders about online learning for 10 years now. They have started asking about MOOCs since 2012.

In 2012, 28 percent of respondents believed MOOCs were sustainable, while 26 percent thought they were not. In this year’s survey (2014), where they surveyed 2800 academic leaders, 16 percent believe MOOCs are sustainable, while 51 percent think they are not.

The academic leaders want to use the courses to improve institutional visibility and drive recruitment, discovers the survey.

Conclusion :

There has been lot of discussion and debate on the usefulness of MOOCs for the participants as well as for the institutions.

For the debate to turn favourable for both, there needs to be deeper penetration and wider choice.

Importantly, an acceptable measurement metric can enhance credibility of MOOCs for participants and for the institutions.

For me, I find MOOCs to be resource rich, convenient and of good value.

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