ExtremeLearners


Numbers vs. intuition: How to make sure that you act on your plans

How many times have you planned to do something and then not done that?

Back when I was a school-going kid, I would sit down with my cousin every time I performed poorly in an exam and after a brief session of self-pity, we would decide to start taking school more seriously. One part of taking school more seriously was to prepare a “schedule” for studying. Thus, we would decide that from the next day onward, we were going to wake up at 5 AM every day, study for one hour, go to school, come back and study for another four hours, finish all our homeworks and so on. Preparing the schedule always seemed like a life-changing event. We were always convinced that we had found the solution to everything finally and that there was no stopping us from being the most successful people on earth any more. The only problem was that it never worked. I would be totally convinced that I was going to do it for the rest of my life and that this was the new me, that waking up early and working hard was what defined me now. But the next day I wouldn’t do it. The slightly annoying sound of the alarm clock at 5 AM was all it ever took me to drop entirely a plan that I had only the previous day, promised to follow for the rest of my life.

The ineptness of human intuition at distinguishing true from false is well documented. Cognitive biases, as they are called, are little errors that the human brain tends to make from time to time. Whether they are good or bad for the human being is debatable. But that they exist, is a fact and has been proven in hundreds of psychological experiments. The purpose of this article is not to provide an extensive survey of cognitive biases, because it’s a huge area of research and entire books have been written about them. However, a particular error in the circuitry of the human brain is relevant to us and it manifests itself in the form of what is called the overconfidence effect. On an average, people tend to be more confident about their abilities than is accurate. For example, in a study done in 1981, it was found that 93% of American drivers rated themselves as better than the median. This would never happen if the beliefs of the drivers about themselves were perfectly aligned with reality. In fact, the study demonstrates a huge discrepancy between the true driving skills and the believed driving skills of the drivers. If all drivers had the correct belief about their driving skills, exactly 50% of them would have claimed to be above the median, since that is exactly what the median means!

Most people are more afraid of plane crashes than of road accidents even though road accidents are much more frequent than plane crashes. If you spend one hour driving a car, statistically speaking, you are much more likely to have an accident than if you spend one hour flying in a plane. And yet, most probably you are more scared of planes than of cars. I am too, until I remind myself of this statistical fact. It is still very difficult to maintain calm when the airplane I am sitting in is passing through a nasty turbulence. My body automatically starts releasing stress hormones and my instincts begin screaming at me the instructions to flee. I have to constantly keep reminding myself that I am still less likely to die than if I were driving a car right now. On the other hand, driving a car is much less stressful, because I too, like the 93% of the American drivers in the study above subconsciously believe that I am better than the median and thus when faced with an accident-prone situation, I subconsciously believe that I will have the dexterity and the reflexes to steer my car away from disaster.

In Hollywood as well as in Bollywood, and in fact in any other entertainment industry, the number of people aspiring to become successful in show business exceeds in several orders of magnitude the number of people who really are successful. And yet, any new aspirant who decides to join the race is usually more optimistic than is justified about his own chances to succeed. This is another manifestation of the overconfidence effect.

What does all of this have to do with planning to do things and not doing them? An unrealistic belief in yourself leads to a tendency to make absurdly unrealistic plans. If you have planned to wake up at 5 AM twenty times and failed every single time, your newfound enthusiasm and conviction to wake up at 5 AM tomorrow is completely unjustified unless you have changed something fundamental about the scenario. Your intuition will mislead you and it will be very hard to not fall into the trap of assuming that tomorrow is going to be different. But most probably, eighteen out of the twenty times that you failed, the day before that you were also entirely convinced that the next day was going to be different. Thus no matter how strongly you believe that you will successfully wake up at 5, all past evidence points unanimously to the highly likely event that you won’t.

So what’s the solution? How does one get out of the cycle of planning and then not following it? By being sceptical about what your intuition says.

Until recently, I had the bad habit of starting more projects than I could handle. I would subconsciously assign some commitment to anything that would temporarily excite me. And then failing to do all of them, I would get depressed and feel worthless about myself. It’s not that I never evaluated whether I had enough time and resources to start another project. I always did that before starting a new one and (incorrectly) always came up to the conclusion that yes, of course I did. The problem was that I did all the calculation intuitively, which, owing to the overconfidence effect, led me astray. So one day I decided to sit down with a pen and paper (actually with a computer and a keyboard) and do all the calculations using actual numbers. So I listed down all the projects that I considered ongoing and specified the amount of time that I expected myself to spend on each in a week. When I added up the times I assigned to each project, the number turned out to be an insane 140 hours per week! Dividing by 7, we get 20 hours a day, which was just pathologically absurd. This meant, to fulfill all my expectations, I would need to sleep for only 4 hours per day and not do anything other than work for the rest of it. That day was very enlightening to me. I crossed out most of the projects from the list except for the two most important ones and postponed the crossed ones for some later time of my life. My productivity and self-worth, both increased since then.

Perhaps most people are not infected with such an extreme case of overconfidence effect, but the basic message of the story and of the article is to rely on actual numbers more than on intuition. Thus when trying to judge how likely you are to follow a plan you just chalked out, base your judgement on the evidence hidden in your past behavior, not on how you feel about the plan. Your past behavior says a lot about you. It puts some constraints on the plans you are likely to follow. Think about the goals you want to achieve and come up with a plan that violates only a very few of those constraints. If such a plan doesn’t exist, you need to revise your goals.

What exactly does your past behavior say about you and how exactly should you use it to make plans for the future? Are you making unrealistic goals? Knowing the person you are, how likely are you to achieve your goals? What steps should you take to increase the probability? It all eventually boils down to numbers and the right way to interpret them. A Personal Preparation Plan provides you with analytics for your own preparation. You will not need to collect the data and interpret them on your own. Our experts will do the math and provide you with the optimal strategy for your preparation.

Footnote: The article presents a slightly simplified version of the overconfidence effect. There are situations where an equivalent “underconfidence” effect has been observed to exist as well. However, the area of planning is dominated by overconfidence, so much so that it has been given its own name: The Planning Fallacy. People’s planning skills have been repeatedly found to err on the “over” side of the spectrum. In any case, under and over are both miscalibrations and have their own harmful effects, which can only be nullified with an approach based on numbers.

Monday, February 11th, 2013


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