I’ve been eyeball-deep in reading Thinking, Fast and Slow, the amazing 2011 book by Daniel Kahneman, Ph.D., the Princeton University professor of psychology and public affairs who won the 2002 Nobel Prize in Economic Sciences for his pioneering work with Amos Tversky on decision-making. Thinking, Fast and Slow is a riveting work of science and analysis, by someone who is a thought leader at the highest level.
As the book’s jacket notes, Kahneman “takes us on a groundbreaking tour of the mind and explains the two systems that drive the way we think. System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical. The impact of overconfidence on corporate strategies, the difficulties of predicting what will make us happy in the future, the profound effect of cognitive biases on everything… can be understood only by knowing how the two systems shape our judgments and decisions.” This is a very conceptually dense book—and, at 499 pages in paperback, worthy of thoughtful study and reflection.
As he opens Chapter 19, “The Illusion of Understanding,” Kahneman writes, “The trader-philosopher-statistician Nassim Taleb could also be considered a psychologist…. [He] introduced the notion of a narrative fallacy to describe how flawed stories of the past shape our views of the world… Narrative fallacies arise inevitably from our continuous attempt to make sense of the world. The explanatory stories that people find compelling are simple,” he notes, and “assign a larger role to talent, stupidity, and intensions than to luck; and focus on a few striking events that happened rather than on the countless events that failed to happen.”
As Kahneman writes, “A compelling narrative fosters an illusion of inevitability. Consider the story of how Google turned into a giant of the technology industry,” he writes. “Two creative graduate students in the computer science department at Stanford University come up with a superior way of searching information on the Internet. They seek and obtain funding to start a company and make a series of decisions that work out well. Within a few years, the company they started is one of the most valuable stocks in America, and the two former graduate students are among the richest people on the planet.”
As Kahneman notes, the tendency to reach for very simple explanations, ones that harmonize with what we already know about the world, is incredibly strong in humans, even as the actual causes of any phenomenon as noteworthy as the success of Google are inevitably very complex.
It’s terrific to be able to turn to experts like Kahneman to help us reflect on the complexity of questions such as why some business ventures might succeed, while others do not. In the healthcare IT world, there are in fact so many dynamics at play that a thinker like Kahneman would find himself happily challenged to diagram all the elements involved in potential success and failure.
At Healthcare Informatics, we are pleased once again to present our annual Healthcare Informatics 100, a unique, and uniquely authoritative, compendium of the leading healthcare IT vendor firms by revenue, as well as our Most Interesting Vendors profiles (read the Epic profile here, and the Optum profile here), and our stories on Up and Comers (see full The 100 coverage here), smaller but rapidly progressing firms in healthcare IT. None of the success stories of any of these vendor companies should be reduced to simple, fairy tale-like narratives; indeed, success in the healthcare IT industry these days inevitably involves a welter of complex variables. But how and where solutions providers are succeeding (or not succeeding) in the current market, is a question worthy of the complexity of reflection on the part of someone like Daniel Kahneman to ponder for its significance, and highly worthy of analysis and study. Happy reading!