Heuristics can be extremely powerful when applied correctly. They simplify our lives, and allow us to make decisions with incomplete information.
Here are three heuristics for human interaction that I’ve found useful.
1. Assume positive intent
Credit: Indra Nooyi, CEO of PepsiCo
My father was an absolutely wonderful human being. From him I learned to always assume positive intent. Whatever anybody says or does, assume positive intent. You will be amazed at how your whole approach to a person or problem becomes very different. When you assume negative intent, you’re angry. If you take away that anger and assume positive intent, you will be amazed. Your emotional quotient goes up because you are no longer almost random in your response. You don’t get defensive. You don’t scream. You are trying to understand and listen because at your basic core you are saying, “Maybe they are saying something to me that I’m not hearing.” So “assume positive intent” has been a huge piece of advice for me.(1)
2. When somebody is acting irrationally, it’s because there’s something bad happening to them you can’t see.
Credit: Laurie Voss(2)
3. If you would persuade, you must appeal to interest rather than intellect.
Credit: Benjamin Franklin
I watched the brilliant and worthy Harvard Law Review-trained general counsel of Solomon Brothers lose his career there. When the able CEO was told that an underlying had done something wrong, the general counsel said, “Gee, we don’t have any legal duty to report this, but I think it’s what we should do. It’s our moral duty.” The general counsel was technically and morally correct. But his approach did not persuade. He recommended a very unpleasant thing for the busy CEO to do and the CEO, quite understandably, put the issue off, and put it off, and not with any intent to do wrong. In due course, when powerful regulators resented not having been promptly informed, down went the CEO and the general counsel with him.
The correct persuasive technique in a situation like that was given by Ben Franklin. He said, “If you persuade, appeal to interest, not to reason.” The self-serving bias of man is extreme and should have been used in attaining the correct outcome. So the general counsel should have said, “Look, this is likely to erupt into something that will destroy you, take away your money, take away your status, grossly impair your reputation. My recommendation will prevent a likely disaster from which you can’t recover.” That approach would have worked. You should often appeal to interest, not to reason, even when your motives are lofty.
Charlie Munger, Vice Chairman of Berkshire Hathaway(3)
Thanks for your 2 minutes!