• Ozzie Paez

Decision-making’s crucial 3rd leg

In his book, Thinking Fast and Slow, Nobel Laureate Daniel Kahneman describes two systems that drive our thinking and decision-making. System One is fast, intuitive, and influenced by emotions, while System Two is more deliberate, logical, and slower[i]. This popular book has made many important and accessible contributions to the field of behavioral science and the study of decision-making.


I’ve reflected on this two-system decision-making framework and concluded that it does not fully describe the complexity of decisions and decision-making that I have encountered in my work. In this context, I found a third system in the work of another Nobel Laureate, F.A. Hayek, who proposed that between instinct and reason is a system of ethics at the heart of culture[ii]. These three systems became the three legs of my decision-making stool. This post focuses on the third leg’s roles and contributions.



Culture influences, mediates, and constrains our fast and slow decision-making processes. It drives decisions and decision-making in all areas of life and the economy, including organizational leadership, management, and operations. Walt Disney, for example, implicitly and explicitly imprinted his own sense of family values on all aspects of Disney parks, movies, and products. These cultural imperatives drove and constrained Fast and Slow decision-making across the company’s leadership, management, and customer engagements.


Similar dynamics have been at play in America’s national security policy and decision-making since the early nuclear age. Presidents Truman and Eisenhower, for example, viewed America’s early nuclear monopoly and dominance as decisive, yet adversaries frequently challenged their presumptions. Stalin and Mao called Truman’s bluff when North Korea invaded the South on June 25, 1950. South Korean, American, and ally troops were ill prepared and initially struggled to stop the onslaught. Yet Truman “refused requests from field commanders, including General Douglas McArthur, to put nuclear weapons at their disposal [and] opted instead to reinstitute the draft and rely on conventional forces to fight a costly, protracted war.[iii] The President’s decisions and decision-making reflected recent changes in his ethical views on the use of nuclear weapons[iv].


President Eisenhower, whose national security strategy implicitly and explicitly relied on nuclear weapons to defeat Communist aggression, did not relinquish civilian control over their use. He also turned down multiple requests by his military chiefs for authority to use low-yield nukes against Communist Chinese aggression in the Taiwan Straits[v]. Cultural tensions between Americans and Europeans, civilian and military leaders were captured in an exchange between Secretary of State John Foster Dulles and Joint Chiefs Chairman General Nathan Twining during the second Taiwan Straits crisis, August – October 1958[vi]. Dulles shared European opposition to the use of nuclear weapons in what they saw as a minor crisis over a few strategically insignificant islands. He then asked Twining if a conventional alternative was available:


Twining responded that their studies clearly identified the need to use nuclear weapons. The official report of the meeting remarks that “…he [Twining] could not understand the public horror at the idea of using nuclear weapons…” and that he believed “we must get used to the idea that such weapons had to be used.”[vii]


Eisenhower kept the nuclear option visible but steered the crisis away from direct conflict with Communist China. His actions deescalated the crisis, pleased America’s European allies, and infuriated Taiwan’s leader, General Chiang Kai-shek. In the balance had been millions of Chinese lives which US intelligence estimated could be lost even in a limited nuclear conflict[viii]. The interplay of choices anchored to different cultural imperatives affected decisions and decision-making by constraining political and military options throughout the crisis.


Dulles’ shifting positions on the ethics of nuclear weapons and their use shed light on culture’s role in decision-making. He had been “a peace activist before, during and immediately after World War II, writing eloquently about the horrors of war in general and of nuclear weapons in particular… It was the spread of “godless communism” and the Berlin crisis [June 1948–May 1949] that changed his views on war, nuclear weapons and their role in preserving democracy and American values.[ix]” Dulles, like Truman, reassessed the ethics of nuclear weapons, a process that reframed the decisions and choices he was willing to consider in responding to Communist threats.


Summary and implications

Culture’s power to drive and constrain decisions is systemic. It mediates Fast and Slow thinking and decision-making processes based on established cultural imperatives. It also influences which system we use in response to internal and external events and the choices available to decision-makers. In the face of strong cultural drivers, many decisions become axiomatic and often problematic because we forego applying reasonable skepticism before acting on them. In these cases, culture drives the use of System One decision-making when more deliberate System Two processes are more appropriate.


It’s not always practical for observers to distinguish which system is being used by decision-makers operating under emotional stress and uncertainty. Cultural drivers are always present, however, influencing, constraining, and driving decisions. Interestingly, the historical record shows that available choices can change dramatically when leaders reconsider the ethics of their decision-making paradigms. Such was the case with President Truman and Secretary Dulles on the use of nuclear weapons.


Final note

Hayek and Kahneman had similar backgrounds, economics, and were each awarded Nobel Prizes in 1974 and 2002, respectively. I’ve found their contributions to our understanding of decision-making indispensable in building practical frameworks and models. I’ve applied these broadly in contexts like organizational leadership, business, national security, nuclear strategy, and the current pandemic. I’m deeply grateful for what I’ve learned from these outstanding scholars.


References

[i] Daniel Kahneman, Thinking Fast and Slow, p 22, 2011, Macmillan. [ii] F.A. Hayek, The Fatal Conceit: The Errors of Socialism, Chapter 3, September 14, 2012, Audible Edition. [iii] Ozzie Paez, Decision-Making in a Nuclear Middle East: Lessons from the Cold War, Kindle Edition, Loc 293, 2016, Decisions to Lead. [iv] Paez, Decision-Making, Loc 280. [v] Paez, Decision-Making, Loc 400 & 436. [vi] Paez, Decision-Making, Loc 436. [vii] Craig Campbell, Destroying the Village: Eisenhower and Thermonuclear War, 83-84, 1998, Columbia University Press. [viii] Paez, Decision-Making, Loc 452. [ix] Paez, Decision-Making, Loc 307.