The Six Disciplines of Strategic Thinking

THE DISCIPLINE OF PATTERN RECOGNITION

is more deliberate, slower and more analytical. As Kahneman describes it in the same excerpt, “System 2 allocates attention to the effortful mental activities that demand it, including complex computations. The operations of System 2 are often associated with the subjective experience of agency, choice, and concentra tion.” This second system gets called to action when you are focusing on challenging cognitive tasks, such as mathematics. It “takes control” of your attention when it spots patterns, such as being surprised by new stimuli. To illustrate, imagine you are a financial services CEO who has set aside provisions for loan losses to hedge against what you believe will be an impending recession. However, your quarterly results beat consensus earnings estimates. As you digest the data, your System 2 taps into your l​ong-​term memory, seeking similar patterns you have previously experienced. (It could be govern ment stimulus or a rise in employment, lowering defaults among borrowers.) You then begin constructing a narrative to help you remember, understand, and communicate what you are “seeing.” Leveraging these insights, you shift to envisioning the future through what is known as “associative activation.” The process ing of one thought (say, government stimulus) sparks the immediate activation of related ideas stored in your l​ong-​term memory (say, quantitative easing, liquidity, inflation). This leads to “priming”, a phenomenon whereby exposure to one stimulus makes you react faster to related stimuli by speeding up your cognitive processing and memory retrieval. Priming is like rip ples in water. Many associations can be formed that, in turn, “prime” other ideas. How does this sort of mental priming work in business lead ership? Imagine you are leading a company that is performing poorly, with falling sales and profits and a decreasing share price.

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