The Death of 'Rational Man'
By David Ignatius (WaPo)
Sunday, February 8, 2009; Page B07
One of the most powerful ideas I heard at Davos was the idea of "pre-mortem" analysis, which was first proposed by psychologist Gary Klein and has been taken up by Kahneman.
A pre-mortem analysis can provide a real "stress test" to conventional thinking. Let's say that a company or government agency has decided on a plan of action. But before implementing it, the boss asks people to assume that five years from now, the plan has failed -- and then to write a brief explanation of why it didn't work. This approach stands a chance of bringing to the surface problems that the decision makers had overlooked -- the "black swans," to use former trader Nassim Nicholas Taleb's phrase, that people assumed wouldn't happen in the near future because they hadn't occurred in the recent past.
One more take-away from this year's Davos forum was a Japanese proverb cited by one speaker: "An inch ahead is darkness." Recognizing the inherent unpredictability of economic life -- the darkness that's just ahead -- should make us wary. But it can also make us smart.