The third system of thinking

The Athenian philosopher Plato (427–347 BCE) famously characterised the process of decision-making as being like a charioteer in charge of two horses. One is steady and true and the other is unruly and impulsive. To effectively steer your mind, he wrote, you need to focus on reason and avoid the unruliness of emotion.

Sound familiar? It should, because Plato still sits in most boardrooms and executive suites today. Blame Plato for the overrepresentation of ‘male reasoning’ versus ‘female emotion’. Trust the numbers and don’t let your feelings get in the way. After all, it’s just business.

The myth of rationality was busted by Seymour Epstein (1924–2016), professor emeritus of psychology at the University of Massachusetts Amherst. He wrote a ground-breaking paper in 1973 titled, ‘The Self-Concept Revisited, or a Theory of a Theory’.

This has become known as the ‘dual process theory’ of decision-making. You utilise two systems of thinking about a problem: an intuitive-experiential style which is automatic, effortless, fast, based on immediate ‘gut feeling’, and essentially preconscious; and an analytical-rational style which is intentional, effortful, logical, reasonoriented, slower and more deliberate, and experienced actively and consciously.

This was later popularised by Daniel Kahneman, professor emeritus at Princeton University’s Department of Psychology and Woodrow Wilson School of Public and International Affairs, who was awarded the Nobel Prize in 2002 for establishing the field of behavioural economics. Kahneman refers to the intuitive-experiential style as system 1 (‘thinking, fast’), and the analytical-rational style as system 2 (‘thinking, slow’).

According to professors of psychology Paul Baltes (1939–2006) from the Max Planck Institute for Human Development and Alex Freund from the University of Zurich (2003), wise decision-making could be more of an ‘orchestration’ of systems 1 and 2, between what feels right and what is reasonable. Baltes and his colleagues formulated the Berlin Wisdom Paradigm in the 1990s, the first and still the most rigorous measurement of wise decision-making when faced with a dilemma.

When it comes to making a wise decision with your heart (system 1 thinking) or your head (system 2 thinking), it turns out neither system is definitive.

You need a third system of thinking.