It’s well known that launching innovations onto the market is difficult. Banks, investors, and customers—quite irrationally—seem far less interested in the potential profit than in the potential risk.
For those who want to learn more about the reasons behind such behavior and find ways to deal with it, we recommend the new book by Daniel Kahnemann, psychologist, behavioral economist, and Nobel laureate in economics: “Thinking, Fast and Slow” (Siedler-Verlag)
Kahnemann analyzes the various “parts” of our selves and, using a wealth of examples, describes how our intuitive thinking takes precedence, even when we’re actually making rational decisions. Clearly, our intuition isn’t statistically trained; otherwise, we wouldn’t make so many mistakes. He spares neither his readers nor himself, pointing out his own errors in reasoning and reminding us—with seemingly simple questions—that we all think in similar ways and, at times, predictably, in the wrong way.
His book shows how decisions are made and which factors play a key role. Or would you have thought that our goal is to weave the best possible story out of our lives?
Among other things, you’ll learn that—and why—the prospect of profit is more than overshadowed by the fear of loss. Your bankers and clients simply don’t behave “rationally” (neither do you, by the way), but at most believe that they do. We all tend to make decisions based on gut instinct. But once you understand how people tick, you can try to present your information in a way that ensures it’s understood correctly—or at least more correctly.
There are no set formulas—you’ll have to draw your own conclusions. But that’s what makes it so exciting. Findings from behavioral economics, statistics, and psychology are just waiting for you to apply them to your next negotiations. Good luck and be creative!
