By Tim Dean

Illustration by Roy Scott

How often have you seen a major decision in your business influenced by anecdote?

How often has a struggling project continued far too long because the company had already invested so much time and money that it might as well see it through?

How often has fear of failure caused a promising new venture to be dumped prematurely? How often has “groupthink” led to a mass delusion that seemed obvious in hindsight? How often has HR praised a star performer in the hope that others might emulate some of their successful habits, yet no-one really changes?

If you’ve experienced any of these phenomena in your workplace — and I wager you’ve witnessed at least one — then you’ve seen first hand some of the ills of common sense thinking.

Despite its reputation for being an eminently sensible mode of thought, in fact common sense thinking is fraught with pitfalls. So it’s worth taking a moment to better understand what common sense is and how it can compromise business decisions.

In a way, we are born to be creatures of common sense, employing intuition first and reason a distant second.

Intuition certainly has its strengths. It’s fast, doesn’t require much effort and enables us to make snap decisions.

Reason, on the other hand, is slow, effortful and, while it can lead to more sophisticated decisions, it comes at the cost of expedience.

You might recognise these two modes of thought from the work of psychologist Daniel Kahneman, who received a Nobel Prize for illuminating the unconscious processes that steer our thinking. The thing is, while we would often like to believe that the rational process is running the show, it’s actually the fast and frugal intuitive mode that directs most of our thought and action.

(That said, Jonathan Swift deserves some credit for anticipating Kahneman by more than two centuries in contesting the notion that man was an animal rationale and suggesting man was rather a rationis capax, or an animal only “capable of reason”.)

Common sense is a product of our intuitive thinking. It represents our natural tendency to extrapolate from past experience and absorb the collective wisdom of those around us.

In many circumstances, particularly during our evolutionary history, this kind of thinking proved rather useful. A close encounter with a predator that left us forever wary, or noticing that everyone avoided eating those plump yellow berries, could be life saving revelations.

Indeed, common sense thinking can still be useful today. Like how we know it’s common sense not to leave valuables in our car overnight, and it’s common sense to pay careful attention to our bookkeeping. We don’t need to spend a long time contemplating whether it might be worth leaving the laptop on the passenger seat or fronting up to the ATO or Inland Revenue with a few scribbly napkins.

These are situations where the future reliably resembles our experience of the past, where advice from others proves prudent and where the consequences of the right action are reasonably predictable.

However, many of the intuitions and heuristics (learnings) that inform common sense are dreadfully prone to error. In many cases the future doesn’t resemble the past, such as when a freak event leads us to infer that it’s more likely to occur again.

Our experience also covers only a tiny fraction of reality, so extrapolating from it can easily lead to erroneous conclusions. This is precisely why we had to invent the rather counterintuitive scientific method in order to correct for the way we intuitively observe the world and extrapolate from experience.

Our thinking is also riddled with hidden biases and clumsy rules of thumb. Our social nature encourages us to conform to the views of those around us, even if we quietly think they might be wrong. We then tend to seek out views that confirm our own attitudes and avoid evidence that challenges them. And we feel the pain of loss more acutely than the joy of acquisition.

These, and many other biases, can lead to poor judgements. Take the sunk cost fallacy, for example, whereby we tend to throw good money after bad in order to justify a prior poor investment. Often it is more prudent just to cut our losses and move on.

In order for critical thinking to function effectively in the workplace, there needs to be a culture that encourages questioning and rational scrutiny. Without that, it’s likely that most people will be reluctant to rock the boat, particularly if the common sense is coming from above.

Or hindsight bias, which can lead us to think that innovation is a directed process, one where we can reliably predict the outcome. Instead, innovation is more akin to experimentation, and outcomes are inherently unpredictable. Our natural aversion towards failure further hampers this experimental innovation process leading to speculative projects being cancelled before they’re put to the test.

Another common misconception is that hard work is sufficient for achieving success. Related is the notion that highly successful people must possess some special qualities which, if only we could emulate them, would lead to us being successful too.

There’s little doubt that working hard helps, but so too do natural talent and dumb luck. However, it’s notoriously difficult to emulate someone’s genes, or their luck.

But it’s not just that common sense is prone to error. Crucially, citing common sense also involves an expectation that everyone around us thinks the same way. That’s precisely how the “sense” becomes “common.” And it’s this aspect of common sense that can make it particularly problematic. It means that if one of our heuristics is wrong, calling it common sense makes it even harder to kick in the rational thinking process to scrutinise it. Common sense becomes a conversation stopper precisely when the conversation ought to get going.

Dr Cristina Neesham, who teaches critical thinking and problem solving in the School of Business and Economics at Monash University, has a few useful tips for avoiding some of the pitfalls of common sense thinking. One is to be mindful of the difference between situations where quick judgements are acceptable and those where we need to pause to think our way through.

“We need to ask ourselves if it is appropriate for us to expect agreement without debate or questioning,” she says.

“The answer is: it depends. There are many situations where debate and questioning are not necessary, such as when asking ‘what is the shortest route between two points on a piece of paper?’. But there are many others when debate and questioning are badly needed.”

Naturally, she also recommends a healthy dose of critical thinking.

“This is the capacity for us to make a sound judgement as to when it is appropriate to accept common sense-based opinions and when we should probe and question further.”

In order for critical thinking to function effectively in the workplace, there needs to be a culture that encourages questioning and rational scrutiny. Without that, it’s likely that most people will be reluctant to rock the boat, particularly if the common sense is coming from above.

The crowd can also be a potent tool for decision making, says Professor Lyn Carson, from the Business School at the University of Sydney.

“I believe that we make better decisions in the company of others than we do on our own,” she says.

“Firstly, we can exploit the creative potential of a larger group. And, importantly, you will often get a devil’s advocate in a group, someone who will say ‘yes, but what about this?’”

From Carson’s perspective, business leaders ought to welcome such deliberation, even if it means opening up their own ideas to scrutiny.

“As a leader, I want to say ‘give it to me, give me all the negatives’, because I don’t want egg on my face when I eventually speak to the client.”

Cultivating a culture of enquiry and questioning might make some business leaders feel a little uncomfortable, particularly if they feel it undermines their authority. The question is, would they rather avoid people challenging their decisions, or would they rather make the right decisions?

The answer to that question seems like common sense to me.

Tim Dean is a science and philosophy writer. He is completing his PhD in evolution and morality at the University of New South Wales.

This article was first published in the February 2016 issue of Acuity magazine.