The Courage to Change Your Mind: Lessons from a Nobel Laureate’s Final Decision

Issue 205, March 27, 2025

Think about making decisions. We make countless decisions daily, both major and trivial. We make them consciously, subconsciously, and more concerning, unconsciously. We often write about the decision-making of individuals, groups, teams and entire organizations, because decisions, the choices we make in work and life, are what drive us forward and can put us into unexpected places. Customer decisions based on products and their benefits can resonate or become a blip in an organization’s unending cycle of market innovation. Equally, uninformed, knee-jerk management and team decisions can lead to financial ruin or the complete failure of an organization. It’s self-evident that knowing how we make decisions – where they come from and on what they are based, is critical.

The Human Factor in Decision-Making

We are always advocates of critical thinking, systems thinking and most importantly seeking out the right information to inform ourselves to make the best decisions given the circumstances. But even our best skills and intentions, including relentless preparation, can be thwarted by our very humanness. We are inconsistent in assessing the litany of circumstances that cause us to make decisions. We act based on a range of motivations: to be quick, deliberate, overly cautious, anxiety-prone, paralyzed by over-analysis, exert a power position, contend with a hostile co-worker, or simply because we don’t want to be responsible for what results from the decision.

At 2040 we are rigorous investigators of human behavior in the workplace. We have studied why we follow rules, why we lie, and how we should consider both positive and negative thinking. We have also explored the subject of choice; too much choice can stop us in our tracks and defer to others to make the decisions for us. At the core of everything is our decision-making process. It guides us in everything from what we say or do not say, or what we think or do not think, and whether to act or not.

The point of this investigation is to examine a few of the factors that lead to decisions and the process of making them and offer our readers some considerations for their own decision-making. Why? The decision-making process is one of the most overlooked strategies in organizations. To put it simply: Why do we make the decisions we do?

Lessons From Daniel Kahneman

Our current look into decision-making is inspired by a recent report in The Wall Street Journal about Daniel Kahneman who was “one of the world’s most influential thinkers—a psychologist at Princeton University, winner of the Nobel Prize in economics. He spent his long career studying the imperfections and inconsistencies of human decision-making.” His final decision to end his life was a testament to a lifetime of understanding why decision-making is ultimately a personal choice. Although his studies were largely focused on behavioral economics, he was one of the most influential thinkers on the broader implications of human decision-making and left a legacy of insights that can directly impact workforce management, leadership, and corporate strategy.

You could argue that spending a lifetime researching decision-making is a highly refined and niche discipline. But when you think about it, the number of decisions we make, their impact on our lives and the lives of others, and the implications for organizations are far-reaching. And we believe that many decisions that are made are not the result of a rational, thought-out process. Rather, they are based on ingrained behavior, bias, risk aversion, expediency, and often, ignorance.

Kahneman’s research underscores the power of rational human decision-making, revealing the biases and inconsistencies that often influence organizational operations. We’ve distilled a few highlights from the WSJ report that spark further thinking about the underpinnings of decision-making in organizational leadership and high performance.

Perception or Reality?

“Economists had long assumed that human beings are rational. By that, they meant that people’s beliefs are internally consistent, they make decisions based on all the relevant information and their preferences don’t change,” the WSJ reports. However, Kahneman argued that decision-makers are “inconsistent, emotional and easily fooled—most easily of all, by themselves. ‘Self-delusion helps sustain most people,’” making the case that “people are neither rational nor irrational; they are, simply, human.”

Kahneman’s research fundamentally challenged the long-standing assumption that people—and by extension, executives—make purely rational decisions. Instead, he highlighted that leaders are prone to cognitive biases, emotional decision-making, and self-deception. High-performance organizations acknowledge these biases and implement structured decision-making processes to mitigate them. Data-driven decision-making, feedback loops, and diverse perspectives in strategy discussions can counteract these natural cognitive tendencies.

We wrote our book, The Truth About Transformation, on how human factors are at the root of any change or transformation initiative. Understanding and leveraging human factors can lead to transformational success. Failing to understand and adapt to them will only lead to failure. And there are cases of sheer dumb luck; lack of consideration of the human factor may still lead to progress, although it may be fleeting.

The Peak-End Rule

Kahneman knew the psychological importance of happy endings. As reported in the Journal, “In repeated experiments, he demonstrated what he called the peak-end rule: Whether we remember an experience as pleasurable or painful doesn’t depend on how long it felt good or bad, but rather on the peak and ending intensity of those emotions.”

This profound insight, the peak-end rule, suggests that people judge experiences based on their emotional peaks and how they end rather than the overall experience. Consider this personal story. What starts off as a bad vacation where everything has gone wrong from the weather and food to seaweed-infested beaches, improves to the point that the last few days are better than enjoyable. When you reflect on the vacation or share your experience with someone, you recall the happy ending, not the bumpy start. This works the same way in organizations. A long delayed and troubled product development and launch to the marketplace is a journey. In those troubled moments, all seems dire, and you may want to stick your head in the sand trying to ignore (or deny) the situation at hand. The moments of innovation, excitement and fulfillment are fleeting. After the launch finally occurs, the product is a huge success, revenues increase, the customer base expands, and the accolades come rolling in. A happy ending and those peak moments are the primary, lasting memory.

Another way to view it is that the end justifies the peak moment means. This has significant implications for employee engagement and performance management. Enlightened companies enhance employee satisfaction and build retention by ensuring positive high-impact moments—such as recognition programs, career development opportunities, and meaningful work experiences. By managing the transition phases in an employee’s journey, peak-end moments can be enhanced. The result is higher commitment, clarity about individual contributions as well as how to measure everyone’s contributions. Employee satisfaction can become a positive experience, with a happy ending encased as the trigger memory.

Flow

One of Kahneman’s most treasured principles was the importance of reconsidering. “Most people hate changing their minds, he said, but I like to change my mind. It means I’ve learned something,” according to the WSJ report. Learning is a life-long endeavor because we simply cannot know everything all at once and things change.  Organizations evolve as they adapt to meet changes in the marketplace and society at large.

The notion of learning and changing my mind/changing course may run counterintuitively to most organizational strategies. But if you substitute “nimble” or “pivot” for “changing my mind,” the concept reveals the benefits of fluid decision-making in adapting to changing customer behaviors and demands. It’s true that most people like things to move along predictably and smoothly; pivots, changes and transformations are uncomfortable. However, we learn more from our mistakes than we do from established, standardized processes and plans. The concept of “changing my mind,” opens the flow of innovation, experimentation and the power of possibility.

Quitting at the Right Time

Kahneman’s final decision to end his life on his own terms was a calculated move, and emblematic of his lifelong research on decision-making. In a business context, this relates to “changing my mind” and the higher principle of strategic quitting—knowing when to pivot, discontinue unproductive initiatives, or step away from outdated business models. Openness to changing one’s mind harkens to our piece last month as we questioned the unending battle between centralization and decentralization as a revolving door in organizational management. The cycle runs counter to changing one’s mind and finding the right productive organizational solution. The revolving door ingrains recycling unproductive ones that are already known to be error prone.

High-performance organizations measure their projects and strategies realistically, ensuring they are not merely continuing efforts due to sunk costs or emotional attachment, or worse because that’s what “we’ve always done.” They stop the cycle to determine the sound path forward.

To thrive in disruptive, increasingly competitive markets, high-performance organizations embrace decision-making strategies to transform and adapt to change rooted in cognitive science. By reducing bias, strategically managing peak employee experiences, knowing when to pivot, and leading with ethical foresight, businesses can enhance performance, innovation, and workforce resilience.

Based on Kahneman’s work, we have a short list of four basic strategies that leverage effective decision-making:

• Implement structured decision-making frameworks to counteract cognitive biases.
• Design employee experiences that maximize engagement based on the peak-end rule.
• Recognize the power of strategic quitting in business operations.
• Lead with ethical consideration, ensuring balanced decision-making for long-term sustainability.

This list may seem simple or obvious, but we suggest they are sound strategies to recognize and act on how we make decisions. Addressing inherent defaults and applying effective strategies result in sound organizational management, better equipped to compete in dynamic hyper-changing times. Want to explore further? We’re here to help and look forward to leveling up your performance and results.

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