Michael Mauboussin – Attention: Pay Now Or Pay Later

Michael Mauboussin is the author of The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing (Harvard Business Review Press, 2012), Think Twice: Harnessing the Power of Counterintuition (Harvard Business Press, 2009) and More Than You Know: Finding Financial Wisdom in Unconventional Places-Updated and Expanded (New York: Columbia Business School Publishing, 2008). More Than You Know was named one of “The 100 Best Business Books of All Time” by 800-CEO-READ, one of the best business books by BusinessWeek (2006) and best economics book by Strategy+Business (2006). He is also co-author, with Alfred Rappaport, of Expectations Investing: Reading Stock Prices for Better Returns (Harvard Business School Press, 2001).

Visit his site at: michaelmauboussin.com/

Michael Mauboussin


We all face a similar challenge: how to pay attention to what matters so as to make sure that we make good decisions. There are lots of bids for our attention, and the introduction of technology in recent years means there are more beeps and buzzes to divert our focus than ever before. Failure to allocate attention properly in the short run can add up to problems in the long run. Hence, the theme for the Thought Leader Forum in 2015—“Attention: Pay Now or Pay Later.”

This year’s forum featured economists, psychologists, and even a world-class pickpocket. Each explained how focusing the spotlight of attention left a great deal to the shadows. We heard that how you allocate your attention can affect your happiness, how organizational mindsets can perpetuate implicit biases, how a failure to pay attention to small problems can snowball into predictable surprises, and how the notion of multitasking is a myth that should be delegated to the trash heap. And you know that focus can be manipulated when a pickpocket takes an audience member on stage and proceeds to swipe all of his valuables in front of a delighted audience.

You can think of attention on three levels—individual, organizational, and financial markets. In our personal lives, we have to figure out how to filter the signal from the noise. In most cases, the answer is not to try to drink from a fire hose of information, but rather to prioritize attention. Further, one useful approach is to shape your environment in order to shift some of your cognitive load. Finally, we know that creativity is generally associated with a mind-wandering state, but constant focus on screens limits that time. Carving out time for mind-wandering may be the path to doing your best thinking.

Attention is also very important for your organization. Companies, similar to individuals, often have mindsets—a lens through which to see the world. Mindsets can have implicit biases that diminish performance. So, you need to think carefully about whether you can include “nudges” in your organization to steer behavior away from the biases. Motivation is also a crucial topic, and evidence suggests that the conditions of intrinsic motivation—autonomy, mastery, and purpose—can be fragile. Effective leaders shape the organization’s attention in such a way to promote motivation.

Attention is important for markets, too. There is always a topic, or worry, of the day. Understanding how to weight the relevance of that topic is critical. It is also important to pay attention to the person on the other side of your trade. What does he or she know that you don’t? Research suggests that we tend to be overconfident in our beliefs. Allocating attention toward the motivation of others can help check that overconfidence.

We all feel that the pace of change in the world is speeding up. This means that there are more demands on our attention than ever before. And there’s plenty of evidence that our attention wasn’t so good to begin with. So, we need to be aware of the challenges of attention and, more importantly, to adopt methods to allocate attention wisely.

The following transcripts not only document the proceedings, they also provide insights into how you can improve your attention management—as an individual and as a leader. One theme that ran throughout the day was how limited our attention truly is, and how much is going on outside our awareness. Once you recognize this reality, you can take concrete steps to address it in your own life and take advantage of it in business.

Michael Mauboussin – Attention: Pay Now Or Pay Later

Good morning. For those of you whom I haven’t met, my name is Michael Mauboussin, and I am head of Global Financial Strategies at Credit Suisse. On behalf of all of my colleagues at Credit Suisse, I want to wish you a warm welcome to the 2015 Thought Leader Forum. For those who joined us last night, I hope you had a wonderful evening. We are very excited about our lineup for today.

I’d like to do couple of things this morning before I hand it off to our speakers. First I want to highlight the levels at which you might consider today’s discussion of the role of attention. I then want to discuss the forum itself, including what you can do to contribute to its success.

You might listen to today’s discussion of attention at three different levels. Some of the points will span multiple levels, but these are some of the ideas that we’ll hear about throughout the day. So here they are.

The first relates to attention for us as individuals. How do I learn to pay attention more effectively? How can I improve my happiness or the happiness of those around me? How do I balance deep focus and mind-wandering? How do I handle the information deluge?

The second is at the level of your organization. This room is full of leaders. What biases are embedded in the organization? How do you motivate employees? How do you pay attention so as to avoid business discontinuities and, in an even more extreme case, ethical breaches?

The final level is that of markets. What information do we pay attention to? And how do we weight it? How do we pay attention to what others are doing without mindlessly falling in line with what they do?

So, let’s start with the individual. One of the big challenges most of us face is lots of demands on our time and attention. Our natural inclination is to want to do many things at once—to multitask. Well, the scientific community has studied multitasking, and the verdict is in: it doesn’t work. When we think we’re multitasking, we are really doing sequential tasking—and each individual task is done poorly. Further, switching tasks is cognitively costly.

So, the prescription is pretty straightforward: don’t do it. And don’t pretend that you can. You may gain some emotional gratification from multitasking, but the evidence is clear that it degrades your cognitive functioning.

Simply speaking, your mind can operate in two states: focused attention or decoupled attention, also known as mind-wandering. Focused attention is required to complete specific tasks, such as writing a crucial email or reading a legal document. Mind-wandering allows us to consolidate thoughts and provides easier access to associative thinking. Indeed, we

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