The Third System of Thinking for Wise Decision Making

In 50 years time some historian will write about the global pandemic of 2020 and the consequent social, economic, and geo-political upheavals, but right now it feels like we're in the middle of an apocalyptic movie with no end in sight. And at almost every turn of events what's become glaringly obvious is that wisdom and wise decision making have been largely absent. The trend towards liberalism after the Second World War is being reversed and popularism and polarization characterise the actions of many business, political, community, and media leaders. It's as if everyone is on 'fast forward' but no one is thinking more slowly and sensibly.

Wisdom has been valued for thousands of years and in all cultures, yet it is rarely mentioned in business schools. We need to restore wisdom to a central position in the thinking, decision making and actions of leaders who decide for better or - as we have increasingly seen - for worse, before it is perhaps, too late. To paraphrase T.H. White: Fools, knaves, and toxic leaders have no use for wisdom. 

In a paper published this week, I argue for a third system of thinking which promotes wisdom-related reasoning, decision making, and action. The dual-process theory of decision making asserts that we use two systems of thinking to make decisions: an intuitive, immediate, automatic "gut feeling" style (system 1); and an analytical, slower, intentional, reason-oriented style (system 2). It turns out most of our everyday decision making is preconscious using system 1 and we mostly use system 2 to rationalise the ideas and feelings we had about the decision in the first place. Neither system is better than the other and we seem able to move between intuitive and rational processing depending on the context. Intuitive kinds of problems such as interpersonal issues respond best to system 1 thinking, and rational kinds of problems like trying to balance a budget respond more effectively to system 2 thinking, and we engage both systems within the same problem if needed.

Wisdom is a multidimensional and adaptive human attribute and the processes of wise decision making are similarly multidimensional. In studies of the neurobiology of wisdom, neuro-correlates for system 1 and system 2 thinking have been identified, but "wise thinking" shows up in brain centres involved with balancing system 1 and system 2 thinking. For example, in a recent study, participants who completed moral reasoning dilemmas while undergoing fMRI and who showed higher wisdom scores on a psychometric assessment demonstrated greater engagement of the DMN (Default Mode Network) for moral-personal conditions, which suggests that a third system might be involved in the ability to recognise and process social and emotional cues. I propose that system 3 is a more considerative way of assessing information when thinking about how to balance competing interests in the short and long-term, particularly when faced with doubt, dilemma, disruption, and complex problems with multiple, unknown solutions. For example: deciding on a career path, solving long-lasting conflicts among family members, accepting the death of a loved one.

System 3 thinking is how we make wise decisions when our "gut feeling" (system 1) might lead us astray, or there is simply not enough predictive data (system 2) to make a confident decision. In my paper, I draw on recent research to outline the psychometric dimensions of a third system of thinking which can be practiced to enhance wise decision making:

Focus - System 3 thinking demands sustained, focused attention on meaningful tasks and activities. If you are too easily distracted you're unlikely to invest the thinking necessary to make a wise decision. Cultivating the ability to focus in the midst of noise has been found to enhance productivity and minimize stress, and mindfulness meditation is viewed as a pathway to wisdom.

Life Experience - Life experience is a necessary but not a sufficient condition for system 3 thinking. However, wise people are more likely to reflect on their own life lessons and the lives of others to make sense of what it means to live a good life, and to offer practical and non-judgmental advice to others.

Decisiveness - paradoxically, an important capability of system 3 thinking is acknowledging uncertainty and ambiguity yet making quick and effective decisions; not suffering "paralysis by analysis"; adopting the entrepreneurial "fail forward" principal.

Compassion - without compassion (the feeling that arises when you are confronted with another's suffering and feel motivated to relieve that suffering) you cannot hope to face the collective problems of humanity and strive to do what is within your power to make positive change. Otherwise decisions are confined to "me-first" and blind to the long-term consequences.

Emotional Regulation - A critical capability of system 3 thinking is to recognize feelings yet not be overwhelmed by them. Control over emotions is not the same as the absence of emotions but rather having control over the intensity and variation in them, which yields a kind of contentedness.

Tolerance for Divergent Values - Acceptance of diversity allows for your own signature strengths, but also opens you up to understand why someone else might rely on different strengths. The key to system 3 thinking appears to be in having strong values "weakly held", which means you are more prepared to change your mind if new information presents itself.

Wise decision making is key to creating a better world and my paper is a call for leaders to engage in a deliberate practice of wise decision making if we are to have any hope of solving the wicked problems of our era. The 6 dimensions of system 3 thinking are foundational to cultivating wisdom, which I define as:

The conscious engagement of system 3 thinking through the dimensions of focus, life experience, decisiveness, compassion, emotional regulation, and tolerance for divergent values; balancing self-interest and well-being with the interests and well-being of others involved directly or indirectly; expressing a considered view of the personal, social, environmental, economic, and political circumstances; in the short-term and the long-term; to achieve the maximum good (or the least harm) for the most people and for society; with positive ethical values; expressed at the point of decision.

Take the FREE T3 Profile here to find out how well you use system 3 thinking and how you can get better at it.

Download a FREE chapter from my upcoming book “System 3 Thinking: How to Choose Wisely when Facing Doubt, Dilemma, or Disruption”.