bSMART Guide

Noreena Hertz is an English author, economist and broadcaster known for her visionary ideas as an influential woman in academia and economics.  Her books have been published in 17 languages, and her work was the inspiration for Bono's (RED) campaign, which partners with the world's most powerful brands to contribute up to 50% of their profits to help fight AIDS, Tuberculosis, and Malaria in developing countries.

Harper Business released Noreena's new book, Eyes Wide Open: How To Make Smart Decisions in a Confusing World on September 24th 2013.  Eyes Wide Open helps readers sift through the data deluge in their environment to make enlightened and smart choices in every day life. 

Be true to yourself.  Have opinions.  Have a voice.


How to make smart decisions

Why is responsible decision making at the heart of empowerment for men and women?

We make a lot of decisions in life - big decisions around health, wealth, and relationships.  If we don’t take responsibility for decision making, if we don’t become smarter while making them and more savvy about our own thinking, and also the ways that others may be leading us into certain behaviors, then we’re just going to be victims of futures that others dictate for us.  If we want to be empowered, then we have to make smart choices.

How has your background in economic analysis influenced your approach to smart decision-making? 
When I became interested in the issue of how to improve our decision-making skills, I looked to economic literature, and also the literature of neuroscience, psychology, sociology, and the history around decision-making.  I wanted to procure lessons we can all use to make smart choices.  I also interviewed some inspirational and extremely intelligent decision-makers in the world. I spoke with everyone from presidents to ER doctors, from the man who bought Harry Potter when all the other publishers had turned it down to Dick Zanuck, who produced Alice in Wonderland.
We make ten-thousand decisions every single day (two-hundred-and-twenty-seven just about food!), so it was crucial for me to take a step back, look at my roots and my field of study, and fill in the blanks with additional research in making smart choices.  For me, the catalyst was my background in economic analysis.



Watch Noreena's bSMART interview here!

If we want to be empowered, then we have to make smart choices.


How do emails, tweets, posts, and our Pavlovian response to those forms of notification, negatively affect our ability to independently think? 
Every time we check an email, it takes us on average twenty-two minutes to get back to the same level of focus we had before we opened it. If you’re checking your emails or your Facebook updates constantly, if you’re looking at gossip sites online, it’s all harming your ability to think.
There are steps we can take to minimize the impact of being chronically ‘plugged in.’ We can batch our emails. We don’t have to check most of those emails on a minute-by-minute basis. We can switch off our email alerts, and we can carve out thinking time. I take a digital Sabbath, or I try to, every weekend. I have one day a week where I’m not constantly checking emails and texts, so that I can properly recharge. Those are some practical steps we can take to create more time for thought and making smart choices.
Why is dissent critical in making smart choices? 
The worst recipe for decision-making is to surround yourself with people who are just like you, with the same views as you, who are only going to reinforce what you already believe. We love receiving “confirming” information. When we receive information that confirms what we already believe, we get a dopamine rush similar to what we feel when we’re having sex, falling in love, or eating chocolate! It’s very appealing, and yet if we’re really going to be smart and have great insights, what we need to seek is information that challenges what we already believe.
Research shows that diverse teams in workplaces are the most successful when it comes to creative problem solving. Other research shows that at companies with women at senior levels of management and on their boards, returns tend to be better. Gender is just one factor. One of the best determinants for creative problem solving, is when teams are made up of people of different ages, when you have people in their twenties and people in their fifties working together.
We need to have diversity if we’re going to make smarter choices, and we also need to have dissent. We need to have different people positing different, challenging opinions, because progress can happen not only from the creation of ideas but also from their destruction. We have to have this creative / destructive process happening if we are going to make smart decisions.


If we’re going to be smart, we need to seek information that challenges what we already believe. 


What are some practical steps a man or woman can take today to make smarter decisions? 
Our emotions play a huge role in the decisions we make, and we are often completely unaware that they have even come into play.  There’s an interesting research study that had people read something funny, or something sad, or something that made them angry, and then asked them whether or not they trusted a colleague at work – and their responses varied widely based on their current emotional state.  If they had read something happy, they were more likely to say that they would trust their colleague.  If they read something sad, they were less likely.  And if they’d read something that made them angry?  Really unlikely to trust their colleague.  Our emotional state affects our decisions.  When we’re stressed we see with tunnel vision.   Conversely, if we’re extremely happy, that can lead to not actually thinking through risks in a careful way.
There was a study done with male undergraduates, where they were shown either a photo of a Victoria Secret model or a photo of a rock, and then given a financial decision to make. The guys who’d been looking at models made much worse financial decisions than ones who had been looking at rocks! So when making decisions, we have to consider our state of sexual arousal or our emotional state - our physical state more generally.
President Clinton talks about how the worst decisions he ever made were when he hadn’t had enough sleep, and the research really backs that up. If you pull an all-nighter or you spend an entire week sleeping just a few hours a night, it’s actually as if you’re making decisions when you’re drunk. We have to get sleep, and we also have to eat properly. I know this sounds a bit like things your mother would tell you to do, sleep and eat, but there’s a lot of research now to actually show how important these fundamentals are.
There was a study done in Israel about judges making parole decisions, and the researchers wanted to understand what factors influenced the granting of parole. Was it the gender of the applicant? Was it type of crime? Was it the ethnicity of the applicant? What was behind it? It turned out it the largest factor was whether the judge had recently eaten. If you went before a judge at 10am, just before the midmorning snack, it was disastrous for you as a potential parolee. You had a zero percent chance of getting granted parole. It was just after the snack, your chances shot up to 65%. Just before lunch, terrible time again, chances dipped down to 10%. Just after lunch, back up to 65%. There are so many factors that are affecting our decision-making that we need to become aware of if we’re going to become smarter and more grounded in our choices.


We tend to really lionize experts and put them on pedestals; whether it’s influential womenor men - and it’s typically men - in white coats, the doctors and specialists and surgeons, or whether it’s the economists, or professors like me. People really hold up experts and trust what they’re saying to quite an incredible degree. There was a study done in which people’s brains were scanned as they heard an expert speak, and the results were really astonishing. As they heard an expert speak, it was as if the independent decision-making part of their brains switched off and they just believed what the expert said, whatever it was.
We need to keep our brains switched on, especially because experts do get so much wrong. In the world of medicine, we now know that doctors misdiagnose as often as one time in six. The financial crisis, the oil crisis of ’73, the fall of the Berlin wall, the Syrian uprising - these were all missed by intelligence experts. In a study of 16,000 experts’ predictions done over a 16-year period, experts got no more right than a monkey randomly throwing darts at a pin board! We need to take experts off the pedestal, and be prepared to challenge them and gather information ourselves. Get inspired to bSmart ourselves!

Don’t Be Silent: bSmart

I think we need to be prepared to challenge others. Challenge the expert. Be the difficult patient. Be the person asking questions at work. Ask questions of the person making the presentation with the PowerPoint slideshow, if you don’t understand it or if you think maybe the assumptions are wrong. It’s very possible that they aren’t right. Do ask those tough questions, and be the challenging voice. Also challenge yourself, because we are prone to a whole host of thinking errors.


Challenge the expert.  Be the difficult patient.  Be the person asking questions at work. 


About Noreena

Who has been the most influential woman or man in your life? 
My mother was probably the most influential woman in my life.  She passed away when I was 20.  She was an arch-feminist, somebody who drummed into me as a little girl that ‘no daughter of mine will ever wash a man’s socks.’  I lived with my husband, Jake, for seven years before I asked him how the washing machine worked!  My mother was a successful entrepreneur, author, academic, artist and in politician.  In her, I saw that as a woman you could do amazing things in the world, and that was inspirational.
What do you consider to be your greatest accomplishment as an author or economist?

There are a few big campaigns that I’ve been involved with that I’m very proud of.  One was a project called Red which began with Bono reading a book that I’d written, The Silent Takeover, which had this idea in it that shopping could be the new politics, that people could vote with their pockets on ethical and environmental issues.  He approached me, and out of that book and our conversation came this amazing initiative, Red, in which a whole host of companies - Gap, American Express, big companies - now create Red products and the money goes to the Global Fund for AIDS.  That’s something I’m really proud of.

Another thing I’m proud of having done is that I launched a campaign in the United Kingdom a few years ago where I tried to get all the soccer players to give up a day’s wages for nurses. In this country it would be comparable to trying to get all the NFL players to give up a day’s wages for teachers. It was a really ambitious idea. I wanted people to be thinking about, ‘Who do we value in society?’ and ‘Why don’t we value people who care?’ I was able to bring these issues into the public conversation. I think I’m most proud of projects where I’ve combined intellect with sufficient populism so that I’ve managed to get people engaged in practical ways with the big issues.
What are your greatest lessons learned as an economist and trend-spotter?
I thought I wanted to be, initially, a film producer. I had my life completely mapped out. All through my teens I would write to film companies and I got jobs on my summer holidays working for them. I thought I knew exactly what I wanted to do and what I was going to do. But then I went to business school in America, and when I graduated from Wharton with my MBA, one of my professors said, ‘Do you want to come to Russia and help set up Russia’s first stock exchange?’ And I took that opportunity; even though it was completely different to everything I thought that I’d ever wanted to do. I took it because it was something that felt like one of those once in a lifetime opportunities.
It was back in 1991 when the Soviet Union was collapsing, and it was a really historic moment. I went and had this incredible time and advised these economists who were advising this up-and-coming politician, Boris Yeltsin. Then after that, I went to Hollywood to take up my job that I’d really worked hard to get, to start my first job in the film industry. For me it was real courage when, a few months down the line, I thought, ‘Even though this is what I thought I wanted to do with my life, actually there’s this other road I didn’t even know existed, but I think I now must pursue.’ Sometimes courage is walking away from something that you thought was your path and destiny. It can be incredibly empowering. It can open up all these new avenues and doors for you.
I’m in a world now where there are very few women. I’m a professor of economics. Less than 10% of economics professors are women. You can make that a terrible cross to bear or you can create an opportunity out of it. You’re never going to fit in 100% because you’re not going to look like your colleagues. Not only am I a woman, but I’m so much younger than my peers. It actually can encourage you to be more authentic, to be the true person that you are because as life goes on you can’t really do anything but be authentic. I think being in a predominantly male world hasn’t necessarily been such a terrible thing. I mean, it’s terrible that there aren’t more women, and I do want more women to join my field, but actually, I think in some ways it’s enabled me to stay true to who I am.


Sometimes courage is walking away from something you thought was your path and destiny.


What advice would you give your younger self with respect to the economy and identifying global trends?
Be true to yourself.  Have opinions.  Have a voice.  You don’t have to be the good girl.  You don’t have to be the one who’s always liked.  It’s okay to be controversial if that’s true what you believe.  Make sure that you have a voice.  No one’s going to give you a voice.  If you want to play a part in the world, you have to grab it.
If you could write the story of the world economy over the next 5 years, what do you see?
Moving into the future, I hope we will not be in the position we’re in today - less than 21% of women globally are in senior management positions. So few women are sitting at the tables of power, and so few women are representing citizens in politics. My hope is that in the future, more women will be firmly at that table with power, with economic power, as well as with strong voices. We desperately need influential women. But we are far from that point currently, and that’s why it’s so wonderful to be speaking to young women who themselves will be championing women in the next decade.

This challenge is partly institutional. Part of the problem is that it’s a self-reinforcing situation because there aren’t women already in these positions. Very few younger women have the role models in place to help them figure out what steps they need to take in order to get where they want to go. Older women need to be helping younger women, and mentoring them and sharing their experiences. But younger women too need to be pooling their information and their resources, which you can do nowadays virtually. You don’t have to just meet people physically. Be involved in forums and discussions online as well as seek out physical events where you can meet like-minded women and share your experiences and stories, struggles and hopes. 





What do you want all bSmart members to know about your story that would help them bSmart too?
It’s not always easy.  There are moments when you’ll have self-doubt.  There are moments when trying to achieve big things in your life will feel lonely and difficult, and that’s okay.  Those are going to be tough moments in that journey towards trying to create a life for yourself and others that is meaningful.  It is okay to not always feel 100% competent, but what’s important and what I’ve learned is to just keep going.  At the end of the day, there aren’t really any shortcuts.  It’s a matter of hard work, tenacity, and determination.

If you want to play a part in the world, you have to grab it.




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