Capital Allocators – Inside the Institutional Investment Industry cover image

Capital Allocators – Inside the Institutional Investment Industry

Gary Klein with Paul Sonkin and Paul Johnson – Conducting Pre-Mortem Analysis (Capital Allocators, EP.109)

Sep 23, 2019
Gary Klein, a cognitive psychologist and founder of Shadow Box, is joined by finance experts Paul Johnson and Paul Sonkin. They delve into the Pre-Mortem method of risk assessment, highlighting its origins in the Air Force and its significance in avoiding investment failures. The trio discusses enhancing decision-making through tools like Shadow Box training and Cognitive After-Action Reviews. They critique common risk mitigation techniques and emphasize the necessity of fostering a candid dialogue in teams to improve outcomes and reduce overconfidence.
48:59

Podcast summary created with Snipd AI

Quick takeaways

  • Premortums are a valuable tool for risk assessment and decision-making, encouraging candid discussions and reducing overconfidence.
  • Premortums contribute to changing organizational culture by promoting transparency, fostering a safe environment, and enhancing teamwork and problem-solving abilities.

Deep dives

The Power of Premortums

The podcast episode discusses the concept of premortums as a powerful tool for risk assessment and improving decision-making processes. The conversation with experts Gary Klein, Paul Johnson, and Paul Sanken explores the effectiveness of premortums in different contexts, including the military, business, and investment decision-making. Premortums involve envisioning a situation where a project or plan has already failed and then identifying the reasons for the failure before it happens. This technique encourages candid discussions, reduces overconfidence, and increases psychological safety within the group. Other risk mitigation techniques such as devil's advocates and red teams are also discussed, but premortums are highlighted as a valuable method due to their ability to bring out valuable insights and enhance group dynamics.

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