McKinsey:new weekly newsletter”Solar Power to the People in Africa

Weekly need-to-know content

Welcome to the Shortlist: new ideas on timely topics, plus a few insights into our people. Get it in your inbox every Friday. This week, scroll down to see what Scott Nyquist, senior partner and energy expert, is reading.

OFF THE CHARTS

Bringing (solar) power to the people

About a billion people around the world have no access to electricity. Expanding the grid is part of the answer, but so are solar home systems, which are just starting to prove that they can serve homes that are too remote or whose energy consumption is too low to make a grid connection economical.

INTERVIEW

Richard Thaler: Rising above the irrational

How do you drive bias and irrationality out of business decisions? “Write stuff down,” is the surprisingly simple advice that Professor Richard H. Thaler, the Nobel-prize-winning economist and author, recently gave in an interview with McKinsey.

Aligning your goals, expectations, and assumptions helps to overcome hindsight bias and show, for example, that an otherwise good decision made in 2005 that was undone by the financial crisis wasn’t stupid—just unlucky. Speaking of luck, Thaler had a memorable cameo in The Big Short, in which he explained the irrational euphoria that led to the 2008 financial crisis while playing blackjack with Selena Gomez.

The same advice about luck applies to financial forecasts, Thaler says: even if you don’t share all your assumptions publicly, write down your high and low estimates, as well as your confidence limits. Over time, you’ll learn more even if you think the resulting equivocation makes you look like an idiot. (All this from the same guy who, when asked what he would do with the more than $1 million in Nobel prize money, quipped, “I will spend this as irrationally as possible.”)

Thaler also told us how the design of his home base, the University of Chicago Booth School of Business, nudges the school’s employees toward better health, how to encourage diversity of thought to debias the boss, and why artificial intelligence should play a bigger role in human resources.