Farnam Street https://www.farnamstreetblog.com Tue, 07 Jul 2015 11:00:49 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.2 Simple Rules: How to Thrive in a Complex Worldhttps://www.farnamstreetblog.com/2015/07/simple-rules/ https://www.farnamstreetblog.com/2015/07/simple-rules/#respond Tue, 07 Jul 2015 11:00:49 +0000 https://www.farnamstreetblog.com/?p=21196 “Simple rules are shortcut strategies that save time and effort by focusing our attention and simplifying the way we process information. The rules aren’t universal— they’re tailored to the particular situation and the person using them.” We use simple rules to guide decision making every day. In fact, without them, we’d be paralyzed by the […]

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Simple Rules

“Simple rules are shortcut strategies that save time and effort by focusing our attention and simplifying the way we process information. The rules aren’t universal— they’re tailored to the particular situation and the person using them.”

We use simple rules to guide decision making every day. In fact, without them, we’d be paralyzed by the sheer mental brainpower required to sift through the complicated messiness of our world. You can think of them as heuristics. Like heuristics, most of the time they work yet some of the time they don’t.

Simple Rules: How to Thrive in a Complex World, a book by Donald Sull and Kathleen Eisenhardt, explores the understated power that comes from using simple rules. As they define them, simple rules refer to “a handful of guidelines tailored to the user and the task at hand, which balance concrete guidance with the freedom to exercise judgment.” These rules “provide a powerful weapon against the complexity that threatens to overwhelm individuals, organizations, and society as a whole. Complexity arises whenever a system— technical, social, or natural— has multiple interdependent parts.”

They work, the authors argue, because they do three things well.

First, they confer the flexibility to pursue new opportunities while maintaining some consistency. Second, they can produce better decisions. When information is limited and time is short, simple rules make it fast and easy for people, organizations, and governments to make sound choices. They can even outperform complicated decision-making approaches in some situations. Finally, simple rules allow the members of a community to synchronize their activities with one another on the fly.

Effective simple rules share four common traits …

First, they are limited to a handful. Capping the number of rules makes them easy to remember and maintains a focus on what matters most. Second, simple rules are tailored to the person or organization using them. College athletes and middle-aged dieters may both rely on simple rules to decide what to eat, but their rules will be very different. Third, simple rules apply to a well-defined activity or decision, such as prioritizing injured soldiers for medical care. Rules that cover multiple activities or choices end up as vague platitudes, such as “Do your best” and “Focus on customers.” Finally, simple rules provide clear guidance while conferring the latitude to exercise discretion.

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Simple Rules for a Complex World

People often attempt to address complex problems with complex solutions. For example, governments tend to manage complexity by trying to anticipate every possible scenario that might arise, and then promulgate regulations to cover every case.

Consider how central bankers responded to increased complexity in the global banking system. In 1988 bankers from around the world met in Basel, Switzerland, to agree on international banking regulations, and published a 30-page agreement (known as Basel I). Sixteen years later, the Basel II accord was an order of magnitude larger, at 347 pages, and Basel III was twice as long as its predecessor. When it comes to the sheer volume of regulations generated, the U.S. Congress makes the central bankers look like amateurs. The Glass-Steagall Act, a law passed during the Great Depression, which guided U.S. banking regulation for seven decades, totaled 37 pages. Its successor, Dodd-Frank, is expected to weigh in at over 30,000 pages when all supporting legislation is complete.

Meeting complexity with complexity can create more confusion than it resolves. The policies governing U.S. income taxes totaled 3.8 million words as of 2010. Imagine a book that is seven times as long as War and Peace, but without any characters, plot points, or insight into the human condition. That book is the U.S. tax code.

[…]

Applying complicated solutions to complex problems is an understandable approach, but flawed. The parts of a complex system can interact with one another in many different ways, which quickly overwhelms our ability to envision all possible outcomes.

[…]

Complicated solutions can overwhelm people, thereby increasing the odds that they will stop following the rules. A study of personal income tax compliance in forty-five countries found that the complexity of the tax code was the single best predictor of whether citizens would dodge or pay their taxes. The complexity of the regulations mattered more than the highest marginal tax rate, average levels of education or income, how fair the tax system was perceived to be, and the level of government scrutiny of tax returns.

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Overfitting

Simple rules do not trump complicated ones all the time but they work more often than we think. Gerd Gigerenzer is a key contributor in this space. He thinks that simple rules can allow for better decision making.

Why can simpler models outperform more complex ones? When underlying cause-and-effect relationships are poorly understood, decision makers often look for patterns in historical data under the assumption that past events are a good indicator of future trends. The obvious problem with this approach is that the future may be genuinely different from the past. But a second problem is subtler. Historical data includes not only useful signal, but also noise— happenstance correlations between variables that do not reveal an enduring cause-and-effect relationship. Fitting a model too closely to historical data hardwires error into the model, which is known as overfitting. The result is a precise prediction of the past that may tell us little about what the future holds.

Simple rules focus on the critical variables that govern a situation and help you ignore the peripheral ones. Of course, in order to identify the key variables, you need to be operating in your circle of competence. When we pay too much attention to irrelevant or otherwise unimportant information, we fail to grasp the power of the most important ones and give them the weighting they deserve. Simple rules also make it more likely people will act on them. This is something Napoleon intuitively understood.

When instructing his troops, Napoleon realized that complicated instructions were difficult to understand, explain, and execute. So, rather than complicated strategies he passed along simple ones, such as: Attack.

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Making Better Decisions

The book mentions three types of rules that “improve decision making by structuring choices and centering on what to do (and what not to do): boundary, prioritizing, and stopping rules.

Boundary Rules cover what to do …

Boundary rules guide the choice of what to do (and not do) without requiring a lot of time, analysis, or information. Boundary rules work well for categorical choices, like a judge’s yes-or-no decision on a defendant’s bail, and decisions requiring many potential opportunities to be screened quickly. These rules also come in handy when time, convenience, and cost matter.

Prioritizing rules rank options to help decide which of multiple paths to pursue.

Prioritizing rules can help you rank a group of alternatives competing for scarce money, time, or attention. … They are especially powerful when applied to a bottleneck, an activity or decision that keeps individuals or organizations from reaching their objectives. Bottlenecks represent pinch-points in companies, where the number of opportunities swamps available resources, and prioritizing rules can ensure that these resources are deployed where they can have the greatest impact. In business settings, prioritizing rules can be used to assign engineers to new-product-development projects, focus sales representatives on the most promising customers, and allocate advertising expenditure across multiple products, to name only a few possibilities.

Stopping rules help you learn when to reverse a decision. Nobel Prize-winning economist Herbert Simon argued that we lack the information, time, and mental engine to determine the single best path when faced with a slew of options. Instead we rely on a heuristic to help us stop searching when we find something that’s good enough. Simon called this satisficing. If you think that’s hard, it’s even hard to stop doing something we’re already doing. Yet when it comes to our key investments of time, money, and energy we have to know when to pull the plug.

Sometimes we pursue goals at all costs and ignore our self-imposed stopping rule. This goal induced blindness can be deadly.

A cross-continental team of researchers matched 145 Chicagoans with demographically similar Parisians. Both the Chicagoans and Parisians used stopping rules to decide when to finish eating, but the rules themselves were very different. The Parisians employed rules like “Stop eating when I start feeling full,” linking their decision to internal cues about satiation. The Chicagoans, in contrast, were more likely to follow rules linked to external factors, such as “Stop eating when I run out of a beverage,” or “Stop eating when the TV show I’m watching is over.” Stopping rules that rely on internal cues— like when the food stops tasting good or you feel full— decrease the odds that people eat more than their body needs or even wants.

Stopping rules are particularly critical in situations when people tend to double down on a losing hand.

These three decision rules—boundary, prioritizing, and stopping—help provide guidelines on what to do—”what is acceptable to do, what is more important to do, and what to stop doing.”

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Doing Things Better

Process rules, in contrast to boundary rules, focus on how to do things better.

Process rules work because they steer a middle path between the chaos of too few rules that can result in confusion and mistakes, and the rigidity of so many rules that there is little ability to adapt to the unexpected or take advantage of new opportunities. Simply put, process rules are useful whenever flexibility trumps consistency.

The most widely used process rule is the how-to rule. How-to rules guide the basics of executing tasks, from playing golf to designing new products. The other process rules, coordination and timing, are special cases of how-to rules that apply in particular situations. Coordination rules center on getting something done when multiple actors— people, organizations, or nations— have to work together. These rules orchestrate the behaviors of, for example, schooling fish, Zipcar members, and content contributors at Wikipedia. In contrast, timing rules center on getting things done in situations where temporal factors such as rhythms, sequences, and deadlines are relevant. These rules set the timing of, for example, when to get up every day and when dragonflies migrate.

While I was skeptical, the book is well worth reading. I suggest you check it out.

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Turning Towards Failurehttps://www.farnamstreetblog.com/2015/07/turning-towards-failure/ https://www.farnamstreetblog.com/2015/07/turning-towards-failure/#respond Mon, 06 Jul 2015 11:00:36 +0000 http://www.farnamstreetblog.com/?p=21010 Our resistance to thinking about failure is especially curious in light of the fact that failure is so ubiquitous. ‘Failure is the distinguishing feature of corporate life,’ writes the economist Paul Ormerod, at the start of his book Why Most Things Fail, but in this sense corporate life is merely a microcosm of the whole […]

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Turning toward failure

Our resistance to thinking about failure is especially curious in light of the fact that failure is so ubiquitous. ‘Failure is the distinguishing feature of corporate life,’ writes the economist Paul Ormerod, at the start of his book Why Most Things Fail, but in this sense corporate life is merely a microcosm of the whole of life. Evolution itself is driven by failure; we think of it as a matter of survival and adaptation, but it makes equal sense to think of it as a matter of not surviving and not adapting. Or perhaps more sense: of all the species that have ever existed, after all, fewer than 1 per cent of them survive today. The others failed. On an individual level, too, no matter how much success you may experience in life, your eventual story – no offence intended – will be one of failure. You bodily organs will fail, and you’ll die. (Source: The Antidote.)

If failure is so ubiquitous you would think that it would be treated as a more natural phenomenon; not exactly something to celebrate but not something that should be hidden away either. In the book The Antidote: Happiness for People Who Can’t Stand Positive Thinking, Oliver Burkeman visits a ‘Museum of Failed Products’ and comes away with quite a few insights into our reluctance to accept, or even acknowledge, our less successful ventures.

By far the most striking thing about the museum of failed products, though, has to do with the fact that it exists as a viable, profit-making business in the first place. You might have assumed that any consumer product manufacturer worthy of the name would have its own such collection, a carefully stewarded resource to help it avoid repeating errors its rivals had already made. Yet the executives arriving every week … are evidence of how rarely this happens. Product developers are so focused on their next hoped-for-success – and so unwilling to invest time or energy in thinking about their industry’s past failures – that they only belatedly realize how much they need, and are willing to pay, to access (the museum of failed products). Most surprising of all is the fact that many of the designers who have found their way to the museum of failed products, over the years, have come there in order to examine – or, alternatively, have been surprised to discover – products that their own companies had created and then abandoned. These firms were apparently so averse to thinking about the unpleasant business of failure that they had neglected even to keep samples of their own disasters.

I’ve spoken about Burkeman’s book before. There is a great chapter on the flaws related to goal setting and another on the Stoic technique of negative visualisation but they all come back to the concept of turning towards the possibility of failure.

The Stoic technique of negative visualisation is, precisely, about turning towards the possibility of failure. The critics of goal setting are effectively proposing a new attitude towards failure, too, since an improvisational, trial-and-error approach necessarily entails being frequently willing to fail.

So what does it all mean? If avoiding failure is as natural as failure itself, why should you embrace it (or even attempt an Antifragile way of life).

… it is also worth considering the subject of failure directly, in order to see how the desperate efforts of the ‘cult of optimism’ to avoid it are so often counterproductive, and how we might be better off learning to embrace it. The first reason to turn towards failure is that our efforts not to think about failure leave us with a severely distorted understanding of what it takes to be successful. The second is that an openness to the emotional experience of failure can be a stepping-stone to a much richer kind of happiness than can be achieved by focusing only on success.

It’s almost jarring how simple and sensical that is, considering our aversion to failure.

Accepting failure is becoming more conversational, even if we’re a ways from embracing it. ‘Learning from our mistakes’ has become the new business mantra, replacing ‘being innovative.’ Although, I can see this quickly losing its shine when the mistake is idiotic.

Burkeman notes, it’s just too easy to imagine how the Museum of Failed Products gets populated (it is also worth noting that successful products have a lot to do with luck.)

Back in Ann Arbor, at the museum of failed products, it wasn’t hard to imagine how a similar aversion to confronting failure might have been responsible for the very existence of many of the products lining its shelves. Each one must have made it through a series of meetings at which nobody realised that the product was doomed. Perhaps nobody wanted to contemplate the prospect of failure; perhaps someone did, but didn’t want to bring it up for discussion. Even if the product’s likely failure was recognised … those responsible for marketing it might well have responded by ploughing more money into it. This is a common reaction when a product looks like it’s going to be a lemon, since with a big enough marketing spend, a marketing manager can at least guarantee a few sales, sparing the company total humiliation. By the time reality sets in, (Robert) McMath notes in What Were They Thinking?, it is quite possible that ‘the executives will have been promoted to another brand, or recruited by another company.’ Thanks to a collective unwillingness to face up to failure, more money will have been invested in the doomed product, and little energy will have been dedicated to examining what went wrong. Everyone involved will have conspired – perhaps without realising what they’re doing – never to think or speak of it again.

The Antidote: Happiness for People Who Can’t Stand Positive Thinking is an eye-opening look at how the pursuit of happiness is causing us to be more unhappy than ever.

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Summer Hours Are In Effecthttps://www.farnamstreetblog.com/2015/07/summer-hours-are-in-effect/ https://www.farnamstreetblog.com/2015/07/summer-hours-are-in-effect/#respond Thu, 02 Jul 2015 11:00:53 +0000 https://www.farnamstreetblog.com/?p=21188 I’ll be taking time over the summer to live, reflect, and enjoy. That means fewer posts than normal. (I’ll aim for 3 or more posts a week but no promises.) The weekly newsletter, Brain Food, will continue as per usual with multi-disciplinary awesomeness delivered right to your inbox every Sunday. I’ll also be onboarding some […]

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I’ll be taking time over the summer to live, reflect, and enjoy. That means fewer posts than normal. (I’ll aim for 3 or more posts a week but no promises.)

The weekly newsletter, Brain Food, will continue as per usual with multi-disciplinary awesomeness delivered right to your inbox every Sunday.

I’ll also be onboarding some help over the summer. Thanks to the membership program, I’ve been able to hire someone part-time.

If you need a fix, make sure to follow me on facebook, twitter, and instagram.

Thanks for being amazing,
— Shane

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Winifred Gallagher On Living a Focused Lifehttps://www.farnamstreetblog.com/2015/07/winifred-gallagher-focused-life/ https://www.farnamstreetblog.com/2015/07/winifred-gallagher-focused-life/#respond Wed, 01 Jul 2015 11:00:22 +0000 http://www.farnamstreetblog.com/?p=21016 “The American dream is no longer just to get rich quick, but also to enjoy doing it, the new captains of industry offer various best-selling decalogue for achieving this goal. Their tips range from philosophical (learn from your failures) to the practical (never handle the same piece of paper twice). There’s one insight into both […]

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focused life

“The American dream is no longer just to get rich quick, but also to enjoy doing it, the new captains of industry offer various best-selling decalogue for achieving this goal. Their tips range from philosophical (learn from your failures) to the practical (never handle the same piece of paper twice). There’s one insight into both productivity and satisfaction that they inevitably share, however: the importance of laser like attention to your goal, be it building a better mousetrap or raising cattle. Unless you can concentrate on what you want to do and suppress distractions, it’s hard to accomplish anything, period.” — Winifred Gallagher in Rapt: Attention and the Focused Life

I’ve been exploring my ability to focus lately. It seems,  the more we practice and the more we try to become aware of when our focus slips away, the better and more productive we become. Being in this moment — not the past and not the future — is something I’ve learned through yoga and philosophy.

One thing that really helped was to identify and systematically remove distractions from my life. This made it easier to work on awareness, that is, staying in the moment, or as Gallagher, paraphrasing Mihaly Csikszentmihalyi, puts it:

Stay focused on the moment, (Csikszentmihalyi says), even when you’re engaged in routine tasks or social encounters. Practise directing and mastering your attention by any enjoyable means.

What does, ‘by any enjoyable means’ actually mean? The more I try to be aware of how my focus ebbs and flows, the more I realize it’s intrinsically tied into the activities I’m participating in.

According to the under-appreciated mid-twentieth-century psychologist Nicholas Hobbs, the way to ensure this calm but heightened attention to the matter at hand is to choose activities that push you so close to the edge of your competence that they demand your absolute focus. In a variation on James’s recipe for interesting experience – the familiar leavened by the novel – Hobb’s ‘art of choosing difficulties’ requires selecting projects that are ‘just manageable.’ If an activity is too easy, you lose focus and get bored. If it’s too hard, you become anxious, overwhelmed, and unable to concentrate.

If you are an avid reader this should sound familiar. This is where learning happens. This is how we get better. Back in early May I wrote a post about how Kyle Bass feels freediving enables better decision making. A good chunk of that post echoes the statements that Gallagher makes above. If you are looking for challenging work or leisure that will help you maintain and even improve your ability to focus, I think Hobbs puts it best when he says the secret of fulfillment is, “to choose trouble for oneself in the direction of what one would like to become.”

To put it simply, you will know when something is worth your time because it will be engaging to you and focusing at those moments should feel almost effortless. Inversely, if you constantly find your mind wandering and you’re struggling to maintain your focus, it’s probably time to reassess how you are using your time. This is not to say that self-discipline and perseverance aren’t important, but if you want to be as productive as possible, asking yourself why you are doing a specific activity is just as important as hammering through it.

Once again Gallagher puts it nicely:

There are different formulas for the fulfilling experience variously described as ‘interesting,’ ‘peak,’ or ‘optimal,’ but rapt focus is central to all of them. Whether the equation’s other integers are the novel balanced with the familiar or the challenging with the enjoyable, they add up to the same thing: engagement in activities that arrest your attention and satisfy your soul. If most of the time you’re not particularly concerned about whether what you’re doing is work or play, or even whether you’re happy or not, you know you’re living the focused life.

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How David Allen increased Drew Carey’s Productivityhttps://www.farnamstreetblog.com/2015/06/david-allen-productivity/ https://www.farnamstreetblog.com/2015/06/david-allen-productivity/#respond Tue, 30 Jun 2015 11:30:56 +0000 http://www.farnamstreetblog.com/?p=20728 Comedian Drew Carey outsourced the development of his productivity strategy to David Allen, author of the cult classic, Getting Things Done: The Art of Stress-Free Productivity, who “taught him how to adhere to specific next steps rather than abstract larger goals.” Allen’s system, outlined in Willpower: Rediscovering the Greatest Human Strength, focuses “on the minutiae […]

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David Allen

Comedian Drew Carey outsourced the development of his productivity strategy to David Allen, author of the cult classic, Getting Things Done: The Art of Stress-Free Productivity, who “taught him how to adhere to specific next steps rather than abstract larger goals.”

Allen’s system, outlined in Willpower: Rediscovering the Greatest Human Strength, focuses “on the minutiae of to-do lists, folders, labels, in-boxes.”

When he began working with overtaxed executives, he saw the problem with the traditional big-picture type of management planning, like writing mission statements, defining long-term goals, and setting priorities. He appreciated the necessity of lofty objectives, but he could see that these clients were too distracted to focus on even the simplest task of the moment. Allen described their affliction with another Buddhist image, “monkey mind,” which refers to a mind plagued with constantly shifting thoughts, like a monkey leaping wildly from tree to tree. Sometimes Allen imagined a variation in which the monkey is perched on your shoulder jabbering into your ear, constantly second-guessing and interrupting until you want to scream, “Somebody, shut up the monkey!”

“Most people have never tasted what it’s like to have nothing on their mind except whatever they’re doing,” Allen says. “You could tolerate that dissonance and that stress if it only happened once a month, the way it did in the past. Now people are just going numb and stupid, or getting too crazy and busy to deal with the anxiety.”

Instead of starting with goals and figuring out how to reach them, Allen tried to help his clients deal with the immediate mess on their desks. He could see the impracticality of traditional bits of organizational advice, like the old rule about never touching a piece of paper more than once— fine in theory, impossible in practice. What were you supposed to do with a memo about a meeting next week? Allen remembered a tool from his travel-agent days, the tickler file. The meeting memo, like an airplane ticket, could be filed in a folder for the day it was needed. That way the desk would remain uncluttered, and the memo wouldn’t distract you until the day it was needed.

[…]

Besides getting paperwork off the desk, the tickler file also removed a source of worry: Once something was filed there, you knew you’d be reminded to deal with it on the appropriate day. You weren’t nagged by the fear that you’d lose it or forget about it. Allen looked for other ways to eliminate that mental nagging by closing the “open loops” in the mind. “One piece I took from the personal-growth world was the importance of the agreements you make with yourself,” he recalls. “When you make an agreement and you don’t keep it, you undermine your own self-trust.

Psychologists have also studied the mental stress of the monkey mind. This nagging of uncompleted tasks and goals is called the Zeigarnik effect and also helps explain why to-do lists are not the answer.

Zeigarnik effect: Uncompleted tasks and unmet goals tend to pop into one’s mind. Once the task is completed and the goal reached, however, this stream of reminders comes to a stop.

Until recently we thought this was the brain’s way of making sure we get stuff done. New research, however, has shed preliminary light on the tension our to-do lists cause in our cognitive consciousness and unconsciousness.

[I]t turns out that the Zeigarnik effect is not, as was assumed for decades, a reminder that continues unabated until the task gets done. The persistence of distracting thoughts is not an indication that the unconscious is working to finish the task. Nor is it the unconscious nagging the conscious mind to finish the task right away. Instead, the unconscious is asking the conscious mind to make a plan. The unconscious mind apparently can’t do this on its own, so it nags the conscious mind to make a plan with specifics like time, place, and opportunity. Once the plan is formed, the unconscious can stop nagging the conscious mind with reminders.

If you have 150 things going on in your head at once, the Zeigarnik effect leaves you leaping from “task to task, and it won’t be sedated by vague good intentions.”

If you’ve got a memo that has to be read before a meeting Thursday morning, the unconscious wants to know exactly what needs to be done next, and under what circumstances. But once you make that plan— once you put the meeting memo in the tickler file for Wednesday, once you specify the very next action to be taken on the project— you can relax. You don’t have to finish the job right away. You’ve still got 150 things on the to-do list, but for the moment the monkey is still, and the water is calm.

This is how David Allen solved Drew Carey’s organizational problems.

“Whether you’re trying to garden or take a picture or write a book,” Allen says, “your ability to make a creative mess is your most productive state. You want to be able to throw ideas all over the place, but you need to be able to start with a clear deck. One mess at a time is all you can handle. Two messes at a time, you’re screwed. You may want to find God, but if you’re running low on cat food, you damn well better make a plan for dealing with it. Otherwise the cat food is going to take a whole lot more attention and keep you from finding God.”

Still curious? Follow up with Getting Things Done and Willpower: Rediscovering the Greatest Human Strength.

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The Wisdom of Crowds and The Expert Squeezehttps://www.farnamstreetblog.com/2015/06/the-expert-squeeze/ https://www.farnamstreetblog.com/2015/06/the-expert-squeeze/#respond Mon, 29 Jun 2015 11:30:47 +0000 http://www.farnamstreetblog.com/?p=20743 As networks harness the wisdom of crowds, the ability of experts to add value in their predictions is steadily declining. This is the expert squeeze. In Think Twice: Harnessing the Power of Counterintuition, Michael Mauboussin, the first guest on my podcast, The Knowledge Project, explains the expert squeeze and its implications for how we make […]

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As networks harness the wisdom of crowds, the ability of experts to add value in their predictions is steadily declining. This is the expert squeeze.

As networks harness the wisdom of crowds, the ability of experts to add value in their predictions is steadily declining. This is the expert squeeze.

In Think Twice: Harnessing the Power of Counterintuition, Michael Mauboussin, the first guest on my podcast, The Knowledge Project, explains the expert squeeze and its implications for how we make decisions.

As networks harness the wisdom of crowds and computing power grows, the ability of experts to add value in their predictions is steadily declining. I call this the expert squeeze, and evidence for it is mounting. Despite this trend, we still pine for experts— individuals with special skill or know-how— believing that many forms of knowledge are technical and specialized. We openly defer to people in white lab coats or pinstripe suits, believing they hold the answers, and we harbor misgivings about computergenerated outcomes or the collective opinion of a bunch of tyros.

The expert squeeze means that people stuck in old habits of thinking are failing to use new means to gain insight into the problems they face. Knowing when to look beyond experts requires a totally fresh point of view, and one that does not come naturally. To be sure, the future for experts is not all bleak. Experts retain an advantage in some crucial areas. The challenge is to know when and how to use them.

The Value of Experts
The Value of Experts

So how can we manage this in our role as decision maker? The first step is to classify the problem.

(The figure above — The Value of Experts) helps to guide this process. The second column from the left covers problems that have rules-based solutions with limited possible outcomes. Here, someone can investigate the problem based on past patterns and write down rules to guide decisions. Experts do well with these tasks, but once the principles are clear and well defined, computers are cheaper and more reliable. Think of tasks such as credit scoring or simple forms of medical diagnosis. Experts agree about how to approach these problems because the solutions are transparent and for the most part tried and true.

[…]

Now let’s go to the opposite extreme, the column on the far right that deals with probabilistic fields with a wide range of outcomes. Here are no simple rules. You can only express possible outcomes in probabilities, and the range of outcomes is wide. Examples include economic and political forecasts. The evidence shows that collectives outperform experts in solving these problems.

[…]

The middle two columns are the remaining province for experts. Experts do well with rules-based problems with a wide range of outcomes because they are better than computers at eliminating bad choices and making creative connections between bits of information.

Once you’ve classified the problem, you can turn to the best method for solving it.

… computers and collectives remain underutilized guides for decision making across a host of realms including medicine, business, and sports. That said, experts remain vital in three capacities. First, experts must create the very systems that replace them. … Of course, the experts must stay on top of these systems, improving the market or equation as need be.

Next, we need experts for strategy. I mean strategy broadly, including not only day-to-day tactics but also the ability to troubleshoot by recognizing interconnections as well as the creative process of innovation, which involves combining ideas in novel ways. Decisions about how best to challenge a competitor, which rules to enforce, or how to recombine existing building blocks to create novel products or experiences are jobs for experts.

Finally, we need people to deal with people. A lot of decision making involves psychology as much as it does statistics. A leader must understand others, make good decisions, and encourage others to buy in to the decision.

So what are the practical tips you can do to make the expert squeeze work for you instead of against you? Here Mauboussin offers 3 tips.

1. Match the problem you face with the most appropriate solution.

What we know is that experts do a poor job in many settings, suggesting that you should try to supplement expert views with other approaches.

2. Seek diversity.

(Philip) Tetlock’s work shows that while expert predictions are poor overall, some are better than others. What distinguishes predictive ability is not who the experts are or what they believe, but rather how they think. Borrowing from Archilochus— through Isaiah Berlin— Tetlock sorted experts into hedgehogs and foxes. Hedgehogs know one big thing and try to explain everything through that lens. Foxes tend to know a little about a lot of things and are not married to a single explanation for complex problems. Tetlock finds that foxes are better predictors than hedgehogs. Foxes arrive at their decisions by stitching “together diverse sources of information,” lending credence to the importance of diversity. Naturally, hedgehogs are periodically right— and often spectacularly so— but do not predict as well as foxes over time. For many important decisions, diversity is the key at both the individual and collective levels.

3. Use technology when possible. Leverage technology to side-step the squeeze when possible.

Flooded with candidates and aware of the futility of most interviews, Google decided to create algorithms to identify attractive potential employees. First, the company asked seasoned employees to fill out a three-hundred-question survey, capturing details about their tenure, their behavior, and their personality. The company then compared the survey results to measures of employee performance, seeking connections. Among other findings, Google executives recognized that academic accomplishments did not always correlate with on-the-job performance. This novel approach enabled Google to sidestep problems with ineffective interviews and to start addressing the discrepancy.

Learning the difference between when experts help or hurt can go a long way toward avoiding stupidity. This starts with identifying the type of problem you’re facing and then considering the various approaches to solve the problem with pros and cons.

Still curious? Follow up by reading Generalists vs. Specialists, Think Twice: Harnessing the Power of Counterintuition, and reviewing the work of Philip Tetlock on why how you think matters more than what you think.

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Why Our Relationship With Ourself is the Most Important of The Three Marriageshttps://www.farnamstreetblog.com/2015/06/the-third-marriage/ https://www.farnamstreetblog.com/2015/06/the-third-marriage/#respond Mon, 29 Jun 2015 11:30:32 +0000 http://www.farnamstreetblog.com/?p=20787 “We are each a river with a particular abiding character, but we show radically different aspects of our self according to the territory through which we travel.” The most difficult of David Whyte’s three marriages, found in The Three Marriages: Reimagining Work, Self and Relationship, is the marriage to the self, which lies beneath both the […]

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“We are each a river with a particular abiding character,
but we show radically different aspects of our self
according to the territory through which we travel.”

The Three Marriages and Mastering Yourself

The most difficult of David Whyte’s three marriages, found in The Three Marriages: Reimagining Work, Self and Relationship, is the marriage to the self, which lies beneath both the marriages of work and relationships.

Work, Self and Relationships: Together these form The Three Marriages.

What is heart-breaking and difficult about this inner self that flirted, enticed, spent time with and eventually committed to a person or a career is that it is not a stationary entity; an immovable foundation; it moves and changes and surprises us as much as anything in the outer world to which it wants to commit.

In the midst of a life where we work hard to put bread on the table and foster a relationship, we often neglect “the necessary internal skills which help us pursue, come to know, and then sustain a marriage with the person we find on the inside.”

Neglecting this internal marriage, we can easily make ourselves a hostage to the externals of work and the demands of relationship. We find ourselves unable to move in these outer marriages because we have no inner foundation from which to step out with a firm persuasion. It is as if, absent a loving relationship with this inner representation of our self, we fling ourselves in all directions in our outer lives, looking for love in all the wrong places.

[…]

If we are involved in the outer world in ways that betray our conscience or deeply held beliefs, then even simple internal questions can become very difficult to ask. As if we intuit that drinking from the well will clear our eyesight and help us see what is real in the outer world and that once we have built that outer solid wall, brick by brick over long years through equally long effort, the gift of seeing that reality is the last gift in the world that we want.

We can easily become afraid of the internal questions and the silences that illuminate them — which is why of the three marriages the marriage to oneself is the hardest.

The act of stopping can be the act of facing something we have kept hidden from ourselves for a very long time.

In a world that doesn’t sleep, where we are bombarded from morning to night, this is the most difficult marriage.

To the outward striver— that is, most of us— it can seem as if this internal marriage is asking for a renunciation of the two outer marriages. Feeling this can come as almost a relief, a way out, for in the name of our many responsibilities and duties, we can use it as the perfect excuse not to look inside at all, feeling as if our outer world will fall apart if we spend any time looking for the person who exists at the intersection of all these outer commitments.

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three_marriages

The Need for Silence

All of our great contemplative traditions advocate the necessity for silence in an individual life: first, for gaining a sense of discernment amid the noise and haste, second, as a basic building block of individual happiness, and third, to let this other all-seeing identity come to life and find its voice inside us.

Equanimity, in the Buddhist tradition, roughly translates into “to be equal to things, to be large enough for the drama in which we find ourselves.”

Almost all of our traditions of instruction in prayer, meditation or silence, be they Catholic, Buddhist or Muslim advocate seclusion or withdrawal as a first step in creating this equanimity. Small wonder we feel it goes against everything we need to do on the outside to keep our outer commitments together. Intimate relationships seem to demand endless talking and passing remarks; work calls for endless meetings, phone calls and exhortations. In the two outer marriages (work and relationships) it seems as if everything real comes from initiating something new. In the inner world we intuit something different and more difficult. It can be disconcerting or even distressing to find that this third marriage; this internal marriage, calls for a kind of cessation, a stopping, a fierce form of attention that attempts to look at where all this doing arises from.

For the busy, Whyte argues, it is nearly impossible to stop and read the following:

In the beginning of heaven and earth
There were no words,
Words came out of the womb of matter
And whether a man dispassionately
Sees to the core of life
Or passionately sees the surface
The core and the surface
Are essentially the same,
Words making them seem different
Only to express appearance.
If name be needed, wonder names them both:
From wonder into wonder
Existence opens.
Tao Te Ching (translation by Witter Bynner)

In an argument reminiscent of the one I made in my webinar on being more productive, Whyte says:

“Thank you,” we say, “but I don’t have time. Please give it to me in three bullet points that I can look at later, when I get a moment, when I retire, when I’m on my deathbed or even when I’m actually dead, surely, then, there’ll be time enough to spare.” Trying to be equal to Lao Tzu’s opening remarks in the Tao Te Ching when we have no practice with silence and the revelations that arise from that spacious sense of reality can be like a novice violinist trying to play the opening notes of a Bach concerto. We can be so overwhelmed by the grandeur of the piece that we give up on our beginning scales.

The third marriage to the internal self seems to be to someone or something that in many ways seems even less open to coercion or sheer willpower than an actual marriage or a real job. Not only does this internal marriage seem to operate under rules different from those of the other two outer contracts but it also seems to be connected to the big; we might even say unbearable, questions of existence that scare us half to death and for which we have no easy answer. Like a skittish single unable to commit to the consequences of a full relationship, we turn away from questions that flower from solitude and quiet.

The marriage with our self is the most difficult. It’s “connected to the great questions of life that refuse to go away.” In our world of non-stop busyness, the cracks of silence that open can reveal an unfamiliar character. Developing this inner relationship, “we see not only the truth of our present circumstances and a way forward but we also realize how short our stay is on this earth.”

This is where we live. This is where we die.

The sudden absence of our partner waits for us. The end of our work or our retirement waits. The hospital bed waits. Right now, in some obscure medical appliance company in a corner of a bleak industrial estate, the very bed on which we will lie, trying to get the great perspective, is perhaps being manufactured as we read. We don’t want to know, of course, but all our great contemplative traditions concerned with this marriage, say, this willingness to look at the transitory nature of existence, are not pessimism but absolute realism: life is to be taken at the tilt, you do not have forever, and therefore why wait? Why wait, especially until your faculties have atrophied or your youth has gone, or you have lost confidence in your self? Why wait, to be, as the poet Mary Oliver says, “a bride to wonder”? To become a faithful and intimate companion to that initially formidable stranger you called your self?

Whyte’s book is a fascinating exploration of the three marriages that challenges our conventional notions of balance.

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Garrett Hardin: The Other Side of Expertisehttps://www.farnamstreetblog.com/2015/06/the-double-edge-of-expertise/ https://www.farnamstreetblog.com/2015/06/the-double-edge-of-expertise/#respond Thu, 25 Jun 2015 14:53:02 +0000 http://www.farnamstreetblog.com/?p=20761 From Garrett Hardin’s mind-blowingly awesome Filters Against Folly. In our highly technological society we cannot do without experts. We accept this fact of life, but not without anxiety. There is much truth in the definition of the specialist as someone who “knows more and more about less and less.” But there is another side to […]

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From Garrett Hardin’s mind-blowingly awesome Filters Against Folly.

In our highly technological society we cannot do without experts. We accept this fact of life, but not without anxiety. There is much truth in the definition of the specialist as someone who “knows more and more about less and less.” But there is another side to the coin of expertise. A really great idea in science often has its birth as apparently no more than a particular answer to a narrow question; it is only later that it turns out that the ramifications of the answer reach out into the most surprising corners. What begins as knowledge about very little turns out to be wisdom about a great deal.

So it was with the development of the theory of probability. It all began in the seventeenth century, when one of the minor French nobility asked the philosopher-scientist Blaise Pascal to devise a fair way to divide the stakes in an interrupted gambling game. Pascal consulted with lawyer-mathematician friend Pierre de Fermat, and the two of them quickly laid the foundation of probability theory. Out of a trivial question about gambling came profound insights that later bore splendid fruit in physics and biology, in the verification of the causes of disease, the calculation of fair insurance premiums, and the achievement of quality control in manufacturing processes. And much more.

The service of experts is indispensable even if we are poor at ascertaining under which circumstances they add value, when they add noise, and when they are harmful. Hardin cautions that each new expertise introduces “new possibilities of error.”

It is unfortunately true that experts are generally better at seeing their particular kinds of trees than the forest of all life.

Thoughtful laymen — that’s us — can, however, “become very good at seeing the forest, particularly if they lose their timidity about challenging the experts. … In the universal role of laymen we all have to learn to filter the essential meaning out of the too verbose, too aggressively technical statements of the experts. Fortunately this is not as difficult a task as some experts would have us believe.”

Filters Against Folly is Hardin’s attempt “to show there …. (are) some rather simple methods of checking on the validity of the statements of experts.”

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The Stanford Prison Experimenthttps://www.farnamstreetblog.com/2015/06/the-stanford-prison-experiment/ https://www.farnamstreetblog.com/2015/06/the-stanford-prison-experiment/#respond Wed, 24 Jun 2015 11:30:15 +0000 http://www.farnamstreetblog.com/?p=20752 This except from Think Twice: Harnessing the Power of Counterintuition encapsulates Philip Zimbardo’s famous prison experiment: Philip Zimbardo, a psychologist at Stanford University, did an experiment in 1971 that ranks with Asch and Milgram in exhibiting the power of the situation. To start, Zimbardo advertised for volunteers in a two-week-long prison experiment, offering $15 a […]

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gp3808_prison_experiment

This except from Think Twice: Harnessing the Power of Counterintuition encapsulates Philip Zimbardo’s famous prison experiment:

Philip Zimbardo, a psychologist at Stanford University, did an experiment in 1971 that ranks with Asch and Milgram in exhibiting the power of the situation. To start, Zimbardo advertised for volunteers in a two-week-long prison experiment, offering $15 a day. He ran the seventy applicants through psychological and physical tests and ended up with twenty-four healthy, mentally stable, middle-class, male students from the Palo Alto, California, area.

By a flip of a coin, Zimbardo assigned half the volunteers to be prisoners and the rest to be prison guards. One morning, a Palo Alto police car picked up the prisoners, “charging” them with armed robbery and burglary. The guards were assigned to work one of three eight-hour shifts.

With the help of prison consultants, Zimbardo built a prison in the basement of the building that housed Stanford’s psychology department. On arrival at the jail, the guards and warden took steps to humiliate, dehumanize, and oppress the prisoners.

Although Zimbardo randomly designated the roles, the situation clearly shaped behavior. He noticed that the volunteers (and he himself) started to act out their assigned roles. The prisoners tried various tactics to gain advantage over the guards and tried to escape, while the guards schemed to keep the prisoners in check. Concerned that the guards were heaping too much abuse on the prisoners, Zimbardo questioned the situation’s morality and ended the study after only five days.

Zimbardo explains the factors that make the situation so forceful:

First, situational power is most likely in novel settings, where there are no previous behavioral guidelines. Second, rules— which may emerge through interaction or be predetermined— can create a means to dominate and suppress others because people justify their behavior as only conforming to the rules. Third, when people are asked to play a certain role for a prolonged period, they risk becoming actors who can’t break from character. Roles shut people off from their normal lives and accommodate behaviors they would generally avoid. Finally, in situations that lead to negative behavior, there is often an enemy— an outside group. This is especially pronounced when both the in-group and out-group stop focusing on individuals.

In his book, The Lucifer Effect: Understanding How Good People Turn Evil, Zimbardo offers tips for “resisting the pull of unwelcome social influence.”

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The Three Essential Properties of the Engineering Mind-Sethttps://www.farnamstreetblog.com/2015/06/the-engineering-mind-set/ https://www.farnamstreetblog.com/2015/06/the-engineering-mind-set/#respond Tue, 23 Jun 2015 11:30:09 +0000 http://www.farnamstreetblog.com/?p=20868 In his book Applied Minds: How Engineers Think, Guru Madhavan explores the mental tools of engineers that allow engineering feats. His framework is built around a flexible intellectual tool kit called modular systems thinking. The core of the engineering mind-set is what I call modular systems thinking. It’s not a singular talent, but a melange […]

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Applied Minds: How Engineers Think

In his book Applied Minds: How Engineers Think, Guru Madhavan explores the mental tools of engineers that allow engineering feats. His framework is built around a flexible intellectual tool kit called modular systems thinking.

The core of the engineering mind-set is what I call modular systems thinking. It’s not a singular talent, but a melange of techniques and principles. Systems-level thinking is more than just being systematic; rather, it’s about the understanding that in the ebb and flow of life, nothing is stationary and everything is linked. The relationships among the modules of a system give rise to a whole that cannot be understood by analyzing its constituent parts.

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Thinking in Systems

Thinking in systems means that you can deconstruct (breaking down a larger system into its modules) and reconstruct (putting it back together).

The focus is on identifying the strong and weak links—how the modules work, don’t work, or could potentially work—and applying this knowledge to engineer useful outcomes.

There is no engineering method, so modular systems thinking varies with contexts.

Engineering Dubai’s Burj Khalifa is different from coding the Microsoft Office Suite. Whether used to conduct wind tunnel tests on World Cup soccer balls or to create a missile capable of hitting another missile midflight, engineering works in various ways. Even within a specific industry, techniques can differ. Engineering an artifact like a turbofan engine is different from assembling a megasystem like an aircraft, and by extension, a system of systems, such as the air traffic network.

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The Three Essential Properties of the Engineering Mind-Set

1. The ability to see structure where there’s nothing apparent.

From haikus to high-rise buildings, our world relies on structures. Just as a talented composer “hears” a sound before it’s put down on a score, a good engineer is able to visualize—and produce—structures through a combination of rules, models, and instincts. The engineering mind gravitates to the piece of the iceberg underneath the water rather than its surface. It’s not only about what one sees; it’s also about the unseen.

A structured systems-level thinking process would consider how the elements of the system are linked in logic, in time, in sequence, and in function—and under what conditions they work and don’t work. A historian might apply this sort of structural logic decades after something has occurred, but an engineer needs to do this preemptively, whether with the finest details or top-level abstractions. This is one of the main reasons why engineers build models: so that they can have structured conversations based in reality. Critically, envisioning a structure involves having the wisdom to know when a structure is valuable, and when it isn’t.

Consider, for example, the following catechism by George Heilmeier—a former director of the U.S. Defense Advanced Research Projects Agency (DARPA), who also engineered the liquid crystal displays (LCDs) that are part of modern-day visual technologies. His approach to innovation is to employ a checklist-like template suitable for a project with well-defined goals and customers.

  • What are you trying to do? Articulate your objectives using absolutely no jargon.
  • How is it done today, and what are the limits of current practice?
  • What’s new in your approach and why do you think it will be successful?
  • Who cares? If you’re successful, what difference will it make?
  • What are the risks and the payoffs?
  • How much will it cost? How long will it take?
  • What are the midterm and final “exams” to check for success?

This type of structure “helps ask the right questions in a logical way.”

2. Adeptness at designing under constraints
The real world is full of constraints that make or break potential.

Given the innately practical nature of engineering, the pressures on it are far greater compared to other professions. Constraints—whether natural or human-made—don’t permit engineers to wait until all phenomena are fully understood and explained. Engineers are expected to produce the best possible results under the given conditions. Even if there are no constraints, good engineers know how to apply constraints to help achieve their goals. Time constraints on engineers fuel creativity and resourcefulness. Financial constraints and the blatant physical constraints hinging on the laws of nature are also common, coupled with an unpredictable constraint—namely, human behavior.

“Imagine if each new version of the Macintosh Operating System, or of Windows, was in fact a completely new operating system that began from scratch. It would bring personal computing to a halt,” Olivier de Week and his fellow researchers at the Massachusetts Institute of Technology point out. Engineers often augment their software products, incrementally addressing customer preferences and business necessities— which are nothing but constraints. “Changes that look easy at first frequently necessitate other changes, which in turn cause more change. . . . You have to find a way to keep the old thing going while creating something new.” The pressures are endless.

3. Understanding Trade-offs
The ability to hold alternative ideas in your head and make considered judgments.

Engineers make design priorities and allocate resources by ferreting out the weak goals among stronger ones. For an airplane design, a typical trade-off could be to balance the demands of cost, weight, wingspan, and lavatory dimensions within the constraints of the given performance specifications. This type of selection pressure even trickles down to the question of whether passengers like the airplane they’re flying in. If constraints are like tightrope walking, then trade-offs are inescapable tugs-of-war among what’s available, what’s possible, what’s desirable, and what the limits are.

Applied Minds: How Engineers Think will help you borrow strategies from engineering and apply them to your most pressing problems.

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