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Notes from Tim Harford’s book Adapt

Here are some of the notes I took while reading Tim Harford's Adapt: Why Success Always Starts With Failure

  • Biologists have a word for the way in which solutions emerge from failure: evolution. … Disconcertingly, given our instinctive belief that complex problems require expertly designed solutions, it is completely unplanned. Astounding complexity emerges in response to a simple process: try out a few variants on what you already have, weed out the failures, copy the success – and repeat forever. Variation, and selection, again and again.
  • The process of evolution strikes a balance between discovering the new and exploiting the familiar very well.
  • If companies could really plan successfully – as most of us naturally assume that they can, despite what Tetlock tells us about the limitations of expert judgement – then the extinction signature of companies would look totally different to that of species. In reality, the signatures could hardly be more similar. … Ormerod's discovery strongly implies that effective planning is rare in the modern economy.
  • Nobody would buy a car that didn't turn or go backwards, so it is unclear why we think of these as desirable qualities in Prime Ministers.
  • Whether we like it or not, trial and error is a tremendously powerful process for solving problems in a complex world, while expert leadership is not.
  • …most real-world problems are more complex than we think. They have a human dimension, a local dimension, and are likely to change as circumstances change. … the method for dealing with this could be summarized in three principles: first, seek out new ideas and try new things; second, when trying something new, do it on a scale where failure is survivable; third, seek out feedback and learn from your mistakes as you go along. (variation, survivability, and selection)
  • Variation is difficult because of two natural tendencies in organizations. One is grandiosity: politicians and corporate bosses both like large projects – anything from the reorganization of a country's entire healthcare system to a gigantic merger – because they win attention and show that a leader is a person who gets things done. This violates the first Palchinsky principle, because errors are common and big projects leave little room to adapt. The other tendency emerges because we rarely like the idea of standards that are inconsistent and uneven from place to place (although Tim doesn't point it out, this is a manifestation of ideological bias).
  • We all want our public services to be like Coca-Cola: all identical, all good. And they can't be.
  • There is a limit to how much honest feedback most leaders really want to hear; and because we know this, most of us sugar-coat our opinions whenever we speak to a powerful person. In a deep hierarchy, that process is repeated many times, until the truth is utterly concealed inside a thick layer of sweet-talk. There is some evidence that the more ambitious a person is, the more he will choose to be a yes-man and with good reason because yes-men tend to be rewarded.
  • Actually telling the unvarnished truth is unlikely to be the best strategy in a bureaucratic hierarchy.
  • Traditional organizations are badly equipped to benefit from a decentralized process of trial and error.
  • (our typical view) How should the leader make good decisions? That's easy. First he should take advantage of the fact that he's in a position to see the big picture. The more technology he devotes to this task, the better he can see how everything fits together, enabling him to coordinate what's happening on the ground, be it in the check-out, the factory floor, or the front line. The leader should be surrounded by a supportive team with a shared vision of where the organization is going. And to ensure that the strategy is carried out effectively, reporting lines should be clear. Information should flow to the top and be analyzed, and instructions should flow back down in response – otherwise nothing but muddle and chaos lie ahead. But while this is how we instinctively think about how leadership works and organizations should operate, it's a dangerously misleading view. The problem is that no leader can make the right decision every time.
  • As a Prussian general once put it, ‘No plan survives first contact with the enemy'. What matters is how quickly the leader is able to adapt.
  • If even the best leaders make mistakes, a good organization will need to have some way to correct those mistakes. Let's recall the features that make our idealized hierarchy an attractive machine for carrying out correct decisions: the refinement of information to produce a ‘big picture'; the power of a team all pulling in the same direction; and the clear responsibilities producing a proper flow of information up and down the chain of command. Every one of these assets can become a liability if the task of the organization is to learn from mistakes. The big picture becomes a self-deluding propaganda poster, the unified team retreats into groupthink, and the chain of command, becomes a hierarchy of wastebaskets, perfectly evolved to prevent feedback from reaching the top. What works in reality is a far more unsightly chaotic and rebellious organization.
  • …the story we tell ourselves about how change happens: that the solution to any problem is a new leader with a new strategy, whether it's the new coach of a football team, the new CEO of a failing business, or a new president. The truth, both in Iraq, and more widely, is more subtle and interesting.
  • Hayek, (the economist) back in 1945, argued that the dilemma should be resolved by thinking about information. Decisions taken at the centre can be more coordinated, limit wasteful duplication, and may be able to lower average costs because they can spread fixed resources (anything from a marketing department to an aircraft carrier) across a bigger base. But the decisions taken at the fringes of an organization are quick and the local information will probably be much better, even if the big picture is not clear. Hayek believed that most people overestimated the value of centralized knowledge, and tended to overlook ‘knowledge of the particular circumstances of time and place.'
  • The traditional purpose of centralisation is to make sure every business unit is coordinated and nobody is duplicating anyone else's effort. That might work for a business like Wal-Mart, businesses with such control over their supply chains and shop floors that experiments with the new products or marketing ideas can be delegated to a computer. But a centralized organization doesn't work so well when confronted with a diverse, fast-moving range of markets. … to get the most out of that flexibility requires well-trained, adaptable workers with authority to make their own decisions, which is precisely the kind of workforce successful firms seek out or train when they upgrade their machinery or their software. In the organization of the future, the decisions that matter won't be taken in some high-tech war-room, but on the front line.
  • This idea of allowing several ideas to develop in parallel runs counter to our instincts: we naturally tend to ask, “what is the best option?” and concentrate on that. But given that life is so unpredictable, what seemed initially like an inferior option may turn out to be exactly what we need. It's sensible in many areas in life to leave room for exploring parallel possibilities…
  • It is far more productive to design better systems than to hope for better people.

If you've read this far and you're thinking, wow, that's some interesting stuff.  Then you should buy the book here.

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If you want to read more nuggets of wisdom, see Why We Get FatOn LeadershipThe Ambiguities of Experience and You Are Not As Ethical As You Think.