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Farnam Street helps you make better decisions, innovate, and avoid stupidity.
With over 350,000 monthly readers and more than 88,000 subscribers to our popular weekly digest, we've become an online intellectual hub.
There are four types of relationships with people.
Seneca says “Time discovers truth.”
Only one of those relationships is sustainable over the long-term. And longevity is the key to so many things.
Yet so many of us operate in the short term. Today. This week. This Month. This Quarter. We want to WIN even if that means the other person LOSES.
We rationalize this behavior, arguing that, while it might not be fair today, we’ll make it right in the future.
The most common strategy in life when you feel like someone is taking advantage of you is tit-for-tat. That is, return what you get. (Newton figured this out long ago.)
The person on the LOSING side of any relationship tends to coil like a spring, the latent energy building with time, frequency, and magnitude of slight. The more they perceive you taking advantage of them, the higher the odds they negatively become spring-loaded. This creates a negative leaping emergent effect. That’s human nature. Given the chance to punish someone that we feel wronged us, even at personal cost, we will often take it.
These outcomes are avoidable.
Biology has taught us that the key to evolving is to be sustainable over a long period of time. We must reproduce. A one-and-done species is not even a footnote in history.
And yet so few of us design systems that incorporate duration as an element. We make them short term. Designed to maximize the short run while ensuring we never get on a path of sustainability.
Anyone can come into an organization and start throwing their title around to get things done. We’ve all met this person. This works for a while but eventually fails. And who is interested in a tactic that only works for a short time?
Ideally, we want something that works for a long time. Taking advantage of relationships, while it may achieve the desired results in the short term, takes you off a path that involves time. And often it’s perception that matters here and that perception belongs to the other person.
The best results in the world are a function of time. The key component to compounding, which Einstein claimed was the most powerful force in the world, is time.
Peter Kaufman, who published Poor Charlie’s Almanack, describes this as the the Reputational Cue Ball
The Four Types of Relationships and the Reputational Cue Ball Click To Tweet
Non-Win/Win tactics are akin to playing a billiards tournament with a focus on sinking only the first shot or two. Billiards—or life—is a multi-shot game. When we fail to consider the future consequences of mistreating our counter-parties in a current “deal”‘ or first phase, it can wind up leaving our “reputational cue ball” ill-positioned for the next shot—the next deal or phase to come down the pike.
The genius of March takes a while to appreciate. I assure you, however, this thought-provoking book is packed full of wisdom you won’t find in the business best seller section.
On Leadership offers a stunning demonstration of stubborn nonconformity, through the lens of some great works of literature. The questions March poses are simple; the answers are not.
The book, based on March’s lectures in a leadership course he taught at Stanford University from 1980 to 1994 is one of the best resources on the subject I’ve come across. The lectures were based on three primary convictions.
The first was that the major issues of leadership were indistinguishable from issues of life. A proper discussion involved reflecting on grand dilemmas of human existence as they presented themselves in a leadership context. The second conviction was that great literature was a primordial source of learning about such issues for educated people. An inquiring, skeptical, and tolerant gaze was cast on leadership, primarily through a lens provided by four great works of literature – Othello by William Shakespeare, Saint Joan by George Bernard Shaw, War and Peace by Leo Tolstoy, and Don Quixote by Miguel Cervantes. The third conviction was that education, including education in business schools, should not attempt to furnish students with recipes or prescriptions for success.
Here are some of my notes from the book:
If we are to believe the current thinking, the issue of leadership has been resolved.
What is certain is that the industry recycles, sometimes with blatant opportunism, materials and techniques whose link to leadership is not readily apparent: 360 degrees, group dynamics, etc.
The fundamental issues of leadership — the complications involved in becoming, being, and confronting, and evaluating leaders—are not unique to leadership. They are echoes of critical issues of life more generally. As a result, they are characteristically illuminated more by great literature than by modern essays or research on leadership.
Future leaders are taught to remove inconsistencies, ambiguities, and complexities through precise objectives and well-conceived plans. … However, inconsistency and ambiguity have a role in change and adaptation, and the compulsion toward coherence could be an incomplete basis for understanding or improving leadership and life.
In general, effective leadership implies an ability to live in two worlds: the incoherent world of imagination, fantasy, and dreams and the orderly world of plans, rules, and pragmatic action.
There is often ambiguity about outcomes and their attractiveness. There is ambiguity about who is responsible for the outcomes. As a result, reputations are social constructs negotiated among observers, accountants, journalists, academics, leaders, competitors, friends, and enemies. Reputations diffuse through a population of observers and often change over time.
History is pictured as being the result of intention and actions of leaders. Biographies of leaders are a steady element of lists of best selling books. These writings develop notions of the role of leaders in society, on the attributes of leaders, and on the relation between being a leader and being a proper person. they create a language of leadership, a language filled with ideas, vision, power, and virtue.
To an overwhelming extent, contemporary ideologies of action within theories of choice see action as instrumental, coherent, and justified subjectively. Action is instrumental in the sense that it is taken intentionally and is based on expectations of future consequences for the objectives of the actor. Actors are intendedly rational. Action is coherent in the sense that goals and alternatives are well-defined and the decision rule is clear. Actors choose from among alternatives by calculating and comparing their expected returns. And the justification for action is subjective. It is assumed that the value an individual associates with a particular outcome cannot be compared meaningfully with the value another individual associates with a particular outcome. There is no interpersonal comparison of utilities. Values, thus, are assumed to be irrefutable.
Human behavior has often been described as stemming less from calculations of consequences than from the fulfilment of an identity, a logic of appropriateness than a logic of consequence. Moreover, such a bias for action has been praised as resulting in more deeply human, even more effective, actions.
Nothing significant about leadership is likely to be said by people who have been leaders. People who have been leaders are no more capable of an intelligent appreciation of leadership than Americans are of appreciating the American experience, men are of appreciating masculinity, artists are of appreciating art, or the elderly are of appreciating old age. Comment.
In the contemporary western world relationships based on contracts (economic relations) have increased in importance relative to relationships based on senses of belonging (family, group, nation).
Our understanding of the actions of individuals is often influenced by various myths and interpretations of the world that determine what we think of as true, beautiful, and just.
Do we expect a good leader to be clever or innocent? Being clever involves a worldview in which every player pursues individual interest, a virtuous action is one that is effective, and the end justifies the means, with God rewarding the toughest by allowing them to survive—unless he simply bestows the gift of cleverness on those he loves. In this scheme, we admire the wily politician who achieves personal end at the expense of gullible fools, the crafty negotiator, and manipulator.
Being innocent involves a worldview in which people are naturally good, virtue is based on a clear knowledge of good and evil or, at the very least, on simple actions, God rewards virtue, history is marked by human progress.
We only tolerate cleverness when it is crowned with success, while the failure of innocence is attributed to the perversity of the world.
We condemn the military commander whose troops have committed atrocities, because he is morally culpable if he know about them and unworthy of his command if he did not know (because he should have).
What happens in a world populated by a mixture of clever and innocent people? In one standard morality/evolutionary tale, at first, the clever ones dominate and exclude the innocents from all positions of power. the distinctions between the powerful very quickly become tenuous, however, as only the clever have survived and cleverness no longer represents a decisive advantage in a competitive situation. The deviants who remain worthy of confidence now become rare and much sought-after allies and find themselves associated with victorious coalitions. This does not lead to a stable equilibrium, however, as when a society of trust is established once again, opportunistic behavior can become worthwhile.
The person responsible for a decision will tend to interpret its consequences in a favorable light, whereas a changeover of power can lead to accusations that past strategies were failures.
It is therefore very difficult to maintain a balance between efficiency and the capacity to adapt, as there is a tendency, in the case of success, to specialize and refine the procedures that have been successful; and, in the case of failure, to be impatient for positive results and novel innovations.
The stories of successful change recounted after the event by leaders, consultants, or researchers are deceptively simple, as they depict the leader as a hero guided by a vision that goes against the prevailing ideas and is brought to fruition through heroic efforts.
Most original ideas are bad ones. Those that are good, moreover, are only seen as such after a long learning period; they rarely are impressive when first tried out. As a result, an organization is likely to discourage both experimentation with deviant ideas and the people who come up with them, thereby depriving itself, in the name of efficient operation, of its main source of innovation.
The choices of an organization therefore depend on the respective importance that it attaches to its mean performance and the achievement of a few dazzling successes.
As a general rule, politically weak, peripheral, or subordinated groups will advocate diversity and decentralization, while dominant groups will sing the praises of unity and centralization.
The genius therefore makes it possible to explore unknown and sometimes profitable paths in a situation in which the exploitation of the run-of-the-mill skills mastered by the institution does not serve in a crisis. When exploration becomes too costly or creates too much uncertainty and threatens established positions, the institution abandons the genius.
Organizational leadership is a contradiction in terms. The essence of organization is routine, conventional behavior, bound by the standards of knowledge, morality, and legality of the time. The essence of leadership, on the other hand, is escaping the routine, the standard, and the contemporary to implement a new morality, knowledge and legality quite different from that seen by others. Leadership is pre-eminently anti-organizational. Leaders confront organizations rather than build or serve them. Comment.
Modern leaders are, in a similar way, deluded into heroic commitments by the St. Catherines of modern life — journalists, pundits, and professors. The promises are the same—that heroic action will be rewarded by honor and respect—and those promises are as false today as the ones made to Joan by her voices.
War and Peace develops Tolstoy’s theory that history does not follow any defined structure, but arises from the complex interaction of countless insignificant events.
Power gives rise to desire, envy, and celebration, but also to revulsion, fear, and jealousy.
The taste for power can be considered an individual characteristic that varies from one person to the next, from one culture to another, from one sex to the other. Like the thirst for vengeance, ambition, or love, it is potentially insatiable.
If there is to be change, we need to reconsider our ideas about order founded on the domination of leaders and an endless tug-of-war among contending interests.
War and Peace proclaims that most people cannot escape from the corruptions of society, but that it is possible to attain some degree of wisdom, based on a lack of faith both in accepted truths and in great expectations along with a capacity to lead a simple life and perform everyday tasks effectively.
Widely diffused competence and initiative, allied with coordination via mutual adjustments, allows for efficient reactions and avoids the need for costly specialists or hierarchical controls. Heroic leadership is neither required nor helpful.
It is unfortunate that studies of visionary leadership focus too much on the lone leader and not enough on the way that he or she can maintain a climate propitious to the blossoming of original visions.
The logic of reality entails two aspects of relevance to a leader. On one hand, reality is complex and our knowledge of it is limited, so we are not sure whether a particular action will achieve our desired goal. This awareness can lead to paralysis (what is the point of doing anything if the results depend on chance?) or cynicism (what is the the point of fighting for a better world if we are not certain of the effect of our actions?). On the other hand, reality can be created by action. It need not necessarily be taken as given.
Heroic leadership demands great action and great commitment. Such commitment is usually justified by expectations of great consequences.
For Quixote, intention is primary in judging virtue; consequences are secondary.
It is often, therefore, easier to understand certain aspects of leaders’ behavior by focusing on the pleasures that they can gain from their actions rather than on the consequences they achieve.
“Do you not see, senor, that what is gained by restoring Don Quixote’s sanity can never equal the enjoyment his delusions give?”
There are two essential dimensions of leadership: “plumbing,” i.e., the capacity to apply known techniques effectively, and “poetry,” which draws on a leader’s great actions and identity and pushes him or her to explore unexpected avenues, discover interesting meanings, and approach life with enthusiasm.
The plumbing of leadership involves keeping watch over an organization’s efficiency in everyday tasks, such as making sure the toilets work and there is someone to answer the telephone. This requires competence, not only at the top but also throughout all parts of the organization; a capacity to master the context (which supposes that the individuals demonstrating their competence are thoroughly familiar with the ins and outs of the organization); a capacity to take initiatives based on delegation and follow-up; a sense of community shared by all the members of the organization, who feel they are “all in the same boat” and trust and help each other; and, finally, an unobtrusive method for coordination, with each person understanding his or her role sufficiently well to be able to integrate into overall process and make constant adjustments to it. These aspects are essential for the smooth operation of organizations, but they do not appear in most treatises on leadership, no doubt because they are too mundane or too closely linked to a precise context and specific techniques.
Leadership also requires, however, the gifts of a poet, in order to find meaning in action and render life attractive.
A leader must know how to appreciate life and be aware of reality, without falling into the cynicism and bitterness that can arise from the knowledge that our efforts are probably in vain.
If variations are almost always less efficient than tried and tested methods, particularly in the beginning, how can we encourage exploration?
There is a sizable industry devoted to producing books about leadership and optimal leadership styles. For the most part, such books, portray relatively heroic attributes of leadership as producing relatively heroic consequences.
In our contemporary sophistication about the limits of elementary efficiency, we sometimes forget the simple fact that organizations cannot work well unless ordinary tasks are performed routinely and well.
Organizing so that problems are handled quickly and more or less automatically by whoever is there requires certain general attributes within the culture, certain kinds of individual feelings within the organization, a distribution of individual competences, and some organizational arrangements.
If you are going to encourage initiative, you need to be tolerant of small deviations from what you would do yourself in the same situation. Delegation implies the right to be wrong.
These four things—competence, initiative, identification, and unobtrusive coordination—are very conventional. They are found in any standard book on administration. Because they are so conventional and so standard, many of us who think we are sophisticated sometimes act as through they are unimportant.
As managers rise through an organization, managerial power is celebrated; the trappings of managerial importance are increased; but it becomes less clear that a leader’s actions have major effects on organizational performance.
The procedures and drama of decision are organized to emphasize the importance of management and managers, to reassure us of the significance of leaders.
As a result of these rituals and ceremonies, it seems very likely that most organizational leaders exaggerate their control over their success.
The managers we see in an organization are typically people who have risen to their present positions by being evaluated as success in previous positions. Such success encourages them to see their own histories as the consequences of their own actions and competences.
Organizations work because they have mutual trust without personal favoritism.
William Deresiewicz delivered a stunning lecture on Solitude and Leadership to the United States Military Academy at West Point.
In the lecture, Deresiewicz convincingly argues that
While a contradiction to a lot of today’s common practice, it’s also an antidote to many of our ills.
Here are two parts to whet your appetite.
My title must seem like a contradiction. What can solitude have to do with leadership? Solitude means being alone, and leadership necessitates the presence of others-the people you’re leading. When we think about leadership in American history we are likely to think of Washington, at the head of an army, or Lincoln, at the head of a nation, or King, at the head of a movement-people with multitudes behind them, looking to them for direction. And when we think of solitude, we are apt to think of Thoreau, a man alone in the woods, keeping a journal and communing with nature in silence.
Leadership is what you are here to learn-the qualities of character and mind that will make you fit to command a platoon, and beyond that, perhaps, a company, a battalion, or, if you leave the military, a corporation, a foundation, a department of government. Solitude is what you have the least of here, especially as plebes. You don’t even have privacy, the opportunity simply to be physically alone, never mind solitude, the ability to be alone with your thoughts. And yet I submit to you that solitude is one of the most important necessities of true leadership. This lecture will be an attempt to explain why.
The very rigor and regimentation to which you are quite properly subject here naturally has a tendency to make you lose touch with the passion that brought you here in the first place. I saw exactly the same kind of thing at Yale. It’s not that my students were robots. Quite the reverse. They were intensely idealistic, but the overwhelming weight of their practical responsibilities, all of those hoops they had to jump through, often made them lose sight of what those ideals were. Why they were doing it all in the first place.
… Here’s the other problem with Facebook and Twitter and even The New York Times. When you expose yourself to those things, especially in the constant way that people do now—older people as well as younger people—you are continuously bombarding yourself with a stream of other people’s thoughts.
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Learning how to think — The journey of learning requires patience, concentration, and most importantly time for thinking.