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With over 400,000 monthly readers and more than 93,000 subscribers to our popular weekly digest, we've become an online intellectual hub.
Farnam Street helps you make better decisions, innovate, and avoid stupidity.
With over 400,000 monthly readers and more than 93,000 subscribers to our popular weekly digest, we've become an online intellectual hub.
We’ve written quite a bit about the marvelous British naturalist Charles Darwin, who with his Origin of Species created perhaps the most intense intellectual debate in human history, one which continues up to this day.
Darwin’s Origin was a courageous and detailed thought piece on the nature and development of biological species. It’s the starting point for nearly all of modern biology.
Charlie Munger thinks Darwin would have placed somewhere in the middle of a good private high school class. He was also in notoriously bad health for most of his adult life and, by his son’s estimation, a terrible sleeper. He really only worked a few hours a day in the many years leading up to the Origin of Species.
Yet his “thinking work” outclassed almost everyone. An incredible story.
In his autobiography, Darwin reflected on this peculiar state of affairs. What was he good at that led to the result? What was he so weak at? Why did he achieve better thinking outcomes? As he put it, his goal was to:
“Try to analyse the mental qualities and the conditions on which my success has depended; though I am aware that no man can do this correctly.”
In studying Darwin ourselves, we hope to better appreciate our own strengths and weaknesses and, not to mention understand the working methods of a “mental overachiever.”
Let’s explore what Darwin saw in himself.
1. He did not have a quick intellect or an ability to follow long, complex, or mathematical reasoning. He may have been a bit hard on himself, but Darwin realized that he wasn’t a “5 second insight” type of guy (and let’s face it, most of us aren’t). His life also proves how little that trait matters if you’re aware of it and counter-weight it with other methods.
I have no great quickness of apprehension or wit which is so remarkable in some clever men, for instance, Huxley. I am therefore a poor critic: a paper or book, when first read, generally excites my admiration, and it is only after considerable reflection that I perceive the weak points. My power to follow a long and purely abstract train of thought is very limited; and therefore I could never have succeeded with metaphysics or mathematics. My memory is extensive, yet hazy: it suffices to make me cautious by vaguely telling me that I have observed or read something opposed to the conclusion which I am drawing, or on the other hand in favour of it; and after a time I can generally recollect where to search for my authority. So poor in one sense is my memory, that I have never been able to remember for more than a few days a single date or a line of poetry.
2. He did not feel easily able to write clearly and concisely. He compensated by getting things down quickly and then coming back to them later, thinking them through again and again. Slow, methodical….and ridiculously effective: For those who haven’t read it, the Origin of Species is extremely readable and clear, even now, 150 years later.
I have as much difficulty as ever in expressing myself clearly and concisely; and this difficulty has caused me a very great loss of time; but it has had the compensating advantage of forcing me to think long and intently about every sentence, and thus I have been led to see errors in reasoning and in my own observations or those of others.
There seems to be a sort of fatality in my mind leading me to put at first my statement or proposition in a wrong or awkward form. Formerly I used to think about my sentences before writing them down; but for several years I have found that it saves time to scribble in a vile hand whole pages as quickly as I possibly can, contracting half the words; and then correct deliberately. Sentences thus scribbled down are often better ones than I could have written deliberately.
3. He forced himself to be an incredibly effective and organized collector of information. Darwin’s system of reading and indexing facts in large portfolios is worth emulating, as is the habit of taking down conflicting ideas immediately.
As in several of my books facts observed by others have been very extensively used, and as I have always had several quite distinct subjects in hand at the same time, I may mention that I keep from thirty to forty large portfolios, in cabinets with labelled shelves, into which I can at once put a detached reference or memorandum. I have bought many books, and at their ends I make an index of all the facts that concern my work; or, if the book is not my own, write out a separate abstract, and of such abstracts I have a large drawer full. Before beginning on any subject I look to all the short indexes and make a general and classified index, and by taking the one or more proper portfolios I have all the information collected during my life ready for use.
4. He had possibly the most valuable trait in any sort of thinker: A passionate interest in understanding reality and putting it in useful order in his head. This “Reality Orientation” is hard to measure and certainly does not show up on IQ tests, but probably determines, to some extent, success in life.
On the favourable side of the balance, I think that I am superior to the common run of men in noticing things which easily escape attention, and in observing them carefully. My industry has been nearly as great as it could have been in the observation and collection of facts. What is far more important, my love of natural science has been steady and ardent.
This pure love has, however, been much aided by the ambition to be esteemed by my fellow naturalists. From my early youth I have had the strongest desire to understand or explain whatever I observed,–that is, to group all facts under some general laws. These causes combined have given me the patience to reflect or ponder for any number of years over any unexplained problem. As far as I can judge, I am not apt to follow blindly the lead of other men. I have steadily endeavoured to keep my mind free so as to give up any hypothesis, however much beloved (and I cannot resist forming one on every subject), as soon as facts are shown to be opposed to it.
Indeed, I have had no choice but to act in this manner, for with the exception of the Coral Reefs, I cannot remember a single first-formed hypothesis which had not after a time to be given up or greatly modified. This has naturally led me to distrust greatly deductive reasoning in the mixed sciences. On the other hand, I am not very sceptical—a frame of mind which I believe to be injurious to the progress of science. A good deal of scepticism in a scientific man is advisable to avoid much loss of time, but I have met with not a few men, who, I feel sure, have often thus been deterred from experiment or observations, which would have proved directly or indirectly serviceable.
Therefore my success as a man of science, whatever this may have amounted to, has been determined, as far as I can judge, by complex and diversified mental qualities and conditions. Of these, the most important have been—the love of science—unbounded patience in long reflecting over any subject—industry in observing and collecting facts—and a fair share of invention as well as of common sense.
5. Most inspirational to us of average intellect, he outperformed his own mental aptitude with these good habits, surprising even himself with the results.
With such moderate abilities as I possess, it is truly surprising that I should have influenced to a considerable extent the belief of scientific men on some important points.
Still Interested? Read his autobiography, his The Origin of Species, or check out David Quammen’s wonderful short biography of the most important period of Darwin’s life. Also, if you missed it, check out our prior post on Darwin’s Golden Rule.
One of the most impactful books we’ve ever come across is the wonderful Seeking Wisdom: From Darwin to Munger, written by the Swedish investor Peter Bevelin. In the spirit of multidisciplinary learning, Seeking Wisdom is a compendium of ideas from biology, psychology, statistics, physics, economics, and human behavior.
Mr. Bevelin is out with a new book full of wisdom from Warren Buffett & Charlie Munger: All I Want to Know is Where I’m Going to Die So I Never Go There. We were fortunate enough to have a chance to interview Peter recently, and the result is the wonderful discussion below.
The short answer: To improve my thinking. And when I started writing on what later became Seeking Wisdom I can express it even simpler: “I was dumb and wanted to be less dumb.” As Munger says: “It’s ignorance removal…It’s dishonorable to stay stupider than you have to be.” And I had done some stupid things and I had seen a lot of stupidity being done by people in life and in business.
A seed was first planted when I read Charlie Munger’s worldly wisdom speech and another one where he referred to Darwin as a great thinker. So I said to myself: I am 42 now. Why not take some time off business and spend a year learning, reflecting and write about the subject Munger introduced to me – human behavior and judgments.
None of my writings started out as a book project. I wrote my first book – Seeking Wisdom – as a memorandum for myself with the expectation that I could transfer some of its essentials to my children. I learn and write because I want to be a little wiser day by day. I don’t want to be a great-problem-solver. I want to avoid problems – prevent them from happening and doing right from the beginning. And I focus on consequential decisions. To paraphrase Buffett and Munger – decision-making is not about making brilliant decisions, but avoiding terrible ones. Mistakes and dumb decisions are a fact of life and I’m going to make more, but as long as I can avoid the big or “fatal” ones I’m fine.
So I started to read and write to learn what works and not and why. And I liked Munger’s “All I want to know is where I’m going to die so I’ll never go there” approach. And as he said, “You understand it better if you go at it the way we do, which is to identify the main stupidities that do bright people in and then organize your patterns for thinking and developments, so you don’t stumble into those stupidities.” Then I “only” had to a) understand the central “concept” and its derivatives and describe it in as simple way as possible for me and b) organize what I learnt in a way that was logical and useful for me.
And what better way was there to learn this from those who already knew this?
After I learnt some things about our brain, I understood that thinking doesn’t come naturally to us humans – most is just unconscious automatic reactions. Therefore I needed to set up the environment and design a system that helped me make it easier to know what to do and prevent and avoid harm. Things like simple rules of thumbs, tricks and filters. Of course, I could only do that if I first had the foundation. And as the years have passed, I’ve found that filters are a great way to save time and misery. As Buffett says, “I process information very quickly since I have filters in my mind.” And they have to be simple – as the proverb says, “Beware of the door that has too many keys.” The more complicated a process is, the less effective it is.
Why do I write? Because it helps me understand and learn better. And if I can’t write something down clearly, then I have not really understood it. As Buffett says, “I learn while I think when I write it out. Some of the things, I think I think, I find don’t make any sense when I start trying to write them down and explain them to people … And if it can’t stand applying pencil to paper, you’d better think it through some more.”
My own test is one that a physicist friend of mine told me many years ago, ‘You haven’t really understood an idea if you can’t in a simple way describe it to almost anyone.’ Luckily, I don’t have to understand zillion of things to function well.
And even if some of mine and others thoughts ended up as books, they are all living documents and new starting points for further, learning, un-learning and simplifying/clarifying. To quote Feynman, “A great deal of formulation work is done in writing the paper, organizational work, organization. I think of a better way, a better way, a better way of getting there, of proving it. I never do much — I mean, it’s just cleaner, cleaner and cleaner. It’s like polishing a rough-cut vase. The shape, you know what you want and you know what it is. It’s just polishing it. Get it shined, get it clean, and everything else.”
Seeking Wisdom because I had to do a lot of research – reading, talking to people etc. Especially in the field of biology and brain science since I wanted to first understand what influences our behavior. I also spent some time at a Neurosciences Institute to get a better understanding of how our anatomy, physiology and biochemistry constrained our behavior.
And I had to work it out my own way and write it down in my own words so I really could understand it. It took a lot of time but it was a lot of fun to figure it out and I learnt much more and it stuck better than if I just had tried to memorize what somebody else had already written. I may not have gotten everything letter perfect but good enough to be useful for me.
As I said, the expectation wasn’t to create a book. In fact, that would have removed a lot of my motivation. I did it because I had an interest in becoming better. It goes back to the importance of intrinsic motivation. As I wrote in Seeking Wisdom: “If we reward people for doing what they like to do anyway, we sometimes turn what they enjoy doing into work. The reward changes their perception. Instead of doing something because they enjoy doing it, they now do it because they are being paid. The key is what a reward implies. A reward for our achievements makes us feel that we are good at something thereby increasing our motivation. But a reward that feels controlling and makes us feel that we are only doing it because we’re paid to do it, decreases the appeal.”
It may sound like a cliché but the joy was in the journey – reading, learning and writing – not the destination – the finished book. Has the book made a difference for some people? Yes, I hope so but often people revert to their old behavior. Some of them are the same people who – to paraphrase something that is attributed to Churchill – occasionally should check their intentions and strategies against their results. But reality is what Munger once said, “Everyone’s experience is that you teach only what a reader almost knows, and that seldom.” But I am happy that my books had an impact and made a difference to a few people. That’s enough.
It was more fun to write about what works and not in a dialogue format. But also because vivid and hopefully entertaining “lessons” are easier to remember and recall. And you will find a lot of quotes in there that most people haven’t read before.
I wanted to write a book like this to reinforce a couple of concepts in my head. So even if some of the text sometimes comes out like advice to the reader, I always think about what the mathematician Gian-Carlo Rota once said, “The advice we give others is the advice that we ourselves need.”
Some kind of representation that describes how reality is (as it is known today) – a principle, an idea, basic concepts, something that works or not – that I have in my head that helps me know what to do or not. Something that has stood the test of time.
For example some timeless truths are:
I favor underlying principles and notions that I can apply broadly to different and relevant situations. Since some models don’t resemble reality, the word “model” for me is more of an illustration/story of an underlying concept, trick, method, what works etc. that agrees with reality (as Munger once said, “Models which underlie reality”) and help me remember and more easily make associations.
But I don’t judge or care how others label it or do it – models, concepts, default positions … The important thing is that whatever we use, it reflects and agrees with reality and that it works for us to help us understand or explain a situation or know what to do or not do. Useful and good enough guide me. I am pretty pragmatic – whatever works is fine. I follow Deng Xiaoping, “I don’t care whether the cat is black or white as long as it catches mice.” As Feynman said, “What is the best method to obtain the solution to a problem? The answer is, any way that works.”
I’ll tell you about a thing Feynman said on education which I remind myself of from time to time in order not to complicate things (from Richard P. Feynman, Michael A. Gottlieb, Ralph Leighton, Feynman’s Tips on Physics: A Problem-Solving Supplement to the Feynman Lectures on Physics):
“There’s a round table on three legs. Where should you lean on it, so the table will be the most unstable?”
The student’s solution was, “Probably on top of one of the legs, but let me see: I’ll calculate how much force will produce what lift, and so on, at different places.”
Then I said, “Never mind calculating. Can you imagine a real table?”
“But that’s not the way you’re supposed to do it!”
“Never mind how you’re supposed to do it; you’ve got a real table here with the various legs, you see? Now, where do you think you’d lean? What would happen if you pushed down directly over a leg?”
I say, “That’s right; and what happens if you push down near the edge, halfway between two of the legs?”
“It flips over!”
I say, “OK! That’s better!”
The point is that the student had not realized that these were not just mathematical problems; they described a real table with legs. Actually, it wasn’t a real table, because it was perfectly circular, the legs were straight up and down, and so on. But it nearly described, roughly speaking, a real table, and from knowing what a real table does, you can get a very good idea of what this table does without having to calculate anything – you know darn well where you have to lean to make the table flip over. So, how to explain that, I don’t know! But once you get the idea that the problems are not mathematical problems but physical problems, it helps a lot.
Anyway, that’s just two ways of solving this problem. There’s no unique way of doing any specific problem. By greater and greater ingenuity, you can find ways that require less and less work, but that takes experience.
Ideas from biology and psychology since many stupidities are caused by not understanding human nature (and you get illustrations of this nearly every day). And most of our tendencies were already known by the classic writers (Publilius Syrus, Seneca, Aesop, Cicero etc.)
Others that I find very useful both in business and private is the ideas of Quantification (without the fancy math), Margin of safety, Backups, Trust, Constraints/Weakest link, Good or Bad Economics slash Competitive advantage, Opportunity cost, Scale effects. I also think Keynes idea of changing your mind when you get new facts or information is very useful.
But since reality isn’t divided into different categories but involves a lot of factors interacting, I need to synthesize many ideas and concepts.
I don’t know about that but what I often see among many smart people agrees with Munger’s comment: “All this stuff is really quite obvious and yet most people don’t really know it in a way where they can use it.”
Anyway, I believe if you really understand an idea and what it means – not only memorizing it – you should be able to work out its different applications and functional equivalents. Take a simple big idea – think on it – and after a while you see its wider applications. To use Feynman’s advice, “It is therefore of first-rate importance that you know how to “triangulate” – that is, to know how to figure something out from what you already know.” As a good friend says, “Learn the basic ideas, and the rest will fill itself in. Either you get it or you don’t.”
Most of us learn and memorize a specific concept or method etc. and learn about its application in one situation. But when the circumstances change we don’t know what to do and we don’t see that the concept may have a wider application and can be used in many situations.
Take for example one big and useful idea – Scale effects. That the scale of size, time and outcomes changes things – characteristics, proportions, effects, behavior…and what is good or not must be tied to scale. This is a very fundamental idea from math. Munger described some of this idea’s usefulness in his worldly wisdom speech. One effect from this idea I often see people miss and I believe is important is group size and behavior. That trust, feeling of affection and altruistic actions breaks down as group size increases, which of course is important to know in business settings. I wrote about this in Seeking Wisdom (you can read more if you type in Dunbar Number on Google search). I know of some businesses that understand the importance of this and split up companies into smaller ones when they get too big (one example is Semco).
Another general idea is “Gresham’s Law” that can be generalized to any process or system where the bad drives out the good. Like natural selection or “We get what we select for” (and as Garrett Hardin writes, “The more general principle is: We get whatever we reward for).
While we are on the subject of mental models etc., let me bring up another thing that distinguishes the great thinkers from us ordinary mortals. Their ability to quickly assess and see the essence of a situation – the critical things that really matter and what can be ignored. They have a clear notion of what they want to achieve or avoid and then they have this ability to zoom in on the key factor(s) involved.
One reason to why they can do that is because they have a large repertoire of stored personal and vicarious experiences and concepts in their heads. They are masters at pattern recognition and connection. Some call it intuition but as Herbert Simon once said, “The situation has provided a cue; this cue has given the expert access to information stored in memory, and the information provides the answer. Intuition is nothing more and nothing less than recognition.”
It is about making associations. For example, roughly like this:
Situation X Association (what does this remind me of?) to experience, concept, metaphor, analogy, trick, filter… (Assuming of course we are able to see the essence of the situation) What counts and what doesn’t? What works/not? What to do or what to explain?
Let’s take employing someone as an example (or looking at a business proposal). This reminds me of one key factor – trustworthiness and Buffett’s story, “If you’re looking for a manager, find someone who is intelligent, energetic and has integrity. If he doesn’t have the last, make sure he lacks the first two.”
I believe Buffett and Munger excel at this – they have seen and experienced so much about what works and not in business and behavior.
Buffett referred to the issue of trust, chain letters and pattern recognition at the latest annual meeting:
You can get into a lot of trouble with management that lacks integrity… If you’ve got an intelligent, energetic guy or woman who is pursuing a course of action, which gets put on the front page it could make you very unhappy. You can get into a lot of trouble. ..We’ve seen patterns…Pattern recognition is very important in evaluating humans and businesses. Pattern recognition isn’t one hundred percent and none of the patterns exactly repeat themselves, but there are certain things in business and securities markets that we’ve seen over and over and frequently come to a bad end but frequently look extremely good in the short run. One which I talked about last year was the chain letter scheme. You’re going to see chain letters for the rest of your life. Nobody calls them chain letters because that’s a connotation that will scare you off but they’re disguised as chain letters and many of the schemes on Wall Street, which are designed to fool people, have that particular aspect to it…There were patterns at Valeant certainly…if you go and watch the Senate hearings, you will see there are patterns that should have been picked up on.
This is what he wrote on chain letters in the 2014 annual report:
In the late 1960s, I attended a meeting at which an acquisitive CEO bragged of his “bold, imaginative accounting.” Most of the analysts listening responded with approving nods, seeing themselves as having found a manager whose forecasts were certain to be met, whatever the business results might be. Eventually, however, the clock struck twelve, and everything turned to pumpkins and mice. Once again, it became evident that business models based on the serial issuances of overpriced shares – just like chain-letter models – most assuredly redistribute wealth, but in no way create it. Both phenomena, nevertheless, periodically blossom in our country – they are every promoter’s dream – though often they appear in a carefully-crafted disguise. The ending is always the same: Money flows from the gullible to the fraudster. And with stocks, unlike chain letters, the sums hijacked can be staggering.
And of course, the more prepared we are or the more relevant concepts and “experiences” we have in our heads, the better we all will be at this. How do we get there? Reading, learning and practice so we know it “fluently.” There are no shortcuts. We have to work at it and apply it to the real world.
As a reminder to myself so I understand my limitation and “circle”, I keep a paragraph from Munger’s USC Gould School of Law Commencement Address handy so when I deal with certain issues, I don’t fool myself into believing I am Max Planck when I’m really the Chauffeur:
In this world I think we have two kinds of knowledge: One is Planck knowledge, that of the people who really know. They’ve paid the dues, they have the aptitude. Then we’ve got chauffeur knowledge. They have learned to prattle the talk. They may have a big head of hair. They often have fine timbre in their voices. They make a big impression. But in the end what they’ve got is chauffeur knowledge masquerading as real knowledge.
One trick or notion I see many of us struggling with because it goes against our intuition is the concept of inversion – to learn to think “in negatives” which goes against our normal tendency to concentrate on for example, what we want to achieve or confirmations instead of what we want to avoid and disconfirmations. Another example of this is the importance of missing confirming evidence (I call it the “Sherlock trick”) – that negative evidence and events that don’t happen, matter when something implies they should be present or happen.
Another example that is counterintuitive is Newton’s 3d law that forces work in pairs. One object exerts a force on a second object, but the second object also exerts a force equal and opposite in direction to the force acting on it – the first object. As Newton wrote, “If you press a stone with your finger, the finger is also pressed by the stone.” Same as revenge (reciprocation).
One that immediately comes to mind is one I have mentioned in the introduction in two of my books is someone I am fortunate to have as a friend – Peter Kaufman. An outstanding thinker and a great businessman and human being. On a scale of 1 to 10, he is a 15.
Their ethics and their ethos of clarity, simplicity and common sense. These two gentlemen are outstanding in their instant ability to exclude bad ideas, what doesn’t work, bad people, scenarios that don’t matter, etc. so they can focus on what matters. Also my amazement that their ethics and ideas haven’t been more replicated. But I assume the answer lies in what Munger once said, “The reason our ideas haven’t spread faster is they’re too simple.”
This reminds me something my father-in-law once told me (a man I learnt a lot from) – the curse of knowledge and the curse of academic title. My now deceased father-in-law was an inventor and manager. He did not have any formal education but was largely self-taught. Once a big corporation asked for his services to solve a problem their 60 highly educated engineers could not solve. He solved the problem. The engineers said, “It can’t be that simple.” It was like they were saying that, “Here we have 6 years of school, an academic title, lots of follow up education. Therefore an engineering problem must be complicated”. Like Buffett once said of Ben Graham’s ideas, “I think that it comes down to those ideas – although they sound so simple and commonplace that it kind of seems like a waste to go to school and get a PhD in Economics and have it all come back to that. It’s a little like spending eight years in divinity school and having somebody tell you that the 10 commandments were all that counted. There is a certain natural tendency to overlook anything that simple and important.”
(I must admit that in the past I had a tendency to be extra drawn to elegant concepts and distracting me from the simple truths.)
The best thing I have done is marrying my wife. As Buffett says and it is so so true, “Choosing a spouse is the most important decision in your life…You need everything to be stable, and if that decision isn’t good, it may affect every other decision in life, including your business decisions…If you are lucky on health and…on your spouse, you are a long way home.”
A good “investment” is taking the time to continuously improve. It just takes curiosity and a desire to know and understand – real interest. And for me this is fun.
Every day is a little different but I read every day.
There is not one single book or one single idea that has done it. I have picked up things from different books (still do). And there are different books and articles that made a difference during different periods of my life. Meeting and learning from certain people and my own practical experiences has been more important in my development. As an example – When I was in my 30s a good friend told me something that has been very useful in looking at products and businesses. He said I should always ask who the real customer is: “Who ultimately decides what to buy and what are their decision criteria and how are they measured and rewarded and who pays?”
But looking back, if I have had a book like Poor Charlie’s Almanack when I was younger I would have saved myself some misery. And of course, when it comes to business, managing and investing, nothing beats learning from Warren Buffett’s Letters to Berkshire Hathaway Shareholders.
Another thing I have found is that it is way better to read and reread fewer books but good and timeless ones and then think. Unfortunately many people absorb too many new books and information without thinking.
Let me finish this with some quotes from my new book that I believe we all can learn from:
Finally, I wish you and your readers an excellent day – Everyday!
Lee Kuan Yew, the “Father of Modern Singapore”, who took a nation from “Third World to First” in his own lifetime, has a simple idea about using theory and philosophy. Here it is: Does it work?
He isn’t throwing away big ideas or theories, or even discounting them per se. They just have to meet the simple, pragmatic standard.
Try it out the next time you study a philosophy, a value, an approach, a theory, an ideology…it doesn’t matter if the source is a great thinker of antiquity or your grandmother. Has it worked? We’ll call this Lee Kuan Yew’s Rule, to make it easy to remember.
Here’s his discussion of it in The Grand Master’s Insights on China, the United States, and the World:
So Plato, Aristotle, Socrates, I am not guided by them...I am interested in what works... Click To Tweet
My life is not guided by philosophy or theories. I get things done and leave others to extract the principles from my successful solutions. I do not work on a theory. Instead, I ask: what will make this work? If, after a series of solutions, I find that a certain approach worked, then I try to find out what was the principle behind the solution. So Plato, Aristotle, Socrates, I am not guided by them…I am interested in what works…Presented with the difficulty or major problem or an assortment of conflicting facts, I review what alternatives I have if my proposed solution does not work. I choose a solution which offers a higher probability of success, but if it fails, I have some other way. Never a dead end.
We were not ideologues. We did not believe in theories as such. A theory is an attractive proposition intellectually. What we faced was a real problem of human beings looking for work, to be paid, to buy their food, their clothes, their homes, and to bring their children up…I had read the theories and maybe half believed in them.
But we were sufficiently practical and pragmatic enough not to be cluttered up and inhibited by theories. If a thing works, let us work it, and that eventually evolved into the kind of economy that we have today. Our test was: does it work? Does it bring benefits to the people?…The prevailing theory then was that multinationals were exploiters of cheap labor and cheap raw materials and would suck a country dry…Nobody else wanted to exploit the labor. So why not, if they want to exploit our labor? They are welcome to it…. We were learning how to do a job from them, which we would never have learnt… We were part of the process that disproved the theory of the development economics school, that this was exploitation. We were in no position to be fussy about high-minded principles.
Want More? Check out our prior posts on Lee Kuan Yew, or check out the short book of his insights from where this clip came. If you really want to dive deep, check out his wonderful autobiography, the amazing story of Singapore’s climb.
Do you know anyone that’s really, really competent? Like really, ridiculously competent?
They seem to have a work ethic that’s twice as powerful as yours, they get things done as asked, going “above and beyond” the call of duty almost always, and always within a reasonable time. They come up with creative solutions, or absent that, simply know how to get to a solution to keep the process moving. They keep going when others stop.
They’re Competent, with a capital “C”.
Now ask yourself, regardless of the other traits you like or dislike about them, is that person at risk of losing their job, whatever it may be? Are they at risk of “wallowing in the shallows” in life? Are they at risk of true, debilitating failure? Or are they just getting ahead time and time again?
I’m going to guess the latter.
There’s something about the pure and simple “getting things done”-type ability, the pure hustle, which acts like oxygen for most organizations and teams, making the people with that ability super-useful. These super-productive, super-able people, almost regardless of their other traits, seem to rise to the top. (Although, multiplicative type thinking tells us that it depends on how severe the lacking traits are. A drinking problem can kill even the best, for example.)
For the man we’ll study today, the “pure oxygen” of competence outweighed so many awful traits that it’s worth figuring out what lessons we might learn for ourselves.
The inimitable Robert Moses was maybe the most powerful man in the history of New York City, responsible for building a large number of the beaches, bridges, tunnels, highways, parkways, and housing developments we all recognize today. Just pulling from Wikipedia the number of artifacts in New York City named after the guy shows you his influence:
Various locations and roadways in New York State bear Moses’s name. These include two state parks, Robert Moses State Park – Thousand Islands in Massena, New York and Robert Moses State Park – Long Island, and the Robert Moses Causeway on Long Island, the Robert Moses State Parkway in Niagara Falls, New York, and the Robert Moses Hydro-Electric Dam in Lewiston, New York. A hydro-electric power dam in Massena, New York also bears Moses’ name. These supply much of New York City’s power. Moses also has a school named after him in North Babylon, New York on Long Island; there is also a Robert Moses Playground in New York City. There are other signs of the surviving appreciation held for him by some circles of the public. A statue of Moses was erected next to the Village Hall in his long-time hometown, Babylon Village, New York, in 2003, as well as a bust on the Lincoln Center campus of Fordham University.
By the time Moses’ reign was done in New York City — he held some form of influential power between 1924 and 1968 — he had built seven of the major bridges that connect Manhattan to its boroughs, at least a dozen major roads that would be familiar to all New York area drivers today (416 miles of parkways), over 1,000 public housing buildings, 658 separate playgrounds, scores of dams, State Parks, and beaches (including Jones Beach), Shea Stadium, the Lincoln Center…the list goes on. He was the dominant force behind all of them.
His physical — and in many ways, social — mark on New York City is unmatched before or since.
Oh, and did I mention he accomplished much of this during the Great Depression, a time when no one, cities least, had any money, finding incredibly creative ways to corral Federal funds to New York and away from the country’s other great cities? And did I mention he was able to do it without ever winning any elections?
That is “capital-C Competence”.
But the thing about Moses is that he was kind of a bastard. He did not treat others well. He didn’t seem to care about making others feel good. He certainly did not follow the popular Dale Carnegie type behavior popular back then. Most of the people he had to work with over the years — Governors, Mayors, Commissioners, thousands and thousands of employees — did not like him.
If I described some of his personal traits to you — verbally abusive, racist, classist, demanding, elitist, difficult, insufferably arrogant — you would not conceive of this as the stereotype of someone you’d help rise to power. He “drove” his men, and he “commanded” those around him. He rarely passed up an opportunity to make a new enemy.
As an example, here’s how his biographer Robert Caro, in his classic book The Power Broker, describes the general feeling when Moses is named New York’s Secretary of State in 1927 by Governor Al Smith, his main ally:
The depth and unanimity of the feeling transcended party affiliation. Moses had for years been either insulting or ignoring legislators of both parties. And now the Legislature was being asked–for under reorganization the Senate had to approve key gubernatorial nominations–to approve the elevation to the second most important post in the state. One observer says: “When he walked down a corridor in the capitol and passed a group of legislators, you could see their eyes follow him as he passed, and you could see how many enemies–bitter, personal enemies–he had. I really believe that Robert Moses was the most hated man in Albany.
How did a guy like that get the elevation needed to become the Secretary of State, the State Parks Commissioner, the Triborough Bridge Authority, the city “Construction Coordinator,” the Long Island Park Commissioner…? He had more titles than a bookstore, all carrying tremendous power to direct the public purse, hand out thousands of jobs, and physically shape the most important city in the country.
Pure and simple, the guy was insanely competent. He could get things done that no one else could get done. His administrative abilities were brilliant and his work ethic legendary.
His written reports, starting with his Oxford PhD thesis The Civil Service of Great Britain, were considered classics of the field. The brilliance of that thesis probably got him his first appointments. The following was said about Moses only in his mid-twenties:
Two men who had read Moses’ thesis — it had been published — were Luther C. Steward, first president of the National Federation of Federal Employees, and H. Elliot Kaplan, later president of the New York civil Service Commission and executive director of the Civil Service Reform Association. Years later, when Kaplan had read everything there was to read on civil service, he was asked to evaluate the thesis and said simply, “It was a masterpiece.”
There were, he said, “very few people in the United States in 1914 who knew much about civil service. Bob Moses really knew.” Steward’s wife, who had been working beside her husband in 1914, was even more emphatic. “Bob Moses wasn’t one of the men in this country who understood civil service best at that stage,” she said. “He was the man who understood it best.”
He didn’t just understand it well: He was the best.
Then again, when Moses got his career started in New York City municipal government, he wrote a report basically alone and in a small apartment (he didn’t have a lot of money), late at night while keeping to his main duties by day.
It was another classic. Speaking of Moses’ 1919 Report of the Reconstruction Commission to Governor Alfred E. Smith on Retrenchment and Reorganization in the State Government, Robert Caro writes:
From the moment on October 10, 1919, that it was published, it was hailed as a historic document, not only by [Al] Smith, who had sponsored it, and not only by the reformers, who saw in it the finest exposition of their philosophy, but, more importantly, by the men Belle Moskowitz had hoped would hail it– the Republican “federal crowd.”
The paper was hailed as “deserving of unreserved approbation,” while another commenter said “This paper is, I think, the most helpful one that I could put in your hands…to give you an idea of…what I believe to be the correct principles of state government.”
With that, Moses got pushed ahead again.
Time and again this would happen: Moses would do something extremely competent, demonstrating great value to this who needed his work, and he would get a boost.
And did he ever work his ass off to keep things moving. As he gathered momentum building up Long Island and Jones Beach State Park in the 1920s, his life became, as Caro puts it, an “orgy of work.”
Sloughing off distractions, he set his life into a hard mold. Shunning evening social life, especially the ceremonial dinners that eat up so much of a public official’s time, he went to bed early (usually before eleven) and awoke early (he was always dressed, shaved, and breakfasted when Arthur Howland arrived at 7:30 to pick up the manila envelope full of memos).
The amenities of life dropped out of his. He and Mary had enjoyed playing bridge with friends; now they no longer played. Sundays with his family all but disappeared. He did not golf; he did not attend sporting events; he was not interested in the diversions called “hobbies” that other executives considered important because they considered it important that they relax; he was not interested in relaxing.
…there was never enough time; minutes were precious to him. To make sure he had as many of them as possible, he tried to make use of all those that most other men waste.
And it was this “orgy of work,” combined with a dedication to being the “best” and not “pretty good” that allowed Moses to rise in spite of his faults.
Even his true enemies, people who truly did not like him or want to see him succeed, like FDR — who was the Governor of New York during the Depression — continued to support his rise, almost against their own will!
Not only does a Governor not interfere with an official like Robert Moses; he heaps on him more and more responsibilities. No matter what the job was, it seemed, if it was difficult Roosevelt turned to the same man. During 1930, 1931, and 1932, Moses handled more than a dozen special assignments for Roosevelt and produced results on every one. And if increasing Moses’ responsibilities meant increasing his power–giving him more money to work with, more engineers, architects, draftsmen, and police to work with–well, the Governor simply had no choice but to increase that power.
No two men in New York would come to hate each other more than Moses and FDR, yet there was FDR, dumping more and more power and more and more work into Moses’ lap. Why?
He could be trusted to get it done and do it well. It was that simple. Competence is oxygen.
This aspect of the life of Robert Moses, a life worth studying for so many reasons, illustrates a few simple points.
The first is the pure value of capital-C Competence: Hard, correct work, repeated ad infinitum with no intermittence, will get almost anyone very far, even if they’re missing other desirable traits. Moses, in spite of faults that would likely stop any mortal in his or her tracks, rose near the very top on the back of it. You can probably think of ten other individuals in your head who demonstrate a similar reality.
But as interesting, true, and instructive as that is, it brings up a very interesting historical counterfactual:
What if Bob Moses had that driving competence but also folded in things like humility, empathy, good temper, fairness, desire for group success over individual glory, and other traits we all desire in our own leaders? Wouldn’t he be considered one of the most inspiring and beloved figures in the history of the United States? Might he have been the President instead of FDR? Might he have lived a much more pleasant and less contentious life than he did?
A great debate lingers even now about whether his actions to reshape the City were on balance a positive or negative — he created a lot of misery in his march to physically reshape New York City. He made it a very car-heavy, traffic-heavy city. He created slums. He destroyed a lot of neighborhoods. And so on. Might a bit of humility and respect for others’ goals and opinions have built a New York City that people are less troubled about today? He could have a record of accomplishment and the unabashed respect of history.
It’s hard to know — traits like Moses’ work ethic are often “co-located” with traits that are not so desirable. But it is interesting to ponder, for our own lives, both the value of pure ability and the value of balancing it out with the other traits that can get us even further. Good is not always optimal.
And most of us probably don’t have the pure ability and fire that Moses did, all the more reason to work on our “soft” skills. We may need to either work harder on our competence and work ethic or find a way to compensate for it in “softer” ways like true leadership ability.
But even as we do that, it’s important to never forget the reality that competence and hustle go pretty far. Sometimes we’re getting “beat” simply because others are providing more “oxygen” than we are, even if they’re not pleasant people. It’s just a part of reality.
So if we’ve already got the “soft skills” down, perhaps we need to do the hard work in figuring out how to raise our competence level.
What did an 18th-century hymn writer have to contribute to the modern understanding of the world? As it turns out, a lot. Sometimes we forget how useful the old wisdom can be.
One of the most popular and prolific Christian hymn writers of all time — including Joy to the World — was a man named Isaac Watts, who lived in England in the late 17th and early 18th century. Watts was a well educated Nonconformist (in the religious sense, not the modern one) who, along with his hymn writing, published a number of books on logic, science, and the learning process, at a time when these concepts were only just starting to grab hold as a dominant ideology, replacing the central role of religious teaching.
Watts’s book The Improvement of the Mind was an important contribution to the growing body of work emphasizing the importance of critical thinking and rational, balanced inquiry, rather than adhering to centuries of dogma. If, as Alfred North Whitehead once pronounced, modernity’s progress was due to the “invention of the method of invention,” Watts and his books (which became textbooks in English schools, including Oxford) can easily be credited with helping push the world along.
One non-conformist who would later come to be deeply influenced by Watts was the great scientist Michael Faraday. Faraday grew up in a poor area of 18th-century England and received a fairly crude education, and yet would go on to become the Father of Electromagnetism. How?
In part, Faraday credits his own “inventing the method of invention” to reading Watts’s books, particularly The Improvement of the Mind — a self improvement guide a few centuries before the internet. Watts recommended keeping a commonplace book to record facts, and Faraday did. Watts recommended he be guided by observed facts, and Faraday was. Watts recommended finding a great teacher, and Faraday starting attending lectures.
In Watts’s book, Faraday had found a guiding ethos for how to sort out truth and fiction, what we now call the scientific method. And, given his tremendous achievements from a limited starting point, it’s worth asking…what did Faraday find?
We needn’t search far to figure it out. Smack dab in Chapter One of the book, Watts lays out his General Rules for the Improvement of Knowledge.
Watts first lays out the goal of the whole enterprise. The idea is a pretty awesome one, the same ethos we promote constantly here: We all need to make decisions constantly, so why not figure out how to make better ones? You don’t have to be an intellectual to pursue this goal. Everybody has a mind worth cultivating in order to improve the practical outcome of their lives:
No man is obliged to learn and know every thing; this can neither be sought nor required, for it is utterly impossible : yet all persons are under some obligation to improve their own understanding; otherwise it will be a barren desert, or a forest overgrown with weeds and brambles. Universal ignorance or infinite errors will overspread the mind, which is utterly neglected, and lies without any cultivation.
Skill in the sciences is indeed the business and profession but of a small part of mankind; but there are many others placed in such an exalted rank in the world, as allows them much leisure and large opportunities to cultivate their reason, and to beautify and enrich their minds with various knowledge. Even the lower orders of men have particular railings in life, wherein they ought to acquire a just degree of skill; and this is not to be done well, without thinking and reasoning about them.
The common duties and benefits of society, which belong to every man living, as we are social creatures, and even our native and necessary relations to a family, a neighbourhood, or government, oblige all persons whatsoever to use their reasoning powers upon a thousand occasions; every hour of life calls for some regular exercise of our judgment, as to time and things, persons and actions; without a prudent and discreet determination in matters before as, we, shall be plunged into perpetual errors in our conduct. Now that which should always be practised, must at some time be learnt.
We then get into the Rules themselves, an 18th-century guide to becoming smarter, better, and more useful which is just as useful three hundred years later. In the Rules, Watts promotes the idea of becoming wiser, more humble, more hungry, and more broad-thinking. These are as good a guide to improving your mind as you’ll find.
Below as an abridged version of the Rules. Check them all out here or get it in book form here. Watts had a bit of a bent towards solemnity and godliness that need not be emulated (unless you’d like to, of course), but most of the Rules are as useful today as the day they were written.
Rule I. DEEPLY possess your mind with the vast importance of a good judgment, and the rich and inestimable advantage of right reasoning.
Review the instances of your own misconduct in life ; think seriously with yourselves how many follies and sorrows you had escaped, and how much guilt and misery you had prevented, if from your early years you had but taken due paius to judge aright concerning persons, times, and things. This will awaken you with lively vigour to address yourselves to the work of improving your reasoning powers, and seizing every opportunity and advantage for that end.
Rule II. Consider the weaknesses, frailties, and mistakes of human nature in general, which arise from the very constitution of a soul united to an animal body, and subjected to many inconveniences thereby.
Consider the many additional weaknesses, mistakes, and frailties, which are derived from our original apostasy and fall from a state of innocence; how much our powers of understanding are yet more darkened, enfeebled, and imposed upon by our senses, our fancies, and our unruly passions, &c.
Consider the depth and difficulty of many truths, and the flattering appearances of falsehood, whence arises an infinite variety of dangers to which we are exposed in our judgment of things.
Read with greediness those authors that treat of the doctrine of prejudices, prepossessions, and springs of error, on purpose to make your soul watchful on all sides, that it suffer itself, as far as possible, to be imposed upon by none of them.
Rule III. A slight view of things so momentous is not sufficient.
You should therefore contrive and practise some proper methods to acquaint yourself with your own ignorance, and to impress your mind with a deep and painful sense of the low and imperfect degrees of your present knowledge, that you may be incited with labour and activity to pursue after greater measures. Among others, you may find some such methods as these successful.
1. Take a wide survey now and then of the vast and unlimited regions of learning. […] The worlds of science are immense and endless.
2. Think what a numberless variety of questions and difficulties there are belonging even to that particular science in which you have made the greatest progress, and how few of them there are in which you have arrived at a final and undoubted certainty; excepting only those questions in the pure and simple mathematics, whose theorems are demonstrable, and leave scarce any doubt; and yet, even in the pursuit of some few of these, mankind have been strangely bewildered.
3. Spend a few thoughts sometimes on the puzzling enquiries concerning vacuums and atoms, the doctrine of infinites, indivisibles, and incommensurables in geometry, wherein there appear some insolvable difficulties: do this on purpose to give you a more sensible impression of the poverty of your understanding, and the imperfection of your knowledge. This will teach you what a vain thing it is to fancy that you know all things, and will instruct you to think modestly of your present attainments […]
4. Read the accounts of those vast treasures of knowledge which some of the dead have possessed, and some of the living do possess. Read and be astonished at the almost incredible advances which have been made in science. Acquaint yourself with some persons of great learning, that by converse among them, and comparing yourself with them, you may acquire a mean opinion of your own attainments, and may thereby be animated with new zeal, to equal them as far as possible, or to exceed: thus let your diligence be quickened by a generous and laudable emulation.
Rule IV. Presume not too much upon a bright genius, a ready wit, and good parts; for this, without labour and study, will never make a man of knowledge and wisdom.
This has been an unhappy temptation to persons of a vigorous and gay fancy, to despise learning and study. They have been acknowledged to shine in an assembly, and sparkle in a discourse on common topics, and thence they took it into their heads to abandon reading and labour, and grow old in ignorance; but when they had lost their vivacity of animal nature and youth, they became stupid and sottish even to contempt aud ridicule. Lucidas and Scintillo are young men of this stamp; they shine in conversation; they spread their native riches before the ignorant; they pride themselves in their own lively images of fancy, and imagine themselves wise and learned; but they had best avoid the presence of the skilful, and the test of reasoning; and I would advise them once a day to think forward a little, what a contemptible figure they will make in age.
The witty men sometimes have sense enough to know their own foible; and therefore they craftily shun the attacks of argument, or boldly pretend to despise and renounce them, because they are conscious of their own ignorance, aud inwardly confess their want of acquaintance with the skill of reasoning.
Rule V. As you are not to fancy yourself a learned man because you are blessed with a ready wit; so neither must you imagine that large and laborious reading, and a strong memory, can denominate you truly wise.
What that excellent critic has determined when he decided the question, whether wit or study makes the best poet, may well be applied to every sort of learning:
“Concerning poets there has been contest,
Whether they’re made by art, or nature best;
But if I may presume in this affair,
Among the rest my judgment to declare,
No art without a genius will avail,
And parts without the help of art will fail:
But both ingredients jointly must unite,
Or verse will never shine with a transcendent light.”
It is meditation and studious thought, it is the exercise of your own reason and judgment upon all you read, that gives good sense even to the best genius, and affords your understanding the truest improvement. A boy of a strong memory may repeat a whole book of Euclid, yet be no geometrician; for he may not be able perhaps to demonstrate one single theorem. Memorino has learnt half the Bible by heart, and is become a living concordance, and a speaking index to theological folios, and yet he understands little of divinity. […]
Rule VII. Let the hope of new discoveries, as well as the satisfaction and pleasure of known trains, animate your daily industry.
Do not think learning in general is arrived at its perfection, or that the knowledge of any particular subject in any science cannot be improved, merely because it has lain five hundred or a thousand years without improvement. The present age, by the blessing of God on the ingenuity and diligence of men, has brought to light such truths in natural philosophy, and such discoveries in the heavens and the earth, as seemed to be beyond the reach of man. But may there not be Sir Isaac Newtons in every science? You should never despair therefore of finding out that which has never yet been found, unless you see something in the nature of it which renders it unsearchable, and above the reach of our faculties. […]
Rule VIII. Do not hover always on the surface of things, nor take up suddenly with mere appearances; but penetrate into the depth of matters, as far as your time and circumstances allow, especially in those things which relate to your own profession.
Do not indulge yourselves to judge of things by the first glimpse, or a short and superficial view of them; for this will fill the mind with errors and prejudices, and give it a wrong turn and ill habit of thinking, and make much work for retractation. Subito is carried away with title pages, so that he ventures to pronounce upon a large octavo at once, and to recommend it wonderfully when he had read half the preface. Another volume of controversies, of equal size, was discarded by him at once, because it pretended to treat of the Trinity, and yet he could neither find the word essence nor subsistences in the twelve first pages; but Subito changes his opinions of men and books and things so often, that nobody regards him.
As for those sciences, or those parts of knowledge, which either your profession, your leisure, your inclination, or your incapacity, forbid you to pursue with much application, or to search far into them, you must be contented with an historical and superficial knowledge of them, and not pretend to form any judgments of your own on those subjects which you understand very imperfectly.
Rule IX. Once a day, especially in the early years of life and study, call yourselves to an account what new ideas, what new proposition or truth you have gained, what further confirmation of known truths, and what advances you have made in any part of knowledge;
And let no day, if possible, pass away without some intellectual gain: such a course, well pursued, must certainly advance us in useful knowledge. It is a wise proverb among the learned, borrowed from the lips and practice of a celebrated painter,
“Let no day pass without one line at least.”
…and it was a sacred rule among the Pythagoreans, That they should every evening thrice run over the actions and affairs of the day, and examine what their conduct had been, what they had done, or what they had neglected: and they assured their pupils, that by this method they would make a noble progress on the path of virtue.
Rule X. Maintain a constant watch at all times against a dogmatical spirit;
Fix not your assent to any proposition in a firm and unalterable manner, till you have some firm and unalterable ground for it, and till you have arrived at some clear and sure evidence; till you have turned the proposition on all sides, and searched the matter through and through, so that you cannot be mistaken.
And even where you may think you have full grounds of assurance, be not too early, nor too frequent, in expressing this assurance in too peremptory and positive a manner, remembering that human nature is always liable to mistake in this corrupt and feeble state. A dogmatical spirit has man; inconveniences attending it: as
1. It stops the ear against all further reasoning upon that subject, and shuts up the mind from all farther improvements of knowledge. If you have resolutely fixed your opinion, though it be upon too slight and insufficient grounds, yet you will stand determined to renounce the strongest reason brought for the contrary opinion, and grow obstinate against the force of the clearest argument. Positive is a man of this character; and has often pronounced his assurance of the Cartesian vortexes: last year some further light broke in upon his understanding, with uncontrollable force, by reading something of mathematical philosophy; yet having asserted his former opinions in a most confident manner, be is tempted now to wink a little against the truth, or to prevaricate in his discourse upon that subject, lest by admitting conviction, he should expose himself to the necessity of confessing his former folly and mistake: and he has not humility enough for that.
2. A dogmatical spirit naturally leads us to arrogance of mind, and gives a man some airs in conversation which are too haughty and assuming. Audens is a man of learning, and very good company ; but his infallible assurance renders his carriage sometimes insupportable.
Rule XI. Though caution and slow assent will guard you against frequent mistakes and retractions; yet you should get humility and courage enough to retract any mistake, and confess an error.
Frequent changes are tokens of levity in our first determinations; yet you should never be too proud to change your opinion, nor frighted at the name of a changeling. Learn to scorn those vulgar bugbears, which confirm foolish man in his old mistakes, for fear of being charged with inconstancy. I confess it is better not to judge, than judge falsely; it is wiser to withhold our assent till we see complete evidence; but if we have too suddenly given up our assent, as the wisest man does sometimes, if we have professed what we find afterwards to be false, we should never be ashamed nor afraid to renounce a mistake. That is a noble essay which is found among the occasional papers ‘ to encourage the world to repractise retractations;’ and I would recommend it to the perusal of every scholar and every Christian.
Rule XV. Watch against the pride of your own reason, and a vain conceit of your own intellectual powers, with the neglect of divine aid and blessing.
Presume not upon great attainments in knowledge by your own self-sufficiency: those who trust to their own understandings entirely, are pronounced fools in the word of God; and it is the wisest of men gives them this character,
‘ He that trusteth in his own heart is a fool/ Prov. xxviii. 26. And the same divine writer advises us to ‘ trust in the Lord with all our heart, and not to lean to our understandings, nor to be wise in our own eyes,’ chap. iii. 5, 7*
Those who, with a neglect of religion and dependence on God, apply themselves to search out every article in the things of God by the mere dint of their own reason, have been suffered to run into wild excesses of foolery, and strange extravagance of opinions. Every one who pursues this vain course, and will not ask for the conduct of God in the study of religion, has just reason to fear he shall be left of God, and given up a prey to a thousand prejudices ; that he shall be consigned over to the follies of his own heart, and pursue his own temporal and eternal ruin. And even in common studies we should, by humility and dependence, engage the God of truth on our side. (Transcribers Note: This talk of God, pure nonsense that it is, does not diminish the value of his other rules.)
“People who have no emotional stake in a decision
can see what needs to be done sooner.”
— Andy Grove
What do you do when you wake up one day and realize that reality has changed, and you will either change with it or perish? Here’s one story of someone who did it successfully: Andy Grove, the former CEO of Intel Corp.
Here’s the long and short: As late as 1981, Intel Corp had massive dominance of the worldwide semiconductor business. They made memory chips (RAM), owning about 60% of the global trade in a business that was growing in leaps and bounds. The personal computer revolution was taking off and the world was going digital slowly, year by year. It was the right business to be in, and Intel owned it. They got designed into the IBM PC, one of the first popular personal computers, in 1981. Life was good.
The problem was that everyone else wanted into the same business. New companies were popping up every day in the United States, and in the late ’70s and throughout the ’80s, Japanese semiconductor manufacturers started nipping at Intel’s heels. They were competing on price and fast availability. Slowly, Intel realized its products were becoming commodities. By 1988, Japanese manufacturers had over 50% of the global market.
What did Intel do in response?
At first, as most all of us do, they tried to cope with the old reality. They tried running faster on a treadmill to nowhere. This is the first true difficulty of facing a new reality: Seeing the world as it truly is. The temptation is always to stick to the old paradigm.
What Intel really wanted was to be able to stay in the old business and make money at it. Andy Grove describes some of the tactics they tried to this end in his great book Only the Paranoid Survive, written in 1996:
We tried a lot of things. We tried to focus on a niche of the memory market segment, we tried to invent special-purpose memories called valued-added designs, we introduced more advanced technologies and built memories with them. What we were desperately trying to do was earn a premium for our product in the marketplace as we couldn’t match the Japanese downward pricing spiral. There was a saying at Intel at that time: “If we do well we get ‘2x’ [twice] the price of Japanese memories, but what good does it do if ‘X’ gets smaller and smaller?
We had meetings and more meetings, bickering and arguments, resulting in nothing but conflicting proposals. There were those who proposed what they called a “go for it” strategy: “Let’s build a gigantic factory dedicated to producing memories and nothing but memories, and let’s take on the Japanese.” Others proposed that we should get really clever and use an avant-garde technology, “go for it” but in a technological rather than a manufacturing sense and build something the Japanese producers couldn’t build. Others were still clinging to the idea that we could come up with special-purpose memories, an increasingly unlikely possibility as memories became a uniform worldwide commodity. Meanwhile, as the debates raged, we just went on losing more and more money.
As Grove started waking up to the reality that the old way of doing business wasn’t going to work anymore, he allowed himself the thought that Intel would leave the business that had buttered its bread for so long.
And with this came the second difficulty of facing a new reality: Being the first to see it means you’ll face tremendous resistance from those who are not there yet.
Of course, Grove faced this in spades at Intel. Notice how he describes the ties to the old reality: Religious conviction.
The company had a couple of beliefs that were as strong as religious dogmas. Both of them had to do with the importance of memories as the backbone of our manufacturing and sales activities. One was that memories were our “technology drivers.” What this phrase meant was that we always developed and refined our technologies on our memory products first because they were easier to test. Once the technology had been debugged on memories, we would apply it to microprocessors and other products. The other belief was the “full product-line” dogma. According to this, our salesmen needed a full product line to do a good job in front of our customers; if they didn’t have a full product line, the customer would prefer to do business with our competitors who did.
Given the strength of these beliefs, an open-minded, rational discussion about getting out of memories was practically impossible. What were we going to use for technology drivers? How were our salespeople going to do their jobs when they had an incomplete product family?
Eventually, after taking half-measures and facing all kinds of resistance from the homeostatic system that is a large organization, Grove was able to convince the executive team it was time to move on from the memory business and go whole-hog into microprocessors, a business where Intel could truly differentiate themselves and build a formidable competitive position.
It’s here that Grove hits on a very humbling point about facing reality: We’re often the last ones to see things the way they truly are! We’re sitting on a train oblivious to the fact that it’s moving at 80 miles per hour, but anyone sitting outside the train watches it whiz right by! This is the value of learning to see the world through the eyes of others.
After all manner of gnashing of teeth, we told our sales force to notify our memory customers. This was one of the great bugaboos: How would our customers react? Would they stop doing business with us altogether now that we were letting them down? In fact, the reaction was, for all practical purposes, a big yawn. Our customers knew that we were not a very large factor in the market and they had half figured that we would get out; most of them had already made arrangements with other suppliers.
In fact, when we informed them of the decision, some of them reacted with the comment, “It sure took you a long time.” People who have no emotional stake in a decision can see what needs to be done sooner.
This is where the rubber hits on the road. As Grove mentions regarding Intel, you must train yourself to see your situation from the perspective of an outsider.“People who have no emotional stake in a decision can see what needs to be done sooner.” Click To Tweet
This is why companies often bring outside management or consulting organizations in to help them — they feel only someone sitting outside the train can see how fast it’s moving! But what if you could have for yourself that kind of objectivity? It takes a passionate interest in reality and a commitment to being open to change. In business especially, the Red Queen effect means that change is a constant, not a variable.
And the story of Andy Grove shows that it can be done. Despite the myriad of problems discussed above, not only did Grove realize how fast the train was moving, but he got all of his people off, and onto a new and better train! By the late ’80s Intel pushed into microprocessing and out of memories, and became one of the great growth companies of the 1990s in a brand new business. (And he did it without bringing in outside help.)
What it took was the courage to face facts and act on them: As hard as it must have been, the alternative was death.
Here’s what Grove took from the experience:
I learned how small and helpless you feel when facing a force that’s “10X” larger than what you are accustomed to. I experienced the confusion that engulfs you when something fundamental changes in the business, and I felt the frustration that comes when the things that worked for you in the past no longer do any good. I learned how desperately you want to run from dealing with even describing a new reality to close associates. And I experienced the exhilaration that comes from a set-jawed commitment to a new direction, unsure as that may be.
In this case, the Japanese started beating us in the memory business in the early eighties. Intel’s performance started to slump when the entire industry weakened in mid-1984. The conversation with Gordon Moore that I described occurred in mid-1985. It took until mid-1986 to implement our exit from memories. Then it took another year before we returned to profitability. Going through the whole strategic inflection point took us a total of three years.
I also learned that strategic inflection points, painful as they are for all participants, provide an opportunity to break out of a plateau and catapult to a higher level of achievement. Had we not changed our business strategy, we would have been relegated to an immensely tough economic existence and, for sure, a relatively insignificant role in our industry. By making a forceful move, things turned out far better for us.
So here is your opportunity: When a new reality awaits, don’t go at it timidly. Take it head on and make it not only as good, but better than the old reality. Don’t be the boy in the well, looking up and seeing only the sides of the well. Take the time to see the world around you as it truly is.
Still Interested? Check out Grove’s classic book on strategic inflection points, Only the Paranoid Survive. For another interesting business case study, read the interesting story of how IBM first built its monster 20th century competitive advantage.Andy Grove and the Value of Facing Reality Click To Tweet