Better Thinking & Incentives: Lessons From Shakespeare

At Farnam Street, we aim to master the best of what other people have figured out. Not surprisingly, it’s quite a lot. The past is full of useful lessons that have much to teach us. Sometimes, we just need to remember what we’re looking for and why.

Life can be overwhelming. It seems like there’s a new technology, a new hack, a new way of doing things, or a new way we need to be every five minutes. Figuring out what to pay attention to is hard. It’s also a task we take seriously at Farnam Street. If we want to be a signal in the noise, we have to find other signals ourselves.

That’s why we spend a lot of time in the past. We like reading about history, and we like to look for timeless ideas. Learning information that is going to stay relevant for one hundred years is a better time investment than trying to digest information that will expire next week.

However, the past is a big place containing a lot of information. So it’s always appreciated when we find a source that has curated some timeless lessons from the past for us. In his book How to Think Like Shakespeare, professor Scott Newstok dives into history to pull out some of what humanity has already learned about better thinking and applying incentives.

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Better thinking and education

“Doing and thinking are reciprocal practices.”

How do we get better at thinking? When you think about something, hopefully you learn more about it. But then the challenge becomes doing something with what you’ve learned. Often, we don’t want our knowledge to stay theoretical. We’ve learned something in order to do something. We want to put our knowledge into practice somehow.

The good news is, doing and thinking reinforce and augment each other. It’s a subtle but powerful feedback loop. You learn something. Armed with that new information, you do something. Informed by the results of your doing, you learn something new.

Throughout his book, Newstok weaves in many ideas on how to think better and how to engage with information. One of the ways to think better is to complement thinking with doing. For centuries, we’ve had the concept of “craft,” loosely understood as the knowledge one attains by doing. Newstok explains that the practice of any craft “requires—well, practice. Its difficult-to-codify habits are best transmitted in person, through modeling, observation, imitation, [and] correction adjustment.” You develop a deeper understanding when you apply your knowledge to creating something tangible. Crafting a piece of furniture is similar to crafting a philosophical argument in the sense that actually doing the work is what really develops knowledge. “Incorporating this body of knowledge, learning how to improvise within constraints, [and] appreciating how limited resources shape solutions to problems” lies at the core of mastery.

The application of what you’ve ingested in order to really learn it reminds us of the Feynman Learning Technique. To really master a subject, teach it to a novice. When you break down what you think you know into a teachable format, you begin to truly know something.

Newstok writes, “It’s human to avoid the hard work of thinking, reading, and writing. But we all fail when technology becomes a distraction from, or, worse, a substitute for, the interminable yet rewarding task of confronting the object under study.” Basically, it’s human to be lazy. It’s easier to cruise around on social media than put your ideas into action.

Better thinking takes strength. You have to be able to tune out the noise and walk away from the quick dopamine hits to put the effort into attempting to do something with your thoughts. You also need strength to confront the results and figure out how to do better next time. And even if your job is figuring out how to be better on social media, focusing on the relationship between doing and thinking will produce better results than undirected consumption.

The time and space to do something with our thoughts is how we transform what we learn into something we know.

Admittedly, knowing something often requires courage. First, the courage to admit what you don’t know, and second, the courage to be the least smart person in the room. But when you master a subject, the rewards are incredible. You have flexibility and understanding and options to keep learning.

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Applying incentives

“If you create an incentive to hit the target, it’s all the less likely you will do so.”

Newstok explains how the wrong incentives do far more damage than diminishing our motivation to attain a goal. Applying bad incentives can diminish the effectiveness of an entire system. You get what you measure, because measuring something incentivizes you to do it.

He explores the problem of incentives in the American education system. The priority is on the immediate utility of information because the incentive is to pass tests. For students, passing tests is the path to higher education, where they can pass more tests and get validated as being a person who knows something. For teachers, students passing tests is the path to higher rankings, more students, and more funding.

Newstok suggests we don’t need to worry so much about being right and feeding the continual assessment pressure this attitude creates. Why? Because we don’t know exactly what we will need to know in the future. He writes, “When Shakespeare was born there wasn’t yet a professional theater in London. His ‘useless’ Latin drills prepared him for a job that didn’t yet exist.…Why are we wasting precious classroom hours on fleeting technical skills—skills that will become obsolete before graduates enter the workforce?” It seems that a better approach is to incentivize teaching tools that will give students the flexibility to develop their thinking in response to changes around them.

Considering the proper application of incentives in relation to future goals has ramifications in all organizations, not just schools.

A common problem in many organizations is that the opportunities to accrue further reward and compensation can only come by climbing ever higher in the pyramid. Thus people are incentivized to get into management, something they may have no interest in and may not be any good at. Not everyone who invents amazing widgets should manage a group of widget inventors. By not incentivizing alternate paths, the organization ends up losing the amazing widget inventors, handicapping itself by diminishing its adaptability.

We’ve written before about another common problem in so many offices: compensation is tied to visibility, physical presence, or volume of output and not to quality of contribution. To be fair, quality is harder to measure. But it is really more about organizational attitude. Do you want people to be busy typing or busy thinking? We all say we want thinkers. We rarely give anyone the time to think. In this case, we end up with organizations that end up being able only to produce more of the same.

And paying people by, say, profit-sharing can be great, as it incentivizes collaboration and commitment to the health of the organization. But even this needs to be managed so that the incentives don’t end up prioritizing short-term money at the expense of long term success—much like students learning only to pass tests at the expense of their future knowledge and resiliency.

Newstok suggests instead that “we all need practice in curiosity, intellectual agility, the determination to analyze, commitment to resourceful communication, historically and culturally situated reflectiveness, [and] the confidence to embrace complexity. In short: the ambition to create something better, in whatever field.” We don’t need to be incentivized for immediate performance. Rather, we need incentives to explore what might need to be known to face future challenges and respond to future opportunities.

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The most fascinating thing about Newstok’s book is that it rests on ideas that are hundreds of years old. The problems he explores are not new, and the answers he presents to the challenges of better thinking and aligning incentives are based on perspectives provided in history books.

So maybe the ultimate lesson is the reminder that not every problem needs to be approached as a blank slate. Humanity has developed some wisdom and insight on a few topics. Before we reinvent the wheel, it’s worth looking back to leverage what we’ve already figured out.