Category: Business

Seizing The Middle: Chess Strategy in Business

Chess can serve as an apt metaphor for other areas of our lives, especially business. That’s because the game is a microcosm of the ways we use strategic thinking. There are not many areas where we can quickly assess the quality of our decisions and whether they are likely to have the desired effects. Chess helps us develop strategic thinking because we get immediate feedback on our strategic decisions. It also shows the benefits of thinking ahead.

Perhaps its value for teaching strategic thinking has something to do with the game’s longstanding appeal. Chess has been around for an estimated fifteen centuries, and precursors go back at least 4,500 years; it both reflects and teaches important skills. Seizing the middle is a chess strategy embodying the value of forward thinking. It involves using pieces to commandeer the middle of the board. A player can then restrict their opponent’s movements by controlling the maximal number of pieces in the game.

Strategies akin to seizing the middle are also used in areas such as business, economics, and negotiation. Analogous strategies involve limiting an opponent’s options by asserting control over a resource or area, be it physical or conceptual. Some of the most profitable businesses throughout history employed this strategy and treated the world like a chessboard.

John D. Rockefeller infamously used the strategy of seizing the middle to control the oil industry throughout the nineteenth century. Before he turned forty (according to a Fortune estimate) Rockefeller had personal control over an estimated 90% of the US oil refining industry via the Standard Oil company, and by the time of his death he was the richest person alive. Depending on who you ask, he was either a callous figure who valued money above all else or a shrewd businessman who boosted employment and gave away most of his fortune. Unsurprisingly, every detail of his life and especially his business strategies have been analyzed at great length. While the opportunities Rockefeller capitalized on are unlikely to come about again, they show how chess strategies can translate into business acumen.

It’s hard to overstate just how important the oil industry is to any nation. Because he controlled the oil, Rockefeller could leverage his power to make almost any negotiation go his way. A power which he used on the railroad companies.

Rockefeller recognized early on that railroads were the lifeblood of the oil industry because oil had to be shipped, and thus he sought to gain control of them. Railroads were to the oil business what the middle of a chessboard is to a player—without dependable, controlled access to them, a company could make precious few moves. As he loathed competition, Rockefeller sought to eliminate it—and one of his maneuvers to reduce his competition in the oil business was making sure no one else could transport it around the country.

In the nineteenth century, it was customary for shipping companies to offer rebates (partial refunds) or generous discounts to their biggest customers. Once Standard Oil became the largest oil refining company in the United States, Rockefeller was in an excellent negotiating position with the railroads. In exchange for huge amounts of regular business, the shipping companies agreed to give him an unusually large rebate. Cutting the costs of transporting oil gave Rockefeller a robust competitive advantage. Combine this with his efficient manufacturing process and shrewd usage of byproducts, and Standard Oil’s prices were a fraction of the usual cost of oil. Unsurprisingly, other oil companies had no hope of offering lower or even equivalent rates and still making a profit. If any of them seemed like they might pose a threat, Rockefeller could use his influence over the shipping companies to restrict their ability to transport oil.

Although controlling access to the railroads was a key element in seizing the middle territory of the oil business, Rockefeller had many more pieces in play. Should restricting railroad access be unfeasible, he would cut off competitor’s access to equipment, undercut their prices or buy up all the available raw materials. The amount of control Rockefeller had allowed him incredible power over the entire industry. In The Politics of the Global Oil Industry, Toyin Falola and Ann Genova explain that “Standard Oil had extended its control not only over its competitors but also over oil transportation. Nearly every method of transport from the oil fields to the consumer was owned by Standard Oil, which allowed the company significant control over prices.

Rockefeller thought in terms of first principles, which often meant controlling his own means of production. For example, he cut the cost of barrels by manufacturing them himself and the cost of laying pipework by employing his own plumbers. As Standard Oil grew, Rockefeller’s power grew exponentially. At a certain point, no one could compete with him. With the lion’s share of the market and profits to match, he could get credit for almost unlimited loans, giving Standard Oil a further advantage over competitors and a dominance over the oil territory.

As Alfred Chandler explains in The Visible Hand, Rockefeller’s strategy was part of a wider transition to a new type of industry, beginning in the 1840s and ending with the crash of the 1920s. Businesses started “seizing the middle” and taking control of the resources they depended on. A single company could take charge of everything from the natural resources required to make a product to the transport systems necessary to deliver it to customers. The implications of this were dramatic. Chandler writes of Rockefeller:

“He and his associates then decided to obtain the cooperation of its rivals by relying on the economic power provided by their high-volume, low-cost operation. They began by asking the Lake Shore Railroad to reduce its rates from $2 to $1.35 a barrel on Standard Oil shipments between Cleveland and New York City if Standard provided sixty carloads a day, every day. The road’s general manager quickly accepted, for assured traffic in such high volume meant he could schedule the use of his equipment much more efficiently and so lose nothing by the reduced rate. Indeed, the general manager, somewhat gratuitously, offered the same rates to any other oil refiner shipping the same volume.”

Chandler describes how the change in business practices allowed managers to start thinking like chess players: a few moves ahead. Being able to anticipate and plan had the undeniably significant effect of allowing companies to invest more in research and development because they could forecast where current trends headed:

“In allocating resources for future production and distribution, the new methods extended the time horizon of the top managers. Entrepreneurs who personally managed large industrials tended, like the owners of smaller, traditional enterprises, to make their plans on the basis of current market and business conditions. . . . The central sales and purchasing offices provided forecasts of future demand and availability of resources.”

Seizing the middle didn’t just help create the energy industry as we know it today. The strategy also contributed to the creation of the modern film industry.

For four tumultuous decades, known as The Golden Age of Hollywood, eight studios all but governed the global film industry. Between the 1920s and 1960s, Fox, Loew’s Inc., Paramount, RKO Radio, Warner Bros., United Artists, Universal, and Columbia Pictures formed the studio system. Much like Standard Oil needed control over the railroads to ensure their success, the film oligarchy also prioritized power over distribution systems. In this case, that meant owning the cinemas that showed their films. For the most part, they also owned the production facilities, and held Hollywood staff and stars under strict long-term contracts.

For example, actor Cary Grant signed a five-year contract with Paramount in 1931. This gave the studio such control over him that they could literally loan him to other studios—in 1935, Paramount lent him to RKO so he could star alongside Katharine Hepburn. Having popular actors with the cache to draw audiences to anything they appeared in under contract restricted the movements of any other studios, dictating the number of pieces that could be on the board.

New anti-trust laws in the late 1940s and the rise of television in the 1950s contributed to the end of the Hollywood studio system. Both Grant and Hepburn escaped the grip of their respective studios and took control of their own careers. Grant refused to renew his contract once it expired and became possibly the first freelance Hollywood actor. Hepburn bought out her contract after being assigned to a string of unsuccessful films.

Hollywood nonetheless achieved a lot during the studio system days. This era, beginning with the rise of “talkies” (films with sound) shaped many of our expectations of films. Many major cinematic genres and conventions were devised during the Golden Age. The low cost of producing films with all aspects of production and distribution under tight control meant studios could take chances with unproven actors, directors, and scripts for films like Citizen Kane. Although the era produced a lot of formulaic, repetitive, or dull works, it also gave birth to many that remain popular and well-loved even now.

In The Hollywood Studio System: A History, Douglas Gomery describes how Adolph Zukor, founder of Paramount, devised the studio system:

“During the 1910s, Adolph Zukor through his Famous Players and then Paramount corporations developed a system by which to manufacture popular feature-length films, distribute them around the world, and present them in Paramount picture palaces. . . . Zukor taught the world how to make motion pictures popular and profitable in a global marketplace. He also laid down the principles of the studio system.

From his entry into the industry, Zukor wanted to take control of the new movie business . . . and began to develop a national distribution system which would hereafter serve as the basis for the studio system. . . . Zukor was smart and looked to see how other industries developed their corporate economic power . . . and made films in a factor like a system; and he developed a distribution division (Paramount) to sell his wares throughout the world.

. . . In the end, Zukor and his followers developed a set of operating principles. Their industry—symbolized by their Hollywood studios—would be made up of a small set of corporations that produced, distributed, and presented films in order to maximize the profits of their corporations. The number . . . would total eight.”

To control the game, one tries to control as much of the board as possible. At the outset, using your pieces to seize the middle of the playing field is a great strategy, because it gives you the widest possible vantage point from which to control the movement of the other pieces. Both Rockefeller and the studio system in Hollywood employed this strategy successfully, allowing them to anticipate change and maneuver effectively for decades.

Efficiency is the Enemy

There’s a good chance most of the problems in your life and work come down to insufficient slack. Here’s how slack works and why you need more of it.

Imagine if you, as a budding productivity enthusiast, one day gained access to a time machine and decided to take a trip back several decades to the office of one of your old-timey business heroes. Let’s call him Tony.

You disguise yourself as a janitor and figure a few days of observation should be enough to reveal the secret of that CEO’s incredible productivity and shrewd decision-making. You want to learn the habits and methods that enabled him to transform an entire industry for good.

Arriving at the (no doubt smoke-filled) office, you’re a little surprised to find it’s far from a hive of activity. In fact, the people you can see around seem to be doing next to nothing. Outside your hero’s office, his secretary lounges at her desk (and let’s face it, the genders wouldn’t have been the other way around.) Let’s call her Gloria. She doesn’t appear busy at all. You observe for half an hour as she reads, tidies her desk, and chats with other secretaries who pass by. They don’t seem busy either. Confused as to why Tony would squander money on idle staff, you stick around for a few more hours.

With a bit more observation, you realize your initial impression was entirely wrong. Gloria does indeed do nothing much of the time. But every so often, a request, instruction, or alert comes from Tony and she leaps into action. Within minutes, she answers the call, sends the letter, reschedules the appointment, or finds the right document. Any time he has a problem, she solves it right away. There’s no to-do list, no submitting a ticket, no waiting for a reply to an email for either Tony or Gloria.

As a result, Tony’s day goes smoothly and efficiently. Every minute of his time goes on the most important part of his work—making decisions—and not on dealing with trivial inconveniences like waiting in line at the post office.

All that time Gloria spends doing nothing isn’t wasted time. It’s slack: excess capacity allowing for responsiveness and flexibility. The slack time is important because it means she never has a backlog of tasks to complete. She can always deal with anything new straight away. Gloria’s job is to ensure Tony is as busy as he needs to be. It’s not to be as busy as possible.

If you ever find yourself stressed, overwhelmed, sinking into stasis despite wanting to change, or frustrated when you can’t respond to new opportunities, you need more slack in your life.

In Slack: Getting Past Burnout, Busywork, and the Myth of Total Efficiency, Tom DeMarco explains that most people and organizations fail to recognize the value of slack. Although the book is now around twenty years old, its primary message is timeless and worth revisiting.

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The enemy of efficiency

“You’re efficient when you do something with minimum waste. And you’re effective when you’re doing the right something.”

Many organizations are obsessed with efficiency. They want to be sure every resource is utilized to its fullest capacity and everyone is sprinting around every minute of the day doing something. They hire expert consultants to sniff out the faintest whiff of waste.

As individuals, many of us are also obsessed with the mirage of total efficiency. We schedule every minute of our day, pride ourselves on forgoing breaks, and berate ourselves for the slightest moment of distraction. We view sleep, sickness, and burnout as unwelcome weaknesses and idolize those who never seem to succumb to them. This view, however, fails to recognize that efficiency and effectiveness are not the same thing.

Total efficiency is a myth. Let’s return to Gloria and Tony. Imagine if Tony decided to assign her more work to ensure she spends a full eight hours a day busy. Would that be more efficient? Not really. Slack time enables her to respond to his requests right away, thus being effective at her job. If Gloria is already occupied, Tony will have to wait and whatever he’s doing will get held up. Both of them would be less effective as a result.

Any time we eliminate slack, we create a build-up of work. DeMarco writes, “As a practical matter, it is impossible to keep everyone in the organization 100 percent busy unless we allow for some buffering at each employee’s desk. That means there is an inbox where work stacks up.

Many of us have come to expect work to involve no slack time because of the negative way we perceive it. In a world of manic efficiency, slack often comes across as laziness or a lack of initiative. Without slack time, however, we know we won’t be able to get through new tasks straight away, and if someone insists we should, we have to drop whatever we were previously doing. One way or another, something gets delayed. The increase in busyness may well be futile:

“It’s possible to make an organization more efficient without making it better. That’s what happens when you drive out slack. It’s also possible to make an organization a little less efficient and improve it enormously. In order to do that, you need to reintroduce enough slack to allow the organization to breathe, reinvent itself, and make necessary change.”

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Defining slack

DeMarco defines slack as “the degree of freedom required to effect change. Slack is the natural enemy of efficiency and efficiency is the natural enemy of slack.” Elsewhere, he writes: “Slack represents operational capacity sacrificed in the interests of long-term health.”

To illustrate the concept, DeMarco asks the reader to imagine one of those puzzle games consisting of eight numbered tiles in a box, with one empty space so you can slide them around one at a time. The objective is to shuffle the tiles into numerical order. That empty space is the equivalent of slack. If you remove it, the game is technically more efficient, but “something else is lost. Without the open space, there is no further possibility of moving tiles at all. The layout is optimal as it is, but if time proves otherwise, there is no way to change it.

Having a little bit of wiggle room allows us to respond to changing circumstances, to experiment, and to do things that might not work.

Slack consists of excess resources. It might be time, money, people on a job, or even expectations. Slack is vital because it prevents us from getting locked into our current state, unable to respond or adapt because we just don’t have the capacity.

Not having slack is taxing. Scarcity weighs on our minds and uses up energy that could go toward doing the task at hand better. It amplifies the impact of failures and unintended consequences.

Too much slack is bad because resources get wasted and people get bored. But, on the whole, an absence of slack is a problem far more often than an excess of it. If you give yourself too much slack time when scheduling a project that goes smoother than expected, you probably won’t spend the spare time sitting like a lemon. Maybe you’ll recuperate from an earlier project that took more effort than anticipated. Maybe you’ll tinker with some on-hold projects. Maybe you’ll be able to review why this one went well and derive lessons for the future. And maybe slack time is just your reward for doing a good job already! You deserve breathing room.

Slack also allows us to handle the inevitable shocks and surprises of life. If every hour in our schedules is accounted for, we can’t slow down to recover from a minor cold, shift a bit of focus to learning a new skill for a while, or absorb a couple of hours of technical difficulties.

In general, you need more slack than you expect. Unless you have a lot of practice, your estimations of how long things will take or how difficult they are will almost always be on the low end. Most of us treat best-case scenarios as if they are the most likely scenarios and will inevitably come to pass, but they rarely do.

You also need to keep a vigilant eye on how fast you use up your slack so you can replenish it in time. For example, you might want to review your calendar once per week to check it still has white space each day and you haven’t allowed meetings to fill up your slack time. Think of the forms of slack that are more important to you, then check up on them regularly. If you find you’re running out of slack, take action.

Once in a while, you might need to forgo slack to reap the benefits of constraints. Lacking slack in the short term or in a particular area can force you to be more inventive. If you find yourself struggling to come up with a creative solution, try consciously reducing your slack. For example, give yourself five-minutes to brainstorm ideas or ask yourself what you might do if your budget were slashed by 90%.

Most of the time, though, it’s critical to guard your slack with care. It’s best to assume you’ll always tend toward using it up—or other people will try to steal it from you. Set clear boundaries in your work and keep an eye on tasks that might inflate.

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Slack and change

In the past, people and organizations could sometimes get by without much slack—at least for a while. Now, even as slack keeps becoming more and more vital for survival, we’re keener than ever to eliminate it in the name of efficiency. Survival requires constant change and reinvention, which “require a commodity that is absent in our time as it has never been before. That commodity—the catalytic ingredient of change—is slack.” DeMarco goes on to write:

“Slack is the time when reinvention happens. It is time when you are not 100 percent busy doing the operational business of your firm. Slack is the time when you are 0 percent busy. Slack at all levels is necessary to make the organization work effectively and to grow. It is the lubricant of change. Good companies excel in creative use of slack. And bad ones only obsess about removing it.”

Only when we are 0 percent busy can we step back and look at the bigger picture of what we’re doing. Slack allows us to think ahead. To consider whether we’re on the right trajectory. To contemplate unseen problems. To mull over information. To decide if we’re making the right trade-offs. To do things that aren’t scalable or that might not have a chance to prove profitable for a while. To walk away from bad deals.

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Slack and productivity

The irony is that we achieve far more in the long run when we have slack. We are more productive when we don’t try to be productive all the time.

DeMarco explains that the amount of work each person in an organization has is never static: “Things change on a day-to-day basis. This results in new unevenness of the tasks, with some people incurring additional work (their buffers build up), while others become less loaded, since someone ahead of them in the work chain is slower to generate their particular kind of work to pass along.” An absence of slack is unsustainable. Inevitably, we end up needing additional resources, which have to come from somewhere.

Being comfortable with sometimes being 0 percent busy means we think about whether we’re doing the right thing. This is in contrast to grabbing the first task we see so no one thinks we’re lazy. The expectation of “constant busyness means efficiency” creates pressure to always look occupied and keep a buffer of work on hand. If we see our buffer shrinking and we want to keep busy, the only possible solution is to work slower.

Trying to eliminate slack causes work to expand. There’s never any free time because we always fill it.

Amos Tversky said the secret to doing good research is to always be a little underemployed; you waste years by not being able to waste hours. Those wasted hours are necessary to figure out if you’re headed in the right direction.

Solve Problems Before They Happen by Developing an “Inner Sense of Captaincy”

Too often we reward people who solve problems while ignoring those who prevent them in the first place. This incentivizes creating problems. According to poet David Whyte, the key to taking initiative and being proactive is viewing yourself as the captain of your own “voyage of work.”

If we want to get away from glorifying those who run around putting out fires, we need to cultivate an organizational culture that empowers everyone to act responsibly at the first sign of smoke.

How do we make that shift?

We can start by looking at ourselves and how we consider the voyage that is our work. When do we feel fulfillment? Is it when we swoop in to save the day and everyone congratulates us? It’s worth asking why, if we think something is worth saving, we don’t put more effort into protecting it ahead of time.

In Crossing the Unknown Sea, poet David Whyte suggests that we should view our work as a lifelong journey. In particular, he frames it as a sea voyage in which the greatest rewards lie in what we learn through the process, as opposed to the destination.

Like a long sea voyage, the nature of our work is always changing. There are stormy days and sunny ones. There are days involving highs of delight and lows of disaster. All of this happens against the backdrop of events in our personal lives and the wider world with varying levels of influence.

On a voyage, you need to look after your boat. There isn’t always time to solve problems after they happen. You need to learn how to preempt them or risk a much rougher journey—or even the end of it.

Whyte refers to the practice of taking control of your voyage as “developing an inner sense of captaincy,” offering a metaphor we can all apply to our work. Developing an inner sense of captaincy is good for both us and the organizations we work in. We end up with more agency over our own lives, and our organizations waste fewer resources. Whyte’s story of how he learned this lesson highlights why that’s the case.

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A moment of reckoning

Any life, and any life’s work, is a hidden journey, a secret code, deciphered in fits and starts. The details only given truth by the whole, and the whole dependent on the detail.

Shortly after graduating, Whyte landed a dream job working as a naturalist guide on board a ship in the Galapagos Islands. One morning, he awoke and could tell at once that the vessel had drifted from its anchorage during the night. Whyte leaped up to find the captain fast asleep and the boat close to crashing into a cliff. Taking control of it just in time, he managed to steer himself and the other passengers back to safety—right as the captain awoke. Though they were safe, he was profoundly shaken both by the near miss and the realization that their leader had failed.

At first, Whyte’s reaction to the episode was to feel a smug contempt for the captain who had “slept through not only the anchor dragging but our long, long, nighttime drift.” The captain had failed to predict the problem or notice when it started. If Whyte hadn’t awakened, everyone on the ship could have died.

But something soon changed in his perspective. Whyte knew the captain was new and far less familiar with that particular boat than himself and the other crew member. Every boat has its quirks, and experience counts for more than seniority when it comes to knowing them. He’d also felt sure the night before that they needed to put down a second anchor and knew they “should have dropped another anchor without consultation, as crews are wont to do when they do not want to argue with their captain. We should have woken too.” He writes that “this moment of reckoning under the lava cliff speaks to the many dangerous arrivals in a life of work and to the way we must continually forge our identities through our endeavors.”

Whyte’s experience contains lessons with wide applicability for those of us on dry land. The idea of having an inner sense of captaincy means understanding the overarching goals of your work and being willing to make decisions that support them, even if something isn’t strictly your job or you might not get rewarded for it, or sometimes even if you don’t have permission.

When you play the long game, you’re thinking of the whole voyage, not whether you’ll get a pat on the back today.

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Skin in the game

It’s all too easy to buy into the view that leaders have full responsibility for everything that happens, especially disasters. Sometimes in our work, when we’re not in a leadership position, we see a potential problem or an unnoticed existing one but choose not to take action. Instead, we stick to doing whatever we’ve been told to do because that feels safer. If it’s important, surely the person in charge will deal with it. If not, that’s their problem. Anyway, there’s already more than enough to do.

Leaders give us a convenient scapegoat when things go wrong. However, when we assume all responsibility lies with them, we don’t learn from our mistakes. We don’t have “our own personal compass, a direction, a willingness to meet life unmediated by any cushioning parental presence.

At some point, things do become our problem. No leader can do everything and see everything. The more you rise within an organization, the more you need to take initiative. If a leader can’t rely on their subordinates to take action when they see a potential problem, everything will collapse.

When we’ve been repeatedly denied agency by poor leadership and seen our efforts fall flat, we may sense we lack control. Taking action no longer feels natural. However, if we view our work as a voyage that helps us change and grow, it’s obvious why we need to overcome learned helplessness. We can’t abdicate all responsibility and blame other people for what we chose to ignore in the first place (as Whyte puts it, “The captain was there in all his inherited and burdened glory and thus convenient for the blame”). By understanding how our work helps us change and grow, we develop skin in the game.

On a ship, everyone is in it together. If something goes wrong, they’re all at risk. And it may not be easy or even possible to patch up a serious problem in the middle of the sea. As a result, everyone needs to pay attention and act on anything that seems amiss. Everyone needs to take responsibility for what happens, as Whyte goes on to detail:

“No matter that the inherited world of the sea told us that the captain is the be-all and end-all of all responsibility, we had all contributed to the lapse, the inexcusable lapse. The edge is no place for apportioning blame. If we had merely touched that cliff, we would have been for the briny deep, crew and passengers alike. The undertow and the huge waves lacerating against that undercut, barnacle-encrusted fortress would have killed us all.”

Having an inner sense of captaincy means viewing ourselves as the ones in charge of our voyage of work. It means not acting as if there are certain areas where we are incapacitated, or ignoring potential problems, just because someone else has a particular title.

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Space and support to create success

Developing an inner sense of captaincy is not about compensating for an incompetent leader—nor does it mean thinking we always know best. The better someone is at leading people, the more they create the conditions for their team to take initiative and be proactive about preventing problems. They show by example that they inhabit a state rather than a particular role. A stronger leader can mean a more independent team.

Strong leaders instill autonomy by teaching and supervising processes with the intention of eventually not needing to oversee them. Captaincy is a way of being. It is embodied in the role of captain, but it is available to everyone. For a crew to develop it, the captain needs to step back a little and encourage them to take responsibility for outcomes. They can test themselves bit by bit, building up confidence. When people feel like it’s their responsibility to contribute to overall success, not just perform specific tasks, they can respond to the unexpected without waiting for instructions. They become ever more familiar with what their organization needs to stay healthy and use second-order thinking so potential problems are more noticeable before they happen.

Whyte realized that the near-disaster had a lot to do with their previous captain, Raphael. He was too good at his job, being “preternaturally alert and omnipresent, appearing on deck at the least sign of trouble.” The crew felt comfortable, knowing they could always rely on Raphael to handle any problems. Although this worked well at the time, once he left and they were no longer in such safe hands they were unused to taking initiative. Whyte explains:

Raphael had so filled his role of captain to capacity that we ourselves had become incapacitated in one crucial area: we had given up our own inner sense of captaincy. Somewhere inside of us, we had come to the decision that ultimate responsibility lay elsewhere.

Being a good leader isn’t about making sure your team doesn’t experience failure. Rather, it’s giving everyone the space and support to create success.

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The voyage of work

Having an inner sense of captaincy means caring about outcomes, not credit or blame. When Whyte realized that he should have dropped a second anchor the night before the near miss, he would have been doing something that ideally no one other than the crew, or even just him, would have known about. The captain and passengers would have enjoyed an untroubled night and woken none the wiser.

If we prioritize getting good outcomes, our focus shifts from solving existing problems to preventing problems from happening in the first place. We put down a second anchor so the boat doesn’t drift, rather than steering it to safety when it’s about to crash. After all, we’re on the boat too.

Another good comparison is picking up litter. The less connected to and responsible for a place we feel, the less likely we might be to pick up trash lying on the ground. In our homes, we’re almost certain to pick it up. If we’re walking along our street or in our neighborhood, it’s a little less likely. In a movie theater or bar when we know it’s someone’s job to pick up trash, we’re less likely to bother. What’s the equivalent to leaving trash on the ground in your job?

Most organizations don’t incentivize prevention because it’s invisible. Who knows what would have happened? How do you measure something that doesn’t exist? After all, problem preventers seem relaxed. They often go home on time. They take lots of time to think. We don’t know how well they would deal with conflict, because they never seem to experience any. The invisibility of the work they do to prevent problems in the first place makes it seem like their job isn’t challenging.

When we promote problem solvers, we incentivize having problems. We fail to unite everyone towards a clear goal. Because most organizations reward problem solvers, it can seem like a better idea to let things go wrong, then fix them after. That’s how you get visibility. You run from one high-level meeting to the next, reacting to one problem after another.

It’s great to have people to solve those problems but it is better not to have them in the first place. Solving problems generally requires more resources than preventing them, not to mention the toll it takes on our stress levels. As the saying goes, an ounce of prevention is worth a pound of cure.

An inner sense of captaincy on our voyage of work is good for us and for our organizations. It changes how we think about preventing problems. It becomes a part of an overall voyage, an opportunity to build courage and face fears. We become more fully ourselves and more in touch with our nature. Whyte writes that “having the powerful characteristics of captaincy or leadership of any form is almost always an outward sign of a person inhabiting their physical body and the deeper elements of their own nature.”

Our Favorite Farnam Street Posts From 2020

At the end of each year, the FS team takes time to reflect on the work we did and what we learned from it. Here’s a selection of our favorite articles from 2020 – and why we think they’re worth a second read.

Much of what we do at FS is about reflection. Learning requires reflection; time to sit, think, and process. There is no doubt that 2020 was tumultuous and challenged us in unexpected ways. What we anticipated and planned for on January 1 was not what we faced the rest of the year. Many of us were busy adjusting and thus might not have had the opportunity to digest and reflect on ideas as much as in the past.

At FS, we know it’s hard to find a signal in all the noise we experience on a daily basis.

To close out the year on the blog, we have decided to look back and share our favorite posts, as well as why we connected with them or how they helped us. Here are each team member’s choices from our 2020 posts.

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Adam

In no way do I consider myself to be an athlete, but I do expect great results when it comes to my work. The article The Inner Game: Why Trying Too Hard can be Counterproductive brought to light some of the internal struggles I deal with when trying to achieve my goals. There are days when I can achieve a “flow-state” in my work, whether it’s shooting or editing video or something else. Other days it’s a battle with self-doubt and self-sabotage despite all the external obstacles I’ve overcome. Finding harmony between the two is on-going, and despite me not being an athlete I plan on winning the inner game.

‘It’s not where you take things from—it’s where you take them to.’ – Jean-Luc Godard

As someone whose job requires creativity I constantly struggle with “Not Invented Here Syndrome.” Trying to come up with an original idea, a different angle, some never before seen concept was just how I assumed all the world-renowned doers and thinkers thought. I never really considered the concept of Standing on the Shoulders of Giants and drawing on our experiences and the raw materials around us to create something. Reflecting on my body of work, it seems obvious now that most of my productions draw from people who I admire, who have taught me, or inspirations sparked by someone else’s creation. Going forward I want to continue to create and who knows, maybe one day I can provide a shoulder to stand on. After all, I’m 6’4”, so I’ve got the giant part down.

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Vicky

One of my favorite articles from this year is Appearances vs Experiences: What Really Makes Us Happy. For me, this article tells a tale of what I try to embrace in my day to day life. Getting caught up in what we think will make us happy can lead us to bypass what truly will. Sometimes we can base decisions and choices on the immediate pleasure we get or expect without looking at the bigger picture or long-term effects. The experience can put things into a perspective we can grasp, while an appearance can just be an illusion.

How do you “win the game of life”? By deciding how you’ll play. In Finite and Infinite Games: Two Ways to Play the Game of Life, I love the perspective shift I feel when I think about how you can play this game. What truly measures success? Does the game end there? By setting new goals and thinking that life can be infinite, we can win by playing, instead of playing to win. For me, this brings on a great perspective of acquiring experience and knowledge over wealth and possessions so I can keep playing.

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Rosie

Daniel Kahneman has said that the main lesson we should learn from surprising events is that the world is surprising. Yet when disasters happen, we often focus on particulars and miss that wider lesson. In the article Stop Preparing For The Last Disaster, we discussed how we can respond to unexpected events by becoming more resilient in general. History may well repeat itself, but we never know which rerun we’re watching until after the matter.

One theme we explored on the blog throughout this year was community and the connections we form with other people. We looked at what brings us together and what drives us apart – as well as what that costs us, how we can make peace with solitude, and how we can rebuild connections.

Muscular Bonding: How Dance Made Us Human is a personal favorite article from 2020. In it, we looked at William H. McNeill’s theory that dancing together to music creates powerful bonds between people, leading to social cohesion and cooperative behavior. I liked this article because McNeill’s ideas suggest a simple, free, universally useful way to overcome disconnection.

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Rhiannon

This year we started to write about more concrete examples of using mental models in common life situations. We so often hear from readers that they love the idea of mental models but have challenges in understanding how to apply them. Our first effort at exploring a situation through the lens of different mental models, how to use them in charged situations, was an exciting step in the evolution of the FS blog.

Like most people, the COVID-19 pandemic served as a backdrop to my year. The challenges were incredible, and the speed of the changes they required were sometimes overwhelming. It felt like so much uncharted territory. One of the reasons I enjoyed the article Why We Feel at Home in a Crisis, was the context it provided for tumultuous times. Reading about the Blitz, a period of history I have always found fascinating, as well as appreciating the good that can come from a crisis, was the perfect solution to the disorientation I experienced at the beginning of the pandemic.

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Shane

As much as this year was about responding to crisis, it was also a test of our resilience. It’s less about what happens to you and more about how you respond. At FS, I frequently thought about how well we’d built our margin of safety, and planned for a wide range of outcomes. 2020 reinforced how important it is to preserve optionality. In a crisis, the more options you have, the greater your chance of survival. Options are the most important resource you can store up.

As many of you know, one of our goals at FS is to master the best of what other people have already figured out. I drew inspiration from how others have kept their teams performing during challenges, including from this post on leadership lessons from Jean Renoir.

From the whole team at FS, thank you to all of our readers for your support and engagement! We know it’s been a busy year for everyone, and we don’t take a minute of the time you’ve spent with us for granted. It was amazing to know that, even in these times of uncertainty, you were on the journey with us to learn and grow. To become better people and live a more meaningful life.

You’re Only As Good As Your Worst Day

We tend to measure performance by what happens when things are going well. Yet how people, organizations, companies, leaders, and other things do on their best day isn’t all that instructive. To find the truth, we need to look at what happens on the worst day.

“Anyone can steer the ship when the sea is calm. ”—Publilius Syrus

We laud athletes on a winning streak, startups with a skyrocketing valuation, hedge funds seeing record-breaking returns, and so on. But it’s easy to look good when everything goes according to plan and circumstances are calm. Anyone can succeed for a while, even if it’s just out of pure luck. It’s no great feat to do well if you’re not being challenged or tested. Watching what happens during a downswing is far more instructive.

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Products and services are only as good as they are when they break, not when everything is functioning fine.

When a program stops working, do you face a baffling error message with no further guidance or clear instructions for how to get help? Is customer service quick and easy to access at any time or does it require you to jump through endless convoluted hoops? Even if you’ve had a positive view of a product or service for years, a problem that takes forever to fix or a hostile response when you ask for help will no doubt make you take your business elsewhere.

From a customer standpoint, companies are only as good as how they behave in a public relations crisis.

Do they shirk blame and try to pin it elsewhere or do they take responsibility? Do they try to cover up what happened or do they come forward with the full truth? Do they ignore any damages or do they promise to make things better for everyone affected—no matter the cost? Reputations are fragile. One incident of bad behavior will linger in the minds of customers for a long time.

From a financial standpoint, companies prove their worth when they show how they cope when something fundamental changes in the market or there’s a financial crisis.

Do they keep persisting with the old business model under the illusion that what worked before should work again or do they reimagine their approach? Do they fire staff to preserve CEO bonuses or do they play the long game to ensure they’ll be able to attract top talent in the future? Do they crumble when there’s a powerful new competitor or do they rise to the challenge? Like companies, investors might be able to perform well in ideal conditions due to luck. But when the market crashes and there’s blood in the streets, very few will know how to cope or be prepared. Only the smartest will know how to survive or even profit.

Leaders are only as good as how they lead during times of uncertainty and fear.

Do they hide away from public sight or do they serve as a reassuring, sympathetic presence that brings everyone together? Do they do what’s defensible or what’s best for everyone in the long run? Are they forced to react in the moment or were they already prepared? Ask anyone to name the finest leaders in the history of their country and they’re not likely to name those who were in power during calm, peaceful times. They’ll name those who were at the helm during wars, economic crises, pandemics, natural disasters, and so on—those who never wavered from a vision and whose consistent, empathetic appearances gave people a sense of hope.

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As individuals, we tell people the most about who we are when everything goes wrong. These times are also when we stand to learn the most about ourselves.

Your kids might not remember how you behaved on a relaxed, sunny Saturday when work went well all week and you had little on your mind beyond playing with them. But they’re sure to remember how you behaved on the day when you’d lost your job due to a recession, you’d just had an argument with your partner, an unexpected bill arrived in the mail that morning, and then someone spilled spaghetti sauce on the couch. That’s the day when your behavior has the most to show them about what to model in the future.

Your partner might not remember how you treated them when you were lying on a beach on holiday together with all of your worries far away and a good book in hand. But they’re sure to remember how you treated them when you had your worst disagreement ever, over a problem that seemed insurmountable and involved complex emotions. That’s the moment when they might well make a decision about whether they’re in this for the long haul.

Your boss might not remember the work you did on an average week when everything went to plan. But they’re sure to remember the time when you stepped up, stretched the limits of your abilities, and delivered what seemed impossible at short notice while everything around you was on fire. That’s what they’ll recall when thinking about what you’re capable of.

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You’re only as good as your worst day. Not because what you do the rest of the time doesn’t matter. Not because you should be expected to be perfect under immense stress or to behave according to plan when everything goes awry. But because what you do on your worst day is impossible to fake. It’s honest signaling. There’s little time for posturing or stalling. On your worst day, you reveal whether you’ve been planning for the possibility of disaster or just coasting along enjoying the good times. Your plans and preparation (or lack thereof) show how much you really care about the people who depend on you. You get to build and strengthen bonds in ways that will last a lifetime, or you risk destroying relationships in moments. You get to build trust and respect or you might break what you have irreparably.

Your worst day is a chance to show your best qualities, to stand out, and to learn an enormous amount about yourself. Very few people plan or prepare for what they’ll do and how they’ll act during those times. Those who do might well end up turning their worst day into their best.

Mental Models for Career Changes

Career changes are some of the biggest moves we will ever make, but they don’t have to be daunting. Using mental models to make decisions we determine where we want to go and how to get there. The result is a change that aligns with the person we are, as well as the person we want to be.

We’ve all been there: you’re at a job, and you know it’s not for you anymore. You come in drained, you’re not excited on a Monday morning, and you feel like you could be using your time so much better. It’s not the people, and it’s not the organization. It’s the work. It’s become boring, unfulfilling, or redundant, and you know you want to do something different. But what?

Just deciding to change careers doesn’t get you very far because there are more areas to work in than you know about. A big change often involves some retraining. A career shift will impact your personal life. At the end of it all, you want to be happier but know there are no guarantees. How do you find a clear path forward?

No matter how ready you think you are to make a move, career changes are daunting. The stress of leaving what you’re comfortable with to venture into foreign territory stops many people from taking the first step toward something new.

It doesn’t have to be this way.

Using mental models can help you clarify the direction you want to go and plan for how to get there. They are tools that will give you more control over your career and more confidence in your decisions. When you do the work up front by examining your situation through the lens of a few mental models, you set yourself up for fewer regrets and more satisfaction down the road.

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Get in touch with yourself

Before you can decide which change to make, you need to get in touch with yourself. No change will be the right one if it doesn’t align with what you want to get out of life.

First, do you know where you want to go? Are you moving with direction or just moving? As a mental model, velocity reminds us there is a difference between speed and direction. It’s easy to move fast without getting anywhere. We can stay busy all day without achieving our goals. Without considering our velocity, we run a huge risk of getting sidetracked by things that make us move faster (more money, a title on a business card) without that movement actually leading us where we want to end up.

As the old saying goes, we want to run to something, not from something. When you start articulating your desired direction, you give yourself clear purpose in your career. It will be easier to play the long game because you know that everything you are doing is leading somewhere you want to be.

When it comes to changing careers, there are a lot of options. Using the mental model of velocity will help you focus on and identify the best opportunities.

Once you know where you want to end up, it’s often useful to work backward to where you are now. This is known as inversion. Start at the end and carefully consider the events that get you there in reverse order.

For example, it could be something as simple as waking up happy and excited to work every day. What needs to be true in order for that to be a reality? Are you working from home, having a quiet cup of coffee as you prepare to do some creative work? Are you working on projects aligned with your values? Are you contributing to making the world a better place? Are you in an intense, collaborative team environment?

Doing an inversion exercise helps you identify the elements needed for you to achieve success. Once you identify your requirements, you can use that list to evaluate opportunities that come up.

Inversion will help you recognize critical factors, like finances or the support of your family, that will be necessary to get to where you want to go. If your dream direction requires you to learn a new skill or work at a junior level while you ramp up on the knowledge you’ll need, you might need to live off some savings in the short term. Inversion, combined with velocity, will help you create the foundation you need now to take action when the right time comes.

Finally, the last step before you start evaluating the career environment is taking stock of the skills you already have. Why do you need to do this? So you know what you can repurpose. Here, you’re using the concept of exaptation, which is part of the broader adaptation model in biology. Exaptation refers to traits that evolved for one purpose and then, through natural selection, were used for completely unrelated capabilities. For instance, feathers probably evolved for insulation. It was only much later that they turned out to be useful for flying.

History is littered with examples of technologies or tools invented for one purpose that later became the foundation for something completely different. Did you know that Play-Doh was originally created to clean coal soot off walls? And bubble wrap was originally envisioned as material for shower curtains.

Using this model is partly about getting out of the “functional fixedness” mindset. You want to look at your skills, talents, and knowledge and ask of each one: what else could this be used for?

Too often we fail to realize just how versatile the experience we’ve built up over the years is. We’re great at using forks to eat, but they can also be used to brush hair, dig in a garden, and pin things to walls. Being great at presenting the monthly status update doesn’t mean you’re good at presenting monthly status updates. Rather, it means you can articulate yourself well, parse information for a diverse audience, and build networks to get the right information. Now, what else can those skills be used for?

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Evaluate the environment

Looking at different careers, we’re usually in a situation where the “map is not the territory.” It’s hard to know how great (or terrible) a job is until you actually do it. We often have two types of maps for the careers we wish we had: maps of the highlights, success stories, and opinions of people who love the work and maps based on how much we love the field or discipline ourselves.

The territory of the day-to-day work of these careers, however, is very different from what those two maps tell us.

In order to determine if a particular career will work for us, we need better maps. For example, the reality of being an actor isn’t just the movies and programs you see them in. It’s audition after audition, with more rejections than roles. It’s intense competition and job insecurity. Being a research scientist at a university isn’t just immersing yourself in a subject you love. It’s grant applications and teaching and navigating the bureaucracy of academia.

In order to build a more comprehensive map of your dream job, do your research on as large a sample size as possible. Talk to people doing the job you want. Talk to people who work in the organization. Talk to the ones that enjoy it. Talk to the ones who quit. Try to get an accurate picture of what the day-to-day is like.

Very few jobs are one-dimensional. They involve things like administrative tasks, networking, project management, and accountability. How much of your day will be spent doing paperwork or updating your coworkers? How much of a connection do you need to maintain with people outside the organization? How many people will you be dependent on? What are they like? And who will you be working for?

It’s not a good idea to become a writer just because you want to tell stories, open a restaurant just because you like to cook, or become a landscape designer just because you enjoy being outside. Those motivations are good places to start—because it’s equally terrible to become a lawyer just because your parents wanted you to. But you can’t stop with what you like. There isn’t a job in the world that’s pleasurable and fulfilling 100% of the time.

You give yourself a much higher chance of being satisfied with your career change if you take the time to learn as much as you can about the territory beforehand.

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Elements of planning

You know which direction you’re heading in, and you’ve identified a great new career possibility. Now what?

Planning for change is a crucial component of switching careers. Two models, global and local maxima and activation energy, can help us identify what we need to plan.

Global and local maxima refers to the high values in a mathematical function. On a graph, it’s a wavy curve with peaks and valleys. The highest peak in a section is a local maximum. The highest peak across the entire graph is the global maximum. Activation energy comes from chemistry, and is the amount of energy needed to see a reaction through to its conclusion.

One of the things global and local maxima teaches us is that sometimes you have to go down a hill in order to climb up a new one. To move from a local maximum to a higher peak you have to go through a local minimum, a valley. Too often we just want to go higher right away, or at the very least we want to make a lateral move. We perceive going down as taking a step backward.

A common problem is when we tie our self-worth to our salary and therefore reject any opportunities that won’t pay us as much as we’re currently making. The same goes for job titles; no one wants to be a junior anything in their mid-forties. But it’s impossible to get to the next peak if we won’t walk through the valley.

If you look at your career change through the lens of global and local maxima, you will see that steps down can also be steps forward.

Activation energy is another great model to use in the planning phase because it requires you to think about the real effort required for sustained change. You need to plan not just for making a change but also for seeing it through until the new thing has time to take hold.

Do you have enough in the bank to support yourself if you need to retrain or take a pay cut? Do you have the emotional support to help you through the challenges of taking on a brand-new career?

Just like fires don’t start with one match and a giant log, you have to plan for what you need between now and your desired result. What do you need to keep that reaction going so the flame from the match leads to the log catching fire? The same kind of thinking needs to inform your planning. After you’ve taken the first step, what will you need to keep you moving in the direction you want to go?

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After you’ve done all the work

After getting in touch with yourself, doing all your research, identifying possible paths, and planning for what you need to do to walk them to the end, it can still be hard to make a decision. You’ve uncovered so many nuances and encountered so many ideas that you feel overwhelmed. The reality is, when it comes to career change, there often is no perfect decision. You likely have more than one option, and whatever you choose, there’s going to be a lot of work involved.

One final model you can use is probabilistic thinking. In this particular situation, it can be helpful to use a Bayesian casino.

A Bayesian casino is a thought experiment where you imagine walking up to a casino game, like roulette, and quantifying how much you would bet on any particular outcome.

Let’s say when investigating your career change, you’ve narrowed it down to two options. Which one would you bet on for being the better choice one year later? And how much would you part with? If you’d bet ten dollars on black, then you probably need to take a fresh look at the research you’ve done. Maybe go talk to more people, or broaden your thinking. If you’re willing to put down thousands of dollars on red, that’s very likely the right decision for you.

It’s important in this thought experiment to fully imagine yourself making the bet. Imagine the money in your bank account. Imagine withdrawing it and physically putting it down on the table. How much you’re willing to part with regarding a particular career choice says a lot about how good that choice is likely to be for you.

Probabilistic thinking isn’t a predictor of the future. With any big career move, there are inevitably a lot of unknowns. There are no guarantees that any choice is going to be the right one. The Bayesian casino just helps you quantify your thinking based on the knowledge you have at this moment in time.

As new information comes in, return to the casino and see if your bets change.

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Conclusion

Career changes are some of the biggest moves we will ever make, but they don’t have to be daunting. Using mental models helps us find both the direction we want to go and a path we can take to get there. The result is a change that aligns with the person we are, as well as the person we want to be.