Category: Human Nature

The Distorting Power of Incentives

“The rabbit runs faster than the fox, because the rabbit is running for his life while the fox is only running for his dinner.”
— R. Dawkins

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Simply put, incentives matter a lot. Incentives are at the root of a lot of situations we face and yet we often fail to account for them. They carry the power to distort our behavior and blind us to reality.

Pebbles of Perception- How a Few Good Choices Make All The Difference

Even accounting for them is often not enough. As Charlie Munger cautions, “I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. Never a year passes that I don’t get some surprise that pushes my limit a little farther.”

In Pebbles of Perception: How a Few Good Choices Make All The Difference, Laurence Endersen writes:

We can only see a situation with true clarity when we take the time to carefully consider the interests at hand. And we understand it even better when we consider how the situation might be different if the underlying interests were different.

But … just as we often fail to understand them, we can also overly focus on them. To the man with a hammer, everything looks like a nail.

Imagine the nature of a football game where the first goal scorer took all the spoils. There would be one hell of a scramble to score the first goal and it might make compelling viewing. The carrot is effective, but it is too pointed. We suddenly focus on the incentive and forget about the second order consequences. What we see is that narrow incentives influence performance, but they may not improve it. Studies of loan officer approvals during the recent US mortgage crisis showed that the loan officers actually believed the cases with the highest commission were more creditworthy. The effect was worse than naked self-interest: the incentive actually blinded their judgement.

Understanding incentives comes through second-and-third-level thinking. Many incentive systems have backfired because people failed to consider other interests and incentives.

An example is monetary rewards offered to help exterminate unwanted animals such as rats and snakes. What authorities failed to foresee was that people would start to breed the rats and snakes. Forcing people to have overly complex passwords can be another perverse incentive. When faced with this complexity we simply write down our passwords somewhere “safe”.

As to good incentives, money is not enough.

Good incentives acknowledge recognition, public perception, and the value of pursuing work that we can be proud of. So yes, if we want to persuade, we should appeal to interests not reason. But when it comes to interests, appeal not just to net worth but also to self-worth.

There are a few things worth keeping in mind.

First, the behavior you see is usually the result of incentives you don’t see. Consider the sharp elbows you see in a typical workplace. Looking at this behavior in isolation it makes little sense. However, odds are, this is rewarded in some way.

Second, we generally get the behavior we reward.

Third, creating effective incentive systems is hard work. We need to consider not only the first level of incentives but also the second and third and how they will impact the system.

Enderson concludes:

Incentives matter greatly – underestimate them at your peril. People will navigate the shortest path to the incentive. The curious among us will pay particular attention to incentives, monetary or otherwise.

The False Allure of a “Natural State” of Man

The heated debate about Sapiens’ “natural way of life” is missing the point.
Ever since the Cognitive Revolution, there hasn’t been a natural way of life for Sapiens.

— Yuval Noah Harari

A Natural State of Curiosity 

We modern humans have a fascination with trying to figure out our “natural” state. What do we eat — “naturally”? What sort of world are we “meant” to live in? What sort of family dynamic are we “meant” to have? Are we supposed to have sex with only the opposite gender, or is it perfectly “natural” to prefer your own? How much violence is natural and acceptable?

(The line of reasoning is a bit strange once we dig into it. Are modern humans not part of the natural world? Isn’t anything we do basically “natural”? At what point did we divert from “natural” to “unnatural”? We digress…)

One of the central conceits of the “man’s natural state” argument is that if we go back to some point in time, we’ll find it. We’ll finally come across the state of being where man lived totally in harmony with each other and with nature; eating the perfect diet for health, worshipping the correct gods, having sex in the natural and acceptable way. And besides studying religious texts, the tool that’s most frequently employed is the study of ancient, “pre-historic” man and woman. We hope that, by going back far enough, we’ll hit some arbitrary Point of Naturalness. That’s partially the approach used, for example, by the Paleo movement which has become such a popular force in nutrition. We evolved to eat bacon, right?

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What Is Natural?

These types of “meant to be” questions presuppose that we existed in some homogenous state in the past, and that we should be striving to get back to that place; that nature has given us a sort of natural endowment that we are best to stick to. Not so, says Yuval Harari.

The value of a book like Harari’s Sapiens, with its broad sweep of human history, is that we learn that ever since our Cognitive Revolution, the point that what we call history diverges from what we call biology, human society has been consistently molded and remolded; changed to suit the temper of the moment. That’s what makes humanity so unique relative to other intelligent creatures. Culturally, we change rapidly and unpredictably. There are very few absolutes, there are very few arrangements we haven’t tried yet. What’s “natural” depends on which society you’re looking at and at which point in time you’re looking at it.

From Sapiens: A Brief History of Humankind:

It stands to reason that the ethnic and cultural variety among ancient hunter-gatherers was equally impressive [as those found in Australia by European settlers], and that the 5 million to 8 million foragers who populated the world on the eve of the Agricultural Revolution were divided into thousands of separate tribes with thousands of different languages and cultures. This, after all, was one of the main legacies of the Cognitive Revolution. Thanks to the appearance of fiction, even people with the same genetic make-up who lived under similar ecological conditions were able to create very different imagined realities, which manifest themselves in different norms and values.

For example, there’s every reason to believe that a forager band that lived 30,000 years ago on the spot where Oxford University stands would have spoken a different language from one living where Cambridge is now situated. One band might have been belligerent and the other peaceful. Perhaps the Cambridge band was communal while the one at Oxford was based on nuclear families. The Cambridgians might have spent long hours carving wooden statues of their guardian spirits whereas the Oxonians may have worshipped through dance. The former perhaps believed in reincarnation, while the latter thought this was nonsense. In one society, homosexual relationships might have been accepted, while in the other they were taboo.

In other words, while anthropological observations of modern foragers can help us understand some of the possibilities available to ancient foragers, the ancient horizon of possibilities was much broader, and much of it is hidden from our view. The heated debates about Homo Sapiens’ “natural way of life” miss the main point. Ever since the Cognitive Revolution, there hasn’t been a natural way of life for Sapiens. There are only cultural choices, from among a bewildering palette of [biological] possibilities.

Take the debate between monogamy and polygamy. Both have certainly been tried before and exist in some form in modern society, with each achieving various levels of success. It’s likely that most modern humans consider monogamy the most “natural” arrangement since it’s the most popular one, but we see the evidence of its failure all the time. Divorces are as common as death-do-us-part marriages, at least in most of Western civilization. We have a host of psychological problems tied to the constant trials of a long term one-to-one relationship. The proponents of polygamy would point to the failures of marriage as being due to the biological prison of monogamy, the unnaturalness of it all.

Wait, no no, say the monogamists. Our biology points the other way: We are meant to live in a tight-knit nuclear family with one spouse. This encourages caring and survival, and strong, unavoidable emotions like jealousy give us evidence that it’s probably right there in our genes. The prevalence of monogamy in modern society must be some evidence that it’s the real contender.

Who’s right? The truth is we don’t really know, and a study of the past is not as revealing as you might think. The Monogamy v. Polygamy debate also points to an even greater problem with our understanding of man in the period before he started writing things down, which is that our knowledge is dwarfed by our lack of knowledge.

Searching for Keys in the Light

Compared to the many things we do know about our past, there are many times more things we don’t know, and in fact can’t know. Our historical methods have deep limitations:

Unfortunately, there are few certainties regarding the lives of our forager ancestors. The debate between the ‘ancient commune’ and the ‘eternal monogamy’ schools is based on flimsy evidence. We obviously have no written records from the age of foragers, and the archaeological evidence consists mainly of fossilized bones and stone tools. Artifacts made of more perishable materials — such as wood, bamboo, or leather — survive only under unique conditions. The common impression that pre-agricultural humans lived in an age of stone is a misconception based on this archaeological bias. The Stone Age should more accurately be called the Wood Age, because most of the tools used by ancient hunter-gatherers were made of wood.

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Foragers moved house every month, every week, and sometimes even every day, toting whatever they had on their backs. There were no moving companies, wagons, or even pack animals to share the burden. They consequently had to make do with only the most essential possessions. It’s reasonable to presume, then, that the greater part of their mental, religious and emotional lives was conducted without the help of artifacts. An archaeologist working 100,000 years from now could piece together a reasonable picture of Muslim belief and practice from the myriad objects he unearthed in a ruined mosque. But we are largely at a loss in trying to comprehend the beliefs and rituals of ancient hunter-gatherers. It’s much the same dilemma that a future historian would face if he had to depict the social world of twenty-first century teenagers solely on the basis of their surviving snail mail — since no records will remain of their phone conversations, emails, blogs and text messages.

This archaeological bias, as Harari terms it, calls to mind the drunk looking under the streetlight for his keys because “That’s where the light is!” We study what is most study-able. The problem is that this bias leaves behind a whole bunch of interesting questions, a whole lot of interesting stuff that probably occurred.

Take the difference between understanding the diet of the ancient person and understanding how they actually felt about their food, and what that said about who they were:

The basics of the forager economy can be reconstructed with some confidence based on quantifiable and objective factors. For example, we can calculate how many calories per day a person needs in order to survive, how many calories were obtained from a pound of walnuts, and how many walnuts could be gathered from a square mile of forest. With this data, we can make an educated guess about the relative importance of walnuts in their diet.

But did they consider walnuts a delicacy or a humdrum staple? Did they believe that walnut trees were inhabited by spirits? Did they find walnut leaves pretty? If a forager boy wanted to take a forager girl to a romantic spot, did the share of a walnut tree suffice? [Ed: Did the concept of romance mean anything to them?]

That’s the thing: We don’t even really know how they felt about these things. They didn’t leave us any memoirs.

An Animated View of Religion

Some of the more interesting sets of questions surround religion. One thing we can reliably suppose is that man has been in an essentially constant state of religious belief.

Most scholars suppose that most ancient humans were animists, believing that all things contained a life-force, be it a rock, a tree, a squirrel, or a human. In addition, there were spirits, fairies, angels, and other mystical creatures that play a role in the world. Human beings, in this worldview, are just part of a larger system; there are no Gods puppeteering our outcomes or watching us with a particularly close eye. We’re not the center of the universe.

But even if we can reliably suppose that most forager humans were animists, and it’s up for debate how reliable that is, there were very likely to be hundreds or thousands of varieties within that framework. It’s really the same as the “theistic” view of the world, which has been shared by billions of modern humans in widely varying forms:

The generic rubric ‘theists’ covers Jewish rabbis from eighteenth-century Poland, witch-burning Puritans from seventeenth-century Massachusetts, Aztec priests from fifteenth-century Mexico, Sufi mystics from twelfth-century Iran, tenth-century Viking warriors, second-century Roman legionnaires, and first-century Chinese bureaucrats. Each of these view others’ beliefs and practices as weird and heretical. The differences between the beliefs of groups of ‘animistic’ foragers were probably just as big. Their religious experience may have been turbulent and filled with controversies, reforms, and revolutions.

[…]

We assume they were animists, but that’s not very informative. We don’t know which spirits they prayed to, which festivals they celebrated, or which taboos they observed. Most importantly, we don’t know what stories they told. It’s one of the biggest holes in our understand of human history.

The Original Conquistadors

Conquest is another fascinating aspect of history. It’s comparatively easy for us to study Columbus and Pizarro and understand why they sought to explore new worlds, and why their wealthy backers supported the cause. Much of it is recorded and has been analyzed, summarized, and synthesized for our modern study.

But what of the conquests of the vastly longer period of pre-recorded history, what of them? We know they happened: The fossil record tells us that we started out as a species in the African/Asian landmass, bounded by the sea, and clearly, we broke free. Our technology was likely to have been barely up to the task, but we went ahead anyway.

Following the Cognitive Revolution, Sapiens acquired technology, the organizational skills, and perhaps even the vision necessary to break out of Afro-Asia and settled the Outer World. Their first achievement was the colonization of Australia some 45,000 years ago. Experts are hard-pressed to explain this feat. In order to reach Australia, humans had to cross a number of sea channels, some more than 60 miles wide , and upon arrival they had to adapt nearly overnight to a completely new ecosystem.

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The journey of the first humans to Australia is one of the most important events in history, at least as important as Columbus’ journey to America or the Apollo 11 expedition to the moon. It was the first time any human had managed to leave the Afro-Asian ecological system — indeed, the first time any large terrestrial mammal had managed to cross from Afro-Asia to Australia.

Imagine what it must have been like arriving in Australia, with the entirety of human history having taken place on another continent with different animals, weather, plants, and geology. It makes the Moon landing seem kinda tame by comparison.

The Curtain of Silence

But the even more salient question is why? What would have motivated a band, or many bands of ancient human foragers to take a risky journey across the sea to new land? Were they trying to escape persecution? Were they curious conquerers? Were they trying to prove something? Were they guided by spirits? At current, we can’t know those answers, and thus our understanding of deep history has limits.

Harari calls this The Curtain of Silence.

This curtain of silence shrouds tens of thousands of years of history. These long millennia may well have witnessed wars and revolutions, ecstatic religious movements, profound philosophical theories, incomparable artistic masterpieces. The foragers may have had their all-conquering Napoleons, who ruled empires half the size of Luxembourg; gifted Beethovens who lacked symphony orchestras but brought people to tears with the sound of their bamboo flutes; and charismatic prophets who revealed the words of a local oak tree rather than those of a creator god. But these are all mere guesses. The curtain of silence is so thick that we cannot even be sure such things occurred — let alone describe them in detail.

In the end, though, our guesses make the study of history a fascinating adventure.

Still Interested? Read our previous post on Sapiens, the book itself, or read about some of the biological lessons of history.

Need to Improve your Relations with Others? Start by Getting Human Nature Right

Most of us periodically struggle to manage our relationships, whether we’re trying to manage a company, a team, a marriage, or a friendship. The problem is that we’re often fighting, rather than riding, the tremendous current of human nature. And when we fight a tide we could be riding, we do ourselves a great disservice.

There are two possible causes of our struggle to act in harmony with the way people really are:

  1. We don’t understand human nature well enough, or
  2. We understand human nature well, but aren’t living in harmony with it.

The first one is addressable. Studying great practical philosophers is one step. Aristotle, MontaigneMarcus AureliusSeneca, and Munger are just a few of our favorites. Much has been written about human nature. The great classics of literature are really all about human nature. Great biographical works give us tremendous understanding of people if we are willing to read them and understand them. Even Seinfeld wasn’t really a show about nothing, but about how silly our behavior is around one another.

Studying evolutionary biology, a more modern development, is the other place to go. The biologists have done a good job explaining where we come from and what’s sitting there in our DNA. We get a lot of that by studying our evolutionary ancestors and cousins — the members of the animal kingdom. Chimps go to war. Bonobos have non-procreative sex, just like we do. Ants organize towards a common goal. We can derive a lot of knowledge about ourselves by asking how we’re similar and dissimilar to our “family tree.”

The second cause of our lack of congruence with human nature is tougher to solve for most. Are we aware of human nature but not executing on what we know? You might call this an Intention-Execution Gap. We know what to do, we just don’t have the discipline to do it. Success would mean closing that gap, probably through a great deal of self-criticism and working on our emotional discipline.

A wonderful Edge talk with Darwinian philosopher Helena Cronin has a telling excerpt on the topic:

Certainly, human nature is fixed. It’s universal and unchanging — common to every baby that’s born, down through the history of our species. But human behavior — which is generated by that nature — is endlessly variable and diverse. After all, fixed rules can give rise to an inexhaustible range of outcomes. Natural selection equipped us with the fixed rules — the rules that constitute our human nature. And it designed those rules to generate behavior that’s sensitive to the environment. So, the answer to ‘genetic determinism’ is simple. If you want to change behavior, just change the environment. And, of course, to know which changes would be appropriate and effective, you have to know those Darwinian rules. You need only to understand human nature, not to change it.

Munger has echoed this in the past, arguing that the way to have a happy partnership is to be a great partner. Buffett has echoed the same: Marrying with the intention of changing the other person is insane. Better to marry right with the intention to change yourself. Learn to be a better partner and create a better environment for the relationship to succeed. How do you think a manager operating in a business environment as awful as steel production was able to do it? He understood human nature and acted in accordance.

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Who else understood human nature pretty well? Machiavelli. Quite possibly the most talked about, least actually read, practical philosopher of all time. For an example, here he is discussing why hiring mercenary soldiers was such a poor choice for 16th century Italy:

Mercenaries and auxiliaries are useless and dangerous; and if one holds his state based on these arms, he will stand neither firm nor safe; for they are disunited, ambitious, and without discipline, unfaithful, valiant before friends, cowardly before enemies; they have neither the fear of God nor fidelity to men, and destruction is deferred only so long as the attack is; for in peace one is robbed by them, and in war by the enemy. The fact is, they have no other attraction or reason for keeping the field than a trifle of stipend, which is not sufficient to make them willing to die for you. They are ready enough to be your soldiers whilst you do not make war, but if war comes they take themselves off or run from the foe.

Isn’t that a pretty simple idea, in accordance with our nature? Incentives drive behavior. And of course we see, with insights like that, The Prince has held up pretty well.

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The modern book on dealing with others is Dale Carnegie’s How to Win Friends and Influence People. It’s so popular, and so “out of date” that it’s easy to dismiss. But Carnegie, like Robin Dreeke, hit on some deep insights about human nature that, if taken seriously, really work. Like understanding others’ incentives:

Why talk about what we want? That is childish. Absurd. Of course, you are interested in what you want. You are eternally interested in it. But no one else is. The rest of us are just like you: we are interested in what we want. So the only way on earth to influence other people is to talk about what they want and show them how to get it.

Again, Carnegie’s wisdom is simple, but absolutely correct. (Another reminder that greats succeed by exploiting unrecognized simplicity.) We are all the protagonists of our own story, aren’t we? And yet, how often do we forget that as we go about our relations with others?

Ben Franklin phrased it famously by saying “If you wish to persuade, appeal to interest, rather than reason.” All that Carnegie and Franklin are doing is recognizing people for what they are, and living in harmony with that reality. When we do so, we go a long way towards well-deserved success. Failing here costs us greatly.

So resolve this year, and all of the rest of your years, to come to a better understand of the way people really are and to start living in accordance with it.

How Analogies Reveal Connections, Spark Innovation, and Sell Our Greatest Ideas

Analogies are a means of drawing a parallel between two different things which we often use to convey complex ideas and to communicate effectively. We often use analogies to aid our reasoning. In this post, we explore how analogies work and how you can best utilize them.

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John Pollack is a former Presidential Speechwriter. If anyone knows the power of words to move people to action, shape arguments, and persuade, it is he.

In Shortcut: How Analogies Reveal Connections, Spark Innovation, and Sell Our Greatest Ideas, he explores the powerful role of analogy in persuasion and creativity.

One of the key tools he uses for this is analogy.

While they often operate unnoticed, analogies aren’t accidents, they’re arguments—arguments that, like icebergs, conceal most of their mass and power beneath the surface. In arguments, whoever has the best argument wins.

But analogies do more than just persuade others — they also play a role in innovation and decision making.

From the bloody Chicago slaughterhouse that inspired Henry Ford’s first moving assembly line, to the “domino theory” that led America into the Vietnam War, to the “bicycle for the mind” that Steve Jobs envisioned as a Macintosh computer, analogies have played a dynamic role in shaping the world around us.

Despite their importance, many people have only a vague sense of the definition.

What is an Analogy?

In broad terms, an analogy is simply a comparison that asserts a parallel—explicit or implicit—between two distinct things, based on the perception of a share property or relation. In everyday use, analogies actually appear in many forms. Some of these include metaphors, similes, political slogans, legal arguments, marketing taglines, mathematical formulas, biblical parables, logos, TV ads, euphemisms, proverbs, fables and sports clichés.

Because they are so disguised they play a bigger role than we consciously realize. Not only do analogies effectively make arguments, but they trigger emotions. And emotions make it hard to make rational decisions.

While we take analogies for granted, the ideas they convey are notably complex.

All day every day, in fact, we make or evaluate one analogy after the other, because some comparisons are the only practical way to sort a flood of incoming data, place it within the content of our experience, and make decisions accordingly.

Remember the powerful metaphor — that arguments are war. This shapes a wide variety of expressions like “your claims are indefensible,” “attacking the weakpoints,” and “You disagree, OK shoot.”

Or consider the Map and the Territory — Analogies give people the map but explain nothing of the territory.

Warren Buffett is one of the best at using analogies to communicate effectively. One of my favorite analogies is when he noted “You never know who’s swimming naked until the tide goes out.” In other words, when times are good everyone looks amazing. When times suck, hidden weaknesses are exposed. The same could be said for analogies:

We never know what assumptions, deceptions, or brilliant insights they might be hiding until we look beneath the surface.

Most people underestimate the importance of a good analogy. As with many things in life, this lack of awareness comes at a cost. Ignorance is expensive.

Evidence suggests that people who tend to overlook or underestimate analogy’s influence often find themselves struggling to make their arguments or achieve their goals. The converse is also true. Those who construct the clearest, most resonant and apt analogies are usually the most successful in reaching the outcomes they seek.

The key to all of this is figuring out why analogies function so effectively and how they work. Once we know that, we should be able to craft better ones.

Don’t Think of an Elephant

Effective, persuasive analogies frame situations and arguments, often so subtly that we don’t even realize there is a frame, let alone one that might not work in our favor. Such conceptual frames, like picture frames, include some ideas, images, and emotions and exclude others. By setting a frame, a person or organization can, for better or worse, exert remarkable influence on the direction of their own thinking and that of others.

He who holds the pen frames the story. The first person to frame the story controls the narrative and it takes a massive amount of energy to change the direction of the story. Sometimes even the way that people come across information, shapes it — stories that would be a non-event if disclosed proactively became front page stories because someone found out.

In Don’t Think of an Elephant, George Lakoff explores the issue of framing. The book famously begins with the instruction “Don’t think of an elephant.”

What’s the first thing we all do? Think of an elephant, of course. It’s almost impossible not to think of an elephant. When we stop consciously thinking about it, it floats away and we move on to other topics — like the new email that just arrived. But then again it will pop back into consciousness and bring some friends — associated ideas, other exotic animals, or even thoughts of the GOP.

“Every word, like elephant, evokes a frame, which can be an image of other kinds of knowledge,” Lakoff writes. This is why we want to control the frame rather than be controlled by it.

In Shortcut Pollack tells of Lakoff talking about an analogy that President George W. Bush made in the 2004 State of the Union address, in which he argued the Iraq war was necessary despite the international criticism. Before we go on, take Bush’s side here and think about how you would argue this point – how would you defend this?

In the speech, Bush proclaimed that “America will never seek a permission slip to defend the security of our people.”

As Lakoff notes, Bush could have said, “We won’t ask permission.” But he didn’t. Instead he intentionally used the analogy of permission slip and in so doing framed the issue in terms that would “trigger strong, more negative emotional associations that endured in people’s memories of childhood rules and restrictions.”

Commenting on this, Pollack writes:

Through structure mapping, we correlate the role of the United States to that of a young student who must appeal to their teacher for permission to do anything outside the classroom, even going down the hall to use the toilet.

But is seeking diplomatic consensus to avoid or end a war actually analogous to a child asking their teacher for permission to use the toilet? Not at all. Yet once this analogy has been stated (Farnam Street editorial: and tweeted), the debate has been framed. Those who would reject a unilateral, my-way-or-the-highway approach to foreign policy suddenly find themselves battling not just political opposition but people’s deeply ingrained resentment of childhood’s seemingly petty regulations and restrictions. On an even subtler level, the idea of not asking for a permission slip also frames the issue in terms of sidestepping bureaucratic paperwork, and who likes bureaucracy or paperwork.

Deconstructing Analogies

Deconstructing analogies, we find out how they function so effectively. Pollack argues they meet five essential criteria.

  1. Use the highly familiar to explain something less familiar.
  2. Highlight similarities and obscure differences.
  3. Identify useful abstractions.
  4. Tell a coherent story.
  5. Resonate emotionally.

Let’s explore how these work in greater detail. Let’s use the example of master-thief, Bruce Reynolds, who described the Great Train Robbery as his Sistine Chapel.

The Great Train Robbery

In the dark early hours of August 8, 1963, an intrepid gang of robbers hot-wired a six-volt battery to a railroad signal not far from the town of Leighton Buzzard, some forty miles north of London. Shortly, the engineer of an approaching mail train, spotting the red light ahead, slowed his train to a halt and sent one of his crew down the track, on foot, to investigate. Within minutes, the gang overpowered the train’s crew and, in less than twenty minutes, made off with the equivalent of more than $60 million in cash.

Years later, Bruce Reynolds, the mastermind of what quickly became known as the Great Train Robbery, described the spectacular heist as “my Sistine Chapel.”

Use the familiar to explain something less familiar

Reynolds exploits the public’s basic familiarity with the famous chapel in the Vatican City, which after Leonardo da Vinci’s Mona Lisa is perhaps the best-known work of Renaissance art in the world. Millions of people, even those who aren’t art connoisseurs, would likely share the cultural opinion that the paintings in the chapel represent “great art” (as compared to a smaller subset of people who might feel the same way about Jackson Pollock’s drip paintings, or Marcel Duchamp’s upturned urinal).

Highlight similarities and obscure differences

Reynold’s analogy highlights, through implication, similarities between the heist and the chapel—both took meticulous planning and masterful execution. After all, stopping a train and stealing the equivalent of $60m—and doing it without guns—does require a certain artistry. At the same time, the analogy obscures important differences. By invoking the image of a holy sanctuary, Reynolds triggers a host of associations in the audience’s mind—God, faith, morality, and forgiveness, among others—that camouflage the fact that he’s describing an action few would consider morally commendable, even if the artistry involved in robbing that train was admirable.

Identify useful abstractions

The analogy offers a subtle but useful abstraction: Genius is genius and art is art, no matter what the medium. The logic? If we believe that genius and artistry can transcend genre, we must concede that Reynolds, whose artful, ingenious theft netted millions, is an artist.

Tell a coherent story

The analogy offers a coherent narrative. Calling the Great Train Robbery his Sistine Chapel offers the audience a simple story that, at least on the surface makes sense: Just as Michelangelo was called by God, the pope, and history to create his greatest work, so too was Bruce Reynolds called by destiny to pull off the greatest robbery in history. And if the Sistine Chapel endures as an expression of genius, so too must the Great Train Robbery. Yes, robbing the train was wrong. But the public perceived it as largely a victimless crime, committed by renegades who were nothing if not audacious. And who but the most audacious in history ever create great art? Ergo, according to this narrative, Reynolds is an audacious genius, master of his chosen endeavor, and an artist to be admired in public.

There is an important point here. The narrative need not be accurate. It is the feelings and ideas the analogy evokes that make it powerful. Within the structure of the analogy, the argument rings true. The framing is enough to establish it succulently and subtly. That’s what makes it so powerful.

Resonate emotionally

The analogy resonates emotionally. To many people, mere mention of the Sistine Chapel brings an image to mind, perhaps the finger of Adam reaching out toward the finger of God, or perhaps just that of a lesser chapel with which they are personally familiar. Generally speaking, chapels are considered beautiful, and beauty is an idea that tends to evoke positive emotions. Such positive emotions, in turn, reinforce the argument that Reynolds is making—that there’s little difference between his work and that of a great artist.

Jumping to Conclusions

Daniel Kahneman explains the two thinking structures that govern the way we think: System one and system two . In his book, Thinking Fast and Slow, he writes “Jumping to conclusions is efficient if the conclusions are likely to be correct and the costs of an occasional mistake are acceptable, and if the jump saves much time and effort.”

“A good analogy serves as an intellectual springboard that helps us jump to conclusions,” Pollack writes. He continues:

And once we’re in midair, flying through assumptions that reinforce our preconceptions and preferences, we’re well on our way to a phenomenon known as confirmation bias. When we encounter a statement and seek to understand it, we evaluate it by first assuming it is true and exploring the implications that result. We don’t even consider dismissing the statement as untrue unless enough of its implications don’t add up. And consider is the operative word. Studies suggest that most people seek out only information that confirms the beliefs they currently hold and often dismiss any contradictory evidence they encounter.

The ongoing battle between fact and fiction commonly takes place in our subconscious systems. In The Political Brain: The Role of Emotion in Deciding the Fate of the Nation, Drew Westen, an Emory University psychologist, writes: “Our brains have a remarkable capacity to find their way toward convenient truths—even if they are not all true.”

This also helps explain why getting promoted has almost nothing to do with your performance.

Remember Apollo Robbins? He’s a professional pickpocket. While he has unique skills, he succeeds largely through the choreography of people’s attention. “Attention,” he says “is like water. It flows. It’s liquid. You create channels to divert it, and you hope that it flows the right way.”

“Pickpocketing and analogies are in a sense the same,” Pollack concludes, “as the misleading analogy picks a listener’s mental pocket.”

And this is true whether someone else diverts our attention through a resonant but misleading analogy—“Judges are like umpires”—or we simply choose the wrong analogy all by ourselves.

Reasoning by Analogy

We rarely stop to see how much of our reasoning is done by analogy. In a 2005 study published in the Harvard Business Review, Giovanni Gavettie and Jan Rivkin wrote: “Leaders tend to be so immersed in the specifics of strategy that they rarely stop to think how much of their reasoning is done by analogy.” As a result they miss things. They make connections that don’t exist. They don’t check assumptions. They miss useful insights. By contrast “Managers who pay attention to their own analogical thinking will make better strategic decisions and fewer mistakes.”

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Shortcut goes on to explore when to use analogies and how to craft them to maximize persuasion.

The Four Types of Relationships and the Reputational Cue Ball

There are four types of relationships with people.

  1. Win Win
  2. Win Lose
  3. Lose Win
  4. Lose Lose

Seneca says “Time discovers truth.”

Only one of those relationships is sustainable over the long-term. And longevity is the key to so many things.

Yet so many of us operate in the short term. Today. This week. This Month. This Quarter. We want to WIN even if that means the other person LOSES.

We rationalize this behavior, arguing that, while it might not be fair today, we’ll make it right in the future. But do you really think that someone who takes advantage of you today with a lopsided deal will make it up to you?

Only this ignores all we know about game theory, biology (survival/evolution), physics (compounding), and psychology (reciprocation).

Reciprocation

The most common strategy in life when you feel like someone is taking advantage of you is tit-for-tat. That is, return what you get. (Newton figured this out long ago.)

The person on the LOSING side of any relationship tends to coil like a spring, the latent energy building with time, frequency, and magnitude of slight. The more they perceive you taking advantage of them, the higher the odds they negatively become spring-loaded. This creates a negative leaping emergent effect. That’s human nature. Given the chance to punish someone that we feel wronged us, even at personal cost, we will often take it.

These outcomes are avoidable.

Biology has taught us that the key to evolving is to be sustainable over a long period of time. We must reproduce. A one-and-done species is not even a footnote in history.

“While others attempt to win every lap around the track, it is crucial to remember that to succeed at investing, you have to be around at the finish.”

— Seth Klarman

And yet so few of us design systems that incorporate duration as an element. We make them short term. Designed to maximize the short run while ensuring we never get on a path of sustainability.

  • When you treat people badly they will respond (eventually) in kind.
  • When you rip your customers off they will (eventually) go elsewhere.
  • When you rip off your suppliers they will (eventually) stop doing business with you or return your behavior in kind.

Anyone can come into an organization and start throwing their title around to get things done. We’ve all met this person. This works for a while but eventually fails. And who is interested in a tactic that only works for a short time?

Ideally, we want something that works for a long time because most of the value in relationships that matter (whether customers, partners, friends) accumulates after the initial period of time.

If you’re offering a lopsided deal to someone, you’re signaling that you’re not in it for the long term. Similarly, if someone is offering you a lopsided deal, they’re signaling they’re not in it for the long term.

While taking advantage of another person or relationship may achieve the desired initial results, it comes at a high cost as it removes you from any path that involves time.  And time is the key because most value comes in long-term relationships.

The best results in the world are a function of time. The key component to compounding, which Einstein claimed was the most powerful force in the world, is time.

Peter Kaufman, who published Poor Charlie’s Almanack, describes this as the the Reputational Cue Ball

Non-Win/Win tactics are akin to playing a billiards tournament with a focus on sinking only the first shot or two. Billiards—or life—is a multi-shot game. When we fail to consider the future consequences of mistreating our counter-parties in a current “deal”‘ or first phase, it can wind up leaving our “reputational cue ball” ill-positioned for the next shot—the next deal or phase to come down the pike.

 

Focusing Illusions

focusing illusions

My favorite chapter in the book Rapt: Attention and the Focused Life by Winifred Gallagher is called ‘Decisions: Focusing Illusions.’ It’s a really great summary of how focusing on the wrong things affects the weights we use to make decisions. There is a lot of great content packed into this chapter but I’ll attempt to highlight a few points.

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Bounded Rationality

According to the principle of ‘bounded rationality,’ which (Daniel) Kahneman first applied to economic decisions and more recently to choices concerning quality of life, we are reasonable-enough beings but sometimes liable to focus on the wrong things. Our thinking gets befuddled not so much by our emotions as by our ‘cognitive illusions,’ or mistaken intuitions, and other flawed, fragmented mental constructs.

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Loss/Risk Aversion

If you’re pondering a choice that involves risk, you might focus too much on the threat of possible loss, thereby obscuring an even likelier potential benefit. Where this common scenario is concerned, research shows that we aren’t so much risk-averse as loss-averse, in that we’re generally much more sensitive to what we might have to give up than to what we might gain.

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The Focusing Illusion

The key to understanding why you pay more attention to your thoughts about living than to life itself is neatly summed up by what Kahneman proudly calls his ‘fortune cookie maxim’ (a.k.a the focusing illusion): ‘Nothing in life is as important as you think it is while you are thinking about it.’ Why? ‘Because you’re thinking about it!

In one much-cited illustration of the focusing illusion, Kahneman asked some people if they would be happier if they lived in California. Because the climate is often delightful there, most subjects thought so. For the same reason, even Californians assume they’re happier than people who live elsewhere. When Kahneman actually measured their well-being however, Michiganders and others are just as contented as Californians. The reason is that 99 percent of the stuff of life – relationships, work, home, recreation – is the same no matter where you are, and once you settle in a place, no matter how salubrious, you don’t think about it’s climate very much. If you’re prompted to evaluate it, however, the weather immediately looms large, simply because you’re paying attention to it. This illusion inclines you to accentuate the difference between Place A and Place B, making it seem to matter much more than it really does, which is marginal.

To test the fortune cookie rule, you have only to ask yourself how happy you are. The question automatically summons your remembering self, which will focus on any recent change in your life – marriage or divorce, new job or home. You’ll then think about this novel event, which in turn will increase its import and influence your answer. If you’re pleased that you’ve just left the suburbs for the city, say, you’ll decide that life is pretty good. If you regret the move, you’ll be dissatisfied in general. Fifteen years on, however, the change that looms so large now will pale next to a more recent event – a career change, perhaps or becoming a grandparent – which will draw your focus and, simply because you’re thinking about it, bias your evaluation of your general well-being.

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The Effects of Adaptation

Like focusing too much on the opinions of your remembering self, overlooking the effects of adaptation – the process of becoming used to a situation – can obstruct wise decisions about how to live. As Kahneman says, ‘when planning for the future, we don’t consider that we will stop paying attention to a thing.

The tendency to stop focusing on a particular event or experience over time, no matter how wonderful or awful, helps explain why the differences in well-being between groups of people in very different circumstances tend to be surprisingly small – sometimes astoundingly so. The classic examples are paraplegics and lottery winners, who respectively aren’t nearly as miserable or happy as you’d think. ‘That’s where attention comes in,’ says Kahneman. ‘People think that if they win the lottery, they’ll be happy forever. Of course, they will not. For a while, they are happy because of the novelty, and because they think about winning all the time. Then they adapt and stop paying attention to it.’ Similarly, he says, ‘Everyone is surprised by how happy paraplegics can be, but they are not paraplegic full-time. They do other things. They enjoy their meals, their friends, the newspaper. It has to do with the allocation of attention.’

Like couples who’ve just fallen in love, professionals starting a career, or children who go to camp for the first time, paraplegics and lottery winners initially pay a lot of attention to their new situation. Then, like everybody else, they get used to it and shift their focus to the next big thing. Their seemingly blase attitude surprises us, because when we imagine ourselves in their place, we focus on how we’d feel at the moment of becoming paralyzed or wildly rich, when such an event utterly monopolizes one’s focus. We forget that we, too, would get used to wealth, a wheelchair, and most other things under the sun, then turn our attention elsewhere.

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Good Enough

Finally, don’t worry if the choice you made wasn’t the absolute best, as long as it meets your needs. Offering the single most important lesson from his research, Schwartz says, ‘Good enough is almost always good enough. If you have that attitude, many problems about decisions and much paralysis melt away.’