Random Posts

Rich Thinking Versus Poor Thinking: Why it Matters

“Thought is the original source of all wealth, all success, all material gain,
all great discoveries and inventions, and of all achievement.”
—Claude M. Bristol

***

One of the most controversial chapters in Brian Tracy’s book, Get Smart!, is “Rich Thinking versus Poor Thinking.”

In that chapter, he shares a series of simple ideas you can learn and apply. While I fundamentally disagree with much of the gross over-simplification, there are veins of excellence that we can use to add to our mental toolkit.

(Pause for a second before we continue. Just to be clear, this isn’t an article about going from zero to a million in a lifetime. No clickbait here. No, this article is about giving you tools you can add to your mental toolbox.)

The Role of Mindset

Best-selling author Og Mandino says:

There are no secrets of success. There are simply timeless truths and universal principles that have been discovered and rediscovered throughout human history. All you have to do is to learn and practice them to enjoy all the success that you could desire.

Sounds a lot like what we’re trying to discover.

Fearing Failure

A lot of us do things not to succeed but to avoid failure. This is what Elon Musk calls the fundamental problem with regulators. Tracy writes:

Because of destructive criticism in early childhood and mistakes they have made as adults, they are paralyzed by the fear of making a mistake, of losing their time or money. Even if they are presented with an opportunity, they go into a form of paralysis.

Their fear of failure causes them to create all kinds of reasons not to take action. They don’t have the time. They can’t make the minimum investment. They don’t have the necessary knowledge and skills. Like a deer caught in the headlights, they are paralyzed by the idea of failure, which causes them to never take any action at all.

As it happens, most fortunes in America were started by the sale of personal services. The people had no money, but they had the ability to work hard, to upgrade their skills, and to become more and more valuable. As a result, more and more doors of opportunity opened up for them.

Fearing Disapproval and Criticism

This relates to our fear of criticism and disapproval, which results in approval-seeking behavior. And when we’re seeking approval and acceptance, we’re more likely to think conventionally. And when we think conventionally, we’re unlikely to get above-average results.

We don’t want to look different. As a result, we stop learning and growing.

***

“I will study and prepare myself and someday my chance will come.”
— Abraham Lincoln

Tracy writes:

To achieve something you’ve never achieved before, you must learn and practice something that you’ve never done before.

If you’re learning something universal you’ll always have an opportunity to practice what you learn.

Putting all of this together becomes tricky.

Often we have the courage to think and act differently, we mentally prepare ourselves for the critical feedback and then we dip our toe in the water only to find it’s not to our liking.

This is where persistence comes in.

Most of us are simply unwilling to sacrifice in order to succeed. We want our cake and we want to eat it too. Most of the people I know that are incredibly successful have suffered some setback that they had to overcome. A lot of people would have given up. Only they persisted. (Of course, there are plenty of people that persist and fail too.) I’m generalizing a bit here but the people who look for the nearest exit when things get tough are usually the ones with the average results.

Something-For-Something

There is only one type of relationship that is sustainable over a long period of time and that’s one where everyone wins. Tracy writes:

Rich people are always looking for ways to create value, to develop and produce products and services that enrich and enhance the lives and work of other people.

They are always willing to put in before they take out. They do not believe in easy money or something for nothing. Rich people believe that you have to justly earn and pay for, in terms of toil and treasure, any rewards and riches that you desire.

Poor people lack this fundamental understanding, the direct relationship between what you put in and what you get out. They are always seeking to get something for nothing or for as little as possible. They want success without achievement, riches without labor, money without effort, and fame without talent.

Poor people gamble, buy lottery tickets, come to work at the last possible moment, waste time while they are there, and then leave work at the first possible minute. They line up by the hundreds and thousands to audition for programs like American Idol, thinking that they can become rich and famous without ever having paid the price necessary to develop the level of talent and ability that enables them to rise above their competitors.

One of the great secrets of becoming wealthy is to always do more than you are paid for. If you do, you will always be paid more than you’re getting today. And there is no other way.

Go the extra mile. Be willing to put in far more than you are taking out. There are never any traffic jams on the extra mile.

Fear can often keep us mediocre. We don’t risk being wrong.

Getting rich isn’t as simple as changing your mindset. However changing your mindset can go a long way to changing the way you see the world. And when you see the world differently you can behave and respond differently to the stimuli around you. When you do that, you have the potential to outperform.

Competitive Strategy

An organization’s core capabilities are those activities that, when performed at the highest level, enable the organization to bring its where-to-play and how-to-win choices to life. They are best understood as operating as a system of reinforcing activities— a concept first articulated by Harvard Business School’s Michael Porter. Porter noted that powerful and sustainable competitive advantage is unlikely to arise from any one capability (e.g., having the best sales force in the industry or the best technology in the industry), but rather from a set of capabilities that both fit with one another (i.e., that don’t conflict with one another) and actually reinforce one another (i.e., that make each other stronger than they would be alone).

For Porter, a company’s “strategic position is contained in a set of tailored activities designed to deliver it.” He calls the visual depiction of this set of activities an activity system. Since “competitive strategy is about being different … [and] means deliberately choosing a different set of activities to deliver unique value,” an activity system must also be distinctive from the activity systems of competitors. In his landmark 1996 article “What Is Strategy?,” Porter illustrated his theory with examples from Southwest Airlines, Progressive Insurance, and The Vanguard Group, articulating the way in which each organization made distinctive choices and tailored an activity system to deliver on those choices. The activity system is a visual representation of the firm’s competitive advantage, capturing on a single page the core capabilities of the firm. Articulating a firm’s core capabilities is a vital step in the strategy process. Identifying the capabilities required to deliver on the where-to-play and how-to-win choices crystallizes the area of focus and investment for the company. It enables a firm to continue to invest in its current capabilities, to build up others, and to reduce the investment in capabilities that are not essential to the strategy.

— Via Playing to Win: How Strategy Really Works. The kindle edition is only $7.99!.

Daniel Pink on Incentives and the Two Types of Motivation

Motivation is a tricky multifaceted thing. How do we motivate people to become the best they can be? How do we motivate ourselves? Sometimes when we are running towards a goal we suddenly lose steam and peter out before we cross the finish line. Why do we lose our motivation part way to achieving our goal?

Dan Pink wrote an excellent book on motivation called Drive: The Surprising Truth About What Motivates Us. We’ve talked about the book before but it’s worth going into a bit more detail.

When Pink discusses motivation he breaks it into two specific types: extrinsic and intrinsic.

Extrinsic motivation is driven by external forces such as money or praise. Intrinsic motivation is something that comes from within and can be as simple as the joy one feels after accomplishing a challenging task. Pink also describes two distinctly different types of tasks: algorithmic and heuristic. An algorithmic task is when you follow a set of instructions down a defined path that leads to a single conclusion. A heuristic task has no instructions or defined path, one must be creative and experiment with possibilities to complete the task.

As you can see the two types of motivations and tasks are quite different.

Let’s look at how they play against each other depending on what type of reward is offered.

Baseline Rewards

Money was once thought to be the best way to motivate an employee. If you wanted someone to stay with your company or to perform better you simply had to offer financial incentives. However, the issue of money as a motivator has become moot in many sectors. If you are a skilled worker you will quite easily be able to find a job in your desired salary range. Pink puts it succinctly:

Of course the starting point for any discussion of motivation in the workplace is a simple fact of life: People have to earn a living. Salary, contract payments, some benefits, a few perks are what I call “baseline rewards.” If someone’s baseline rewards aren’t adequate or equitable, her focus will be on the unfairness of her situation and the anxiety of her circumstance. You’ll get neither the predictability of extrinsic motivation nor the weirdness of intrinsic motivation. You’ll get very little motivation at all. The best use of money as a motivator is to pay people enough to take the issue of money off the table.

Once the baseline rewards have been sorted we are often offered other ‘carrots and sticks’ to nudge our behavior. Many of these rewards will actually achieve the opposite effect to what was intended.

‘If, then’ Rewards

‘If, then’ rewards are when we promise to deliver something to an individual once they complete a specific task. If you hit your sales goals this month then I will give you a bonus. There are inherent dangers with ‘if, then’ rewards. They tend to prompt a short term surge in motivation but actually dampen it over the long term. Just the fact of offering a reward for some form of effort sends the message that the work is, well, work. This can have a large negative impact on intrinsic motivation. Additionally, rewards by their very nature narrow our focus, we tend to ignore everything but the finish line. This is fine for algorithmic tasks but hurts us with heuristic based tasks.

Amabile and others have found that extrinsic rewards can be effective for algorithmic tasks – those that depend on following an existing formula to its logical conclusion. But for more right-brain undertakings – those that demand flexible problem-solving, inventiveness, or conceptual understanding – contingent rewards can be dangerous. Rewarded subjects often have a harder time seeing the periphery and crafting original solutions.

Goals

When we use goals to motivate us how does that affect how we think and behave?

Like all extrinsic motivators, goals narrow our focus. That’s one reason they can be effective; they concentrate the mind. But as we’ve seen, a narrowed focus exacts a cost. For complex or conceptual tasks, offering a reward can blinker the wide-ranging thinking necessary to come up with an innovative solution. Likewise, when an extrinsic goal is paramount – particularly a short-term, measurable one whose achievement delivers a big payoff – its presence can restrict our view of the broader dimensions of our behavior. As the cadre of business school professors write, ‘Substantial evidence demonstrates that in addition to motivating constructive effort, goal setting can induce unethical behavior.

The examples are legion, the researchers note. Sears imposes a sales quota on its auto repair staff – and workers respond by overcharging customers and completing unnecessary repairs. Enron sets lofty revenue goals – and the race to meet them by any means possible catalyzes the company’s collapse. Ford is so intent on producing a certain car at a certain weight at a certain price by a certain date that it omits safety checks and unleashes the dangerous Ford Pinto.

The problem with making extrinsic reward the only destination that matters is that some people will choose the quickest route there, even if it means taking the low road.

Indeed, most of the scandals and misbehavior that have seemed endemic to modern life involve shortcuts. Executives game their quarterly earnings so they can snag a performance bonus. Secondary school counselors doctor student transcripts so their seniors can get into college. Athletes inject themselves with steroids to post better numbers and trigger lucrative performance bonuses.

Contrast that approach with behavior sparked by intrinsic motivation. When the reward is the activity itself – deepening learning, delighting customers, doing one’s best – there are no shortcuts. The only route to the destination is the high road. In some sense, it’s impossible to act unethically because the person who’s disadvantaged isn’t a competitor but yourself.

These same pressures that may nudge you towards unethical actions can also push you to make more risky decisions. The drive towards the goal can convince you to make decisions that in any other situation you would likely never consider. (See more about the dangers of goals.)

It’s not only the person who is being motivated with the reward that is hurt here. The person who is trying to encourage a certain type of behaviour also falls into a trap and is forced to try and course correct which, often, leaves them worse off than if they had never offered the reward in the first place.

The Russian economist Anton Suvorov has constructed an elaborate econometric model to demonstrate this effect, configured around what’s called ‘principal-agent theory.’ Think of the principal as the motivator – the employer, the teacher, the parent. Think of the agent as the motivatee – the employee, the student, the child. A principal essentially tries to get the agent to do what the principal wants, while the agent balances his own interests with whatever the principal is offering. Using a blizzard of complicated equations that test a variety of scenarios between principal and agent, Suvorov has reached conclusions that make intuitive sense to any parent who’s tried to get her kids to empty the garbage.

By offering a reward, a principal signals to the agent that the task is undesirable. (If the task were desirable, the agent wouldn’t need a prod.) But that initial signal, and the reward that goes with it, forces the principal onto a path that’s difficult to leave. Offer too small a reward and the agent won’t comply. But offer a reward that’s enticing enough to get the agent to act the first time, and the principal ‘is doomed to give it again in the second.’ There’s no going back. Pay your son to take out the trash – and you’ve pretty much guaranteed the kid will never do it again for free. What’s more, once the initial money buzz tapers off, you’ll likely have to increase the payment to continue compliance.

Even if you are able to trigger the better behaviour it will often disappear once incentives are removed.

In environments where extrinsic rewards are most salient, many people work only to the point that triggers the reward – and no further. So if students get a prize for reading three books, many won’t pick up a fourth, let alone embark on a lifetime of reading – just as executives who hit their quarterly numbers often won’t boost earnings a penny more, let alone contemplate that long-term health of their company. Likewise, several studies show that paying people to exercise, stop smoking, or take their medicines produces terrific results at first – but the healthy behavior disappears once the incentives are removed.

When Do Rewards Work?

Rewards can work for routine (algorithmic) tasks that require little creativity.

For routine tasks, which aren’t very interesting and don’t demand much creative thinking, rewards can provide a small motivational booster shot without the harmful side effects. In some ways, that’s just common sense. As Edward Deci, Richard Ryan, and Richard Koestner explain, ‘Rewards do not undermine people’s intrinsic motivation for dull tasks because there is little or no intrinsic motivation to be undermined.’

You will increase your chances for success when rewarding routine tasks using these three practices:

  1. Offer a rationale for why the task is necessary.
  2. Acknowledge that the task is boring.
  3. Allow people to complete the task their own way (think autonomy not control).

Any extrinsic reward should be unexpected and offered only once the task is complete. In many ways this is common sense as it is the opposite of the ‘if, then’ rewards allowing you to avoid its many failings (focus isn’t solely on the prize, motivation won’t wane if reward isn’t present during task, etc…). However, one word of caution – be careful if these rewards become expected, because at that point they are no different than the ‘if, then’ rewards.

Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments

We tend to feel we’re more able and smarter than we really are. We think we’re above average drivers, we’re above average investors, and we make better decisions than everyone else.

According to a recent study, this occurs, in part, because we “suffer a dual burden: Not only do these people reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the metacognitive ability to realize it.”

“Ignorance more frequently begets confidence than does knowledge.”

The study goes on to make several key points:

  • In many domains in life, success and satisfaction depend on knowledge, wisdom, or savvy in knowing which rules to follow and which strategies to pursue.
  • People differ widely in the knowledge and strategies they apply in these domains with varying levels of success. Some of the knowledge and theories that people apply to their actions are sound and meet with favorable results.
  • When people are incompetent in the strategies they adopt to achieve success and satisfaction, they suffer a dual burden: Not only do they reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the ability to realize it.

The authors come to the conclusions that the skills we need to have competence in any domain are often the same skills we need to accurately evaluate competence. The better we are at something, the better we’re able to judge ourselves. Because of this, incompetent individuals often exaggerate their ability more than competent ones.

Sol LeWitt on the Power of Doing

Stop is and just DO
Stop it and just DO

In 1960 two American artists met for the first time: Sol LeWitt and Eva Hesse. The meeting sparked a bond that resulted in “countless inspirational discussions and rich exchanged of ideas” until Hesse passed away in 1970.

In 1965 Hesse was facing a creative block, plagued with self-doubt. She told LeWitt who replied with this work of art found in Letters of Note. “An invaluable letter of advice, it has since inspired many other artists, and copies now grace the walls of art studios the world over.”

Dear Eva,
April 14

It will be almost a month since you wrote to me and you have possibly forgotten your state of mind (I doubt it though). You seem the same as always, and being you, hate every minute of it. Don’t! Learn to say “Fuck You” to the world once in a while. You have every right to. Just stop thinking, worrying, looking over your shoulder, wondering, doubting, fearing, hurting, hoping for some easy way out, struggling, grasping, confusing, itching, scratching, mumbling, bumbling, grumbling, humbling, stumbling, numbling, rambling, gambling, tumbling, scumbling, scrambling, hitching, hatching, bitching, moaning, groaning, honing, boning, horse-shitting, hair-splitting, nit-picking, piss-trickling, nose sticking, ass-gouging, eyeball-poking, finger-pointing, alleyway-sneaking, long waiting, small stepping, evil-eyeing, back-scratching, searching, perching, besmirching, grinding, grinding, grinding away at yourself. Stop it and just

Do

From your description, and from what I know of your previous work and your ability; the work you are doing sounds very good “Drawing— clean— clear but crazy like machines, larger and bolder . . . real nonsense.” That sounds fine, wonderful—real nonsense. Do more. More nonsensical, more crazy, more machines, more breasts, penises, cunts, whatever— make them abound with nonsense. Try and tickle something inside you, your “weird humor.” You belong in the most secret part of you. Don’t worry about cool, make your own uncool. Make your own, your own world. If you fear, make it work for you— draw & paint your fear & anxiety. And stop worrying about big, deep things such as “to decide on a purpose and way of life, a consistant approach to even some impossible end or even an imagined end.” You must practice being stupid, dumb, unthinking, empty. Then you will be able to

Do

I have much confidence in you and even though you are tormenting yourself, the work you do is very good. Try to do some BAD work— the worst you can think of and see what happens but mainly relax and let everything go to hell— you are not responsible for the world— you are only responsible for your work— so DO IT. And don’t think that your work has to conform to any preconceived form, idea or flavor. It can be anything you want it to be. But if life would be easier for you if you stopped working— then stop. Don’t punish yourself. However, I think that it is so deeply engrained in you that it would be easier to

Do

It seems I do understand your attitude somewhat, anyway, because I go through a similar process every so often. I have an “Agonizing Reappraisal” of my work and change everything as much as possible— and hate everything I’ve done, and try to do something entirely different and better. Maybe that kind of process is necessary to me, pushing me on and on. The feeling that I can do better than that shit I just did. Maybe you need your agony to accomplish what you do. And maybe it goads you on to do better. But it is very painful I know. It would be better if you had the confidence just to do the stuff and not even think about it. Can’t you leave the “world” and “ART” alone and also quit fondling your ego. I know that you (or anyone) can only work so much and the rest of the time you are left with your thoughts. But when you work or before your work you have to empty your mind and concentrate on what you are doing. After you do something it is done and that’s that. After a while you can see some are better than others but also you can see what direction you are going. I’m sure you know all that. You also must know that you don’t have to justify your work—not even to yourself. Well, you know I admire your work greatly and can’t understand why you are so bothered by it. But you can see the next ones & I can’t. You also must believe in your ability. I think you do. So try the most outrageous things you can— shock yourself. You have at your power the ability to do anything.

I would like to see your work and will have to be content to wait until Aug or Sept. I have seen photos of some of Tom’s new things at Lucy’s. They are very impressive—especially the ones with the more rigorous form; the simpler ones. I guess he’ll send some more later on. Let me know how the shows are going and that kind of stuff.

My work has changed since you left and it is much better. I will be having a show May 4– 29 at the Daniels Gallery 17 E 64th St (where Emmerich was), I wish you could be there. Much love to you both.

Sol

sol2
sol3

Still curious? Letters of Note is full of interestingness.

How credit cards bribe the purchasing agent

“They competed on the basis of raising prices. What other industry do you know that gets away with that?”

Charlie Munger talks about how you can bribe the purchaing agent.

I have one more anecdote: I have fun with this when I speak in front of students and professors. I say, “You all understand supply and demand curves. If you raise price, you sell less, but make more margin. So, give me four instances where the correct answer is to raise the price [meaning volume will go up].” I’ve done this about four times, and maybe one person in 50 can give me one answer that’s correct.

A recent New York Times article illuminates how Visa raises prices and bribes the purchasing agent (in this case, bank) with some of the proceeds.

Competition, of course, usually forces prices lower. But for payment networks like Visa and MasterCard, competition in the card business is more about winning over banks that actually issue the cards than consumers who use them. Visa and MasterCard set the fees that merchants must pay the cardholder’s bank. And higher fees mean higher profits for banks, even if it means that merchants shift the cost to consumers.

Seizing on this odd twist, Visa enticed banks to embrace signature debit — the higher-priced method of handling debit cards — and turned over the fees to banks as an incentive to issue more Visa cards. At least initially, MasterCard and other rivals promoted PIN debit instead.

As debit cards became the preferred plastic in American wallets, Visa has turned its attention to PIN debit too and increased its market share even more. And it has succeeded — not by lowering the fees that merchants pay, but often by pushing them up, making its bank customers happier.

In an effort to catch up, MasterCard and other rivals eventually raised fees on debit cards too, sometimes higher than Visa, to try to woo bank customers back.

“What we witnessed was truly a perverse form of competition,” said Ronald Congemi, the former chief executive of Star Systems, one of the regional PIN-based networks that has struggled to compete with Visa. “They competed on the basis of raising prices. What other industry do you know that gets away with that?”

What did Steve Jobs Read?

“Everything around you that you call life was made up by people that were no smarter than you.”

— Steve Jobs

I’ve always wondered just what influenced Steve Jobs thinking?

Walter Isaacson‘s biography of Steve Jobs provides an unprecedented look at not only Steve Jobs life but the books which influenced him.

For such a success, there is oddly only one business book on the list,  The Innovator’s Dilemma. According to Isaacson, this book “deeply influenced” Jobs.

Reminiscing on his teen years, Jobs recalled “I started to listen to music a whole lot, and I started to read more outside of just science and technology — Shakespeare, Plato. I loved King Lear“.

Moby-Dick and Dylan Thomas‘ poetry were among Jobs’ favorites as well.

During his freshman year at Reed, Jobs devoured books such as Shunryu Suzuki’s “Zen Mind, Beginner’s Mind,” Chogyam Trungpa’s “Cutting Through Spiritual Materialism” and Paramahansa Yogananda’s “Autobiography of a Yogi,” a book Jobs would come back to and re-read many times during his life.

Isaacson writes:

Jobs found himself deeply influenced by a variety of books on spirituality and enlightenment, most notably Be Here Now, a guide to meditation and the wonders of psychedelic drugs by Baba Ram Dass, born Richard Alpert.

“It was profound,” Jobs said. “It transformed me and many of my friends.”

The one book that Steve Jobs had downloaded on his iPad was Autobiography of a Yogi, “the guide to meditation and spirituality that he had first read as a teenager,” Isaacson writes, “then re-read in India and had read once a year ever since.”

Now compare this to what Bill Gates reads for fun.

Footnotes

An Ancient Lesson on Taking Responsibility For Decisions

“A decision is responsible,” wrote Charles Frankel, “when the man or group that makes it has to answer for it to those who are directly or indirectly affected by it.”

Think about that for a second.

How often does that happen today? Not very often.

In most organizations people don’t make decisions — committees do. Responsibility is diffused to a group, not the individual. Everyone is insulated from their mistakes. Everyone takes credit for success.

The ancients had a way around this. Consider Hammurabi’s Code:

If a builder builds a house for a man and does not make its construction firm, and the house which he has built collapses and causes the death of the owner of the house, that builder shall be put to death.

While extreme, that is the best risk-management rule ever. If you have the upside, you have to keep the downside.

The Roman System

The Romans had a similar system.

The guy who created the arch stood under it as the scaffolding was removed. And to some extent, we do the same thing today. No one packs your parachute for you.

Charlie Munger, the partner of Warren Buffett at Berkshire Hathaway, puts it another way:

Another thing that is never discussed any more is my idea of one of the great philosophers of America who was Charlie Frankel. He was mugged to death in due course because, after all, he lived in Manhattan in a different time. Before he was mugged to death, he created this philosophy of responsibility. He said the system is responsible in proportion to the degree that the people who make the decisions bear the consequences.

So to Charlie Frankel, you don’t create a loan system where all the people who make the loans promptly dump them on somebody else through lies and twaddle, and they don’t bear the responsibility when the loans are good or bad. To Frankel, that is amoral, that is an irresponsible system. That is like selling an automobile with bad brakes and you know the brakes are bad. You shouldn’t do it.

We’ve gotten away from responsibility for our decisions, which allows people to get all the upside and none of the downside. Is it any wonder why things go wrong?

How can we implement better decisions in organizations? Make people stand under their own arches. One effective way to implement this is to make the person responsible for a decision sign their name to the decision. Simple and effective but not easy to implement.

Homeostasis and Why We Backslide

At some time or another, we’ve all sought to make big changes. And almost of all of us have, after making grand plans, discovered that changing some aspect of our lives or organizations, whether adding in a new skill or simply changing an old process, resulted in great backsliding.

Why the disconnect?

As George Leonard discusses in his classic book Mastery, based on his experiences in the patient lifelong practice of Aikido, it’s not necessary to beat ourselves up or derive a complicated psychological explanation.

The problem is due to a very simple mental model that explains how systems are regulated through feedback loopsHomeostasis.

Backsliding is a universal experience. Every one of us resists significant change, no matter whether it’s for the worse or for the better. Our body, brain, and behavior have a built-in tendency to stay the same within rather narrow limits, and to snap back when changed—and it’s a very good thing they do. Just think about it: if your body temperature moved up or down by 10 percent, you’d be in big trouble. The same thing applies to your blood-sugar level and to any number of other functions of your body.

This condition of equilibrium, this resistance to change, is called homeostasis. It characterizes all self-regulating systems, from a bacterium to a frog to a human individual to a family to an organization to an entire culture—and it applies to psychological states and behavior as well as to physical functioning.

The simplest example of homeostasis can be found in your home heating system. The thermostat on the wall senses the room temperature; when the temperature on a winter’s day drops below the level you’ve set, the thermostat sends an electrical signal that turns the heater on. The heater completes the loop by sending heat to the room in which the thermostat is located. When the room temperature reaches the level you’ve set, the thermostat sends an electrical signal back to the heater, turning it off, thus maintaining homeostasis. Keeping a room at the right temperature takes only one feedback loop. Keeping even the simplest single-celled organism alive and well takes thousands. And maintaining a human being in a state of homeostasis takes billions of interweaving electrochemical signals pulsing in the brain, rushing along nerve fibers, coursing through the bloodstream. One example: each of us has about 150,000 tiny thermostats in the form of nerve endings close to the surface of the skin that are sensitive to the loss of heat from our bodies, and another sixteen thousand or so a little deeper in the skin that alert us to the entry of heat from without.

An even more sensitive thermostat resides in the hypothalamus at the base of the brain, close to branches of the main artery that brings blood from the heart to the head. This thermostat can pick up even the tiniest change of temperature in the blood. When you start getting cold, these thermostats signal the sweat glands, pores, and small blood vessels near the surface of the body to close down. Glandular activity and muscle tension cause you to shiver in order to produce more heat, and your senses send a very clear message to your brain, leading you to keep moving, to put on more clothes, to cuddle closer to someone, to seek shelter, or to build a fire.

Homestasis seems to be the rule when it comes to systems, yet we often forget about it, or think we’re not subject to a simple law of nature. But we needn’t totally despair. Homeostasis is often quite positive, and it keeps systems alive and well. Our bodies wouldn’t work without it, nor would our social systems.

Homeostasis in social groups brings additional feedback loops into play. Families stay stable by means of instruction, exhortation, punishment, privileges, gifts, favors, signs of approval and affection, and even by means of extremely subtle body language and facial expressions. Social groups larger than the family add various types of feedback systems. A national culture, for example, is held together by the legislative process, law enforcement, education, the popular arts, sports and games, economic rewards that favor certain types of activity, and by a complex web of mores, prestige markers, celebrity role modeling, and style that relies largely on the media as a national nervous system. Although we might think that our culture is mad for the new, the predominant function of all this—as with the feedback loops in your body—is the survival of things as they are.

The problem is that homeostasis, like natural selection and like life itself, is undirected and does not have a “value system” — it doesn’t keep what’s good and reject what’s bad. It’s just like inertia: It’s a simple algorithim that keeps things in motion as they were.

Let’s say, for instance, that for the last twenty years—ever since high school, in fact—you’ve been almost entirely sedentary. Now most of your friends are working out, and you figure that if you can’t beat the fitness revolution, you’ll join it. Buying the tights and running shoes is fun, and so are the first few steps as you start jogging on the high school track near your house. Then, about a third of the way around the first lap, something terrible happens. Maybe you’re suddenly sick to your stomach. Maybe you’re dizzy. Maybe there’s a strange, panicky feeling in your chest. Maybe you’re going to die. No, you’re going to die.

What’s more, the particular sensations you’re feeling probably aren’t significant in themselves. What you’re really getting is a homeostatic alarm signal—bells clanging, lights flashing. Warning! Warning!  Significant changes in respiration, heart rate, metabolism. Whatever you’re doing, stop doing it immediately. Homeostasis, remember, doesn’t distinguish between what you would call change for the better and change for the worse. It resists all change. After twenty years without exercise, your body regards a sedentary style of life as “normal”; the beginning of a change for the better is interpreted as a threat. So you walk slowly back to your car, figuring you’ll look around for some other revolution to join.

Leonard does provide a few possible solutions, or at least an approach to the homeostasis problem. The good thing is that homeostasis isn’t all-powerful, it’s simply a force that we must work with. He offers five ways to approach the issue:

1. Be aware of the way homeostasis works. This might be the most important guideline of all. Expect resistance and backlash. Realize that when the alarm bells start ringing, it doesn’t necessarily mean you’re sick or crazy or lazy or that you’ve made a bad decision in embarking on the journey of mastery. In fact, you might take these signals as an indication that your life is definitely changing—just what you’ve wanted. Of course, it might be that you have started something that’s not right for you; only you can decide. But in any case, don’t panic and give up at the first sign of trouble. You might also expect resistance from friends and family and co-workers. (Homeostasis, as we’ve seen, applies to social systems as well as individuals.) Say you used to struggle out of bed at 7:30 and barely drag yourself to work at 9:00. Now that you’re on a path of mastery, you’re up at 6:00 for a three-mile run, and in the office, charged with energy, at 8:30. You might figure that your co-workers would be overjoyed, but don’t be too sure. And when you get home, still raring to go, do you think that your family will welcome the change? Maybe. Bear in mind that an entire system has to change when any part of it changes. So don’t be surprised if some of the people you love start covertly or overtly undermining your self-improvement. It’s not that they wish you harm, it’s just homeostasis at work.

2. Be willing to negotiate with your resistance to change. So what should you do when you run into resistance, when the red lights flash and the alarm bells ring? Well, you don’t back off, and you don’t bull your way through. Negotiation is the ticket to successful long-term change in everything from increasing your running speed to transforming your organization. The long-distance runner working for a faster time on a measured course negotiates with homeostasis by using pain not as an adversary but as the best possible guide to performance. The change oriented manager keeps his or her eyes and ears open for signs of dissatisfaction or dislocation, then plays the edge of discontent, the inevitable escort of transformation. The fine art of playing the edge in this case involves a willingness to take one step back for every two forward, sometimes vice versa. It also demands a determination to keep pushing, but not without awareness. Simply turning off your awareness to the warnings deprives you of guidance and risks damaging the system. Simply pushing your way through despite the warning signals increases the possibility of backsliding. You can never be sure exactly where the resistance will pop up. A feeling of anxiety? Psychosomatic complaints? A tendency toward self-sabotage? Squabbles with family, friends, or fellow workers? None of the above? Stay alert. Be prepared for serious negotiations.

3. Develop a support system. You can do it alone, but it helps a great deal to have other people with whom you can share the joys and perils of the change you’re making. The best support system would involve people who have gone through or are going through a similar process, people who can tell their own stories of change and listen to yours, people who will brace you up when you start to backslide and encourage you when you don’t. The path of mastery, fortunately, almost always fosters social groupings. In his seminal book Homo Ludens: A Study of the Play Element in Culture, Johan Huizinga comments upon the tendency of sports and games to bring people together. The play community, he points out, is likely to continue even after the game is over, inspired by “the feeling of being ‘apart together’ in an exceptional situation, of sharing something important, of mutually withdrawing from the rest of the world and rejecting the usual norms.” The same can be said about many other pursuits, whether or not they are formally known as sports—arts and crafts, hunting, fishing, yoga, Zen, the professions, “the office.” And what if your quest for mastery is a lonely one? What if you can find no fellow voyagers on that particular path? At the least, you can let the people close to you know what you’re doing, and ask for their support.

4. Follow a regular practice. People embarking on any type of change can gain stability and comfort through practicing some worthwhile activity on a more or less regular basis, not so much for the sake of achieving an external goal as simply for its own sake. A traveler on the path of mastery is again fortunate, for practice in this sense (as I’ve said more than once) is the foundation of the path itself. The circumstances are particularly happy in case you’ve already established a regular practice in something else before facing the challenge and change of beginning a new one. It’s easier to start applying the principles of mastery to your profession or your primary relationship if you’ve already established a regular morning exercise program. Practice is a habit, and any regular practice provides a sort of underlying homeostasis, a stable base during the instability of change.

5. Dedicate yourself to lifelong learning. We tend to forget that learning is much more than book learning. To learn is to change. Education, whether it involves books, body, or behavior, is a process that changes the learner. It doesn’t have to end at college graduation or at age forty or sixty or eighty, and the best learning of all involves learning how to learn— that is, to change. The lifelong learner is essentially one who has learned to deal with homeostasis, simply because he or she is doing it all the time. The Dabbler, Obsessive, and Hacker are all learners in their own fashion, but lifelong learning is the special province of those who travel the path of mastery, the path that never ends.

Still Interested? Check out the classic (short) book in its entirety: Mastery: The Keys to Success and Long-Term Fulfillment.

Philip Tetlock: Ten Commandments for Aspiring Superforecasters

The Knowledge Project interview with Philip Tetlock deconstructs our ability to make accurate predictions into specific components. He learned through his work on The Good Judgment Project.

In Superforecasting: The Art and Science of Prediction, Tetlock and Dan Gardner (his co-author), set out to distill the ten key themes that have been “experimentally demonstrated to boost accuracy” in the real-world.

1. Triage

Focus on questions where your hard work is likely to pay off. Don’t waste time either on easy “clocklike” questions (where simple rules of thumb can get you close to the right answer) or on impenetrable “cloud-like” questions (where even fancy statistical models can’t beat the dart-throwing chimp). Concentrate on questions in the Goldilocks zone of difficulty, where effort pays off the most.

For instance, don’t ask, “Who will win the world series in 2050?” That’s impossible to forecast and unknowable. The question becomes more interesting when we come closer to home. Asking in April who will win the World Series for the upcoming season and how much justifiable confidence we can have in that answer is a different proposition. While we have low confidence in who will win, we can have a lot more than trying to predict the 2050 winner. At the worst, we can narrow the range of outcomes. This allows us to move back on the continuum from uncertainty to risk.

Certain classes of outcomes have well-deserved reputations for being radically unpredictable (e.g., oil prices, currency markets). But we usually don’t discover how unpredictable outcomes are until we have spun our wheels for a while trying to gain analytical traction. Bear in mind the two basic errors it is possible to make here. We could fail to try to predict the potentially predictable or we could waste our time trying to predict the unpredictable. Which error would be worse in the situation you face?

2. Break seemingly intractable problems into tractable sub-problems.

This is Fermi-style thinking. Enrico Fermi designed the first atomic reactor. When he wasn’t doing that he loved to tackle challenging questions such as “How many piano tuners are in Chicago?” At first glance, this seems very difficult. Fermi started by decomposing the problem into smaller parts and putting them into the buckets of knowable and unknowable. By working at a problem this way you expose what you don’t know or, as Tetlock and Gardner put it, you “flush ignorance into the open.” It’s better to air your assumptions and discover your errors quickly than to hide behind jargon and fog. Superforecasters are excellent at Fermi-izing — even when it comes to seemingly unquantifiable things like love.

The surprise is how often remarkably good probability estimates arise from a remarkably crude series of assumptions and guesstimates.

3. Strike the right balance between inside and outside views.

Echoing Michael Mauboussin, who cautioned that we should pay attention to what’s the same, Tetlock and Gardner add a historical perspective:

Superforecasters know that there is nothing new under the sun. Nothing is 100% “unique.” Language purists be damned: uniqueness is a matter of degree. So superforecasters conduct creative searches for comparison classes even for seemingly unique events, such as the outcome of a hunt for a high-profile terrorist (Joseph Kony) or the standoff between a new socialist government in Athens and Greece’s creditors. Superforecasters are in the habit of posing the outside-view question: How often do things of this sort happen in situations of this sort?

The planning fallacy is a derivative of this.

4. Strike the right balance between under- and overreacting to evidence.

Belief updating is to good forecasting as brushing and flossing are to good dental hygiene. It can be boring, occasionally uncomfortable, but it pays off in the long term. That said, don’t suppose that belief updating is always easy because it sometimes is. Skillful updating requires teasing subtle signals from noisy news flows— all the while resisting the lure of wishful thinking.

Savvy forecasters learn to ferret out telltale clues before the rest of us. They snoop for nonobvious lead indicators, about what would have to happen before X could, where X might be anything from an expansion of Arctic sea ice to a nuclear war in the Korean peninsula. Note the fine line here between picking up subtle clues before everyone else and getting suckered by misleading clues.

The key here is a rational Bayesian updating of your beliefs. This is the same ethos behind Charlie Munger’s thoughts on killing your best loved ideas. The world doesn’t work the way we want it to but it does signal to us when things change. If we pay attention and adapt we let the world do most of the work for us.

5. Look for the clashing causal forces at work in each problem.

For every good policy argument, there is typically a counterargument that is at least worth acknowledging. For instance, if you are a devout dove who believes that threatening military action never brings peace, be open to the possibility that you might be wrong about Iran. And the same advice applies if you are a devout hawk who believes that soft “appeasement” policies never pay off. Each side should list, in advance, the signs that would nudge them toward the other.

There are no paint-by-number rules here. Synthesis is an art that requires reconciling irreducibly subjective judgments. If you do it well, engaging in this process of synthesizing should transform you from a cookie-cutter dove or hawk into an odd hybrid creature, a dove-hawk, with a nuanced view of when tougher or softer policies are likelier to work.

If you really want to have fun at meetings (and simultaneously decrease your popularity with your bosses) start asking what would cause them to change their mind. Never forget that having an opinion is hard work. You really need to concentrate and rag on the problem.

6. Strive to distinguish as many degrees of doubt as the problem permits but no more.

This could easily be called nuance matters. The more degrees of uncertainty you can distinguish the better.

As in poker, you have an advantage if you are better than your competitors at separating 60/ 40 bets from 40/ 60— or 55/ 45 from 45/ 55. Translating vague-verbiage hunches into numeric probabilities feels unnatural at first but it can be done. It just requires patience and practice.

7. Strike the right balance between under- and overconfidence, between prudence and decisiveness.

Superforecasters understand the risks both of rushing to judgment and of dawdling too long near “maybe.” They routinely manage the trade-off between the need to take decisive stands (who wants to listen to a waffler?) and the need to qualify their stands (who wants to listen to a blowhard?). They realize that long-term accuracy requires getting good scores on both calibration and resolution— which requires moving beyond blame-game ping-pong. It is not enough just to avoid the most recent mistake. They have to find creative ways to tamp down both types of forecasting errors— misses and false alarms— to the degree a fickle world permits such uncontroversial improvements in accuracy.

8. Look for the errors behind your mistakes but beware of rearview-mirror hindsight biases.

It’s easy to justify or rationalize your failure. Don’t. Own it and keep score with a decision journal. You want to learn where you went wrong and determine ways to get better. And don’t just look at failures. Evaluate successes as well so you can determine when you were just plain lucky.

9. Bring out the best in others and let others bring out the best in you.

Master the fine art of team management, especially perspective taking (understanding the arguments of the other side so well that you can reproduce them to the other’s satisfaction), precision questioning (helping others to clarify their arguments so they are not misunderstood), and constructive confrontation (learning to disagree without being disagreeable). Wise leaders know how fine the line can be between a helpful suggestion and micromanagerial meddling or between a rigid group and a decisive one or between a scatterbrained group and an open-minded one.

10. Master the error-balancing bicycle.

Implementing each commandment requires balancing opposing errors. Just as you can’t learn to ride a bicycle by reading a physics textbook, you can’t become a superforecaster by reading training manuals. Learning requires doing, with good feedback that leaves no ambiguity about whether you are succeeding—“ I’m rolling along smoothly!”— or whether you are failing—“ crash!”

As with anything, doing more of it doesn’t mean you’re getting better at it. You need to do more than just go through the motions.  The way to get better is deliberate practice.

And finally …

“It is impossible to lay down binding rules,” Helmuth von Moltke warned, “because two cases will never be exactly the same.” Guidelines (or maps) are the best we can do in a world where nothing represents the whole. As George Box said: “All models are false. Some are useful.”

***

Mark Steed, a former member of The Good Judgment Project offered us 13 ways to make better decisions.