Random Posts

The Antilibrary: Why Unread Books Are The Most Important

How are we to navigate the unknown — the vast chasm between what we know, what we don’t know, and coming to grips with what is unknowable?

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This week, I caught myself feeling guilty as I walked into my office and looked at the ever-growing number of unread books.

The library, as I call my office, is full of books I might never get to in my life let alone read this week. (See that picture above, I haven’t read most of those books.) My bookshelf, which seems to reproduce on its own, is a constant source of ribbing from my friends.

“You’ll never read all of those,” they say. And they’re right. I won’t. That’s not really how it works.

“It is our knowledge — the things we are sure of — that makes the world go wrong and keeps us from seeing and learning.”

— Lincoln Steffens

Some questions are only asked by people with a fundamental misunderstanding. The friends who walk into my office and ask, “have you read all of these” miss the point of books.

In his book, The Black Swan, Nassim Taleb describes our relationship between books and knowledge using the legendary Italian writer Umberto Eco (1932-2016).

The writer Umberro Eco belongs to that small class of scholars who are encyclopedic, insightful, and nondull. He is the owner of a large personal library (containing thirty thousand books), and separates visitors into two categories: those who react with “Wow! Signore professore dottore Eco, what a library you have. How many of these books have you read?” and the others—a very small minority—who get the point is that a private library is not an ego-boosting appendages but a research tool. The library should contain as much of what you do not know as your financial means … allow you to put there. You will accumulate more knowledge and more books as you grow older, and the growing number of unread books on the shelves will look at you menacingly. Indeed, the more you know, the larger the rows of unread books. Let us call this collection of unread books an antilibrary.

Taleb adds:

We tend to treat our knowledge as personal property to be protected and defended. It is an ornament that allows us to rise in the pecking order. So this tendency to offend Eco’s library sensibility by focusing on the known is a human bias that extends to our mental operations. People don’t walk around with anti-résumés telling you what they have not studied or experienced (it’s the job of their competitors to do that), but it would be nice if they did. Just as we need to stand library logic on its head, we will work on standing knowledge itself on its head.

A good library is filled with mostly unread books. That’s the point. Our relationship with the unknown causes the very problem Taleb is famous for contextualizing: the black swan. Because we underestimate the value of what we don’t know and overvalue what we do know, we fundamentally misunderstand the likelihood of surprises.

The antidote to this overconfidence boils down to our relationship with knowledge. The anti-scholar, as Taleb refers to it, is “someone who focuses on the unread books, and makes an attempt not to treat his knowledge as a treasure, or even a possession, or even a self-esteem enhancement device — a skeptical empiricist.”

My library serves as a visual reminder of what I don’t know.

Bill Gates — My Top Reads of 2012

I read some amazing books this year. Every one of these books changed my worldview and I highly recommend them if you’re looking for inspiring reading.

—Bill Gates

The Better Angels of Our Nature: Why Violence Has Declined

How would you go about making the world a fundamentally better place? Eliminating violence, particularly violent deaths, would be a great start. Cognitive scientist Steven Pinker shows in his masterful new book just how violence is declining. It is a triumph of a book.

Deng Xiaoping and the Transformation of China

If you’re going to read one book about modern China in the period after Mao, then this is the book you should read. Though the book is framed around the rise of Deng Xiaoping and his reforms that transformed China into an economic powerhouse, Ezra Vogel’s compelling biography examines how China went from being a desperately poor country to certainly one of the two most important countries in the world today.

The Quest: Energy, Security, and the Remaking of the Modern World

Recently I finished reading Daniel Yergin’s new book, The Quest: Energy, Security, and the Remaking of the Modern World. It’s a valuable guide to the complex factors shaping the world’s energy needs, supplies and prices – even if a workout at over 800 pages.

Moonwalking with Einstein

I never thought much about whether I could improve my memory across a wider set of domains, but now I think I could, after reading Moonwalking with Einstein: The Art and Science of Remembering Everything, by a young science writer, Joshua Foer. It’s absolutely phenomenal, one of the most interesting books I’ve read this summer.

Behind the Beautiful Forevers: Life, Death, and Hope in a Mumbai Undercity

I just finished Katherine Boo’s book, Behind the Beautiful Forevers. It reads like a novel by Dickens, but is a real-life depiction of the challenges hundreds of millions of people face every day in urban slums. It’s also a reminder of the humanity that connects us all.

One Billion Hungry: Can we Feed the World?

Conway’s book is well organized, with chapters on hunger, agricultural innovation, and environmental challenges that can easily be read on their own. Feeding our growing world is fundamentally important to all of us, no matter where you live. If there’s one book I’d recommend reading to get the definitive story about the state of agriculture today and what we need to focus on to increase productivity and eliminate hunger, it would be One Billion Hungry.

A World-Class Education

Vivien Stewart in her book, A World Class Education, looks at five countries—Singapore, Canada, Finland, China, and Australia—where students are doing significantly better on global assessments than students in the U.S. Despite differences in the political systems and cultural contexts of these countries, there are some common policies and practices that drive success. Understanding how other countries are succeeding can offer insights that help us do a better job here in the U.S.

Academically Adrift: Limited Learning on College Campuses

Before reading this book, I took it for granted that colleges were doing a very good job. But there is really no measurement or feedback system that tracks results, to help guide students and help institutions improve. Not overall, and not for individual courses of study. What do students in different programs learn, how many graduates get jobs in their field, how much do they earn? The outputs of higher education are a deeply understudied question.

This Time is Different: Eight Centuries of Financial Folly

An important book that will affect policy discussions for a long time to come, This Time Is Different exposes centuries of financial missteps.

The City that Became Safe: New York’s Lessons for Urban Crime and Its Control

New York has shown that crime rates can be greatly reduced without increasing prison populations. New York teaches that targeted harm reduction strategies can drastically cut down on drug related violence even if illegal drug use remains high. And New York has proven that epidemic levels of violent crime are not hard-wired into the populations or cultures of urban America. This careful and penetrating analysis of how the nation’s largest city became safe rewrites the playbook on crime and its control for all big cities.

(source)

Simple Rules for Business Strategy

The book Simple Rules by Donald Sull and Kathleen Eisenhardt has a very interesting chapter on strategy, which tries to answer the following question: How do you translate your broad objectives into a strategy that can provide guidelines for your employees from day to day?

It’s the last bit there which is particularly important — getting everyone on the same page. 

Companies don’t seem to have a problem creating broad objectives (which isn’t really a strategy). Your company might not call them that, they might call them “mission statements” or simply “corporate goals.”  They sound all well and good, but very little thought is given to how we will actually implement these lofty goals.

As Sull and Eisenhardt put it: 

Developing a strategy and implementing it are often viewed as two distinct activities — first you come up with the perfect plan and then you worry about how to make it happen. This approach, common through it is, creates a disconnect between what a company is trying to accomplish and what employees do on a day-to-day basis.

The authors argue that companies can bridge this gap between strategic intent and actual implementation by following three steps:

  1. Figure out what will move the needles.
  2. Choose a bottleneck.
  3. Craft the rules.

1. Moving the Needles

The authors use a dual needle metaphor to visualize corporate profits. They see it as two parallel needles: an upper needle which represents revenues and a lower needle which represents costs. The first critical step is to identify which actions will drive a wedge between the needles causing an increase in profits, a decrease in costs, and sustain this over time.

In other words, as simple as it sounds, we need an actual set of steps to get from figure a. to figure b.

screen-shot-2016-10-17-at-1-36-10-pm

What action will become the wedge that will move the needles?

The authors believe the best way to answer this is to sit down with your management team and ask them to work as a group to answer the following three questions:

  1. Who will we target as customers?
  2. What product or service will we offer?
  3. How will we provide this product at a profit?

When you are trying to massage out these answers remember to use inversion as well. 

Equally important are the choices on who not to serve and what not to offer.

Steve Jobs once pointed out that Apple was defined as much by what it didn’t do as by what it did.

2. Bottlenecks

Speaking of inversion, in order to complete our goal we must also figure out what’s holding us back from moving the needles — the bottlenecks standing in our way.

When it comes to implementing a strategy of simple rules, pinpointing the precise decision or activity where rules will have the most impact is half the battle. We use the term bottleneck to describe a specific activity or decision that hinders a company from moving the needles.

You may be surprised at the amount of bottlenecks you come across, so you’ll have to practice some “triage” of your issues, sorting what’s important from what’s really important.

The authors believe that the best bottlenecks to focus your attention on share three characteristics:

  1. They have a direct and significant impact on value creation.
  2. They should represent recurrent decisions (as opposed to ‘one off’ choices).
  3. They should be obstacles that arise when opportunities exceed available resources.

Once we’ve established what the bottlenecks are, it’s time to craft the rules which will provide you a framework in which to remove them.

3. Craft the Rules

Developing rules from the top down is a big mistake. When leaders rely on their gut instincts, they overemphasize recent events, build in their personal biases, and ignore data that doesn’t fit with their preconceived notions. It is much better to involve a team, typically ranging in size from four to eight members, and use a structured process to harness members’ diverse insights and points of view. When drafting the dream team to develop simple rules, it is critical to include some of the people who will be using them on a day-to-day basis.

This probably seems like common sense but we’re guessing you have worked at least one place where all information and new initiatives came from above, and much of it seemingly came out of nowhere because you weren’t likely involved.

In these situations it’s very hard to get buy-in from the employees — yet they are the ones doing the work, implementing the rules. So we need to think about their involvement from the beginning.

Having users make the rules confers several advantages. First, they are closest to the facts on the ground and best positioned to codify experience into usable rules. Because they will make decisions based on the rules, they can strike the right balance between guidance and discretion, avoiding rules that are overly vague or restrictive. User can also phrase the rules in language that resonates for them, rather than relying on business jargon. By actively participating in the process, users are more likely to buy into the final rules and therefore apply them in practice. Firsthand knowledge also makes it easier to explain the rules, and their underlying rationale, to colleagues who did not participate in the process.

It’s important to note here that this is a process, a process in which you are never done – there is no real finish line. You must always plan to learn and to iterate as you learn — keep changing the plan as new information comes in. Rigidity to a plan is not a virtue; learning and adapting are virtues

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There’s nothing wrong with strategy. In fact, without a strategy, it’s hard to figure out what to do; some strategy or another must guide your actions as an organization. But it’s simply not enough: Detailed execution, at the employee level, is what gets things done. That’s what the Simple Rules are all about.

Strategy, in our view, lives in the simple rules that guide an organization’s most important activities. They allow employees to make on-the-spot decisions and seize unexpected opportunities without losing sight of the big picture.

The process you use to develop simple rules matters as much as the rules themselves. Involving a broad cross-section of employees, for example, injects more points of view into the discussion, produces a shared understanding of what matters for value creation, and increases buy-in to the simple rules. Investing the time up front to clarify what will move the needles dramatically increases the odds that simple rules will be applied where they can have the greatest impact.

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Still Interested? Read the book, or check out our other post where we cover the details of creating your simple rules.

Choosing your Choice Architect(ure)

“Nothing will ever be attempted
if all possible objections must first be overcome.”

— Samuel Johnson

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In the book Nudge by Richard Thaler and Cass Sunstein they coin the terms ‘Choice Architecture’ and ‘Choice Architect’. For them, if you have an ability to influence the choices other people make, you are a choice architect.

Considering the number of interactions we have everyday, it would be quite easy to argue that we are all Choice Architects at some point. But this also makes the inverse true; we are also wandering around someone else’s Choice Architecture.

Let’s take a look at a few of the principles of good choice architecture, so we can get a better idea of when someone is trying to nudge us.

This information can then be used/weighed when making decisions.  

Defaults

Thaler and Sunstein start with a discussion on “defaults” that are commonly offered to us:

For reasons we have discussed, many people will take whatever option requires the least effort, or the path of least resistance. Recall the discussion of inertia, status quo bias, and the ‘yeah, whatever’ heuristic. All these forces imply that if, for a given choice, there is a default option — an option that will obtain if the chooser does nothing — then we can expect a large number of people to end up with that option, whether or not it is good for them. And as we have also stressed, these behavioral tendencies toward doing nothing will be reinforced if the default option comes with some implicit or explicit suggestion that it represents the normal or even the recommended course of action.

When making decisions people will often take the option that requires the least effort or the path of least resistance. This makes sense: It’s not just a matter of laziness, we also only have so many hours in a day. Unless you feel particularly strongly about it, if putting little to no effort towards something leads you forward (or at least doesn’t noticeably kick you backwards) this is what you are likely to do. Loss aversion plays a role as well. If we feel like the consequences of making a poor choice are high, we will simply decide to do nothing. 

Inertia is another reason: If the ship is currently sailing forward, it can often take a lot of time and effort just to slightly change course.

You have likely seen many examples of inertia at play in your work environment and this isn’t necessarily a bad thing.

Sometimes we need that ship to just steadily move forward. The important bit is to realize when this is factoring into your decisions, or more specifically, when this knowledge is being used to nudge you into making specific choices.

Let’s think about some of your monthly recurring bills. While you might not be reading that magazine or going to the gym, you’re still paying for the ability to use that good or service. If you weren’t being auto-renewed monthly, what is the chance that you would put the effort into renewing that subscription or membership? Much lower, right? Publishers and gym owners know this, and they know you don’t want to go through the hassle of cancelling either, so they make that difficult, too. (They understand well our tendency to want to travel the path of least resistance and avoid conflict.)

This is also where they will imply that the default option is the recommended course of action. It sounds like this:

“We’re sorry to hear you no longer want the magazine Mr. Smith. You know, more than half of the fortune 500 companies have a monthly subscription to magazine X, but we understand if it’s not something you’d like to do at the moment.”

or

“Mr. Smith we are sorry to hear that you want to cancel your membership at GymX. We understand if you can’t make your health a priority at this point but we’d love to see you back sometime soon. We see this all the time, these days everyone is so busy. But I’m happy to say we are noticing a shift where people are starting to make time for themselves, especially in your demographic…”

(Just cancel them. You’ll feel better. We promise.)

The Structure of Complex Choices

We live in a world of reviews. Product reviews, corporate reviews, movie reviews… When was the last time you bought a phone or a car before checking the reviews? When was the last time that you hired an employee without checking out their references? 

Thaler and Sunstein call this Collaborative Filtering and explain it as follows:

You use the judgements of other people who share your tastes to filter through the vast number of books or movies available in order to increase the likelihood of picking one you like. Collaborative filtering is an effort to solve a problem of choice architecture. If you know what people like you tend to like, you might well be comfortable in selecting products you don’t know, because people like you tend to like them. For many of us, collaborative filtering is making difficult choices easier.

While collaborative filtering does a great job of making difficult choices easier we have to remember that companies also know that you will use this tool and will try to manipulate it. We just have to look at the information critically, compare multiple sources and take some time to review the reviewers.

These techniques can be useful for decisions of a certain scale and complexity: when the alternatives are understood and in small enough numbers. However, once we reach a certain size we require additional tools to make the right decision.

One strategy to use is what Amos Tversky (1972) called ‘elimination by aspects.’ Someone using this strategy first decides what aspect is most important (say, commuting distance), establishes a cutoff level (say, no more than a thirty-minute commute), then eliminates all the alternatives that do not come up to this standard. The process is repeated, attribute by attribute (no more than $1,500 per month; at least two bedrooms; dogs permitted), until either a choice is made or the set is narrowed down enough to switch over to a compensatory evaluation of the ‘finalists.’”

This is a very useful tool if you have a good idea of which attributes are of most value to you.

When using these techniques, we have to be mindful of the fact that the companies trying to sell us goods have spent a lot of time and money figuring out what attributes are important to you as well.

For example, if you were to shop for an SUV you would notice that there are a specific number of variables they all seem to have in common now (engine options, towing options, seating options, storage options). They are trying to nudge you not to eliminate them from your list. This forces you to do the tertiary research or better yet, this forces you to walk into dealerships where they will try to inflate the importance of those attributes (which they do best).

They also try to call things new names as a means to differentiate themselves and get onto your list. What do you mean our competitors don’t have FLEXfuel?

Incentives

Incentives are so ubiquitous in our lives that it’s very easy to overlook them. Unfortunately, this can influence us to make poor decisions.

Thaler and Sunstein believe this is tied into how salient the incentive is.

The most important modification that must be made to a standard analysis of incentives is salience. Do the choosers actually notice the incentives they face? In free markets, the answer is usually yes, but in important cases the answer is no.

Consider the example of members of an urban family deciding whether to buy a car. Suppose their choices are to take taxis and public transportation or to spend ten thousand dollars to buy a used car, which they can park on the street in front of their home. The only salient costs of owning this car will be the weekly stops at the gas station, occasional repair bills, and a yearly insurance bill. The opportunity cost of the ten thousand dollars is likely to be neglected. (In other words, once they purchase the car, they tend to forget about the ten thousand dollars and stop treating it as money that could have been spent on something else.) In contrast, every time the family uses a taxi the cost will be in their face, with the meter clicking every few blocks. So behavioral analysis of the incentives of car ownership will predict that people will underweight the opportunity costs of car ownership, and possibly other less salient aspects such as depreciation, and may overweight the very salient costs of using a taxi.

The problems here are relatable and easily solved: If the family above had written down all the numbers related to either taxi, public transportation, or car ownership, it would have been a lot more difficult for them to undervalue the salient aspects of any of their choices. (At least if the highest value attribute is cost).

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This isn’t an exhaustive list of all the daily nudges we face but it’s a good start and some important, translatable, themes emerge.

  • Realize when you are wandering around someone’s choice architecture.
  • Do your homework
  • Develop strategies to help you make decisions when you are being nudged.

 

Still Interested? Buy, and most importantly read, the whole book. Also, check out our other post on some of the Biases and Blunders covered in Nudge.

Are Cities More Innovative?

Jane Jacobs in The Death and Life of Great American Cities: “The larger a city, the greater the variety of its manufacturing, and also the greater both the number and the proportion of its small manufacturers.”

The benefits that cities offer to smallness are just as marked in retail trade, cultural facilities and entertainment. This is because city populations are large enough to support wide ranges of variety and choices in these things. And again we find that bigness has all the advantage in smaller settlements. Towns and suburbs for instance are natural homes for huge supermarkets, and for little else in the way of groceries, for standard movie houses or drive ins for little else in the way of theatre.

There are simply not enough people to support further variety, although there may be people(too few of them) who would draw upon it were it there. Cities, however, are the natural homes of supermarkets, and standard movie houses, plus delicatessens, Viennese bakeries, foreign groceries, art movies, and so on, all of which can be found co-existing, the standard with the strange, the large with the small. Wherever lively and popular parts of the cities are found, the small much outnumber the large.

“Cities, then,” writes Steven Johnson in Where Good Ideas Come From: The Natural History of Innovation, “Cities, then, are environments that are ripe for exaptation, because they cultivate specialized skills and interests, and they create a liquid network where information can leak out of those subcultures, and influence their neighbors in surprising ways. This is one explanation for superlinear scaling in urban creativity. The cultural diversity those subcultures create is valuable not just because it makes urban life less boring. The value also lies in the unlikely migrations that happen between the different clusters.”

And Samuel Arbesman, in The Half-life of Facts, adds: “Larger groups of interacting people can maintain skills and innovations, and in turn develop new ones. A small group doesn’t have the benefit of specialization and idea exchange necessary for any of this to happen.”

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Still curious? If you want a deeper understanding, read Growth in Cities.

Five Book recommendations from Dan Ariely on Behavioural Economics

Dan Ariely, professor of psychology and behavorial economics, says we can all be more aware of our surroundings and our decision-making process. He suggests the following five books:

The Invisible Gorilla

We think we see with our eyes, but the reality is that we largely see with our brains. Our brain is a master at giving us what we expect to see. It’s all about expectation, and when things violate expectation we are just unaware of them. We go around the world with a sense that we pay attention to lots of things. The reality is that we notice much less than we think. And if we notice so much less than we think, what does that mean about our ability to figure out things around us, to learn and improve? It means we have a serious problem. I think this book has done a tremendous job in showing how even in vision, which is such a good system in general, we are poorly tooled to make good decisions.

Mindless Eating

This is one of my favourite books. He takes many of these findings about decision-making and shows how they work in the domain of food. Food is tangible, so it helps us understand the principles.

The Person and the Situation

This is an oldie but a goodie. It’s a book that shows how when we make decisions, we think personality plays a big role. “I’m the kind of person who does this, or I’m the kind of person who does that.” The reality is that the environment in which we make decisions determines a lot of what we do. Mindless Eating is also about that – how the food environment affects us. Nudge is also about that – how we can actually design the environment or external influences to make better decisions. But The Person and the Situation was the first book to articulate how we think we are making decisions, when the reality is that the environment around us has a lot to do with it.

Influence

The Cialdini book is very important because it covers a range of ways in which we end up doing things, and how we don’t understand why we’re doing them. It also shows you how much other people have control, at the end of the day, over our actions. Both of these elements are crucial. The book is becoming even more important these days.

Nudge

One of the reasons Nudge is so important is because it’s taking these ideas and applying them to the policy domain. Here are the mistakes we make. Here are the ways marketers are trying to influence us. Here’s the way we might be able to fight back. If policymakers understood these principles, what could they do? The other important thing about the book is that it describes, in detail, small interventions. It’s basically a book about cheap persuasion.

Dan Ariely is the best-selling author of The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home and Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions.

Samuel Arbesman, Interview No. 1

Samuel Arbesman is an applied mathematician and network scientist. His recent book, The Half-life of Facts, explores how much of what we think we know has an expiry date.

Samuel, who was happy to be the first in an ongoing series of interviews, talks about his book, science, knowledge, and society.

A friend of mine, Neil Cruickshank, helped come up with some of the questions.

* * *

INTERVIEWER

Can you tell me a little bit about your background?

ARBESMAN

I began my training in evolutionary biology and I received a PhD in computational biology from Cornell University. However, even during graduate school I began to think about how to use the computational and mathematical models I had been learning about to help understand society. This transition continued when I did a postdoctoral fellowship at Harvard under Nicholas Christakis, where I explored social networks, cooperation, and scientific discovery. About two years ago I moved to Kansas City to be a Senior Scholar at the Ewing Marion Kauffman Foundation, where I study and write about a lot of different topics, ranging from the future of science to how cities grow and develop.

INTERVIEWER

What was the motivation behind writing The Half-life of facts?

ARBESMAN

I’ve always been aware of the huge amount of information that we learn that becomes out-of-date rather quickly. But as I moved into the field of quantitative social science, and explored topics from network science to scientometrics, I realized that there is a deep order to how knowledge grows and changes over time, and even how it spreads from person to person. I wanted to tell this story in the hope that a reader will find it as fascinating as I do, but more importantly, would come away with a deeper appreciation and understanding of the underlying regularities behind all of the knowledge change we see on a daily basis.

INTERVIEWER

… When I read about cognitive biases and also the research that suggests for some areas of expertise – such as medical surgery – at a certain point of time the accumulation of experience does not equate to better performance results, I think about how we often defend our opinions and decisions on the basis of our experience, but in fact that experience may just be a reinforcement of error or bias.

In your book, you supply additional reason for me to doubt even those things I may be very sure of. How do you see the connection between the half-life of facts and what this means to the idea of wisdom and the respect we offer to an individual’s experience?

ARBESMAN

It’s certainly true that many of the bits of information we learn over the years become outdated and are overturned, and so we have to make sure that what we are working with is not obsolete. And on the basis of this, experience might be a hindrance. But I think a lifetime of experience and wisdom, rather than simply an accumulation of facts, can often leave someone better prepared for dealing with change. Because they’ve had to deal with so much change throughout their lives, people often have a better sense of the shape and impact of change. While it is certainly true that someone with more experience might also be less likely to change their ways, and adhere to outdated information, understanding the regularities behind change—even if only known in an intuitive qualitative sense due to experience—can provide a mechanism for adaptation.

INTERVIEWER

When I read your book I often reflected on moments when I have been sure, and confident. And I also thought about how I have managed being in time of change. In psychology, one of the “big five” personality traits is Openness. Some of us seem to be much more comfortable with flux, or change, and readily able to respond to and even gain energy from change. Others seem to have a greater need for anchors and continuity with the past, and as the degree of change increases we focus more on and more on the things that remain unchanged, and change itself is fatiguing and depressing. Is there a fundamental disadvantage for those of us who are less open and more at ease with stability?

ARBESMAN

In a word, yes. People who cannot deal with change are going to be at a huge disadvantage in the world. These type of people might not have been disadvantaged in previous generations, where change proceeded rather more slowly, but as the many fundamental changes around us—in what we know and in what the world likes—continue to accumulate, we often have to deal with large numbers of these changes in a single lifetime. In the book, I chronicled the large number of computational information storage technologies (ranging from floppy disks to the Cloud) that I have used over the course of three decades, which is a far cry from the one or two that people of the Middle Ages might have used for storing information (books and scrolls). Those who can’t adapt will have a great deal of trouble in this world.

INTERVIEWER

You quote John H Jackson: “It takes 50 years to get a wrong idea out of medicine, and 100 years a right one into medicine.” I’ve heard teachers say similar things about changes to curriculum. Do you have any thoughts on how education and educators, particularly in schools, should incorporate your ideas into teaching and curriculum design?

ARBESMAN

This is a really important question. I think that we need to move from an educational system that is focused on memorizing facts to one that is focused on how to learn. Of course you need a fundamental background and familiarity with certain information in order to have a basic understanding of the world, so I wouldn’t throw out memorization entirely. But so much of what we know is going to change and we need to have an educational system that recognizes this. In medicine, there is continuing medical education—constantly learning what is new in one’s field—and I think this kind of attitude needs to be universalized for knowledge in general. Specifically, students need to be taught how to continue to learn new facts, and embrace the changing knowledge around them. If that is the focus, rather than the facts themselves, education will be more durable, but will also create graduates that can continue to learn on their own and adapt the world around them

INTERVIEWER

What about organizations… in a world of constant change how can understanding how facts change better prepare us for dealing with uncertainty?

ARBESMAN

Organizations often adapt slowly, just like many of us, sometimes even maintaining a mission after it has outlived its usefulness. A willingness to confront these changes must be deeply embedded within the leadership of the organization, which hopefully will be easier when people are educated to understand changing knowledge. Otherwise, the organization will slowly fail, hemorrhaging the more adaptable people—who are frustrated by the lack of change—along the way.

INTERVIEWER

I was struck by your statement: “ONE of the most fundamental rules of hidden knowledge is the lesson learned from InnoCentive: a long tail of expertise— everyday people in large numbers—has a greater chance of solving a problem than do the experts.”

I imagine trying to promote this idea in an organization, such as an IT firm or a Government Department – where there is a strong culture of respect for expertise – and I think it would be an extremely hard sell. If I can be extreme, this idea argues that credentials or other normally recognized markers of individual status are maybe not worth as much, or perhaps overvalued. Do you have any comments on how the idea of “the long tail of expertise” can actually function in a domain where expertise is part of the status and hierarchy?

ARBESMAN

I think expertise is still important for many questions, especially ones that can be solved in a relatively straightforward manner. But as we move into an increasingly complicated and interdisciplinary world, the expertise we value with likely shift: we will move from valuing those who can solve problems, to those who know different ways to solve problems, or at least those who know how to ask the right questions of a large crowd. Using InnoCentive, or other way to crowdsource expertise is by no means trivial, and understanding the ways that they succeed, as well as the many ways that they can fail, is going to become more important.

INTERVIEWER

How important of a role does diversity play in all of this? If we all goto the same training and schools, and we’re all taught to look at the problem the same way, to what extent would this impact the long tail?

ARBESMAN

Diversity is critical. We don’t want everyone to have the same background and information. At the same time, making sure that we have people who can bring together diverse backgrounds, translating from one field to another—even at the level of jargon—is also crucial, and something that we often neglect in our excitement of the power of intellectual diversity.

INTERVIEWER

For the most part, I find the tone of your book to be very positive and optimistic – a message of affirmation of the value of trying to understand and learn. But I also note your observation in the Chapter “The Human Side of Facts,” where you describe how we seem to come to a point, often quite early in our lives, where we cease to learn. I observe this often, how we feel there is a sense of having learned and after that learning, life- professional life – is really just the application of learned knowledge. I don’t see a great commitment to “lifelong learning” in North American society, certainly not between the ages of, say, forty and retirement. But professional people often have their greatest influence on the rest of society at this age. Do you have any thoughts on what your ideas imply about lifelong learning and personal development, particularly for those of us who are well-established in our professional careers?

ARBESMAN

As I mentioned earlier, I think we need to take a page from medicine and its devotion to continuing medical education. Of course, there is a clear incentive in this field, as lives are on the line. But If we can find ways to better incentivize continuing education for everyone, we’ll be a better society. Frankly, this is a hard thing to do. If we can teach students at an early age about the obsolescence of their knowledge, this task will be easier. But for now, it’s quite daunting.

INTERVIEWER

Changing gears a bit… What authors have your learned the most from and why?

ARBESMAN

I’ve learned a great deal from the novelist Neal Stephenson. His books are generally a set of fascinating ideas wrapped around an engaging plot. The plots pull you along, and in the process I’ve learned about—and been forced to think deeply about—the Scientific Revolution, the invention of the modern monetary system, mathematical platonism, the relationship between Greek mythology and the history of technology, and much more. If you need your mind expanded, Stephenson will deliver.

I’ve also gained a lot from Steven Johnson, who has written many fascinating “idea books” (this term doesn’t quite satisfy me but it’s hard to think of a better description). His ability to weave together numerous concepts that often seem unrelated on the surface and then convey them in a coherent and exciting way is something that is incredibly rare and wonderful to experience.

INTERVIEWER

Do you have daily writing ritual?

ARBESMAN

I unfortunately don’t have much in the way of rituals. Essentially, I set myself a low word count goal for the day (the amount varies based on how much writing I need to achieve). And then I exceed it. That way, I always overachieve and feel good about my writing for the day. And once I’ve gotten a whole lot of quantity, I then pare it down and do my best to turn it into quality.

INTERVIEWER

Say I’ve anointed you as dictator. What five books would you make every adult read?

ARBESMAN

This certainly sounds like an intriguing dictatorship. Rather than focusing on my favorite books, I’ll try to limit this to five books that I think are important for thinking about science, knowledge, and society:

Little Science, Big Science by Derek J. de Solla Price — the foundation for a rigorous and quantitative approach for thinking about how science works.

Collected Fictions of Jorge Luis Borges — Interested in thinking about knowledge and infinity? The stories of Borges are essential reading.

Gödel, Escher, Bach: An Eternal Golden Braid by Douglas Hofstadter — from computer science to how the mind works, this book will change how you think about the world of information.

Nonzero by Robert Wright — a wonderful exploration of how the world has become more complicated and better over time, improving each of our lives

The Varieties of Scientific Experience by Carl Sagan—Sagan’s examination of the complexity of the universe and his personal approach to religion as scientific awe

And an optional bonus book for my dictatorship:

How I Killed Pluto and Why It Had It Coming by Mike Brown — captures the excitement and process of science. It’s also a great story.

* * *

18 Truths: The Long Fail of Complexity

The Eighteen Truths

The first few items explain that catastrophic failure only occurs when multiple components break down simultaneously:

1. Complex systems are intrinsically hazardous systems.

The frequency of hazard exposure can sometimes be changed but the processes involved in the system are themselves intrinsically and irreducibly hazardous. It is the presence of these hazards that drives the creation of defenses against hazard that characterize these systems.

2. Complex systems are heavily and successfully defended against failure.

The high consequences of failure lead over time to the construction of multiple layers of defense against failure. The effect of these measures is to provide a series of shields that normally divert operations away from accidents.

3. Catastrophe requires multiple failures – single point failures are not enough.

Overt catastrophic failure occurs when small, apparently innocuous failures join to create opportunity for a systemic accident. Each of these small failures is necessary to cause catastrophe but only the combination is sufficient to permit failure.

4. Complex systems contain changing mixtures of failures latent within them.

The complexity of these systems makes it impossible for them to run without multiple flaws being present. Because these are individually insufficient to cause failure they are regarded as minor factors during operations.

5. Complex systems run in degraded mode.

A corollary to the preceding point is that complex systems run as broken systems. The system continues to function because it contains so many redundancies and because people can make it function, despite the presence of many flaws.

Point six is important because it clearly states that the potential for failure is inherent in complex systems. For large-scale enterprise systems, the profound implications mean that system planners must accept the potential for failure and build in safeguards. Sounds obvious, but too often we ignore this reality:

6. Catastrophe is always just around the corner.

The potential for catastrophic outcome is a hallmark of complex systems. It is impossible to eliminate the potential for such catastrophic failure; the potential for such failure is always present by the system’s own nature.

Given the inherent potential for failure, the next point describes the difficulty in assigning simple blame when something goes wrong. For analytic convenience (or laziness), we may prefer to distill narrow causes for failure, but that can lead to incorrect conclusions:

7. Post-accident attribution accident to a ‘root cause’ is fundamentally wrong.

Because overt failure requires multiple faults, there is no isolated ’cause’ of an accident. There are multiple contributors to accidents. Each of these is necessary insufficient in itself to create an accident. Only jointly are these causes sufficient to create an accident.

The next group goes beyond the nature of complex systems and discusses the all-important human element in causing failure:

8. Hindsight biases post-accident assessments of human performance.

Knowledge of the outcome makes it seem that events leading to the outcome should have appeared more salient to practitioners at the time than was actually the case. Hindsight bias remains the primary obstacle to accident investigation, especially when expert human performance is involved.

9. Human operators have dual roles: as producers & as defenders against failure.

The system practitioners operate the system in order to produce its desired product and also work to forestall accidents. This dynamic quality of system operation, the balancing of demands for production against the possibility of incipient failure is unavoidable.

10. All practitioner actions are gambles.

After accidents, the overt failure often appears to have been inevitable and the practitioner’s actions as blunders or deliberate willful disregard of certain impending failure. But all practitioner actions are actually gambles, that is, acts that take place in the face of uncertain outcomes. That practitioner actions are gambles appears clear after accidents; in general, post hoc analysis regards these gambles as poor ones. But the converse: that successful outcomes are also the result of gambles; is not widely appreciated.

11. Actions at the sharp end resolve all ambiguity.

Organizations are ambiguous, often intentionally, about the relationship between production targets, efficient use of resources, economy and costs of operations, and acceptable risks of low and high consequence accidents. All ambiguity is resolved by actions of practitioners at the sharp end of the system. After an accident, practitioner actions may be regarded as ‘errors’ or ‘violations’ but these evaluations are heavily biased by hindsight and ignore the other driving forces, especially production pressure.

Starting with the nature of complex systems and then discussing the human element, the paper argues that sensitivity to preventing failure must be built in ongoing operations.

In my experience, this is true and has substantial implications for the organizational culture of project teams:

12. Human practitioners are the adaptable element of complex systems.

Practitioners and first line management actively adapt the system to maximize production and minimize accidents. These adaptations often occur on a moment by moment basis.

13. Human expertise in complex systems is constantly changing

.

Complex systems require substantial human expertise in their operation and management. Critical issues related to expertise arise from (1) the need to use scarce expertise as a resource for the most difficult or demanding production needs and (2) the need to develop expertise for future use.

14. Change introduces new forms of failure.

The low rate of overt accidents in reliable systems may encourage changes, especially the use of new technology, to decrease the number of low consequence but high frequency failures. These changes maybe actually create opportunities for new, low frequency but high consequence failures. Because these new, high consequence accidents occur at a low rate, multiple system changes may occur before an accident, making it hard to see the contribution of technology to the failure.

15. Views of ’cause’ limit the effectiveness of defenses against future events.

Post-accident remedies for “human error” are usually predicated on obstructing activities that can “cause” accidents. These end-of-the-chain measures do little to reduce the likelihood of further accidents.

16. Safety is a characteristic of systems and not of their components

Safety is an emergent property of systems; it does not reside in a person, device or department of an organization or system. Safety cannot be purchased or manufactured; it is not a feature that is separate from the other components of the system. The state of safety in any system is always dynamic; continuous systemic change insures that hazard and its management are constantly changing.

17. People continuously create safety.

Failure free operations are the result of activities of people who work to keep the system within the boundaries of tolerable performance. These activities are, for the most part, part of normal operations and superficially straightforward. But because system operations are never trouble free, human practitioner adaptations to changing conditions actually create safety from moment to moment.

The paper concludes with a ray of hope to those have been through the wars:

18. Failure free operations require experience with failure.

Recognizing hazard and successfully manipulating system operations to remain inside the tolerable performance boundaries requires intimate contact with failure. More robust system performance is likely to arise in systems where operators can discern the “edge of the envelope”. It also depends on providing calibration about how their actions move system performance towards or away from the edge of the envelope.

Source

The Iconic Think Different Apple Commercial Narrated by Steve Jobs

Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.

— Steve Jobs, 1997

I’ve been thinking a lot lately about creativity and to what extent attitude plays a role.

The most creative people I know are often the ones who have a hell-raiser trait in them, regardless of whether this comes from nature or nurture.

These are people who think different, feel different, behave different. These are the people who can’t easily fit into the square corporate box.

Organizations both value and despise them. They make people uncomfortable. They challenge thoughts, processes, and the status quo. They disrupt and dismiss. They push. They raise the bar for everyone else and they call people out. They’re not being difficult on purpose — they’re being themselves. They see things differently. And that comes with both opportunities and challenges.

Many people — especially those who are less secure about themselves — have a hard time working with people that push boundaries and challenge the way things are done. They don’t want to be challenged. They don’t want the bar raised. They don’t want to explain why something needs to stay the same. All of this, after all, is exhausting. It’s much easier to just ignore, dismiss, or add layers of management to dilute the impact these people can have.

The problem with that approach, however, is that you dilute what your organization is capable of. Embracing people who think differently is not a sign of weakness as a leader (and I’m not advocating for embracing everyone who thinks differently, there is some nuance here). Allowing yourself to hear the perspective of others who think differently is not a sign of weakness, it’s a sign of strength.

***

Two related Farnam Street Posts:

Steve Jobs on Creativity. Steve Jobs had a lot to say about creativity.

Steve Jobs on The Most Important thing. Life can be so much better once you understand this one simple fact.

Warren Buffett: The Inner Scorecard

“The big question about how people behave is whether they’ve got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard.”
— Warren Buffett

***

Human beings are, in large part, driven by the admiration of their peers.

We seek to satisfy a deep biological need by acting in such a way that we feel praise and adulation; for our wealth, our success, our skills, our looks. It could be anything. The trait we are admired for matters less than the admiration itself. The admiration is the token we dance for. We feel envy when others are getting more tokens than us, and we pity ourselves when we’re not getting any.

There’s nothing inherently wrong with this. The pursuit of (deserved) admiration causes us to drive and accomplish. It’s a part of the explanation for why the human world has moved along so far from where it started — we’re willing to do extraordinary things that are extraordinarily difficult, like starting a company from scratch, inventing a new and better product, solving some ridiculously complicated theorem, or conquering unknown territory.

This is all well and good.

The problems come when we start compromising our own standards, those we have set for ourselves, in order to earn admiration. False, undeserved admiration.

Warren Buffett frequently relates an interesting way to frame this problem. From Alice Schroeder’s Buffett biography The Snowball:

Lookit. Would you rather be the world’s greatest lover, but have everyone think you’re the world’s worst lover? Or would you rather be the world’s worst lover but have everyone think you’re the world’s greatest lover? Now, that’s an interesting question. “Here’s another one. If the world couldn’t see your results, would you rather be thought of as the world’s greatest investor but in reality have the world’s worst record? Or be thought of as the world’s worst investor when you were actually the best?

Buffett’s getting at a rather fundamental model he’s used most of his life: The Inner Scorecard. It’s a major reason Buffett has stayed so successful for so long, with so little failure or scandal intervening: While most are are “checking the official time,” Buffett is setting his watch by an internal clock!

The investor Guy Spier once won a charity lunch with Buffett, and related his experience in a book called The Education of a Value Investor. He immediately recognized Buffett’s lack of falseness:

One of Buffett’s defining characteristics is that he so clearly lives by his own inner scorecard. It isn’t just that he does what’s right, but that he does what’s right for him. As I saw during our lunch, there’s nothing fake or forced about him. He sees no reason to compromise his standards or violate his beliefs. Indeed, he has told Berkshire’s shareholders that there are things he could do that would make the company bigger and more profitable, but he’s not prepared to do them. For example, he resists laying people off or selling holdings that he could easily replace with more profitable businesses. Likewise, some investors have complained that Berkshire would be much more profitable if he’d moved its tax domicile to Bermuda as many other insurers have done. But Buffett doesn’t want to base his company in Bermuda even though it would be legal and would have saved tens of billions in taxes.

We don’t, by the way, claim Buffett has an unblemished record. That would not be accurate. But it does seem that his record is far more spotless than others who have climbed as far as he has.

If Buffett was “setting his clock externally” — living by the standards of others — he would not have been able to maintain the independence of mind that led him to avoid a number of financial bubbles and tremendous personal misery.

What Buffett and a lot of other people who have been successful in life — true success, not money — have in common is that they’re able to remember what we all set out to do: live a fulfilling life! Not get rich. Not get famous. Not even get admiration, necessarily. But to live a satisfying existence and help others around them do the same.

It’s not that getting rich or famous or admired can’t be deeply satisfying. It can be! I’m positive Buffett deeply enjoys his wealth and status. He’s got more “admiration tokens” than almost anyone in the world.

But all of that can be ruined very, very easily along the way by making too many compromises, by living according to an external scorecard rather than an internal one. How many stories have you heard of famous and/or wealthy folks becoming entrapped in constant lawsuits, bickering, loneliness, and pure unhappiness? A countless number, right?

Bernie Madoff achieved great admiration and wealth, but was he happy? He made it clear, after he’d been caught, that he wasn’t. Here was a guy who had all the admiration tokens in the world, an External Scorecard showing an A+, and what happened when he lost it all? He felt relieved.

So, did fame or wealth actually work in giving him a satisfying and fulfilling life? No!

The little mental trick is to remember that success, money, fame, and beauty, all the things we pursue, are merely the numeratorIf the denominator — shame, regret, unhappiness, loneliness — is too large, our “Life Satisfaction Score” ends up being tiny, worthless. Even if we have all that good stuff!

Nassim Taleb once related a very similar idea:

The optimal solution to being independent and upright while remaining a social animal is: to seek first your own self-respect and, secondarily and conditionally, that of others, provided your external image does not conflict with your own self-respect. Most people get it backwards and seek the admiration of the collective and something called “a good reputation” at the expense of self-worth for, alas, the two are in frequent conflict under modernity.

It’s so simple. This is why you see people that “should be happy” who are not. Big denominators destroy self-worth.

***

Adam Smith addressed this issue similarly about 225 years ago in his lesser known, though equally useful book The Theory of Moral Sentiments. Here’s how he put it:

Man naturally desires, not only to be loved, but to be lovely; or to be that thing which is the natural and proper object of love. He naturally dreads, not only to be hated, but to be hateful; or to be that thing which is the natural and proper object of hatred. He desires, not only praise, but praiseworthiness; or to be that thing which, though it should be praised by nobody, is, however, the natural and proper object of praise. He dreads, not only blame, but blame-worthiness; or to be that thing which, though it should be blamed by nobody, is, however, the natural and proper object of blame.

To Smith, happiness was a combination of being loved and lovely: In modern terms, his wording makes it sound like he means “loved by others and also beautiful.”

But as you read on, you see that’s not what he meant. He adds “Hated, but hateful.” “Praise, but praiseworthiness.” “Blame, but blame-worthiness.”

He’s saying we’re only happy if we’re successful by an Inner Scorecard! We can’t just earn praise, we must be praiseworthy. We can’t just be loved, we must be loveable. It makes all the difference in the world. Our dissatisfaction with ourselves will always trump the satisfaction we feel with false rewards. We must, as Charlie Munger puts itearn and deserve the success we desire.

There’s a simple word for this: Authenticity. We seek it, and we’re only happy when we feel we’ve achieved it. It can’t be faked. And the way to get there is to remember the Inner Scorecard and start grading yourself accordingly.