People are different. And the more diversity between the people, the more differences there are.
So – here is the question of the day: Do you always hang out with the same people – the same kinds of people? If so, maybe it’s time broaden your circle.
This simple advice is a key part of the message from Yale’s President Rick Levin to the arriving freshman class. (I read this in this blog post by Arianna Huffington). Here’s a key excerpt:
Levin pointed out how the students “come from all 50 states and 58 nations” and urged them (and their parents) to go “entirely outside the range of your past experience,” and “stretch yourself.” “If the friends you make here are exclusively those who come from backgrounds just like your own and went to high schools just like your own,” he said, “you will have forfeited half the value of a Yale education. Seek out friends with different histories and different interests; you will find that you learn the most from the people least like you.”
I’ve read plenty of books that offer similar advice. Like this:
Sticking to the people we already know is a tempting behavior. But unlike some forms of dating, a networker isn’t looking to achieve only a single successful union. Creating an enriching circle of trusted relationships requires one to be out there, in the mix, all the time.
Set a goal for yourself of initiating a meeting with one new person a week. It doesn’t matter where or with whom.
Keith Ferrazzi, Never Eat Alone: And Other Secrets to Success, One Relationship at a Time (The Ultimate Networker Reveals How to Build a Lifelong Community of Colleagues, Contacts, Friends, and Mentors)
Seize any opportunity, or anything that looks like opportunity. They are rare, much rarer than you think. Remember that positive Black Swans have a necessary first step: you need to be exposed to them. If a big publisher (or a big art dealer or a movie executive or a hotshot banker or a big thinker) suggests an appointment, cancel anything you have planned: you may never see such a window open up again.
Nassim Nicholas Taleb, The Black Swan: The Impact of the HIGHLY IMPROBABLE
In my own life, I am always learning from the wide array of people I “hang with.” I speak monthly at the Urban Engagement Book Club, which includes a true mix of people: non-profit leaders, business folks, some people who are pretty much in the homeless category, retired people… I have experienced no other mix of people like it in my lifetime.
And I teach at a local community college. There are people from multiple ethnic backgrounds, and all levels of the economic spectrum. My students teach me so much every semester.
And then we have the audience of business leaders who attend the First Friday Book Synopsis.
And I lead regular sessions (Current Events and reading/discussion groups) with retired people.
You put all of these together, and my life is a rich, diverse set of moments that represent genuine diversity.
But I need to become even more intentional about this – as, I suspect, you do. So, here some suggestions for us all:
1) Go to at least one gathering, on a regular basis, that is made up of people who are not all “like you.”
2) Read authors, and types of books, that are outside of your beaten path, and represent points of view that you disagree with.
3) Look for another “new” person, and some new event, regularly.
Diversity is good for us. But experiencing true diversity will not happen by accident. You have to get intentional about it. There are people to meet, ideas to discover, viewpoints to ponder.
Hanging with people who are not all just like you may be the most neglected learning discipline of them all.
News item: Alan Greenspan is the recipient of this year’s Dynamite Prize in Economics as “the economist most responsible for causing the Global Financial Crisis.” The once-lauded Federal Reserve chairman has been awarded the “Dynamite Prize In Economics” by his fellow economists, according to the blog Real-World Economics Review. The Real World Economics Review Blog has over 11,000 subscribers, and they have named Alan Greenspan its recipient for this prize. Finishing second and third were Milton Freidman and Lawrence Summers. (No, receiving this prize is not a good thing). Here is a line from the article:
This blog established the prize in response to attempts by economists to evade responsibility for the crisis by calling it an unpredictable, “Black Swan” event. In reality, the public perception that economic theories and policies helped cause the crisis is correct.
(I first read about this here on the Huffington Post).
Their next prize will go the Revere Award winner:
The economics establishment has attempted to evade responsibility for the Global Financial Collapse by calling it an unpredictable, “Black Swan” event. But in fact some non-neoclassical economists foresaw the crisis and warned the public of its approach. The Revere Award aims to give these economists the professional and public recognition that they deserve, to encourage others to utilize their methods, and to increase the likelihood that, for the benefit of humankind, empirically responsible economists will be listened to in the future.
And I got to thinking. I have presented a synopsis of The Black Swan by Nassim Nicholas Taleb. I like the book, and I have bought into the philosophy of the book pretty enthusiastically. The book says that “nobody knows anything.” Here are the characteristics of a black swan:
• A Black Swan is an event which follows three attributes:
• First, it is an outlier. (rarity)
• Second, it carries an extreme impact.
• Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable. (retrospective, though not prospective, predictability).
But these economists definitely call into question the explanation of the current crisis as an actual example of a “black swan.” And, I have been quite intrigued by Gawande’s simple formulation: the two great problems are ignorance and ineptitude. (see my earlier post here).
Maybe some of the events that we label as “black swans” are in fact knowable. The trick is to overcome enough ignorance, and find the right experts with the right knowledge, to be better prepared and make better decisions and take better steps… In other words, the crisis may not have been the result of ignorance, but ineptitude.
This much is clear. Some economists missed it – and others (fewer) got it right. It looks like we may have listened to the wrong economists.
Anyway, I’m intrigued by all this.
If you are like me, whenever you re-read a book, or revisit your own highlights of a book, you have different quotes jump out at you. And, in my case, this especially happens when I present a synopsis a second, or third time.
Well, I presented my synopsis of The Black Swan: The Impact of the HIGHLY IMPROBABLE by Nassim Nicholas Taleb for the third time in the last few weeks just last night. And in presenting it, this quote seemed to grab me more than usual. I think it is really, really true to our experience:
“We do not spontaneously learn that we don’t learn that we don’t learn…”
And the fact that we do not know that we don’t learn that we don’t learn can be really bad…
To purchase my synopsis of The Black Swan, with audio + handout, go to our companion web site, 15minutebusinesssbooks.com.
Yesterday, I presented my synopsis of the provocative book The Black Swan: The Impact of the HIGHLY IMPROBABLE by Nassim Nicholas Taleb. This was requested by a large, Dallas-based international company to launch their lunch & learn sessions for 2010. The CEO had mentioned the book at a yearly planning meeting, and all of the folks wanted to know just what the book was about.
Well – here’s the book in a phrase: “nobody knows anything!”
And one of the specific points in the book is that we get really good at facing down yesterday’s problems today while remaining amazingly ignorant about what the next problem might be. Here’s a key quote:
What did people learn from the 9/11 episode? Did they learn that some events, owing to their dynamics, stand largely outside the realm of the predictable? No? Did they learn the built-in defect of conventional wisdom? No. What did they figure out? They learned precise rules for avoiding Islamic prototerrorists and tall buildings… The story of the Maginot Line shows how we are conditioned to be specific. The French, after the Great War, built a wall along the previous German invasion route to prevent reinvasion – Hitler just (almost) effortlessly went around it. The French had been excellent students of history; they just learned with too much precision. They were too practical and exceedingly focused for their own safety.
We do not spontaneously learn that we don’t learn that we don’t learn…
So, the book was on my mind when late last night I watched the 2000 movie Thirteen Days, the somewhat fictionalized/dramatized account of the Kennedy Administration in the midst of the Cuban Missile Crisis. It is a gripping story, even though we already know the outcome. In the movie, President Kennedy refers back to the great Barbara Tuchman book, The Guns of August. Here is the section from the movie (you can find the script here)
Last summer I read a book. The Guns of August. I wish every man on that blockade line had read that book.
The President moves over to the GLOBE by his desk, spins it, stopping in on Europe.
THE PRESIDENT (CONT’D)
World War One. Thirteen million killed all because the militaries of both alliances were so highly attuned to each other’s movements and dispositions, afraid of letting the other guy have a theoretical advantage. And your man in the field, his family at home, couldn’t even tell you the reasons why their lives were being sacrificed. Why couldn’t they stop it?
The President’s fingers turn the globe. It stops on North America. Kenny and Bobby listen.
THE PRESIDENT (CONT’D)
And here we are, fifty years later. One of their ships resists the inspection. We shoot out its rudder and board. They shoot down our planes in response. We bomb their anti-aircraft sites in response to that. They attack Berlin. We invade Cuba. They fire their missiles. We fire ours.
In the movie, the President basically argues that we don’t really learn the lessons we should learn from the conflicts, the mistakes, the wars of yesterday.
This clearly transfers to the business world. We try to fix today’s problems with yesterday’s solutions, and we assume that tomorrow’s problems will be like yesterday’s problems. Then, when a Black Swan flies into our face, we are surprised, astounded, unprepared. Taleb says this: you won’t know what the next Black Swan will be, but you should know by now that there will be a new Black Swan coming at you soon. When it arrives, don’t be surprised. Simply say, “there’s our next Black Swan.”
One of the ongoing discussions that I am having, in my own head and with others, is just how reliable all of these studies about success and efficiency really are. Does anybody know anything? In The Black Swan, Nassim Nicholas Taleb quotes “the legendary screenwriter William Goldman, who was said to have shouted ‘Nobody knows anything.’”
The Black Swan describes the problem as this: the world is not predictable, the world is random, and black swans genuinely throw us into a new set of problems, reminding us that “nobody knows anything.” (All swans were known to be white until someone went to Australia and saw a Black swan –thus, a black swan is any new happening/discovery that throws all of our previous “knowledge” overboard). Taleb argues that we are so in need of certainty that: “We have seen how good we are at narrating backward, at inventing stories that convince us that we understand the past.”
I write this to discuss another aspect of this problem – do management consultants really know anything? I admire the work they do. They work hard, approach their tasks with great seriousness, and genuinely try to help companies do better. But the question is one of actual capability – do they really know what they think they know?
That is the question raised by an extensive article in The New Yorker, NOT SO FAST: Scientific management started as a way to work. How did it become a way of life? by Jill Lepore. (Read it here).
The article quotes from the book The Management Myth: Why the Experts Keep Getting It Wrong by Matthew Stewart, which I have blogged about before in my post Are Consultants Worth Their Pay? — Are there genuine experts that provide value? (which you can read here).
The New Yorker article begins with this:
Ordering people around, which used to be just a way to get things done, was elevated to a science in October of 1910, when Louis Brandeis, a fifty-three-year-old lawyer from Boston, held a meeting at an apartment in New York with a bunch of experts who, at Brandeis’s urging, decided to call what they were experts at “scientific management.” Everyone there—including Frank and Lillian Gilbreth, best known today as the parents in “Cheaper by the Dozen”—had contracted “Tayloritis”: they were enthralled by an industrial engineer from Philadelphia named Frederick Winslow Taylor, who had been ordering people around, scientifically, for years. Speedy Taylor, as he was called, had invented a new way to make money. He would get himself hired by some business; spend a while watching people work, stopwatch and slide rule in hand; write a report telling them how to do their work faster; and then submit an astronomical bill for his services. He is the “Father of Scientific Management” (it says so on his tombstone), and, by any rational calculation, the grandfather of management consulting.
Whether he was also a shameless fraud is a matter of some debate, but not, it must be said, much: it’s difficult to stage a debate when the preponderance of evidence falls to one side. In “The Management Myth: Why the Experts Keep Getting It Wrong” (Norton; $27.95), Matthew Stewart points out what Taylor’s enemies and even some of his colleagues pointed out, nearly a century ago: Taylor fudged his data, lied to his clients, and inflated the record of his success. As it happens, Stewart did the same things during his seven years as a management consultant; fudging, lying, and inflating, he says, are the profession’s stock-in-trade.
And here is a description of how this approach “worked:”
Taylor is the mortar, and the Gilbreths the bricks, of every American business school. But it was Brandeis who brought Taylor national and international acclaim. He could not, for all that, have saved the railroads a million dollars a day—the number was, as a canny reporter noted, the “merest moonshine”—because, despite the parade of experts and algorithms, the figure was based on little more than a ballpark estimate that the railroads were about five per cent inefficient. That’s the way Taylorism usually worked. How did Taylor arrive at forty-seven and a half tons for Bethlehem Steel? He chose twelve “large, powerful Hungarians,” observed them for an hour, and calculated that, at the rate they were working, they were loading twenty-four tons of pig iron per man per day. Then he handpicked ten men and dared them to load sixteen and a half tons as fast as they could. They managed to do it in fourteen minutes; this yields a rate of seventy-one tons per man per ten-hour day. Taylor inexplicably rounded up the number to seventy-five. To get to forty-seven and a half, he reduced seventy-five by about forty per cent, claiming that this represented a work-to-rest ratio of the “law of heavy laboring.” Workers who protested the new standards were fired. Only one—the best approximation of an actual Schmidt was a man named Henry Noll—loaded anything close to forty-seven and a half tons in a single day, a rate that was, in any case, not sustainable. After providing two years of consulting services, Taylor billed the company a hundred thousand dollars (which works out to something like two and a half million dollars today), and then he was fired.
It reminds me of the fact, now widely know, that in the modern classic In Search of Excellence, Peters and Waterman “made up’ some of the numbers – “faked the data.” Though the phrase “faked the data” did not come directly from the mouth of Peters, there is certainly an acknowledgement that the numbers were not fully pure. Here’s the quote by Peters from an article in 2001 in Fast Company:
This is pretty small beer, but for what it’s worth, okay, I confess: We faked the data. A lot of people suggested it at the time. The big question was, How did you end up viewing these companies as “excellent” companies? A little while later, when a bunch of the “excellent” companies started to have some down years, that also became a huge accusation: If these companies are so excellent, Peters, then why are they doing so badly now? Which I’d say pretty much misses the point.
[In] Search [of Excellence] started out as a study of 62 companies. How did we come up with them? We went around to McKinsey’s partners and to a bunch of other smart people who were deeply involved and seriously engaged in the world of business and asked, Who’s cool? Who’s doing cool work? Where is there great stuff going on? And which companies genuinely get it? That very direct approach generated a list of 62 companies, which led to interviews with the people at those companies. Then, because McKinsey is McKinsey, we felt that we had to come up with some quantitative measures of performance. Those measures dropped the list from 62 to 43 companies. General Electric, for example, was on the list of 62 companies but didn’t make the cut to 43 — which shows you how “stupid” raw insight is and how “smart” tough-minded metrics can be.
Were there companies that, in retrospect, didn’t belong on the list of 43? I only have one word to say: Atari.
Was our process fundamentally sound? Absolutely! If you want to go find smart people who are doing cool stuff from which you can learn the most useful, cutting-edge principles, then do what we did with Search: Start by using common sense, by trusting your instincts, and by soliciting the views of “strange” (that is, nonconventional) people. You can always worry about proving the facts later.
Notice that last line, You can always worry about proving the facts later, and remember the Taleb quote: “We have seen how good we are at narrating backward, at inventing stories that convince us that we understand the past.”
We already know that not all the companies in In Search of Excellence, and later in Good to Great, maintained their place of excellence/greatness. Collins has followed up with How the Mighty Fall, wresting with this problem.
I think we need to keep seeking the knowledge and wisdom we need to discover what makes a company great, and then what keeps a company great. But at the end of the day, I’m not sure we will ever “know.” And that is ok – if we acknowledge our limitations. But when “experts” imply that they do know, and then predictions/projections do not come true, or remain true, it calls into question other observations and findings. And when numbers are fudged, or even made up, it absolutely undermines all credibility. Some management consultants fudge their numbers. And any fudging of numbers can deal a serious blow to credibility. And when numbers are fudged, companies think they know more than they actually know.
Management consultants can be valuable. But ultimately, who really knows anything? Or, to put it another way, is management consulting actually a science? Or is it more of an art, imprecise, requiring an extra-heavy dose of ethics because of the imprecision involved?
Here’s one more thought from the New Yorker article:
Business schools have been indicted before. Earning an M.B.A. has been found to have little correlation with later business success. Business isn’t a science, critics say; it’s a set of skills, best learned on the job. Some business schools, accused of teaching nothing so much as greed, now offer ethics courses. Stewart argues that this whole conversation, about people, production, wealth, and virtue, is a conversation about ethics, and is better had within a liberal-arts curriculum.
You might want to also read my post Dehumanized — A Cause for Alarm in Education, and in the World of Business Books.
You can purchase my synopses of The Black Swan, and Karl Krayer’s synopsis of Good to Great, with audio + handout, at our companion site, 15minutebusinessbooks.com.
I just re-watched Joel Barker’s newest version of his video, The Business of Paradigms. (See Bob’s interview with Joel Barker from our blog here). His example of a company that was “sent back to zero,” thus lost out in the midst of a paradigm shift, was Motorola, which switched from analog to digital a few moments too late, and Nokia took over the cell phone market. The video is a little dated — and now Blackberry, and of course the iPhone, are creating the most buzz, though Nokia is still quite healthy. Who will lead five years from now? No one knows for sure. The life span of a product’s success and dominance has never been as potentially short as it is today.
I recently presented a synopsis of the book Get There Early (Get There Early: Sensing the Future to Compete in the Present; Using Foresight to Provoke Strategy and Innovation by Bob Johansen, Institute for the Future) to an association of Grantmakers meeting in Sante Fe. Their world has been greatly effected by the economic downturn. And one thing was clear – the better you can prepare for the unpredictable future right around the corner, the better you will be able to weather the storm.
Here are some key quotes from this thought-provoking book:
• In today’s marketplace, we have little buffer time between our decisions and their impacts.
• The most intense pain that leaders experience, the pain that keeps them awake at night, is caused by not being able to solve problems… Every profession has become a dangerous profession – every leader is at risk, and the range of risk is growing.
• For corporations, get there early means finding new markets, new customers, and new products ahead of your competitors… For non-profits, get there early means anticipating the needs of your stakeholders and sensing emerging issues before they become overwhelming or before others who don’t agree with your issues have taken a commanding position. Get there early means seeing a possible future before others see it. Get there early also means being able to act before others have figured out what to do.
Johansen does not claim that we can predict the future. In fact, he argues that we cannot do so. But he does strongly recommend forecasting the future. Here’s another quote:
• A forecast is a plausible, internally consistent view of what might happen. It is designed to be provocative… We don’t use the word prediction… A prediction is almost always wrong… A forecast doesn’t need to come true to be worthwhile.
Johansen recommends a three step approach – foresight, insight, and action. He includes a number of examples. Here’s one about Wikipedia:
The Story of Wikipedia’s Encyclopedia for the World
• Foresight: Much of the world will have limited access to knowledge
• Insight: The world needs a free, open-source encyclopedia
• Action: Create Wikipedia
His (Jimmy Wales) ambitious goal is to include “all human knowledge.
I have read (and presented) other books that deal with possible futures coming around the next corner, especially The Extreme Future by James Canton. He wrote:
Everyone needs to think differently about the future, a future that is riddled with change, challenge, and risk. It is a new kind of future, not the steady plodding of progress from one moment to the next, punctuated by brief bursts of innovation that characterizes much of history. Now we face a post-9/11 future. The future of our lives, of our work, of our businesses – and most of all, the future of our world – depends on us gaining a new understanding of the dizzying changes that lie ahead. I call this future-readiness.
But the warnings about the potential dangers are everywhere around us in the business book universe. Gary Hamel in The Future of Management reminds us:
Every business is successful until it’s not. What’s disconcerting, though, is how often top management is surprised when “not” happens.
And, of course, Nicholas Talib in The Black Swan warns us that there is always another Black Swan waiting to be revealed:
Just imagine how little your understanding of the world on the eve of the events of 1914 would have helped you guess what was to happen next.
So, back to Johansen. His advice: forecast! Create future scenarios, or use some other technique to paint a picture in order to think about the future. The more possible futures you can imagine and prepare for, the better you will be able to survive that unexpected future that will most assuredly arrive.
• You can order synopses of my presentations for The Black Swan, The Extreme Future, and The Future of Management, at our companion web site, 15 Minute Business Books. I hope to add the synopsis for Get There Early to the site soon.