Tag Archives: Optimism

Your Invention is about to Launch: Did You Consider ALL Ramifications?

Do you think it’d be wonderful to have government departments with such lofty titles like the Ministry of Peace, the Ministry of Truth, the Ministry of Plenty, and the Ministry of Love? OK, maybe that’s a bit too on the nose, as most people have probably read (and/or heard of) 1984. The point I’m trying to make:

The best-laid plans of mice and men often go awry.

Huh? Let me explain.

You’re a burgeoning, young social entrepreneur who can’t wait to set the world on fire with this idea you’ve been cultivating for years. This invention has all the hallmarks of a game-changer in its industry and will surely have a spillover effect into other industries. It will revolutionize the way business takes place for years to come. You know that as soon as your invention goes to market, the world will be a better place. Finally, the day is here and your invention goes live. There is an enormous uptake rate. People start using it instantly – across the world. You’re so happy and can’t believe how quickly people have adapted to making it part of their daily lives. You always hoped and thought they would, but to see it actually happening – wow!

Two months later, you start to notice something peculiar in how your invention is being used. You notice that people are starting to use the invention in a way that you hadn’t intended and that this is starting to have an adverse effect in some areas. Weeks pass and you see that the trend has continued. People are continuing to use your invention in the “wrong” way and as a result, some people are starting to get hurt. More weeks pass and you realize that your invention, while if used in the way you intended is wonderful, has become a main driver of pain and suffering in the world.

Recognizing this, you wish with all your might that you could go back to the day before you launched the invention to undo it. Take it all back. Unfortunately, the proverbial cat is out of the bag and there’s no going back. The internet is here to stay…

I share this anecdote on account of something I read in The New Yorker recently:

In an influential piece that appeared in Rolling Stone in 1972, Brand prophesied that, when computers became widely available, everyone would become a “computer bum” and “more empowered as individuals and co-operators.” This, he further predicted, could enhance “the richness and rigor of spontaneous creation and human interaction.” No longer would it be the editors at the Times and the Washington Post and the producers at CBS News who decided what the public did (or didn’t) learn. No longer would the suits at the entertainment companies determine what the public did (or didn’t) hear.

“The Internet was supposed to be a boon for artists,” Taplin observes. “It was supposed to eliminate the ‘gatekeepers’—the big studios and record companies that decide which movies and music get widespread distribution.” Silicon Valley, Foer writes, was supposed to be a liberating force—“the disruptive agent that shatters the grip of the sclerotic, self-perpetuating mediocrity that constitutes the American elite.”

Fifty years ago, people thought computers would bring us closer together in a way that we hadn’t imagined. Certainly, we can say that that’s the case, but we must also say that they’ve brought us closer together in a way that we hadn’t imagined!

When we aspire to bring things into the world through entrepreneurship (or) intrapreneurship, it’s extremely important that there be someone there to play the role of “devil’s advocate” to consider ways in which this “wonderful idea” might literally set the world on fire. Optimism is great, but without a healthy dose of pessimism in the planning process, we might be closer to a Ministry of Plenty than we’d like to believe.

NOTE: This was cross-posted.

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The Most Common Biases in Business Decisions

If you’ve been following me for any length of time, you’ll know that one of topics that I write about the most is cognitive biases. So, when I came across an article on the Harvard Business Review that neatly wrapped up some of the more common biases in business decisions, I just had to comment on it.

I agree with just about everything in this table (?), but I’m surprised about one thing: the endowment effect. That is, I’m surprised it’s not listed in the table. Specifically, listed under ‘stability biases’ as this is where it would fit. To refresh your memory:

In short, it means that people want more money for something than they’d be willing to pay for it. Put differently: we overvalue that which we own. You could think of a simple example of this through the course of a negotiation. When negotiation with someone, we’ll probably overvalue what we bring to the table. Someone may offer you $50 for your 25-year old keyboard (piano), but you think it’s worth at least $75. Barring any outside appraisal, the endowment effect is likely at play here.

Given the number of deal-making that takes place on a regular basis, I’m surprised that we didn’t see this as part of the table. It seems to me that in business, when money is often the thing that’s held in the highest regard (for better or for worse), you’d want to have people with the decision-making power understand that they may be overvaluing what’s theirs.

Upon further reflection, I can understand why one may not see it as a “common” bias because in today’s society, (at least in Western cultures), the common transaction is cash for stuff and not stuff for stuff (barter). If bartering were more the name of the game, then I would certainly want to see the endowment effect on that list. Either way, though, it’s certainly worth remembering that we tend to overvalue the stuff we have.

“Who didn’t make it out? The optimists” — Lessons from the Stockdale Paradox

I mentioned that I had borrowed a number of books to read for what I thought was going to be a road trip from DC to Newfoundland. Things didn’t turn out the way that I thought they would, but I still had these books that I was interested to read. One of those books: .

Good to Great was written by Jim Collins, with the help of his research team, a little over a decade ago. After reading through it, it’s amazing how many of his findings still seem to apply in today’s business world. In fact, now that I’ve finished reading Good to Great, I’m excited to read a book he published this past year: . One of the stories that I read in the book I found quite profound. I’ve found some , but I also want to give you the opportunity to read the passage and discover it in the same way that I have. So, I’ve included the relevant text (from page 83-85):

The Stockdale Paradox
The name refers to Admiral Jim Stockdale, who was the highest ranking United States military officer in the “Hanoi Hilton” prisoner-of-war camp during the height of the Vietnam War. Tortured over 20 times during his eight-year imprisonment from 1965 to 1973, Stockdale lived out the war without any prisoner’s rights, no set release date, and no certainty as to whether he would even survive to see his family again. He shouldered the burden of command, doing everything he could to create conditions that would increase the number of prisoners who would survive unbroken, while fighting an internal war against his captors and their attempts to use the prisoners for propaganda. At one point, he beat himself with a stool and cut himself with a razor, deliberately disfiguring himself, so that he could not be put on videotape as an example of a “well-treated prisoner.” He exchanged secret intelligence information with his wife through their letters, knowing that discovery would mean more torture and perhaps death. He instituted rules that would help people to deal with torture (no one can resist torture indefinitely, so he created a step-wise system—after x minutes, you can say certain things—that gave the men milestones to survive toward). He instituted an elaborate internal communications system to reduce the sense of isolation that their captors tried to create, which used a five-by-five matrix of tap codes for alpha characters. (Tap-tap equals the letter a, tap-pause-tap-tap equals the letter b, tap-tap-pause-tap equals the letter f, and so forth, for 25 letters, c doubling for k.) At one point, during an imposed silence, the prisoners mopped and swept the central yard using the code, swish-swashing out “We love you” to Stockdale, on the third anniversary of his being shot down. After his release, Stockdale became the first three-star officer in the history of the navy to wear both aviator wings and the Congressional Medal of Honor.
You can understand, then, my anticipation at the prospect of spending part of an afternoon with Stockdale. One of my students had written his paper on Stockdale, who happened to be a senior research fellow studying the Stoic philosophers at the Hoover Institution right across the street from my office, and Stockdale invited the two of us for lunch. In preparation, I read In Love and War, the book Stockdale and his wife had written in alternating chapters, chronicling their experiences during those eight years.
As I moved through the book, I found myself getting depressed. It just seemed so bleak—the uncertainty of his fate, the brutality of his captors, and so forth. And then, it dawned on me: “Here I am sitting in my warm and comfortable office, looking out over the beautiful Stanford campus on a beautiful Saturday afternoon. I’m getting depressed reading this, and I know the end of the story! I know that he gets out, reunites with his family, becomes a national hero, and gets to spend the later years of his life studying philosophy on this same beautiful campus. If it feels depressing for me, how on earth did he deal with it when he was actually there and did not know the end of the story?”
“I never lost faith in the end of the story,” he said, when I asked him. “I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

* * *

I didn’t say anything for many minutes, and we continued the slow walk toward the faculty club, Stockdale limping and arc-swinging his stiff leg that had never fully recovered from repeated torture. Finally, after about a hundred meters of silence, I asked, “Who didn’t make it out?”
“Oh, that’s easy,” he said. “The optimists.”
“The optimists? I don’t understand,” I said, now completely confused, given what he’d said a hundred meters earlier.
“The optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.”
Another long pause, and more walking. Then he turned to me and said, “This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
To this day, I carry a mental image of Stockdale admonishing the optimists: “We’re not getting out by Christmas; deal with it!”

Amazing, huh?

I don’t think I’ll soon forget the story of Admiral Stockdale. I hope you were able to glean some insights from this story as I have. And, in case you want to listen to the audio of Jim Collins talking about this story, you can find that .