More on this book
Community
Kindle Notes & Highlights
When you use analogies—when you find someone who has solved your problem—you can take your pick from the world’s buffet of solutions. But when you don’t bother to look, you’ve got to cook up the answer yourself. Every time. That may be possible, but it’s not wise, and it certainly ain’t speedy.
the more you are able to extract the “crucial features” of a problem, the further afield you can go. A
when you’re stuck, you can use a process of “laddering up” to get inspiration. The lower rungs on the ladder offer a view of situations very similar to yours; any visible solutions will offer a high probability of success, since the conditions are so similar. As you scale the ladder, you’ll see more and more options from other domains, but those options will require leaps of imagination. They’ll offer the promise of an unexpected
breakthrough—but also a high probability of failure.
We’ve encountered a handful of techniques for doing just that—for Widening Our Options. One of them was the Vanishing Options Test: What if you couldn’t do any of the things you’re considering—what else might you try?
We also saw that multitracking—thinking “AND not OR”—is a powerful way to compare options and that we can create more “balanced” options by toggling between the prevention and promotion mindsets.
Finally, if we get stuck, we should find someone who has already solved our problem. To find them, we can look inside (for bright spots), outside (for competitors and best practices), and into the distance (via laddering up).
“Bright spots” is a term that we defined in Switch, which discusses how to spark change. It was a more central concept in that book—if you’d like to learn more, check out a free excerpt about bright spots at http://www.fastcompany.com/1514493/switch-dont-solve-problems-copy-success.
For public companies, the average premium paid in an acquisition is 41%, which means that if the target company is valued by the stock market at $100 million, the acquirer will bid $141 million for it.
Hubris is exaggerated pride or self-confidence that often results in a comeuppance. In Greek mythology, a hubristic protagonist often suffers humiliation. When Icarus ignored advice not to fly too close to the sun, his wax wings melted and he fell to his death. (By contrast, in American business, hubris is less damning. If Icarus had been a bank CEO, he’d have escaped with a $10 million golden parachute.)
What they wanted to see was whether the price paid in the acquisition was influenced by three particular factors, all of which would tend to inflate the ego of the acquiring CEO: 1. Praise by the media
2. Strong recent corporate performance (which the CEO could interpret as evidence of his/her genius)
3. A sense of self-importance (which was measured, cleverly, by looking at the gap between the CEO’s compensation package and the next-highest-paid officer—a CEO must think a lot of himse...
This highlight has been truncated due to consecutive passage length restrictions.
As each of these three factors increased, so did the tendency of a CEO to pay a higher premium for an acquisition.
they found that for every favorable article written in a major publication about the CEO, the acquisition premium paid went up by 4.8%.
They found that CEOs paid lower acquisition premiums when they had people around them who were more likely
to challenge their thinking,
reviewing more than 91 studies of over 8,000 participants, the researchers concluded that we are more than twice as likely to favor confirming information than disconfirming information.
The meta-study found that the confirmation bias was stronger in emotion-laden domains such as religion or politics and also when people had a strong underlying motive to believe one way or the other
Another alternative is to seek out existing dissent rather than creating it artificially. If you haven’t encountered any opposition to a decision you’re considering, chances are you haven’t looked hard enough. Could
ROGER MARTIN SAYS THE “What would have to be true?” question has become the most important ingredient of his strategy work,
What if our least favorite option were actually the best one? What data might convince us of that?
if someone asks you to figure out what would have to be true for that approach to work, your frame of thinking changes.… This subtle shift gives people a way to back away from their beliefs and allow exploration by which they give themselves the opportunity to learn something new.
This technique is particularly useful in organizations where dissent is unwelcome, where people who challenge the prevailing ideas are accused of failing to be “team players.
It goes beyond merely exposing ourselves to disconfirming evidence; it forces us to imagine a set of conditions where we’d willingly change our minds, without feeling that we “lost” the debate.
Barbour recommends a process that is better equipped to dodge the confirmation bias. When the doctor starts asking questions, she should start broad and open-ended: “What was the pain like? How did you feel?” Then she can move slowly and cautiously toward more directed questions: “Was it sharp or dull?” “Were you sad?” In this way, the doctor can avoid unwittingly biasing the interview.
WE’VE REVIEWED three approaches for fighting the confirmation bias: One, we can make it easier for people to disagree with us. Two, we can ask questions that are more likely to surface contrary information. Three, we can check ourselves by considering the opposite.
Psychologists distinguish between the “inside view” and “outside view” of a situation. The inside view draws from information that is in our spotlight as we consider a decision—our own impressions and assessments of the situation we’re in. The outside view, by contrast, ignores the particulars and instead analyzes the larger class it’s part of.
The outside view is more accurate—it’s a summary of real-world experiences, rather than a single person’s impressions—yet we’ll be drawn to the inside view.
when you’re trying to gather good information and reality-test your ideas, go talk to an expert.
An expert is simply someone who has more experience than you. If
Here’s what is less intuitive: Be careful what you ask them.
As we’ll see in the next chapter, experts are pretty bad at
predictions. But they are great at assess...
This highlight has been truncated due to consecutive passage length restrictions.
when you need trustworthy information, go find an expert—someone more experienced than you. Just keep them talking about the past and the present, not the future.
The humble approach is to ask, “What can I reasonably expect to happen if I make this choice?” Once we accept the answer—and trust it to make our decision—then we can turn our attention to fighting the odds.
Experts are great with base rates and mediocre at predictions.)
the right kind of emotion can be exactly what we need to make a wise choice.
In assessing our options, the best complement to the big picture is often a close-up.
FDR
He was also aggressive about developing sources of “ground truth,” cultivating a network of sources outside the federal government, such as businessmen, academics, friends, and relatives. They served as his eyes and ears outside of the bureaucracy. “Go and see what’s happening,” he told one. “See the end product of what we are doing. Talk to people; get the wind in your nose.” He had an able collaborator in the
Roosevelt insisted that the mail be analyzed scientifically; he had it sorted by category and by stance, and these statistical breakdowns were delivered to him as “mail briefs.” These briefs provided ready-made base rates on the public’s point of view.
It’s one thing to know, in statistical terms, how people feel about an issue. But what’s their temperature? Are they concerned, or irritated, or angry, or violently incensed? The numbers can conceal the nuance.
Mulcahy announced that executives, on a rotating basis, would have to serve as the customer officer of the day. The customer officer would have to deal with every customer complaint that came into corporate headquarters that day.
genba, a Japanese term meaning “the real place” or, more loosely, the place where the action happens.
WHEN WE ASSESS OUR choices, we’ll take the inside view by default.
What we’ve seen, though, is that we can correct this bias by doing two things: zooming out and zooming in.† When we zoom out, we take the outside view, learning from the experiences of others who have made choices like the one we’re facing. When we zoom in, we take a close-up of the situation, looking
for “color” that could inform our decision.
The inside view = our evaluation of our specific situation. The outside view = how things generally unfold in situations like ours. The outside view is more accurate, but most people gravitate toward the inside view.
To ooch is to construct small experiments to test one’s hypothesis.
