Author: David Greenwood

💎 On expert predictions (beware)

The average expert was a horrific forecaster. Their areas of specialty, years of experience, academic degrees, and even (for some) access to classified information made no difference. They were bad at short-term forecasting, bad at long-term forecasting, and bad at forecasting in every domain. When experts declared that some future event was impossible or nearly impossible, it nonetheless occurred 15 percent of the time. When they declared a sure thing, it failed to transpire more than one-quarter of the time. The Danish proverb that warns “It is difficult to make predictions, especially about the future,” was right. Dilettantes who were pitted against the experts were no more clairvoyant, but at least they were less likely to call future events either impossible or sure things, leaving them with fewer laugh-out-loud errors to atone for — if, that was, the experts had believed in atonement.

Excerpt from: Range: How Generalists Triumph in a Specialized World by David Epstein

💎 On the difficulty of making predictions (even by experts)

In separate work, from 2000 to 2010 German psychologist Gerd Gigerenzer compiled annual dollar-euro exchange rate predictions made by twenty-two of the most prestigious international banks — Barclays, Citigroup, JPMorgan Chase, Bank of America Merrill Lynch, and others. Each year, every bank predicted the end-of-year exchange rate. Gigerenzer’s simple conclusion about those projections, from some of the worlds most prominent specialists: “Forecasts of dollar-euro exchange rates are worthless.” In six of the ten years, the true exchange rate fell outside the entire range of all twenty-two bank forecasts.

Excerpt from: Range: How Generalists Triumph in a Specialized World by David Epstein

💎 On dangerous unintended consequences that hamper vital (medical) innovation

A second, ironic, problem is that companies fear that if they produce a truly vital technology, governments will lean on them to relinquish their patent rights or slash prices. This was the fate of Bayer, the manufacturer of the anthrax treatment Cipro, when an unknown terrorist began mailing anthrax spores in late 2001, killing five people. Four years later, as anxiety grew about an epidemic of bird flu in humans, the owner of the patent on Tamiflu, Roche, agreed to license production of the drug after very similar pressure from governments across the world. It is quite obvious why governments have scant respect for patients in true emergencies. Still, if everybody knows that governments will ignore patents when innovations are most vital, it is not clear why anyone expects the patent system to encourage vital innovations.

Excerpt from: Adapt: Why Success Always Starts with Failure by Tim Harford

💎 On how much the analogies we use can shape our thinking (for first introductions)

An experiment on Stanford international relations students during the Cold War provided a cautionary tale about relying on kind-world reasoning — that is, drawing only from the first analogy that feels familiar. The students were told that a small, fictional democratic country was under threat from a totalitarian neighbor, and they had to decide how the United States should respond. Some students were given descriptions that likened the situation to World War II (refugees in boxcars; a president “from New York, the same state as FDR”; a meeting in “Winston Churchill Hall”). For others, it was likened to Vietnam, (a president “from Texas, the same as LBJ,” and refugees in boats). The international relations students who were reminded of World War II were far more likely to choose to go to war; the students reminded of Vietnam opted for nonmilitary diplomacy. That phenomenon has been documented all over the place. College football coaches rated the same player’s potential very differently depending on what former player was likened to an introductory description, even with all other information kept exactly the same.

Excerpt from: Range: How Generalists Triumph in a Specialized World by David Epstein

💎 On the power of observing nature (for engineering breakthroughs)

Engineer Marc Isambard Brunel, (father of the more famous Isambard Kingdom Brunel) discovered the perfect method for tunnelling through mud and clay to build the Thames Tunnel under London by observing the action of the shipworm, which tunnels through the hulls of boats, lining the hold with a hard chalky material as it goes. Mirroring the worm’s action, Brunel designed a revolutionary and ingenious tunnelling system, in which workers could simultaneous cut and line a tunnel with brickwork to seal it.

On its opening in 1843, the Thames Tunnel was described as the ‘Eight Wonder of the World’, and Brunel’s shipworm system is the basis of tunnelling methods still used today — a version of it was used in the construction of the 50- kilometre (31-mile) Channel Tunnel, built 40 metres (130 feet) below the seabed.

Excerpt from How to Have Great Ideas: A Guide to Creative Thinking and Problem Solving by John Ingledew

💎 On attributing success to being committed rather than involved (in professional tennis)

Martina Navratilova was described as “the greatest singles, doubles, and mixed doubles player who’s ever lived.”

That was some compliment, coming from former World Number One player Billie Jean King.

This is what Marina had to say about commitment:

“Other players are involved in tennis, but I’m committed. It’s like ham and eggs. The chicken is involved; the pig is committed.”

Excerpt from: The Smart Thinking Book: 60 Bursts of Business Brilliance by Kevin Duncan

💎 On the false belief that using complicated words conveys intelligence (and low credibility)

Daniel Kahneman sets them straight in Thinking, Fast and Slow: ‘If you care about being thought credible and intelligent, do not use complex language where simpler language will do. My Princeton colleague Danny Oppenheimer refuted a myth prevalent among undergraduates about the vocabulary that professors find most impressive. In an article titled “Consequences of Erudite Vernacular Utilized Irrespective of Necessity: Problems with Using Long Words Needlessly”, he showed the couching familiar ideas in pretentious language is taken as a sign of poor intelligence and low credibility.

Excerpt from: How To Write Better Copy (How To: Academy) by Steve Harrison

💎 On the advantages of making small changes, rather than big ones (cheaper, faster, reversible)

Big doesn’t necessarily mean good. It could even be bad.

By contrast, there are tremendous advantages to making small changes.

Behavioural science has shown that tiny variations in phraseology can cause huge change.

Small changes are usually less costly, and often free.

Small changes attract less attention from bosses and meddlers, so they are easier to implement.

Small changes are easier to rectify if they don’t achieve their original objective.

So bear in mind that the ‘next big thing’ could be small.

Excerpt from: The Smart Thinking Book: 60 Bursts of Business Brilliance by Kevin Duncan

💎 On idea generation (5 simple steps)

A guy named James Webb Young, a copywriter from the 1940s, laid out a five-step process of idea generation that holds water today.

1. You gather as much information on the problem as you can. You read, you underline stuff, you ask questions, you visit the factory.

2. You sit down and actively attack the problem.

3. You drop the whole thing and go do something else while your subconscious mind works on the problem.

4 . “Eureka!”

5. You figure out how to implement your idea.

Excerpt from: Hey, Whipple, Squeeze This: The Classic Guide to Creating Great Ads by Luke Sullivan and Sam Bennett

💎 On how easy it is to forget we see the world from one particular perspective (when driving)

Naive realism suggests an answer: they do. It calls to mind a famous line of George Carlin’s: “Have you ever noticed that everyone driving slower than you is an idiot, and anyone going faster is a maniac?”

Excerpt from: Mindwise: How We Understand What Others Think, Believe, Feel, and Want by Nicholas Epley

💎 On how social cohesion among groups leads to conformity and reduced (financial) performance

The worst-performing clubs were built on affective ties and primarily social; the best-performing clubs had limited social connections and were focused on increasing returns. Dissent was far more frequent in the high-performing clubs. The low performers usually had unanimous votes, with little open debate. Harrington found that the votes in low-performing groups were “cast to build social cohesion rather than make the best financial decision.” In short conformity resulted in significantly lower returns.

Excerpt from: Conformity: The Power of Social Influences by Cass Sunstein

💎 On avoiding the perception that cheap prices equate to poor quality (selling hot-dogs)

Take what happened when Coney Island visitors encountered entrepreneur Nathan Handwerker’s new food stand. When he went into business in 1916, the Polish immigrant decided to undercut the competition. Everyone else was charging 10 cents for the classic Coney Island meal — the hot dog — so Handwerker priced the dogs he made from his wife’s old recipe at a mere five cents. Despite the fact that Handwerker’s hot dogs were every bit as delicious as the competition’s (and were made from real beef), he attracted almost no customers. Visitors to Coney Island viewed these mysterious half-priced hot dogs as inferior and wondered what cheap, substandard ingredients went into the recipe. It didn’t help when Handwerker offered free pickles or free root beer to hot dog buyers. Sales remained flat and, if anything, giving away freebies only further cemented the value attribution.

It wasn’t until Handwerker came up with a clever new ploy that his hot dogs really started selling. He recruited doctors from a nearby hospital to stand by his shop eating his hot dogs while wearing their white coats and stethoscopes. Because people place a high value on physicians, customers figured if doctors were eating there, the food had to be good. So they soon started buying from Handwerker, and his “Nathan’s Famous Hot Dogs” took off. It makes you wonder just how many times we miss out on something worthwhile because of our preconceptions about its value.

Except from: Sway: The Irresistible Pull of Irrational Behaviour by Ori Brafman and Rom Brafman

💎 Don’t confuse movement with progress (busyness is not a measure of productivity)

Some people, and businesses generally, love having lots of people rushing around.

It makes them feel productive.

Regardless of what they are doing, all the frenetic activity suggests that much helpful work is being done.

People even say sometimes that they like the buzz.

But it’s a bit like a goalkeeper diving to save a penalty.

He might be just as effective staying exactly where he is.

So movement doesn’t necessarily mean progress.

Don’t confuse the two.

Excerpt from: The Smart Thinking Book: 60 Bursts of Business Brilliance by Kevin Duncan

💎 On the cumulative benefits of a simple idea across an entire ecosystem (saving chickens to inventing a new economy)

Paul Seward runs an NGA in Kenya called Farm Input Promotions (FIPS-Africa), dedicated to increasing the productivity of the local smallholder farmers, many of whom have just a quarter-acre of land. Seward discovered that if you paint the chicks blue, the eagles and hawks don’t realize what they are, and don’t try to eat them. The biodegradable paint washes off in ten weeks, by which time the chicks have enough yard-smarts to run for cover when they see a shadow overhead.

Because the farmers are losing fewer chicks to birds of prey, it is now more worthwhile for them to inoculate the young birds against disease. Through both of these measures, they have gone from a survival rate of 20 percent to close to 85 percent. Because the farmers have more chickens, they are eating more chickens themselves — and better nutrition means a healthier family. And because it is now a better business, more people are taking up chicken farming. Oh, and the idea has created an entirely new profession: chicken painters, who charge three Kenyan shillings to paint each chick. A fascinating example of the cumulative benefits of a simple idea across an entire ecosystem.

Excerpt from: A Beautiful Constraint: How To Transform Your Limitations Into Advantages, and Why It’s Everyone’s Business by Adam Morgan and Mark Barden

💎 People don’t just eat food (they eat the brand)

One day, Korzybski offered to share a packet of biscuits, which were wrapped in plain paper, with the font row of his lecture audience. ‘Nice biscuit, don’t you think?’ said Korzybski, while the students tucked in happily. Then he tore the white paper and revealed the original wrapper – on it was a picture of a dog’s head and the words ‘Dog Cookies’. Two students began to retch, while the rest put their hands in front of their mouths or in some cases ran out of the lecture hall to the toilet. ‘You see,’ Korzybski said, ‘I have just demonstrated that people don’t just eat food, but also words, and that the taste of the former is often outdone by the taste of the latter.’

Excerpt from: Alchemy: The Surprising Power of Ideas That Don’t Make Sense by Rory Sutherland

💎 On the psychology of price (the Veblen effect)

Sailing across the Aegean Sea he was captured by Sicilian pirates.

They demanded a ransom: 20 talents of silver.

(That’s about 620kg worth about $600k.)

Caesar told them they were being ridiculous.

He couldn’t possibly allow himself to be ransomed so cheaply.

The pirates hesitated, the were confused.

Caesar insisted the ransom must be more than doubled to 50 talents of silver.

(Around 1550kg worth about $1.5 million.)

Now the pirated didn’t know what to make of this.

Normally their captives tried to escape as cheaply as possible.

They didn’t understand what was going on.

But if he said he would double the ransom, why argue?

They let Caesar’s men go back to Rome to raise the money.

And in Rome, in his absence, Caesar suddenly became very famous.

No one had ever been ransomed for such a vast sum before.

He must be very special, he must be very important/

That ransom demand put Julius Caesar on the political map.

He had just invented the Veblen effect.

Excerpt from: Creative Blindness (And How To Cure It): Real-life stories of remarkable creative vision by Dave Trott

💎 No such thing as new ideas (only new combinations)

There is no such thing as a new idea. It is impossible. We simply take a lot of old ideas and put them into a sort of mental kaleidoscope. We give them a turn and they make new and curious combinations. We keep on turning and making new combinations indefinitely; but they are the same old pieces of coloured glass that have been in use through all the ages.

Excerpt from: Hello World: How to be Human in the Age of the Machine by Hannah Fry

💎 Goodhart’s law and the unintended consequences of targets (in the former Soviet Union)

Consider Gosplan, the agency charged with central economic planning for the Soviet Union for most of the twentieth century. Their plans often involved setting economy-wide target amounts for commodities (wheat, tires, etc.), which broke down into production targets for specific facilities. In 1990, economist Robert Heilbroner described some of the complications with this system in “After Communism,” published in The New Yorker.

For many years, targets were given in physical terms — so many yards of cloth or tons of nails — but this lead to obvious difficulties. If cloth was reqarded by the yard, it was woven loosely to make the yarn yield more yards. If the output of nails was determined by their number, factories produced huge numbers of pin like nails; if by weight, smaller numbers of very heavy nails. The satiric magazine Krokodil once ran a cartoon of a factory manager proudly displaying his record output, a sing gigantic nail suspended from a crane.

Goodhart’s law summarizes the issue: When a measure becomes a target, it ceases to be a good measure.

Excerpt from: Super Thinking: The Big Book of Mental Models by Gabriel Weinberg and Lauren McCann