Critical Thinking

Let’s Hope She Gets Thrown in the Pokey

November 16, 2021 By Nagesh Belludi 1 Comment

The Elizabeth Holmes-Theranos criminal trial hasn’t been without its share of theatrics.

Yes, Holmes’s massive fraud is obvious. She entranced (read WSJ reporter John Carreyrou’s excellent chronicle, Bad Blood (2018; my summary)) journalists, investors, politicians, and business partners into believing her fantasy science. She may even be responsible for negligent homicide if people died because of her company’s fake test results.

Elizabeth Holmes / Theranos criminal trial

Then again, these sorts of cases generally hang on subtle distinctions between hyperbole and outright dishonesty and whether such deceit was deliberate.

Holmes’s lawyers will argue that she was merely an ambitious entrepreneur who failed to realize her vision but wasn’t a fraudster. Her lawyers will make a case that she is not to be blamed because people took her puffery and exaggeration as factually accurate. At what point do her wishfulness and enthusiasm go from optimism to intentional fraud? That’ll be the critical question.

At any rate, the Theranos verdict is unlikely to deter others from the swagger, self-assurance, hustle, and the “fake it till you make it” ethos that is so endemic to start-up culture. Investors will never cease looking at people and ideas rather than the viability of their work.

Idea for Impact: Don’t be so swayed by story-telling that has a way of making people less objectively observant. Assemble the facts, and ask yourself what truth the facts bear out. Never let yourself be sidetracked by what you wish to believe.

Don’t Be Deceived by Others’ Success

November 15, 2021 By Nagesh Belludi Leave a Comment

Imitating successful competitors is a leading pathway to business innovation. Benchmarking can offer meaningful insights into comparative performance and help discover learnings for improvement. However, adopting others’ best practices can be surprisingly misleading and ineffective.

Four perception biases that come with benchmarking other companies can fail to make yours any better.

Many companies luck into success.

Don't Be Deceived by Others' Success As I’ve noted before, you can’t reproduce others’ luck. Successful companies tend to significantly overvalue the effect of their leaders’ deliberate decisions on their performance and understate the role of chance—being at the right time, at the right place, with the right people. Alas, what worked in their circumstances may not work in yours.

The set-up-to-fail syndrome.

Benchmarking can be remarkably misleading when you make oversimplified comparisons to superstars who may not represent your situation. You could sink your business if you blindly copy celebrity leaders’playbooks in the wrong context, product, strategy, or market.

Companies that benchmark Apple and Steve Jobs and sidestep market research often disappoint themselves when their product launches fail. The leaders of these companies neither have Jobs’s brilliant intuition nor his extraordinarily talented creative team to build what customers want but didn’t know they wanted yet.

In the same way, companies that imitate the 20-70-10 “rank and yank” processes from Jack Welch’s playbook often fail to realize that several factors contributed to their success at General Electric. Welch had a robust organizational culture that insisted on regular and candid employee feedback and robust personnel processes for recognizing and developing the best talent within the company.

Corporate culture is a tricky business.

Your company’s culture—the prevailing way your people feel, think, behave, and relate to one another—cannot be changed easily. One industrial company aborted trying to imitate Google’s culture. This company couldn’t get its managers and employees to be more autonomous and innovative because the company’s and the industry’s ingrained culture did not lend itself to experimentation, risk-taking, and the celebration of fast failure.

Benchmarks look backward, not forwards.

In a competitive, ever so fast-changing world, what has succeeded in the past ten years may not necessarily do so in the next 10. The management guru Tom Peters once warned, “Benchmarking is stupid! Because we pick the current industry leader, and then we launch a five-year program, the goal of which is to be as good as whoever was best five years ago, five years from now.”

A strong focus on “quick wins” can turn out long-term losers.

Benchmarking can make short-term gains but have adverse long-term effects that may not manifest until many years later. By imitating an industry leader, a capital goods company decided to boost efficiency by outsourcing design to its suppliers. Years later, it discovered the debilitating effects of the loss of vital technical knowledge.

Idea for Impact: Best practices only add value when applied in the proper context

Applying best practices in the wrong context is a sure-fire way to hold your company back.

Pay attention to all ideas, mull them over, test what makes sense, adopt what works, and discard what doesn’t.

Sure, help yourself to great ideas wherever you can get them, but be mindful of the context. Try to understand how the top performers’ circumstances and culture may be causing their success. Think through the long-term consequences of any decision you take or any practice you adopt.

You Can’t Believe Those Scientific Studies You Read About in the Papers

November 11, 2021 By Nagesh Belludi Leave a Comment

Look at the filler articles in the well-being section of your preferred newspaper, and you’ll often luck into health advice with nuance-free mentions of all sorts of scientific studies.

One week, drinking coffee is good for you. Next week it’s harmful. Ditto video games. Swearing makes you look intelligent, but hold your flipping horses … the next day, swearing makes you seem verbally challenged to explain your annoyances respectfully.

Gutter press revelations isn’t only less-than-scientific, but it actually defeats the objectives of science.

You Can't Believe Those Scientific Studies You Read About in the Papers In June 2014, the Proceedings of the National Academy of Sciences published an allegedly peer-reviewed paper titled “Female hurricanes are deadlier than male hurricanes.” The study deduced that hurricanes with feminine names generate more casualties supposedly because tacit sexism makes communities take the storms with a feminine name less seriously. The work was discredited as soon as its methods were dissected. Nevertheless, the dubious paper had made its way into media channels across the country because of the believability implied by the influential National Academy of Sciences.

Positive results that make a sensational headline tend to get published readily—especially if they speak to the audiences’ worldviews. In truth, many of these studies are low-quality studies where the variables are latent, and the effects aren’t directly observable and quantifiable, especially in the social sciences. Sadly, with the push to produce ever more papers in academia, peer review doesn’t necessarily corroborate the quality of research nearly so much as it enforces a discipline’s norms.

Idea for Impact: Let’s be skeptical readers. Let’s be better readers.

Let’s subject every claim to the common-sense test: is the claim possible, plausible, probable, and likely? Everything possible isn’t plausible, everything plausible isn’t probable, and everything probable isn’t likely.

Being skeptical does not mean doubting the validity of everything, nor does it mean being cynical. Instead, to be skeptical is to judge the validity of a claim based on objective evidence and understand the assertions’ nuances. Yes, even extraordinary claims can be valid, but the more extraordinary a claim, the more remarkable the evidence to be mobilized.

While we’re on the subject, have you heard about research that found that you could make unsuspecting people believe in anything by merely asserting that it’s been “shown by research?” Now then, the former’s the only research worth believing. Very much so, yes, even without evidence!

Reinvent Everyday

October 26, 2021 By Nagesh Belludi Leave a Comment

General Electric supremo Jack Welch’s advice to Indian-American investor and businessman Vivek Paul:

Every time I land in New York after an international business trip, I imagine that I’ve just been appointed chairman and that this is my first day in the role, and the guy before me was a real dud. Every time I think, “What would I do that was different than the guy before? What big changes would I make?”

When you can think about expectations from a more detached point of view, rather than an immersed point of view, you aren’t overly invested in an entrenched pattern of thinking.

A period of rest, entertainment, or exposure to an alternative environment can dissipate fixation and help you gain a fresh perspective. It makes you think big. Subconsciously, you can push yourself harder and go after bigger, loftier, harder goals.

Idea for Impact: Don’t limit yourself by past expectations.

Don’t Demonize Employees Who Raise Problems

October 21, 2021 By Nagesh Belludi Leave a Comment

Don't Demonize Employees Who Raise Problems

One of the traps of successful leadership is being surrounded with “yes men.” Your team could hesitate to challenge your decisions, no matter how bad or mistaken they may be.

Hearing what others rally think can give you a valuable perspective. Nevertheless, it’s not really in human nature to invite others to inform you how—and why—you’re wrong. Human nature is such that we all want to hear nice things about ourselves and be reassured that we’re on the right track.

“When in doubt, keep your mouth shut,” indeed

Employees are terrified to speak up owing to the need for self-preservation. The apparent risks of speaking up are very personal and immediate, especially in comparison to some potential benefits to your organization someday. Employees impulsively play it safe.

Even if your employees are more knowledgeable, they may think twice before giving you candid feedback, especially if you’ve demonstrated tendencies of being vindictive, penalizing—even reprimanding publicly or sacking—anybody with a dissenting view.

Disciplining employees who raise problems only exacerbates the problematical frame of mind around a successful leader. It promotes the toxic culture of unquestioned power. As the American general and diplomat Colin Powell reminded in a famous speech at Sears headquarters, “The day your people stop bringing you their problems is the day you have stopped leading them. They have either lost confidence that you can help them or concluded that you do not care. Either is a failure of leadership.”

Idea for Impact: Cultivate a culture in which psychological safety thrives.

Create a work environment where your employees aren’t afraid to speak up and express their concerns. People will stick their neck out only if they sense a low psychological threat level.

Seek a Fresh Pair of Eyes

October 14, 2021 By Nagesh Belludi Leave a Comment

Seek a Fresh Pair of Eyes---Get a New Perspective

When was the last time your team stopped to ask, “Why”?

“Why are we doing this?”

“Why are we doing it that way?”

You can ask this important question about everything—in your business or life!

We humans are creatures of habit—unquestioned and unexamined. Unless you intentionally ask “why,” you’ll just do things the same way because that the default mode for how you’ve always done it, or that’s how somebody showed you.

Once you’re set in your habits, keep scrutinizing them.

The best improvement ideas often come from people who aren’t stuck in the established ways.

Encourage new hires and interns to challenge the “that’s just how things are done around here” mentality when they disagree with it. Until they’ve been housetrained, they’re the ones with the freshest perspective.

Ask them to make a note of everything that they see and doesn’t make sense. After a few weeks, when they’ve become familiar with the organization and its workflow, have them reassess their initial opinions, reflect, and report their observations. Invite them to spend time on the internet looking for how these things are done at other companies and provide suggestions for improvement.

Idea for Impact: Sometimes people are too close to things to see the truth. To get a new perspective on the status quo, seek a fresh pair of eyes.

Consensus is Dangerous

August 30, 2021 By Nagesh Belludi Leave a Comment

Management books tout the importance of harmony, cohesion, and alignment with company values and practices. Comforting though they are, such goals often carry with them the assumption that unanimity is always helpful.

Indeed, like-mindedness has its benefits, viz. high morale, a sense of identity, and a vision’s execution. But an unchallenged majority can “bend reality.” Toeing the line can delude everyone into having faith in opinions that’re not true or beneficial.

I’ve talked previously about how humans have a tendency to create, maintain, and guard cliques. Life-minded groups recruit, socialize, and reward consensus while reproving dissent (consider Scientology.) People are recruited to fit with the organization, and they become even more socialized into the culture.

Influence-by-majority belief narrows the cognitive map

For the sake of consensus, people can overlook the confutation from their own senses and blindly follow the majority, whether right or wrong. In the bestselling Outliers: The Story of Success (2008,) pop sociologist Malcolm Gladwell calls attention to the cultural predisposition to maintain silence and not rock the boat:

Korean Air had more plane crashes than almost any other airline in the world for a period at the end of the 1990s. When we think of airline crashes, we think, Oh, they must have had old planes. They must have had badly trained pilots. No. What they were struggling with was a cultural legacy, that Korean culture is hierarchical. You are obliged to be deferential toward your elders and superiors in a way that would be unimaginable in the U.S.

Uniformity of thought and esprit de corps can act together to make people amenable and taciturn when they see a problem or a better option.

Idea for Impact: Making sure everyone’s on the same page can produce harmony—of the cult-like variety. Encourage dissent and counterevidence in decision-making.

The Solution to a Problem Often Depends on How You State It

August 25, 2021 By Nagesh Belludi Leave a Comment

The Solution to a Problem Often Depends on How You State It Consider a family with four drivers and one car. Being a one-car family isn’t always convenient or even pleasant. Creative solutions can’t emerge if the family asks, “How could we make the car available to everybody who needs it when they need it?” If, instead, they ask, “How can we each meet our needs without using the car?” Mom can join a carpool to work. Dad can combine his trips when he runs errands once a week. The kids can ride their bikes whenever the weather favors. If the family needs to be in two places at the same time, somebody can Uber. Coordinating can be annoying, but with a bit of flexibility and communication, getting by with one car can easily be pulled off.

Defining a problem narrowly (“How can we create a better mousetrap?”) will only get you restricted answers. When you define the issue more broadly (“How can we get rid of mice?,”) you open up a whole range of possibilities.

Idea for Impact: Revisit and redefine the problem if you can’t get through the tensions inherent in conflicting expectations. The fresh perspective can open your mind to alternative interpretations.

Lessons from David Dao Incident: Watch Out for the Availability Bias!

August 23, 2021 By Nagesh Belludi Leave a Comment

In the weeks and months after the United Airlines’ David Dao incident and the ensuing customer service debacle, news of all kinds of disruptive airline incidents, coldblooded managers, and inconsiderate airline staff showed up everywhere.

The United incident raised everyone’s awareness of airline incidents. Expectedly, the media started drawing attention to all sorts of airline incidents—fights on airplanes, confusion and airports, seats taken from small children, insects in inflight meals, snakes on the plane—affecting every airline, large and small. However, such unpleasant incidents rarely happen, with thousands of flights every day experiencing nothing of the sort.

Lessons from David Dao Incident: Watch Out for the Availability Bias Parenthetically, the underlying problem that led to the David Dao incident wasn’t unique to United. The incident could have happened at other airlines. All airlines had similar policies regarding involuntary-denied boarding and prioritizing crew repositioning. Every other airline, I’m sure, felt lucky the David Dao incident didn’t happen on their airline.

In the aftermath of the incident, many people vowed to boycott United. Little by little, that negative consumer sentiment faded away while the backlash—and media coverage—over the incident diminished.

Availability bias occurs when we make decisions based on easy or incomplete ideas.

The David Dao incident’s media coverage is an archetypal case of the Availability Bias (or Availability Heuristic) in force. Humans are inclined to disproportionately assess how likely something will happen by how easy it is to summon up comparable–and recent–examples. Moreover, examples that carry a fierce emotional weight tend to come to mind quickly.

The availability heuristic warps our perception of real risks. Therefore, if we’re assessing whether something is likely to happen and a similar event has occurred recently, we’re much more liable to expect the future possibility to occur.

What we remember is shaped by many things, including our beliefs, emotions, and things like intensity and frequency of exposure, particularly in mass media. When rare events occur, as was the case with the David Dao incident, they become evident. Suppose you’re in a car accident involving a Chevy, you are likely to rate the odds of getting into another car accident in a Chevy much higher than base rates would suggest.

If you are aware of the availability bias and begin to look for it, you will be surprised how often it shows up in all kinds of situations. As with many other biases, we can’t remove this natural tendency. Still, we can let our rational minds account for this bias in making better decisions by being aware of the availability bias.

Idea for Impact: Don’t be disproportionately swayed by what you remember. Don’t underestimate or overestimate a risk or choosing to focus on the wrong risks. Don’t overreact to the recent facts.

If You’re Looking for Bad Luck, You’ll Soon Find It

August 16, 2021 By Nagesh Belludi Leave a Comment

Consider a woman who complained that her neighborhood dry cleaner ruined her expensive slacks. “Last month, he spoiled my wool blazer. Last Christmas, he … . It always happens,” she grumbled.

This woman knew she was taking chances with this dry cleaner. She allowed it to happen.

How to Change Your Luck Luck is sometimes the result of taking appropriate action. And, bad luck is sometimes the result of tempting fate.

Say, you’ve been planning for weeks for your next big trip. You got an incredible deal on the day’s very last flight to your destination. On the day of departure, your late-night flight gets canceled. Sure, you’re a victim of back luck—but you invited it. Think about it. Odds are, you’re more likely to have a flight delay or cancellation later in the day because airlines schedule their rosters tightly to maximize aircraft and flight crew utilization. Delays and disruptions from earlier in the day propagate onward to the late flights.

Often, luck has nothing to do with bad luck. “The fault,” as Shakespeare wrote, “is not in our stars, but in ourselves.”

Sometimes you can be your own worst enemy. Don’t self-sabotage yourself by tempting fate.

Idea for Impact: Bad choices beget bad luck

You have to be lucky to get lucky. You have no control over many outcomes in life, but you can always increase the odds of getting lucky by taking appropriate action. More importantly, you can minimize the chance of bad luck by decreasing its odds.

Remember, a good mathematics student never buys a lottery ticket, and if he does, he never grumbles about not winning the jackpot!

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Critical Thinking

Wondering what to read next?

Many companies luck into success.

The set-up-to-fail syndrome.

Corporate culture is a tricky business.

Benchmarks look backward, not forwards.

A strong focus on “quick wins” can turn out long-term losers.

Idea for Impact: Best practices only add value when applied in the proper context

Wondering what to read next?

Gutter press revelations isn’t only less-than-scientific, but it actually defeats the objectives of science.

Idea for Impact: Let’s be skeptical readers. Let’s be better readers.

Wondering what to read next?

Wondering what to read next?

“When in doubt, keep your mouth shut,” indeed

Idea for Impact: Cultivate a culture in which psychological safety thrives.

Wondering what to read next?

Once you’re set in your habits, keep scrutinizing them.

Wondering what to read next?

Influence-by-majority belief narrows the cognitive map

Wondering what to read next?

Wondering what to read next?

Availability bias occurs when we make decisions based on easy or incomplete ideas.

Wondering what to read next?

Idea for Impact: Bad choices beget bad luck

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