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Thought Process

One of the Tests of Leadership is the Ability to Sniff out a Fire Quickly

July 18, 2017 By Nagesh Belludi Leave a Comment

I’ve previously stressed the importance of problem-finding as an intellectual skill. I’ve also highlighted why risk analysis and risk reduction should be one of the primary goals of any intellectual process. In this article, I’ll write about being proactive in identifying problems before they evolve into crises.

How Wells Fargo Failed to Recognize a Problem and Address it before it Became a Bigger Problem

As the Wells Fargo accounts scandal unfolded, it was clear that Wells Fargo’s leadership was well aware of the burgeoning problems early on, but failed to act decisively and nip the problem in the bud.

Given impossible sales quotas to reach, Wells Fargo’s “high pressure sales culture” opened as many as two million bank and credit card accounts on behalf of its customers without their consent. Employees were rebuked or even fired for not meeting aggressive cross-selling targets.

Human nature is such that high-pressure demands can deplete the willpower people need to act morally and resist temptations. And such demanding circumstances encourage people to go into defensive mode, engage in self-interested behaviors, and consider only short term benefits and dangers.

Leadership Lessons from the Wells Fargo Accounts Scandal: “A Stitch in Time Indeed Saves Nine”

Leadership Lessons from the Wells Fargo Accounts Scandal Wells Fargo’s leadership reportedly had data about ethical breaches, but they ignored or misjudged the impact of the problem. Wells Fargo even held a two-day ethics workshop in 2014 unequivocally telling their employees not to do that. As per an internal review, managers knew that 1% of employees had been fired for “sales integrity” violations.

Wells Fargo’s leadership didn’t act quickly and decisively to mitigate the effects of the crisis. Warren Buffett, one of the Wells Fargo’s biggest investors, summarized this leadership inaction at the 2017 Berkshire Hathaway annual meeting:

There were three very significant mistakes, but there was one that was worse than all the others … The main problem was that they didn’t act when they learned about it … at some point if there’s a major problem, the CEO will get wind of it. And at that moment, that’s the key to everything, because the CEO has to act. It was a huge, huge, huge error if they were getting, and I’m sure they were getting, some communications and they ignored them or they just sent them back down to somebody down below.

Leadership: “Only the Paranoid Survive”

Andy Grove (1936–2016,) the illustrious cofounder and CEO of Intel, was a famous worrier. At Intel, the focal point of Grove’s leadership style was worry and skepticism. He believed that business success contains the seeds of its own destruction, and that in order for an organization to have longevity, it needs to continue to worry about the future.

'Only the Paranoid Survive' by Andrew S. Grove (ISBN 0385483821) Grove’s principle was immortalized in his famous proclamation, “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” He eloquently explained his worrisome mantra in his bestselling corporate memoir, Only the Paranoid Survive (1996.) He wrote in the preface:

The things I tend to be paranoid about vary. I worry about products getting screwed up, and I worry about products getting introduced prematurely. I worry about factories not performing well, and I worry about having too many factories. I worry about hiring the right people, and I worry about morale slacking off. And, of course, I worry about competitors. I worry about other people figuring out how to do what we do better or cheaper, and displacing us with our customers.

At Intel, worrying about the future created a culture of triumph that propelled change and innovation. Grove never let Intel rest on its laurels and led the company to break boundaries in microprocessor innovation. During his tenure as CEO from 1987—98, Intel’s stock price rose 32% a year. Grove also said, “A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation.”

Idea for Impact: Learn to Sniff out a Fire Better than Anyone Does

The principal tasks of leadership are (1) identifying the biggest risks and opportunities, and (2) allocating organizational resources. Therefore, one of the tests of leadership is the ability to recognize a problem before it becomes a disaster. If identified and addressed early, nearly any problem can be resolved in a way that is beneficial for everyone involved.

Many leaders tend to be reactionary—they claim, “why fix something that isn’t broken.” Even when they see an impending problem, they may assume that the problem “isn’t that big of a deal” and wish the problem will just go away. Alas, many problems never go away; they only get worse.

To become a good leader, be paranoid—always assume that “there’s no smoke without fire.” If, according to Murphy’s Law, everything that can go wrong will go wrong, the paranoid leader has an advantage.

Whenever you are doing anything, have your eyes on the possibility of potential problems and actively mitigate those risks. Never allow a problem to reach gigantic proportions because you can and must recognize and fix it in its early stages.

As the medieval French philosopher and logician Peter Abelard (1079–1142) wrote, “The beginning of wisdom is found in doubting; by doubting we come to the question, and by seeking we may come upon the truth.”

Wondering what to read next?

  1. A Sense of Urgency
  2. Charlie Munger’s Iron Prescription
  3. Overcoming Personal Constraints is a Key to Success
  4. How to Stimulate Group Creativity // Book Summary of Edward de Bono’s ‘Six Thinking Hats’
  5. Four Ideas for Business Improvement Ideas

Filed Under: Leadership, Sharpening Your Skills Tagged With: Adversity, Attitudes, Conflict, Creativity, Critical Thinking, Great Manager, Human Resources, Mental Models, Performance Management, Persuasion, Thinking Tools, Thought Process, Winning on the Job

Let Go of Sunk Costs

July 4, 2017 By Nagesh Belludi Leave a Comment

When people put their weight behind an idea or a belief, they become invested in it. They are likely to fight its corner rather than discard that idea or renounce their prior decision.

This tendency to throw good resources after bad, rather than cut losses, is the Sunk Cost Fallacy.

Quitting is Not Always Wrong

'Thinking, Fast and Slow' by Daniel Kahneman (ISBN 0374275637) People frequently become stuck with poor decisions that they keep holding on to in hopes that they will eventually prove their efforts worthwhile. Here’s Nobel laureate in economics Daniel Kahneman (author of Thinking, Fast and Slow, the bestselling exposition of human irrationality) in an interview with financial journalist Morgan Housel:

When I work I have no sunk costs. I like changing my mind. Some people really don’t like it but for me changing my mind is a thrill. It’s an indication that I’m learning something. So I have no sunk costs in the sense that I can walk away from an idea that I’ve worked on for a year if I can see a better idea. It’s a good attitude for a researcher. The main trap that young researchers fall into is sunk costs. They get to work on a project that doesn’t work and that is not promising but they keep at it. I think too much persistence can be bad for you in the intellectual world.

Don’t Become Biased Against Quitting

Sunk cost fallacy is why people who have already wasted money on tickets to an awful movie continue to watch it to the end and waste their time instead of walking out of the cinema hall. It’s the urge to justify previous decisions using the next one—for example, when people force themselves to munch their way through an unsavory meal at a restaurant or when people waste time in dead-end romantic relationships because they’ve already devoted so much time to the relationships and irrationally hope things will improve someway.

Some leaders continue a project once an initial investment is made and found flawed because stopping the project would be tantamount to conceding that previously-allocated resources have been wasted. For this reason, the sunk cost fallacy is also called the ‘Concorde Effect’ after the Anglo-French supersonic jet. In the ’60s, even though there was never a sufficient demand from airlines for the Concorde, the British and French governments continued to subsidize the development and production of the Concorde instead of admitting that they had wasted billions on a non-viable undertaking. The airline industry had long understood that the economics of supersonic transport were dubious, which had forced Americans to abandon their preliminary studies of supersonic jets.

Idea for Impact: Let to Cut Your Losses When Something’s Not Working

Sunk costs are backward-looking decisions. Don’t become excessively focused on a specific goal or outcome—you’ll become inflexible and unyielding. You’ll narrow your options and make yourself feel more limited and inhibited.

Don’t get attached to ideas and become affected by the sunk cost fallacy as your projects develop. Remain objective, identify the warning signs of losing propositions, and abandon lost causes where sensible. As the American cartoonist Charles Schulz of Peanuts fame once said, “No problem is so formidable that you cannot walk away from it.”

Wondering what to read next?

  1. Zeigarnik Effect: How Incomplete Tasks Trigger Stress
  2. Hofstadter’s Law: Why Everything Takes Longer Than Anticipated
  3. Everything in Life Has an Opportunity Cost
  4. Warren Buffett’s Advice on How to Focus on Priorities and Subdue Distractions
  5. Don’t Ruminate Endlessly

Filed Under: Mental Models, Sharpening Your Skills Tagged With: Biases, Decision-Making, Discipline, Procrastination, Targets, Thought Process, Time Management, Wisdom

Enabling the Highest Degrees of Understanding // Book Summary of Howard Gardner’s ‘The Unschooled Mind’

June 27, 2017 By Nagesh Belludi Leave a Comment

Traditional Schooling Fails to Teach Kids to Ask the Right Questions

'The Unschooled Mind' by Howard Gardner (ISBN 0465024386) In The Unschooled Mind (1991,) Harvard developmental psychologist Howard Gardner makes a persuasive case for why even the brightest students often lack a deep understanding of what traditional schooling purports to teach them.

According to Gardner, students (in elementary schools to graduate colleges) may take exams and earn degrees, but their supposed knowledge turns out deficient in situations that are at variance from the “text-to-test” framework in which they learnt it. To some extent, this disconnect is an outcome of teachers’ settling for “correct-answer compromises” whereby students take the rote repetition of facts, formulas, concepts, and theories for a real understanding of fundamental concepts.

Robust Forms of Intuitive Knowledge

Overall, Gardner argues that children tend to acquire well-established models for perceptive learning and intuitive thinking by the time they are five years old. They develop wide-ranging beliefs about the physical world and distinctive models of events and people.

Subsequently, when children begin their schooling, they are launched into pedagogic methods that often sidestep—even interfere with—the children’s entrenched patterns of learning and understanding. That is to say, children have to put up with a disagreeable dichotomy between their intuitive learning patterns and the academic learning:

In its theoretical resourcefulness and intuitions, [a 5-year old’s mind] is powerful; in its artistic endeavors, it can be creative and imaginative; in its adventurousness, it is exemplary. … Education that takes seriously the ideas and intuitions of the young child is far more likely to achieve success than education that ignores these views, either considering them to be unimportant or assuming that they will disappear on their own.

Experiential Learning, Supplanted by Critical Analysis and Synthesis, Can Enhance Students’ Points of View

The Unschooled Mind contends that far-reaching knowledge and appreciation of education can occur only when students are allowed to integrate their “prescholastic” learning modes with the scholastic and the disciplinary ways of traditional school education. “The problem is less a difficulty in school learning per se and more a problem in integrating the notational and conceptual knowledge featured in school with the robust forms of intuitive knowledge that have evolved spontaneously during the opening years of life.”

Gardner’s solution to this problem is to situate students in educational environments that pique their curiosity about the subject matter and, at the higher levels of education, challenge their preexisting assumptions. Educating children for the utmost degrees of understanding involves designing educational systems that help students synthesize these several patterns of learning.

Real Education Opens the Way to Thinking, Knowing, and Deeper Understanding

For real learning to occur, Gardner argues, students must have an opportunity to realize their own ignorance, and then ask and explore their own questions. Teachers must regularly expose students to “Christopherian encounters”—compelling personal discoveries of the inconsistencies between their various frames of reference—by approaching any subject matter through at least five instructive channels:

  • through narratives and stories,
  • through logical and quantitative lines of attack,
  • through “foundational” or philosophical inquiries,
  • through aesthetic approaches (exploring the creative and artistic elements) and
  • through creating and drawing upon the students’ life-experiences.

Gardner claims that traditional schooling should incorporate more apprenticing—apprenticeship programs build most effectively on the ways children learn—and schools should become more like children’s museums.

Recommendation: Read The Unschooled Mind by Howard Gardner, especially if you have a child in school. The key takeaway: to enable the highest degrees of understanding, any skills instruction must be systematically reinforced by instruction in which the deployment of the skills makes holistic sense.

Wondering what to read next?

  1. What Isn’t Matters Too
  2. Reframe Your Thinking, Get Better Answers: What the Stoics Taught
  3. Stuck on a Problem? Shift Your Perspective!
  4. Disproven Hypotheses Are Useful Too
  5. Overcoming Personal Constraints is a Key to Success

Filed Under: Leadership Reading, Sharpening Your Skills Tagged With: Creativity, Development, Learning, Philosophy, Thinking Tools, Thought Process, Training

Rapoport’s Rules to Criticize Someone Constructively

June 16, 2017 By Nagesh Belludi Leave a Comment

'Intuition Pumps' by Daniel Dennett (ISBN 0393082067) In Intuition Pumps and Other Tools for Thinking, philosopher Daniel Dennett lists Anatol Rapoport’s rules of constructive argument and debate:

Just how charitable are you supposed to be when criticizing the views of an opponent? If there are obvious contradictions in the opponent’s case, then you should point them out, forcefully. If there are somewhat hidden contradictions, you should carefully expose them to view—and then dump on them. But the search for hidden contradictions often crosses the line into nitpicking, sea-lawyering and outright parody. The thrill of the chase and the conviction that your opponent has to be harboring a confusion somewhere encourages uncharitable interpretation, which gives you an easy target to attack. But such easy targets are typically irrelevant to the real issues at stake and simply waste everybody’s time and patience, even if they give amusement to your supporters. The best antidote I know for this tendency to caricature one’s opponent is a list of rules promulgated many years ago by social psychologist and game theorist Anatol Rapoport (creator of the winning Tit-for-Tat strategy in Robert Axelrod’s legendary prisoner’s dilemma tournament).

How to compose a successful critical commentary:

  1. You should attempt to re-express your target’s position so clearly, vividly, and fairly that your target says, “Thanks, I wish I’d thought of putting it that way.”
  2. You should list any points of agreement (especially if they are not matters of general or widespread agreement).
  3. You should mention anything you have learned from your target.
  4. Only then are you permitted to say so much as a word of rebuttal or criticism.

One immediate effect of following these rules is that your targets will be a receptive audience for your criticism: you have already shown that you understand their positions as well as they do, and have demonstrated good judgment (you agree with them on some important matters and have even been persuaded by something they said).

This comports with the following sage advice gentle art of criticizing people effectively:

  • “If you disagree with somebody, you want to be able to state their case better than they can. And at that point you’ve earned the right to disagree with them. Otherwise you should keep quiet.”
    —Charlie Munger, Warren Buffett’s business partner (see this article)
  • “The man who can hold forth on every matter under debate in two contradictory ways of pleading, or can argue for and against every proposition that can be laid down—such a man is the true, the complete, and the only orator.”
    —Roman Orator Cicero (see this article)
  • “I have yet to find a more efficient and reliable way to probe the depths of a person’s knowledge and seriousness about an issue than asking them to explain the other side’s perspective.”
    —Entrepreneur Ben Casnocha (see this article)
  • “If you can’t imagine how anyone could hold the view you are attacking, you just don’t understand it yet.”
    —Philosopher Anthony Weston in Rulebook for Arguments (see this article)
  • “When you think you can nail someone with your argument, take a breath & see if you can phrase it as a face-saving question.”
    —Career Coach Marty Nemko

Wondering what to read next?

  1. To Make an Effective Argument, Explain Your Opponent’s Perspective
  2. How to Gain Empathic Insight during a Conflict
  3. Presenting Facts Can Sometimes Backfire
  4. Don’t Ignore the Counterevidence
  5. How to Argue like the Wright Brothers

Filed Under: Mental Models, Sharpening Your Skills Tagged With: Conflict, Conversations, Critical Thinking, Getting Along, Persuasion, Thinking Tools, Thought Process

Bad Customers Are Bad for Your Business

June 6, 2017 By Nagesh Belludi Leave a Comment

Herb Kelleher: “Dear Mrs. Crabapple, We will miss you.”

Southwest Airlines is a paragon of superlative customer service. Southwest’s happy and engaged employees routinely go out of their way to delight their customers. In spite of such remarkable devotion to customer satisfaction, there have been times when Southwest had to decide that some customers were just wrong for their business.

In the very entertaining and enlightening Nuts!: Southwest Airlines’ Crazy Recipe for Business and Personal Success, authors Kevin and Jackie Freiberg narrate how Southwest had to let go of a customer who couldn’t be less satisfied with her travel experience. This customer relations-story is best appreciated in light of the fun-loving and gregarious nature of Southwest’s legendary founder and ex-Chairman/CEO Herb Kelleher.

'Nuts- Southwest Airlines' by Kevin and Jackie Freiberg (ISBN 0767901843) A woman who frequently flew on Southwest, was constantly disappointed with every aspect of the company’s operation. In fact, she became known as the “Pen Pal” because after every flight she wrote in with a complaint.

She didn’t like the fact that the company didn’t assign seats; she didn’t like the absence of a first-class section; she didn’t like not having a meal in flight; she didn’t like Southwest’s boarding procedure; she didn’t like the flight attendants’ sporty uniforms and the casual atmosphere.

Her last letter, reciting a litany of complaints, momentarily stumped Southwest’s customer relations people. They bumped it up to Herb’s desk, with a note: ‘This one’s yours.’

In sixty seconds, Kelleher wrote back and said, ‘Dear Mrs. Crabapple, We will miss you. Love, Herb.’

Bad Customers: Wrong for Your Business, Wrong for Your Employees

Customers are the lifeblood of any business. Customer satisfaction begets loyalty, and loyalty begets revenues and profits. Businesses can therefore never place too much emphasis on their customers.

However, with slogans like “the customer is always right,” many businesses fall into the trap—and the slippery slope—of trying to satisfy every customer’s every wish.

Although your business may need all its customers—even the irksome ones—the reality is that some customers can actually be bad for your business. You can’t sustainably run a business without trying to satisfy every customer—particularly those cranky, annoying, or unreasonable ones.

Be wary of customers that fall into these categories:

  • Customers who require high maintenance but cannot be charged more
  • Customers whose demand for price destroys your profitability
  • Customers who want a lot more (better product, better service, better schedule) but are tightfisted
  • Customers who require supplementary services or products (especially those that are not part of your business’s core competencies) and tailored solutions that you don’t provide and can’t profitably offer to the rest of your customer base
  • Customers who don’t subscribe into the future vision of your business or your industry, which they’ll need to strategically commit to as some point in the future
  • Customers who tend to be aggressive and hostile, and disrespectful to your employees, regardless of how well they serve the customers

Strategic Customer Management Involves Being Tough Minded with Some Customers

Considering your long-term business goals, sifting through who should and who shouldn’t be your customers is an important element of strategic leadership.

With every product or service you offer, focus on who you want your customer to be, what expectations they have of you, and what you can profitably provide to them. Once you have figured that out, customers who don’t fit well need to be managed judiciously and decisively.

Without strategic customer management, you run a risk of disrupting your ability to converge around the needs of your principal customer base.

Remember the notion of opportunity cost—every ‘no’ is a ‘yes’ to something important.

Idea for Impact: Let Go of Some of Your Troublesome Customers

Sometimes, it may be better to lose certain customers by turning them down than to dilute your ability to serve other valuable customers profitably. Stop trying to delight every customer. Take a hard look at the past, current, and future of every customer and prioritize whom you can going to serve better and more successfully.

Wondering what to read next?

  1. Your Product May Be Excellent, But Is There A Market For It?
  2. A Sense of Urgency
  3. Fire Fast—It’s Heartless to Hang on to Bad Employees
  4. How to Manage Overqualified Employees
  5. David Ogilvy on Russian Nesting Dolls and Building a Company of Giants

Filed Under: Career Development, Leadership, Managing People, Mental Models Tagged With: Customer Service, Feedback, Great Manager, Hiring & Firing, Parables, Strategy, Thought Process

Good Questions Encourage Creative Thinking

May 23, 2017 By Nagesh Belludi Leave a Comment


Thought-provoking questions: potential game changers that are not asked nearly enough

“To think creatively, we must be able to look afresh at what we normally take for granted,” wrote George F. Kneller (1909–1999), the American academic and pioneer in the field of philosophy of education, in Art and Science of Creativity (1965.) Many people don’t know how to probe their thought processes with questions that encourage creativity.

Consider a brainstorming meeting where a new idea was received with comments and judgments like, “this won’t work,” “we’ve never done it this way,” “the customer won’t like it,” or, “if this is such a great idea, why hasn’t it been done before?” Immediately, a dysfunctional pattern ensues. Defensiveness sets in and the meeting’s participants will resist making any more suggestions and will fail to explore those ideas that were previously made. (One of the key principles of “divergent thinking” for idea-generation is to defer judgment. Neuroscience has suggested that the human prefrontal cortex—the self-monitoring element of the brain—is less active when we’re most creative.)

Creative thinkers ask open-ended, accommodating, and exploratory lead-in questions such as,

  • “I wonder if/why/whether … “
  • “Perhaps we could … “
  • “That would work if/when … “
  • “In what ways can we … .” This favorite of mine was introduced by Edward de Bono, the lateral thinking pioneer and creator of the “Six Thinking Hats” method for group creativity. De Bono called this lead-in question the ‘IWW.’

Instead of declaring “we could never do this,” ask “IWW (in what ways) may people start to do this?” In practical terms, this rephrasing may seem a small thing, but it embodies a leap in unhindered, open-minded thinking. The former seems a categorical rejection; but the latter invites an exploration of possibilities and signals the beginning of the search for solutions to constraints.

Idea for Impact: The ability to pose meaningful—and often deceptively simple questions is the hallmark of creativity

Often, what leads a creative person to get fresh insight is the quality of questions he/she asks. Questions such as “I wonder if …” and “In what ways can we … ” ignite dialogues in your mind that can lead to creative insights and new discoveries.

The prospect for creative thinking expands when you can reframe restraining statements into creative questions. Consider the following examples:

  • Restraining statement: “We can’t possibly do that.”
    Creative question: “If it were possible, how would you do it?”
  • Restraining statement: “It’ll take too long.”
    Creative question: “If it’s time-consuming, how can I make it short?”
  • Restraining statement: “I can’t talk to her.”
    Creative question: “If you could talk to her, what would you say?”
  • Restraining statement: “I’m too busy to do this.”
    Creative question: “In what ways can we free up some time for you?”

During brainstorming, asking questions in a way that opens participants’ minds to newer possibilities can have a transformative shift in the creative atmosphere. When participants suspend their judgments, everyone in the brainstorming session will feel comfortable enough to explore creative solutions to constraints.

Wondering what to read next?

  1. Howard Gardner’s Five Minds for the Future // Books in Brief
  2. How to Stimulate Group Creativity // Book Summary of Edward de Bono’s ‘Six Thinking Hats’
  3. This is Yoga for the Brain: Multidisciplinary Learning
  4. Four Ideas for Business Improvement Ideas
  5. Many Businesses Get Started from an Unmet Personal Need

Filed Under: Mental Models, Sharpening Your Skills Tagged With: Conversations, Creativity, Questioning, Skills for Success, Thinking Tools, Thought Process, Winning on the Job

Looking at Problems from an Outsider’s Perspective

March 28, 2017 By Nagesh Belludi 1 Comment

Fixation Hinders Creative Thinking

In two previous articles (this and this,) I’ve addressed the psychological concept of a “fixed mental set” or “fixation:” assessing a problem from a habituated perspective can prevent you from seeing the obvious and from breaking away from an entrenched pattern of thinking.

A period of rest, entertainment, or exposure to an alternative environment can usually dissipate fixation. The resulting shift in perspective can alter your point of view in a literal and sensory way, or it may change the way you think about or define the problem at hand.

A particularly instructive example of the beneficial effects of altering thought perspectives comes from Andy Grove’s autobiography / management primer Only the Paranoid Survive (1996.) Grove, the former Chairman and CEO of Intel who passed away earlier this year, was one of the most influential tech executives Silicon Valley has ever seen.

Japanese Onslaught on Intel’s Memory Business

'Only the Paranoid Survive' by Andrew S. Grove (ISBN 0385483821) Memory chips dominated Intel’s revenue, since the company was founded in 1968. In fact, Intel had a near monopoly in the memory business. However, by the late ’70s, a few Japanese competitors emerged. Grove reflected, “The quality levels attributed to Japanese memories were beyond what we thought possible. … Our first reaction was denial. We vigorously attacked the data.” In due course, Intel recognized the threat to its competitive position. (Between 1978 and 1988, the Japanese companies grew their market share in the memory business from 30% to 60%.)

At the same time, a small entrepreneurial team of engineers had developed Intel’s first microprocessor. In 1981, Intel persuaded IBM to choose this microprocessor to run their personal computers.

By 1985, when Grove was President, Intel’s executives engaged in an intense debate on how to respond to the onslaught of Japanese competitors in the memory business. One faction of engineers wanted to leapfrog the Japanese and build better memory chips. Another faction was in favor of disposing the lucrative memory business and betting Intel’s future on its promising microprocessor technology—something they believed the Japanese couldn’t match.

The “Revolving Door Test:” Getting an Outsider’s Perspective

In the middle of this intense debate, Grove was at a meeting with Intel’s CEO, Gordon Moore (of the Moore’s Law fame.) Grove had an idea for Moore; he recalled this episode in Only the Paranoid Survive,

I remember a time in the middle of 1985, after this aimless wandering had been going on for almost a year. I was in my office with Intel’s chairman and CEO, Gordon Moore, and we were discussing our quandary. Our mood was downbeat. I looked out the window at the Ferris Wheel of the Great America amusement park revolving in the distance, then I turned back to Gordon and asked, “If we got kicked out and the board brought in a new CEO, what do you think he would do?” Gordon answered without hesitation, “He would get us out of memories.” I stared at him, numb, then said, “Why don’t you and I walk out the door, come back in and do it ourselves?”

The switch in perspective—i.e. asking “What would our successors do?”—provided a moment of clarity for Moore and Grove. By contemplating Intel’s strategic challenges from an outsider’s perspective, shutting down the memory business was the discernible choice. Even Intel’s customers were supportive:

In fact, when we informed them of the decision, some of them reacted with the comment, “It sure took you a long time.” People who have no emotional stake in a decision can see what needs to be done sooner.

From the time Intel made the important decision to kill its memory chips business, it has dominated the microprocessor market.

If existing management want to keep their jobs when the basics of the business are undergoing profound change, they must adopt an outsider’s intellectual objectivity. They must do what they need to do to get through the strategic inflection point unfettered by any emotional attachment to the past. That’s what Gordon and I had to do when we figuratively went out the door, stomped out our cigarettes and returned to the job.

People in the trenches are usually in touch with pending changes early. Salespeople understand shifting customer demand before management does; financial analysts are the earliest to know when the fundamentals of a business change. While management was kept from responding by beliefs that were shaped by out earlier successes, our production planners and financial analysts dealt with allocations and numbers in an objective world.

Idea for Impact: If You’re Stuck on a Problem, Shift Your Perspective

Often, you can find the solutions to difficult problems merely by defining or formulating them in a new, more productive way.

Consider employing Andy Grove’s “Revolving Door Test” and examining your problems through an outsider’s lens. This shift in perspective may not only engender intellectual objectivity but also muffle the emotion and anxiety that comes with momentous decision-making.

Wondering what to read next?

  1. Making Tough Decisions with Scant Data
  2. The “Ashtray in the Sky” Mental Model: Idiot-Proofing by Design
  3. Five Where Only One is Needed: How Airbus Avoids Single Points of Failure
  4. After Action Reviews: The Heartbeat of Every Learning Organization
  5. Pretotype It: Fail Fast, Learn Faster

Filed Under: Business Stories, MBA in a Nutshell Tagged With: Customer Service, Decision-Making, Leadership, Problem Solving, Thought Process

Hofstadter’s Law: Why Everything Takes Longer Than Anticipated

March 24, 2017 By Nagesh Belludi Leave a Comment

Think of your weekend days. You typically wake up and think of all the free time at hand. You plan a day of leisure. You intend to run some errands and get a few things done around the house. Yet, at the end of the day, you’ve done barely half of what you originally set out to do.

People Habitually Underestimate the Time Tasks Take

Almost everything that humankind has ever wished for—from renewing a driver’s license to achieving peace between countries at war—seems to have not completed within the time originally planned.

As the following case studies will illustrate, interruptions, deferrals, and delays characteristically result in cost overruns, benefit shortfalls, and disputes.

  • Sydney’s Opera House was originally forecast in 1957 to be completed in 1963. The magnificent performing arts complex formally opened only in 1973 and cost 15 times the original budget.
  • When Boeing first launched its 787 Dreamliner aircraft in 2004, it ambitiously planned for first flight in September 2007. After six delays in the design and prototype phases, the 787 first flew only in December 2009. First aircraft delivery was scheduled for 2008, but didn’t happen until September 2011, more than three years behind schedule. Then, after a series of early in-service technical and operational problems, Boeing embarked on serious drawn-out repairs on 787s. Following yet more production delays, the 787 started flying full-fledged only in 2013. The innumerable delays and cost overruns associated with the 787 program became a financial nightmare for Boeing’s investors. Boeing took nine years to get the Dreamliner off the drawing board and into mature service at a total development cost of $32 billion—twice as long as the company’s original estimation and more than five times more expensive.
  • Less than 50 days before the start of last year’s Summer Olympic Games in Brazil, the state of Rio de Janeiro declared a “state of public calamity” citing severe delays and acute cost overruns. The New York Times reported, “The city is a huge construction site. Bricks and pipes are piled everywhere; a few workers lazily push wheelbarrows as if the Games were scheduled for 2017.”

Hofstadter’s Law: We Chronically Underestimate the Time Things Take

Hofstadter's Law: We Chronically Underestimate the Time Things TakeThe American cognitive scientist Douglas Hofstadter conceived an ironic and recursive rule to characterize the observation that everything takes longer than planned.

Hofstadter’s Law states, “It always takes longer than you expect, even when you take into account Hofstadter’s law”

Hofstadter first discussed this law in his Pulitzer Prize-winning Gödel, Escher, Bach: An Eternal Golden Braid, a book popular among American computer programmers.

Underestimating Task-Time Means Constantly Rushing to Finish Things

According to planning fallacy, when people predict the time it takes to complete a task, they make their estimations by considering the various steps they have to take, but fail to imagine the pessimistic conditions where things could go wrong.

In other words, thanks to optimism bias, people are generally too optimistic about the time it takes for them to complete a task, even when they are explicitly asked to think about potential obstacles.

Hofstadter’s Law also alludes to,

  • Superiority Bias where people overrate their own positive qualities and abilities—and underrate their negative qualities—when compared with others. “This takes three hours for the average Joe, but I am smarter, and I can do it in two hours.”
  • Beneffectance Bias where people perceive themselves as selectively accountable for the desired—but not the undesired—outcomes. “Last week, this took me 45 minutes, but the delay was because of conditions beyond my control. Today, I have full control; so I should take just 20 minutes.”

Idea for Impact: The problem with unforeseen delays is that you can’t foresee them, no matter how comprehensively you plan

Though somewhat silly in its recursive character, Hofstadter’s Law observes that, irrespective of how carefully you plan, every project will be prone to something unanticipated that will hinder its timely completion. The law’s recursiveness affirms that, even if you know a project may overrun and build that expectation into your planning, the project will overrun even your new estimated finish time.

Wondering what to read next?

  1. Zeigarnik Effect: How Incomplete Tasks Trigger Stress
  2. Let Go of Sunk Costs
  3. Everything in Life Has an Opportunity Cost
  4. Warren Buffett’s Advice on How to Focus on Priorities and Subdue Distractions
  5. To-Do or Not To-Do?

Filed Under: Mental Models, Sharpening Your Skills Tagged With: Biases, Decision-Making, Discipline, Goals, Procrastination, Stress, Tardiness, Targets, Thought Process, Time Management

Zeigarnik Effect: How Incomplete Tasks Trigger Stress

March 14, 2017 By Nagesh Belludi 2 Comments


People Remember Incomplete Tasks Better than Completed Tasks

When you listen to a song that’s unexpectedly cut off in the middle, your mind will repeatedly inject your thought stream with bits of the song in an attempt to remind you that you’re not yet “done” listening. But, once you listen to that song completely, your mind moves on.

Psychologists identify this tendency for interrupted tasks—and thoughts—to be evoked better than completed tasks the Zeigarnik Effect.

Ruminating about Unfinished Tasks Causes Anxiety

This phenomenon was first reported in the 1920s by the Lithuanian psychologist Bluma Zeigarnik. Working with her research advisor Kurt Lewin at the University of Berlin, Zeigarnik observed that restaurant waiters seemed to remember a complex order just so long as the order was in the process of being prepared and served, but not after it was finished.

Zeigarnik Effect and Cliffhangers

Zeigarnik effect is in force when an episode of a TV series ends with a cliffhanger leaving the audience in suspense until the next episode. Teachers who conclude their lectures by posing a perplexing question stimulate the class to think about the answer until the next class.

In another prominent use of the cliffhanger and the Zeigarnik Effect as a literary device, the English novelist Charles Dickens released most of his novels in the form of serial publications, i.e. in monthly or weekly installments. Dickens’s cliffhangers initiated such anticipation in reader’s minds that his American fans would gather at New York City’s docks for the latest installment to arrive by ship from England. The installment format also allowed Dickens to rework his character development and his plots depending on audiences’ reactions.

Zeigarnik Effect and Cliffhangers

Zeigarnik Effect and the Need for Closure: Task Management

Psychologist Bluma Zeigarnik’s research showed that the human mind hates unfinished tasks. Zeigarnik theorized that incomplete tasks incite “psychic tension” in you, which can be a persuasive impetus to complete the task. As long as you leave the task unfinished, your brain is in an uncomfortable position. Thoughts of the task serve to remind your brain of what it needs to do to get “comfortable” once again. As soon as you complete the task, this tension is alleviated, and in so doing, your brain lets the mind to release thoughts of the task from consciousness.

In other words, much mental effort is required when your tasks are interrupted or are still in the process of being completed.

From a time-management perspective, uncompleted tasks and unmet goals have a propensity for popping into your mind and worrying you persistently until the task is completed and the goal reached.

Emptying Your Mind of Nagging Tasks to Get Things Done

'Willpower: Rediscovering the Greatest Human Strength' by Roy F. Baumeister and John Tierney (ISBN 0143122231) According to John Tierney and Roy Baumeister’s Willpower: Rediscovering the Greatest Human Strength, further research in cognitive psychology has suggested that the Zeigarnik effect exists not just until you actually finish a task but also until you make concrete plans related to the task.

… turns out that the Zeigarnik effect is not, as was assumed for decades, a reminder that continues unabated until the task gets done. The persistence of distracting thoughts is not an indication that the unconscious is working to finish the task. Nor is it the unconscious nagging the conscious mind to finish the task right away. Instead, the unconscious is asking the conscious mind to make a plan. The unconscious mind apparently can’t do this on its own, so it nags the conscious mind to make a plan with specifics like time, place, and opportunity. Once the plan is formed, the unconscious can stop nagging the conscious mind with reminders.

According to Willpower, one research study asked students to think about an important exam. Half of the students were asked to put in writing specific plans of what/where/when they would study. Later, all students were asked to do a word association test. The group of students that did not write any study plans produced more word associations related to studying because studying was still on their mind; the group who did write down their study plans did not exhibit a comparable bias during the word association test.

Emptying Your Mind of Nagging Tasks to Get Things Done

The Zeigarnik Effect is the central theorem in David Allen’s legendary “Getting Things Done” method for task-management works.

Allen reasons that the dominant cause of everyday anxiety is that you are never truly sure of all the ‘things’ you’re supposed to do. You know you’ve got things to take care of and haven’t. Therefore, your mind keeps incoherently revisiting all that’s important but not yet completed. These “open loops” occupy much of your cognitive effort and debilitate your attention, causing anxiety, sapping your energy, and draining your willpower.

The primary benefit of using Allen’s Getting Things Done system is to reduce anxiety by emptying your mind of nagging tasks, filing away (or writing down) everything that must be done, placing them into a processing system, and scheduling chunks of time to single-mindedly do important things.

Human Mind Hates Unfinished Tasks

'Getting Things Done' by David Allen (ISBN 0670899240) According to the Zeigarnik Effect, unresolved and interrupted tasks thieve the attention of your brain until you have a clear—if subconscious—proposal of what you’re going to deal with them.

Just the simple act of capturing a task that reaches your head can achieve that sense of completion. Even if you haven’t completed the task, you’ll know that you’ve accomplished what could be done up to the moment.

Here’s three clever ways to use the Zeigarnik Effect to your advantage:

  • Use the Two-minute ‘Do-It-Now’ Rule. See my previous article on this task management discipline—in a nutshell: act immediately upon a contemplated task if it can be completed in less than two minutes. Don’t add it to your to-do list.
  • Make a Concrete Plan. Whenever you have a task in mind, stop doing whatever you’re doing, take a blank sheet of paper, and invest one minute to plan and record how you intend to tackle the task. If you intend to write an essay, write an outline; if it’s a report, start the list of contents.
  • Use To-Do Lists Judiciously. Establish and peruse a trusted system to capture your projects and tasks, and the commitments you have to yourself and others. According to David Allen’s Getting Things Done, your human brain is an ineffective and unreliable repository of all the things you try to cram into it. All this “stuff” collectively clutters your headspace. Getting all your stuff out of your head and into a trusted system can bring about a profound sense of relief.

Wondering what to read next?

  1. Hofstadter’s Law: Why Everything Takes Longer Than Anticipated
  2. Let Go of Sunk Costs
  3. Everything in Life Has an Opportunity Cost
  4. Ask This One Question Every Morning to Find Your Focus
  5. Warren Buffett’s Advice on How to Focus on Priorities and Subdue Distractions

Filed Under: Mental Models, Sharpening Your Skills Tagged With: Biases, Decision-Making, Discipline, Motivation, Procrastination, Stress, Tardiness, Targets, Thought Process, Time Management

Doing Is Everything

January 3, 2017 By Nagesh Belludi Leave a Comment

Many people know what they should do: lose weight, start exercising, stop smoking, get serious about managing careers, find a romantic partner, start saving money, and so on. Yet they can’t seem to make themselves do.

You know what to do, but you don’t do it!

It is told that long ago in China, a reclusive monk climbed up a tree in a forest. He settled comfortably and sat there in deep meditation, undisturbed by the outside world.

That became his everyday routine.

People from hamlets in the vicinity adopted him. They approached him with offerings and discussed their affairs. And he imparted his wisdom.

His fame soon spread everywhere. Visitors from far-flung towns trekked to the forest for his counsel.

Folks started calling him Birdsnest for the reason that he perched high up his tree.

On one occasion, the local king learned of Birdsnest and set forth to see him. After an arduous journey, the king located Birdsnest’s tree.

The king hollered at the monk trying to seek his attention. “O wise one, I have an important question to ask of you.”

The king waited for Birdsnest. No response came.

The king tried repeatedly to evoke Birdsnest, but didn’t succeed.

The king grew impatient waiting for Birdsnest.

Eventually, the king became irritated and shouted out, “I can wait no longer! Here is my question. Say, what is it that all the wise ones taught? What is at the heart of all the teachings of the great masters? What is the most profound thing the Buddha ever said?”

The king lingered around Birdsnest’s tree for a long time.

Finally, Birdsnest summoned the king. Holding a meditative poise, Birdsnest declared, “At all times, do good things. Don’t do bad things. This is all the Buddha said. This is what the wise men instructed.”

The king became infuriated.

Birdsnest continued to meditate with a gentle half smile behind his eyes. He was obviously toning down the power of the Buddha’s wisdoms.

The king screamed, “I can’t believe this impertinence! Is that all you’ve got for me? Do good things and don’t do bad things. I knew that when I was three years old, you blithering fool!”

The afternoon sun filtered in through the trees as Birdsnest looked down from his perch. His compassion and matter-of-factness radiated out from your heart. He sympathetically acknowledged, “Indeed, the three-year-old knows it. Yet the eighty year-old finds it very difficult to do!”

The Knowledge-Action Gap

'The Now Habit' by Neil Fiore (ISBN 1585425524) One of the most insidious obstacles to your success in life is the chasm between knowing and doing—between thinking about something and acting on it, between ideating and implementing.

Your ideas may be impressively simple, but accomplishing them with discipline and steadiness can be very, very difficult indeed. This is the knowing-doing gap.

Ruminate about what stops you from accomplishing the things you need to do, want to do, and know how to do, but can’t get to do. Usually, your alleged obstacles—your boss, parents, spouse, children, colleagues, situations—are but excuses. When you sincerely unearth the reasons for your putting things off, you’ll realize that, by and large, it’s you who are sabotaging yourself.

Yes, occasionally, you may face a few genuine external obstacles. Nevertheless, in the grand scheme of things, you usually have the power to overcome them or work around them.

Procrastination is a Breakdown of Self-Discipline

As I have stated in my previous articles, procrastination is weakness of will. Chronic procrastination is a recurrent breakdown of self-discipline.

The overpowering emotion associated with chronic procrastination is guilt. These feelings of guilt are not just specific to the task you’re dodging, even though, at the time of procrastination, your mind may be full of qualms and repentance under the direct influence of your putting off the dreadful task. More accurately, the guilt you feel about your chronic procrastination is the outcome of not living up to your full potential and not authentically engaging in the many possibilities life presents you.

'When Things Fall Apart' by Pema Chodron (ISBN 1611803438) It takes courage to face your anxieties, to forge ahead despite your feelings, and to act. Self-improvement begins with self-reflection. And self-reflection derives from self-compassion. The renowned Buddhist nun Pema Chödrön wrote about self-compassion in her wonderfully reassuring classic When Things Fall Apart: Heart Advice for Difficult Times, “The most fundamental aggression to ourselves, the most fundamental harm we can do to ourselves, is to remain ignorant by not having the courage and the respect to look at ourselves honestly and gently.”

Don’t hunt for motivation. As I’ve asserted in previous articles, motivation is glorified as a personal trait. While it is beneficial to be motivated, folks who actually manage to get things done are those who find a way to work at whatever they are interested in even when they do not really feel like doing it.

Idea for Impact: Make 2017 the Year of Getting Things Done

Transform your thoughts into action.

Put your ideas into practice.

Don’t let excuses, apologies, indolence, or a lack of motivation get in the way.

Knowing is nothing.

Doing is everything.

Wondering what to read next?

  1. Get Good At Things By Being Bad First
  2. Intentions, Not Resolutions
  3. Change Your Mindset by Taking Action
  4. To-Do or Not To-Do?
  5. Hofstadter’s Law: Why Everything Takes Longer Than Anticipated

Filed Under: Sharpening Your Skills Tagged With: Decision-Making, Discipline, Emotions, Goals, Motivation, Parables, Procrastination, Thought Process

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About: Nagesh Belludi [hire] is a St. Petersburg, Florida-based freethinker, investor, and leadership coach. He specializes in helping executives and companies ensure that the overall quality of their decision-making benefits isn’t compromised by a lack of a big-picture understanding.

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