Right Attitudes

Ideas for Impact

Thought Process

Be Smart by Not Being Stupid

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No superhuman ability is usually required to dodge the many foolish choices to which we’re prone. A few basic rules are all that’s needed to shield you, if not from all errors, from silly errors.

Charlie Munger often emphasizes that minimizing mistakes may be one of the least appreciated tricks in successful investing. He has reputedly credited much of Berkshire Hathaway’s success to consistently avoiding stupidity. “It is remarkable how much long-term advantage we have gotten by trying to be consistently not stupid instead of trying to be very intelligent.” And, “I think part of the popularity of Berkshire Hathaway is that we look like people who have found a trick. It’s not brilliance. It’s just avoiding stupidity.” They’ve avoided investing in situations they don’t understand or summon experience.

As a policy, avoiding stupidity in investing shouldn’t mean avoiding risk wholly; instead, it’s taking on risk only when there’s a fair chance that you’ll be adequately rewarded for assuming that risk.

Idea for Impact: Tune out stupidity. Becoming successful in life isn’t always about what you do but what you don’t do. In other words, improving decision quality is often more about decreasing your chances of failure than increasing your chances of success.

Wondering what to read next?

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  2. Accidents Can Happen When You Least Expect Them: The Overconfidence Effect
  3. Making Tough Decisions with Scant Data
  4. Defect Seeding: Strengthen Systems, Boost Confidence
  5. How to Solve a Problem By Standing It on Its Head

The Creativity of the Unfinished

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Don’t dot every I and cross every T. Leave a stone unturned.

Ignore a rule. Don’t tie up every loose end.

Leave some questions unanswered. Let something be out of place.

Violate the expectation and usher a realm of potentiality. As the American artist Julia Cameron noted in her seminal self-help book The Artist’s Way: A Spiritual Path to Higher Creativity (1992,) “Art needs time to incubate, to sprawl a little, to be ungainly and misshapen and finally emerge as itself. The ego hates this fact. The ego wants instant gratification and the addictive hit of an acknowledged win.”

A piece of art, a movie, a melodic line, or a production all tend to be more captivating when they leave you wondering—when they urge you to explore the possibilities your mind has to offer.

Wondering what to read next?

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  3. You Can’t Develop Solutions Unless You Realize You Got Problems: Problem Finding is an Undervalued Skill
  4. Van Gogh Didn’t Just Copy—He Reinvented
  5. Turning a Minus Into a Plus … Constraints are Catalysts for Innovation

Lessons from the Japanese Decision-Making Process

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Japanese firms traditionally use the ringi seido (“request for approval system”) to make critical decisions. A proposal is circulated to appropriate people, advancing from lower to higher ranks. As the proposal works through the management layers before landing at the top, each participant puts their stamp (the hanko) on the document.

This collective consensus process allows for a greater number of reasonable alternatives to be considered and for the risk to be spread. Although it may be slow, the implementation is faster once the decision is made. (Since the early ’90s, Toyota has followed a “three-stamp movement,” restricting the number of people needing to approve a proposal to three.)

Unlike consensus management in the west, the ringi system is often used to appease factions in an institution. Given the Japanese norms (nemawashi) of social structure and intercultural communication, everybody tends to be very diplomatic when giving an opinion. A decision isn’t made if unanimity isn’t reached.

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  4. The Abilene Paradox: Just ‘Cause Everyone Agrees Doesn’t Mean They Do
  5. To Make an Effective Argument, Explain Your Opponent’s Perspective

3 Ways to … Manage for Creativity

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Managers can create the conditions for innovation by encouraging a culture of being creative—not just productive—and razing barriers that stifle individual expression.

  1. Get less formal. Foster a culture characterized by a tolerance for failure and a willingness to experiment. Involve everyone and welcome great ideas from everywhere. Make sure everyone feels free to speak out: people will own solutions if they’ve been involved in the decision-making.
  2. Simplify the workplace. Look at things with a fresh eye, as an outsider might—sometimes you’re too close to things to see the truth. Drop unnecessary work, and explore what routines can be phased out or improved. Work with coworkers to eliminate extraneous loops and redundancies if your organization has far too many rules, approvals, and forms. Streamline decision-making.
  3. Defy tradition. If no one can recall why your team does something a particular way, the task is likely more convoluted than it needs to be. Hold a ‘why do we do it that way?’ challenge. Invite colleagues from different teams to come in and look at things in a detached way. Figure out what’s relevant and necessary (and what’s not) and frequently reevaluate the priority list as new things are added.

Idea for Impact: Managing for creativity is a conscious effort in experimentation.

Wondering what to read next?

  1. Question the Now, Imagine the Next
  2. Defect Seeding: Strengthen Systems, Boost Confidence
  3. Overcoming Personal Constraints is a Key to Success
  4. Creativity—It Takes a Village: A Case Study of the 3M Post-it Note
  5. What the Rise of AI Demands: Teaching the Thinking That Thinks About Thinking

To Rejuvenate Your Brain, Give it a Break

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Research suggests that once you hit a “plateau of productivity,” the number of hours you work without a break is inversely proportional to how much you’ll accomplish.

Even brief escapes such as a walk in nature or a run around the block can clear your head and rejuvenate the brain. Just leave the phone behind and seek novelty (e.g., noticing something new or taking different paths.) Engage your mind with the world instead of worrying about the work you’re supposedly taking a break from.

Downtime allows the brain to refresh the specific neural network you’ve been using, make new connections, and inspire you to fresh approaches to tasks.

Idea for Impact: Intermittent escapism can be valuable. It distracts the brain from useless worry, helps generate out-of-the-box ideas, and may even restore a sense of wonder.

Novelist Neil Gaiman said it better, “People talk about escapism as if it’s a bad thing… Once you’ve escaped and come back, the world is not the same as when you left it. You return to it with skills, weapons, and knowledge you didn’t have before. Then you are better equipped to deal with your current reality.”

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  3. Everything in Life Has an Opportunity Cost
  4. Make a Habit of Stepping Back from Work
  5. Zen in a Minute: Centering with Micro-Meditations

Why Investors Keep Backing Unprofitable Business Models

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Investors have heaped billions into Q-Commerce—especially the rapid grocery startups—hoping to hook consumers on the convenience of groceries that would turn up immediately, sometimes in minutes.

I’ve never really fathomed how the small-basket orders of low-margin groceries can endlessly compensate for the labor costs and overheads, even after discontinuing the generous referral bonuses, discount codes, and freebies enticing customers. The prospects may evolve if these startups subsist on ever more funding and develop massive businesses with efficiencies from scale. But then they’re right in Amazon’s wheelhouse.

Idea for Impact: Some business models are never created to be profitable, and investors should be wary of encouraging—and funding—loss-making propositions. The lure of backing an initial entrant, capturing market share, and then selling out to a more determined fool isn’t viable! Who needs goods delivered in such a rush for such charges, anyway?

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  2. Consumer Power Is Shifting and Consumer Packaged Goods Companies Are Struggling
  3. Elon Musk Insults, Michael O’Leary Sells: Ryanair Knows Cheap-Fare Psychology
  4. We Trust What We Can See: James Dyson Builds for That Instinct
  5. Your Product May Be Excellent, But Is There A Market For It?

Sometimes a Conflict is All About the Process

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There’s a considerable difference between a “decision conflict” and a “process conflict,” and it’s necessary to disentangle the two.

A decision conflict is about a choice or another to be made. But a process conflict is about the approach, e.g., where making a choice has lacked rigorous deliberation (haste, a lack of participation from essential stakeholders, contempt for shared priorities, lack of attention to the tradeoffs, and so forth.) A sound decision has ensued from a meticulous-enough thought process, even if the decision emerges to be defective in the fullness of time.

Idea for Impact: Worry about bad decision processes. Make the “how” the anchor for your decision-making process. Improving the quality of decisions is developing better frameworks for making those decisions.

Wondering what to read next?

  1. Accidents Can Happen When You Least Expect Them: The Overconfidence Effect
  2. Situational Blindness, Fatal Consequences: Lessons from American Airlines 5342
  3. Be Smart by Not Being Stupid
  4. How To … Be More Confident in Your Choices
  5. How to … Escape the Overthinking Trap

What if Something Can’t Be Measured

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During a September-2021 Airlines Confidential podcast (via Gary Leff’s View from the Wing,) former Spirit Airlines CEO Ben Baldanza told an exciting story about the airline industry’s systematic approach to reckon if potential new routes are economically feasible:

For the most part, airlines rely on data—required and reported by the Bureau of Transportation Statistics—on ticket purchases that show the number of people flying a given route and what price. For example, New Orleans, which is home to one of the largest Honduran populations in the U.S., has not had direct service to Honduras. Spirit Airlines will therefore analyze data from Sabre Market Intelligence for 2019 showing O&D (Origin and Destination) traffic between New Orleans and Honduras.

Sometimes, though, there’s no data on historical demand on a route, such as when Spirit Airlines was considering service to Armenia, Colombia. There hadn’t ever been a U.S. carrier flying into the airport, so there wasn’t available traffic data Spirit could access. Instead, Spirit looked at telephone data and migrant remittance statistics to get a sense of ties between the U.S. and the Latin American city. Spirit studied the frequency with which people were calling friends and relatives and how much money and how frequently money was being remitted as a reliable metric to determine if the new route was viable.

Spirit Airlines relies heavily on leisure bookings, especially visiting friends and relatives (VFR) traffic. In the absence of historical yield data for a route being considered, Spirit used fund transfers to Latin America as a stand-in variable.

A surrogate metric or proxy metric is exactly that—a substitute used in place of a variable of interest when that variable can’t be measured directly or is difficult to measure. For example, per-capita GDP is often a proxy for the standard of living, and the value of a house is a stand-in for the household’s wealth. Freight tonnage is often a proxy for economic activity.

Idea for Impact: Relying on intuition for sound decision-making isn’t sustainable, so folks need a systematic approach to making those decisions. Use meaningful proxy and surrogate metrics in your decisions to help overcome inherent biases with what can’t be measured.

Wondering what to read next?

  1. The Data Never “Says”
  2. Question the Now, Imagine the Next
  3. Making Tough Decisions with Scant Data
  4. Situational Blindness, Fatal Consequences: Lessons from American Airlines 5342
  5. The “Ashtray in the Sky” Mental Model: Idiot-Proofing by Design

Get Good At Things By Being Bad First

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Your first attempts are going to be bad

A technique used by many a brilliant inventor:

  • Make something. Get it functional. Get it adequate. It’s okay if it’s subpar.
  • Then, stumble around. Iterate until it’s good.

Now, that’s a better creative process than making something good on the first go.

Start, even if you’re bad at it

Case in point: Write bad first drafts quickly. Start by getting something—anything—down on paper. Let it all pour out. Let it romp all over the place. No one’s going to see it. You can shape it up later. You can gradually polish the thought flow and enrich the choice of words.

If you aren’t willing to be bad initially, you’ll never get started on anything new.

It’s vastly easier to revise your way into a cut above than drum up brilliance out of thin air.

The way you create something good is by launching into it and then iterating gradually rather than by going into your cave and trying to create that perfect masterpiece.

Essentially, this is agile development. The best programmers write functional code to prove some concept. Along the way, they’ll get a better understanding of the business need for the software and the workflow. Bit by bit, they rework snippets of code and improve continuously.

Idea for Impact: Just start. Do a bad first job.

The bad is the precursor to the good. Bad will get you started. It’ll move you forward. Pressing on, you’ll get illuminated, enlightened, and informed.

Momentum is everything. Don’t put off any contemplated task thinking, “This is hard. I don’t know how to do this well. I’m going to have to do it perfectly. Or I need to wait till I have enough time.” The instant you stop cold and put something off, momentum starts the other way.

Motivation is often the result of an action, not its cause. Taking action—even in small, sloppy ways—naturally produces momentum. It’s a better solution than trying to do it right the first time.

Wondering what to read next?

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  2. How to Banish Your Inner Perfectionist
  3. An Effective Question to Help Feel the Success Now
  4. Just Start with ONE THING
  5. Why Doing a Terrible Job First Actually Works

It’s Not What You See; It’s How You See It

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Try to consider the sunny side of a situation rather than focusing on what’s wrong with it.

If it’s pouring rain, don’t upset yourself over plans hampered or stress about getting drenched. Instead, relish the splendor of landscape under the grey sky, delight in the pattering noise of the rain, and savor how the flowers have their heads as if to rest. Appreciate how rain is the great facilitator of life. And use this as a perfect excuse to curl up with a good book and chill out.

It’s not what you see; it’s how you see it.

Got a demanding new boss? Bring to mind all the things you can learn from her—including what not to do as a manager.

Reframing allows you an expanded view of your reality. You can move your experience from a negative frame to a more hopeful one, filled with opportunities.

How you frame something can change everything. When you change your point of view, the facts of the situation remain the same. But the shift in your emotional tone changes the meaning that you give to the situation.

Idea for Impact: Practice cognitive control. Learn how to put things in perspective.

When something or somebody annoys you, shift your attention. Ask, “What’s right about this? What’s to be appreciated about this?” Imagine the best possible outcomes.

Reframing an event or stimulus changes your emotional response to it—and it helps keep stress in check.

Changing the way you see the world is not a denial. It doesn’t imply naive optimism. Instead, it is the purging of mental pollutants such as dislike and anger—even aggression—that poison the mind and disable you from finding refuge in presence.

In Buddhism, the opposite of pleasure is not pain but delusion.

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  2. Imagine a Better Response
  3. How to … Stop Getting Defensive
  4. Cope with Anxiety and Stop Obsessive Worrying by Creating a Worry Box
  5. Summary of Richard Carlson’s ‘Don’t Sweat The Small Stuff’