Everything is Obvious Once You Know The Answer, in his titillatingly titled thesis Duncan J. Watts seeks to explain how what we call common sense is actually quite misleading, completely uncommon and fatally flawed.
Rather than a book review, I’m just going to comment on some of the points that I found interesting. It took me a while to get into this book because I find Watts to be a very technical writer, meaning it requires a lot of focus to glean his point.
The only way to identify attributes that differentiate successful from unsuccessful entities is to consider both kinds, and to look for systematic differences. Yet because what we care about is success, it seems pointless–or simply uninteresting–to worry about the absence of success. Thus we infer that certain attributes are related to success when in fact they may be equally related to failure. p.114
This is a classic example of creeping determinism and sampling bias, commonly seen in cherry picking data and because you’re looking for a correlation you find it. We focus as a society so heavily on successful people and what makes them successful that we ignore the very obvious fact that many unsuccessful people also share those qualities it’s a combination of a number of factors, the most obvious being right time, right place that make successful people successful.
The one method you don’t want to use when making predictions is to rely on a single person’s opinion–especially not your own. The reason is that although humans are generally good at perceiving which factors are potentially relevant to a particular problem, they are generally bad at estimating how important one factor is relative to another. p.172
This should be something that Uni is supposed to drill into you. Research, seek other opinions, diversify your viewpoint. Yet, we still like to think in a vacuum. People hang out with people who think like them and your world becomes exceedingly small and self-replicating in it’s belief system. This is how cults are made.
Watts discusses some things that I find relevant to how corporations are often run and the dire need for change management so we can all move towards a more strategic direction.
the only way to deal adequately with strategic uncertainty is to manage it continuously–“once an organization has gone through the process of building scenarios, developing optimal strategies, and identifying and acquiring the desired portfolio of strategic options, it is time to do it all over again.” And if indeed strategic planning requires such a continuous loop it does make a kind sense that the best people to be doing it are senior management. Nevertheless, it is hard to imagine how senior managers can suddenly stop doing the sort of planning that got them promoted to senior management in the first place and start acting like an academic think tank.” pp.182-183
I find this salient because there is a lot of chatter regarding strategic human resources yet most companies still see it as a transaction function and that’s also how we’re trained. But in order to be useful and help companies stop lying about people being their best feature and making it true HR needs to be allowed to be strategic and outsource transactions. This is still a thought in process and part of my musings on the future and use of HR. I mean I trained in it and I still don’t know how it provides the best value for the company. We should not be the safeguards of the money, but of the people.
There’s a section called Don’t Just Measure: Experiment on page 196 where Watts uses the example of a CEO who spent 400 million on brand advertising but didn’t know if that money was well spent of not because there was a lack of data to show if the advertising was effective, reaching the right audience, and providing a return on investment. The section illustrates the huge problem for advertising that it’s really hard to measure and extract relevant data to the advertising goals. This made me think about the current push for individual branding, your personal brand. Why are we being told that we are our brand and that we need to manage it when data is so difficult to measure?
Taking a religious bend. Me, not Watts. Page 217 speaks about Joseph Gray a cop who while driving drunk killed an entire family and how he got a relatively light punishment for those manslaughter. However, there are two crimes there, the driving drunk and the manslaughter. Is one worse than the other simply because the circumstances dictated that he ended up killing people? Watts said,
That the nature of the outcome should matter is about as commonsense an observation as one can think of. If great harm is caused, great blame is called for –and conversely, if n harm is cause, we are correspondingly inclined to leniency…in being swayed so heavily by the outcome, our commonsense notions of justice inevitably lead us to a logical conundrum.
I call this a religious thing because it relates to the concept that there is not sin greater than any other, apart from rejecting Christ. You can see how our logical conundrum likes to say that murder is worse than lying but it really isn’t, the circumstances were just different.
Moving back around to the first topic I touched on, success vs. unsuccessful people with the same traits. Talent Versus Luck (pages 222-223). Do people deserve bonuses on a good year when other years they didn’t? The Halo Effect deals us a blow when we measure individual performance because an employee may feel that success if based on skill, experience, and hard work, not luck, and that those colleagues who didn’t do as well made errors in judgement that they avoided. But if this is what all the employees think why should we believe them any more than another? Pay for Performance is a flawed system because it relies on circumstances that are not affected or changed by the employee. Systems need to differentiate luck from talent. There is no conclusively simple answer given.
The cynic’s question, if you’re so smart, why aren’t you rich? is misguided not only for the obvious reason that at least some smart people care about rewards other than material wealth, but also because talent is talent, and success is success, and the latter does not always reflect the former. p. 231
I just like this point. Smart does not equal rich in wealth nor does success have to correlate to money. Something that is easy to forget in a capitalist system where the almighty dollar rules all.
I appreciate that Watts attacks CEO pay towards the end of the book. He notes the market is a self-fulfilling prophesy of well-connected people, socially and professionally connected that operates outside of the public sphere. “Corporate boards, analysts, and the media all believe that only certain key people can make the ‘right’ decisions; thus only a few such people are considered for the job in the first place” (p. 234). This creates an artificial scarcity of clients which allows them to exact a ridiculous pay package. The truth is that many CEOs are replaceable with a wider candidate pool.
I’ll end on the Fairness And Justice section which neatly concludes that societal reality is created by society. Therefore, in a very anarchist kind of statement we must question everything and take nothing for granted.