9 Insights on Building a Company Culture That Actually Embraces Top Talent
/In a world obsessed with certainty and perfection, Tim Harford’s “Adapt: Why Success Always Starts with Failure,” offers a refreshing perspective: success comes from experimentation, trial and error, and feedback from failure. We need less leadership worship, predictability, perfect solutions, and consensus. The world is complex so let’s stop pretending that we have all the answers and try new things, learn from failure, and iterate.
Key Takeaways:
Experts are great, but only to a degree
Trial and Error is far more effective than you think
Leadership matters, but only to a degree
Why centrally planned economies and bureaucracies fail
Feedback is essential, but hated by most
Variation is suppressed due to egos and a preference for stability
Disagreement, not consensus, is what drives great decisions
Generate multiple solutions rather than finding “the one”
Develop better systems rather than relying on better people
Try new things, safely fail, and get feedback
Idea #1: Experts are better than non-experts, but only to a certain degree
From Adapt: Yet there is a reason why Tetlock himself hesitates to draw that conclusion: his results clearly show that experts do outperform non-experts. These intelligent, educated and experienced professionals have insights to contribute – it’s just that those insights go only so far. The problem is not the experts; it is the world they inhabit – the world we all inhabit – which is simply too complicated for anyone to analyse with much success.
Yes, experts are more reliable than random people. But experts also make mistakes, have a hard time predicting the future, and have biases and hidden agendas. So it’s not about dismissing experts, just putting their advice in context, and focusing on getting multiple, independent views to calibrate who you rely on.
Idea #2: Trial and Error is an underappreciated tool to solve problems
From Adapt: Why is trial and error such an effective tool for solving problems? The evolutionary algorithm – of variation and selection, repeated – searches for solutions in a world where the problems keep changing, trying all sorts of variants and doing more of what works…Given the likely shape of these ever-shifting landscapes, the evolutionary mix of small steps and occasional wild gambles is the best possible way to search for solutions. Evolution is effective because, rather than engaging in an exhaustive, time-consuming search for the highest peak – a peak that may not even be there tomorrow – it produces ongoing, ‘works for now’ solutions to a complex and ever-changing set of problems.
Trial and error is often ignored because our egos convince us that we’ll figure out the answer if only we think about it hard enough. After all, we tell ourselves we’re smart, so relying on trial and error is an admission that we don’t know, which is painful to admit.
Idea #3: Leadership matters, but like experts, only to a certain degree
From Adapt: Are chief executives just as impotent, fumbling around for workable strategies in an impenetrable fog? That would be what the evolutionary analogy implies. In biological evolution, the evolutionary process has no foresight. It is the result of pure trial and error over hundreds of millions of years. Could that also be true in an economy, despite the best efforts of managers, corporate strategists and management consultants?
Leaders are often put in an impossible position when people expect them to always have “the answer.” The world is complicated and even the best leaders struggle with doubt and mistakes. It’s time to disregard the notion of infallible leadership and recognize how experimentation and iteration can supplement the leader’s thinking.
Idea #4: Why centrally planned systems, like the Soviet Union or a bureaucratic organization, will fail
From Adapt: The Soviet failure revealed itself much more gradually: it was a pathological inability to experiment. The building blocks of an evolutionary process, remember, are repeated variation and selection. The Soviets failed at both: they found it impossible to tolerate a real variety of approaches to any problem; and they found it hard to decide what was working and what was not. The more the Soviet economy developed, the less of a reference point the planners had. The whole system was unable to adapt…The monstrous moral flaws of the Soviet system are now obvious. The economic flaw was more subtle: its inability to produce variation and selection, and therefore its inability to adapt. Central planners decided what would be built, lulled into a sense of omniscience by having a map or a table of statistics in front of them. Such plans inevitably missed the messy complexities of the situation on the ground, and also produced far too little variation.
Many people chuckle when thinking about the failure of the Soviet Union. Relying on a central planning committee to run an entire economy? It seems, and is, quite ridiculous. Yet these same people run their organization with the same centrally planned mindset: little variation, muted dissent/feedback, grandiose actions, ego driven decisions, and a demand that people fall in line and obey.
Idea #5: Feedback is essential, but generally hated by those in power
From Adapt: Above all, feedback is essential for determining which experiments have succeeded and which have failed. And in the Soviet Union, feedback was ruthlessly suppressed…There is a limit to how much honest feedback most leaders really want to hear; and because we know this, most of us sugar-coat our opinions whenever we speak to a powerful person. In a deep hierarchy, that process is repeated many times, until the truth is utterly concealed inside a thick layer of sweet-talk.
It's a rare person that demands honest, direct feedback. When people say they want feedback, it’s usually feedback disguised as compliments, or feedback that’s highly sterilized.
Idea #6: Variation is suppressed due to grandiosity and a preference for stability
From Adapt: Variation is difficult because of two natural tendencies in organisations. One is grandiosity: politicians and corporate bosses both like large projects…because they win attention and show that the leader is a person who gets things done…The other tendency emerges because we rarely like the idea of standards that are inconsistent and uneven from place to place. It seems neater and fairer to provide a consistent standard for everything…
Like trial and error, variation is hated because leaders want the one big project that will cement their legacy, rather than relying on a bunch of little bets which will take time to pay off. Leaders also detest variability because it’s psychologically comforting to have one standard and one way of running the business, rather than embracing flexible, iterative types of organization.
Idea #7: Disagreement, not consensus, is what drives great decisions
From Adapt: The doctrine of avoiding split advice, then, couldn’t have been more misguided. The last thing Lyndon Johnson needed was to be confronted with a unanimous view [regarding the Vietnam War]. He desperately needed to hear disagreement. Only then would he feel free to use his own judgement, and only then would he avoid the trap of considering too narrow a range of options.
If you want to identify a weak organization, look at how much the team strives for consensus. Consensus isn’t about making better decisions; it’s about avoiding tough conversations and staying comfortable. Thoughtful dissent and disagreement, done by a team that cares for one another and wants the best outcome, is the goal.
Idea #8: Implement multiple options instead of finding “the one”
From Adapt: This idea of allowing several ideas to develop in parallel runs counter to our instincts: we naturally tend to ask, ‘What is the best option?’, and concentrate on that. But given that life is so unpredictable, what seemed initially like an inferior option may turn out to be exactly what we need.
Stop focusing on finding the best solution. Find multiple good solutions and starting testing and experimenting, getting real-time feedback to get to the optimal decision.
Idea #9: Develop better systems rather than relying on better people
From Adapt: ‘We always blame the operator – “pilot error”,’ says Charles Perrow, the Yale sociologist. But like a power-plant operator staring at the wrong winking light…but safety experts like Perrow know it is far more productive to design better systems than to hope for better people.
Developing better systems adds stability and robustness. Relying on better people is much more hit or miss. You don’t know you’ve missed on someone until it’s too late. It’s like the Warren Buffett quote, you better buy a business that an idiot can run, because sooner or later one will. It’s the same with systems. Design systems so an idiot can run it, because eventually one will.