Discover a revolutionary approach to solving complex problems in life and business, from the acclaimed author of "The Undercover Economist."
In this groundbreaking book, Tim Harford shows us a new and inspiring approach to solving the most pressing problems in our lives. When faced with complex situations, we have all become accustomed to looking to our leaders to set out a plan of action and blaze a path to success. Harford argues that today's challenges simply cannot be tackled with ready-made solutions and expert opinion; the world has become far too unpredictable and profoundly complex. Instead, we must adapt.
Deftly weaving together psychology, evolutionary biology, anthropology, physics, and economics, along with compelling stories of hard-won lessons learned in the field, Harford makes a passionate case for the importance of adaptive trial and error in tackling issues such as climate change, poverty, and financial crises—as well as in fostering innovation and creativity in our business and personal lives.
Taking us from corporate boardrooms to the deserts of Iraq, Adapt clearly explains the necessary ingredients for turning failure into success. It is a breakthrough handbook for surviving—and prospering—in our complex and ever-shifting world. Essential reading for entrepreneurs, business leaders, and anyone seeking effective strategies for navigating today's rapidly changing landscape.
Discover a revolutionary approach to solving complex problems in life and business, from the acclaimed author of "The Undercover Economist."
In this groundbreaking book, Tim Harford shows us a new and inspiring approach to solving the most pressing problems in our lives. When faced with complex situations, we have all become accustomed to looking to our leaders to set out a plan of action and blaze a path to success. Harford argues that today's challenges simply cannot be tackled with ready-made solutions and expert opinion; the world has become far too unpredictable and profoundly complex. Instead, we must adapt.
Deftly weaving together psychology, evolutionary biology, anthropology, physics, and economics, along with compelling stories of hard-won lessons learned in the field, Harford makes a passionate case for the importance of adaptive trial and error in tackling issues such as climate change, poverty, and financial crises—as well as in fostering innovation and creativity in our business and personal lives.
Taking us from corporate boardrooms to the deserts of Iraq, Adapt clearly explains the necessary ingredients for turning failure into success. It is a breakthrough handbook for surviving—and prospering—in our complex and ever-shifting world. Essential reading for entrepreneurs, business leaders, and anyone seeking effective strategies for navigating today's rapidly changing landscape.
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Overview
Discover a revolutionary approach to solving complex problems in life and business, from the acclaimed author of "The Undercover Economist."
In this groundbreaking book, Tim Harford shows us a new and inspiring approach to solving the most pressing problems in our lives. When faced with complex situations, we have all become accustomed to looking to our leaders to set out a plan of action and blaze a path to success. Harford argues that today's challenges simply cannot be tackled with ready-made solutions and expert opinion; the world has become far too unpredictable and profoundly complex. Instead, we must adapt.
Deftly weaving together psychology, evolutionary biology, anthropology, physics, and economics, along with compelling stories of hard-won lessons learned in the field, Harford makes a passionate case for the importance of adaptive trial and error in tackling issues such as climate change, poverty, and financial crises—as well as in fostering innovation and creativity in our business and personal lives.
Taking us from corporate boardrooms to the deserts of Iraq, Adapt clearly explains the necessary ingredients for turning failure into success. It is a breakthrough handbook for surviving—and prospering—in our complex and ever-shifting world. Essential reading for entrepreneurs, business leaders, and anyone seeking effective strategies for navigating today's rapidly changing landscape.
Product Details
| ISBN-13: | 9781429920681 |
|---|---|
| Publisher: | Farrar, Straus and Giroux |
| Publication date: | 05/10/2011 |
| Sold by: | Macmillan |
| Format: | eBook |
| Pages: | 320 |
| File size: | 347 KB |
About the Author
Tim Harford is the Undercover Economist and Dear Economist columnist for the Financial Times. His writing has also appeared in Esquire, Forbes, New York magazine, Wired, The Washington Post, and The New York Times. His previous books include The Undercover Economist and The Logic of Life. Harford presents the popular BBC radio show More or Less and is a visiting fellow at London's Cass Business School. He is the winner of the 2006 Bastiat Prize for economic journalism and the 2010 Royal Statistical Society Award for excellence in journalism.
Read an Excerpt
Adapt
Why Success Always Starts with Failure
By Tim Hartford
Farrar, Straus and Giroux
Copyright © 2011 Tim HarfordAll rights reserved.
ISBN: 978-1-4299-2068-1
CHAPTER 1
Adapting
'The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.'
– Friedrich von Hayek
'Cross the river by feeling for stones.'
– attributed to Deng Xiaoping
1 'You could easily spend your life making a toaster'
The electric toaster seems a humble thing. It was invented in 1893, roughly halfway between the appearance of the light bulb and that of the aeroplane. This centuryold technology is now a household staple. Reliable, efficient toasters are available for less than an hour's wage.
Nevertheless, Thomas Thwaites, a postgraduate design student at the Royal College of Art in London, discovered just what an astonishing achievement the toaster is when he embarked on what he called the 'Toaster Project'. Quite simply, Thwaites wanted to build a toaster from scratch. He started by taking apart a cheap toaster, to discover that it had over four hundred components and subcomponents. Even the most primitive model called for:
Copper, to make the pins of the electric plug, the cord, and internal wires. Iron to make the steel grilling apparatus, and the spring to pop up the toast. Nickel to make the heating element. Mica (a mineral a bit like slate) around which the heating element is wound, and of course plastic for the plug and cord insulation, and for the all important sleek looking casing.
The scale of the task soon became clear. To get iron ore, Thwaites had to travel to an old mine in Wales that now serves as a museum. He tried to smelt the iron using fifteenth-century technology, and failed dismally. He fared no better when he replaced bellows with hairdryers and a leaf-blower. His next attempt was even more of a cheat: he used a recently patented smelting method and two microwave ovens, one of which perished in the attempt, to produce a coin-sized lump of iron.
Plastic was no easier. Thwaites tried but failed to persuade BP to fly him out to an offshore rig to collect some crude oil. His attempts to make plastic from potato starch were foiled by mould and hungry snails. Finally, he settled for scavenging some plastic from a local dump, melting it down and moulding it into a toaster's casing. Other short cuts followed. Thwaites used electrolysis to obtain copper from the polluted water of an old mine in Anglesey, and simply melted down some commemorative coins to produce nickel, which he drew into wire using a specialised machine from the RCA's jewellery department.
Such compromises were inevitable. 'I realised that if you started absolutely from scratch, you could easily spend your life making a toaster,' he admitted. Despite his Herculean efforts to duplicate the technology, Thomas Thwaites's toaster looks more like a toaster-shaped birthday cake than a real toaster, its coating dripping and oozing like an icing job gone wrong. 'It warms bread when I plug it into a battery,' he told me, brightly. 'But I'm not sure what will happen if I plug it into the mains.' Eventually, he summoned up the courage to do so. Two seconds later, the toaster was toast.
2 Problem solving in a complicated world
The modern world is mind-bogglingly complicated. Far simpler objects than a toaster involve global supply chains and the coordinated efforts of many individuals, scattered across the world. Many do not even know the final destination of their efforts. As a lumberjack fells a giant of the Canadian forest, he doesn't know whether the tree he topples will make bed frames or pencils. At the vast Chuquicamata mine in Chile, a yellow truck the size of a house growls up an incline blasted into the landscape; the driver does not trouble himself to ask whether the copper ore he carries is destined for the wiring of a toaster or the casing of a bullet.
The range of products, too, is astounding. There are a hundred thousand or so distinct items in an ordinary Wal-Mart. Eric Beinhocker, a complexity researcher at the McKinsey Global Institute, reckons that if you were to add up all the different sizes and shapes of shoes, shirts and socks, the different brands and flavours and sizes of jams and sauces, the millions of different books, DVDs and music downloads on offer, you would find that a major economy such as New York or London offers over ten billion distinct types of product. Many of these products were undreamt of when the toaster was first invented, and millions of new ones appear every month. The complexity of the society we have created for ourselves envelops us so completely that, instead of being dizzied, we take it for granted.
I used to view this sophistication as cause to celebrate. Now I am less sure. Certainly, this complex economy produces vast material wealth. Not everyone gets a share, but far more people today enjoy a high material standard of living than at any time in history; and, notwithstanding the occasional recession, the wealth continues to grow more quickly than it ever used to. The process that produces this wealth is near miraculous, and the job is far harder than we tend to acknowledge. Alternative systems, from feudalism to central planning, have attempted the same task and been consigned to the history books.
Yet the Toaster Project should give us pause for thought. Because it is a symbol of the sophistication of our world, the toaster is also a symbol of the obstacles that lie in wait for those who want to change it. From climate change to terrorism, fixing the banks to ending global poverty, there is no shortage of big policy problems out there. They are always up for debate, yet we never seem to move any closer to a solution. Humbler problems in business and everyday life also tend to conceal the same unexpected complexity as the Toaster Project.
This is partly a book about those problems. But more fundamentally, it's a book that aims to understand how any problem – big or small – really gets solved in a world where even a toaster is beyond one man's comprehension.
The toasting problem isn't difficult: don't burn the toast; don't electrocute the user; don't start a fire. The bread itself is hardly an active protagonist. It doesn't deliberately try to outwit you, as a team of investment bankers might; it doesn't try to murder you, terrorise your country, and discredit everything you stand for, as a terrorist cell or a group of insurgents in Iraq would. The toaster is merely an improved way to solve an old problem – the Romans loved toast – unlike the World Wide Web or the personal computer, which provide solutions to problems we never realised we had. The toasting problem is laughably simple compared to the problem of transforming a poor country such as Bangladesh into the kind of economy where toasters are manufactured with ease and every household can afford one, along with the bread to put into it. It is dwarfed by the problem of climate change – the response to which will require much more than modifying a billion toasters.
Such problems are the stuff of this book: how to fight insurgents who, of course, fight back; how to nurture ideas that matter when so many of those ideas are hard even to imagine; how to restructure an economy to respond to climate change, or to make poor countries rich; how to prevent rogue investment bankers from destroying the banking system again. These are complex, fast-moving problems in a complex, fast-moving world. I will argue that they have far more in common with each other than we realise. Curiously, they also have something in common with the more humble problems we face in our own lives.
Whenever such problems are solved, it is little short of a miracle. This book is about how such miracles happen, why they matter so much, and whether we can make them happen more often.
3 The experts are humbled
We're proud of the change we've brought to Washington in these first hundred days, but we've got a lot of work left to do, as all of you know. So I'd like to talk a little bit about what my administration plans to achieve in the next hundred days. During the second hundred days, we will design, build and open a library dedicated to my first hundred days ... I believe that my next hundred days will be so successful I will be able to complete them in 72 days. And on the 73rd day, I will rest.
This was President Obama addressing the White House Correspondents' Dinner, traditionally a venue for a joke or two, a few months after a tidal wave of hope and high expectations had swept him into power in November 2008. It seems a long time ago now, but Obama's joke cut close to the bone even then: people were expecting too much of one man.
We badly need to believe in the potency of leaders. Our instinctive response, when faced with a complicated challenge, is to look for a leader who will solve it. It wasn't just Obama: every president is elected after promising to change the way politics works; and almost every president then slumps in the polls asreality starts to bite. This isn't because we keep electing the wrong leaders. It is because we have an inflated sense of what leadership can achieve in the modern world.
Perhaps we have this instinct because we evolved to operate in small hunter–gatherer groups, solving small hunter–gatherer problems. The societies in which our modern brains developed weren't modern: they contained a few hundred separate products, rather than ten billion. The challenges such societies faced, however formidable, were simple enough to have been solved by an intelligent, wise, brave leader. They would have been vastly simpler than the challenges facing a newly elected US president.
Whatever the reason, the temptation to look to a leader to fix our problems runs deep. Of course, a leader doesn't have to solve every problem by himself. Good leaders surround themselves with expert advisers, seeking out the smartest specialists with the deepest insights into the problems of the day. But even deep expertise is not enough to solve today's complex problems.
Perhaps the best illustration of this comes from an extraordinary two-decade investigation into the limits of expertise, begun in 1984 by a young psychologist called Philip Tetlock. He was the most junior member of a committee of the National Academy of Sciences charged with working out what the Soviet response might be to the Reagan administration's hawkish stance in the Cold War. Would Reagan call the bluff of a bully or was he about to provoke a deadly reaction? Tetlock canvassed every expert he could find. He was struck by the fact that, again and again, the most influential thinkers on the Cold War flatly contradicted one another. We are so used to talking heads disagreeing that perhaps this doesn't seem surprising. But when we realise that the leading experts cannot agree on the most basic level about the key problem of the age, we begin to understand that this kind of expertise is far less useful than we might hope.
Tetlock didn't leave it at that. He worried away at this question of expert judgement for twenty years. He rounded up nearly three hundred experts – by which he meant people whose job it was to comment or advise on political and economic trends. They were a formidable bunch: political scientists, economists, lawyers and diplomats. There were spooks and think-tankers, journalists and academics. Over half of them had PhDs; almost all had postgraduate degrees. And Tetlock's method for evaluating the quality of their expert judgement was to pin the experts down: he asked them to make specific, quantifiable forecasts – answering 27,450 of his questions between them – and then waited to see whether their forecasts came true. They rarely did. The experts failed, and their failure to forecast the future is a symptom of their failure to understand fully the complexities of the present.
It wasn't that expertise was entirely useless. Tetlock compared his experts' responses to those of a control group of undergraduates, and the experts did better. But by any objective standard, they didn't do well. And the return on expertise was distinctly limited. Once experts have acquired a broad knowledge of the political world, deeper expertise in a specific field doesn't seem to help much. Predictions about Russia from experts on Russia were no more accurate than predictions about Russia from experts on Canada.
Most accounts of Tetlock's research savour the humbling of the professional pundits. And why not? One of Tetlock's more delicious discoveries was that the more famous experts – those who spent a lot of time as talking heads on television – were especially incompetent. Louis Menand, writing in the New Yorker, enjoyed the notion of bumbling seers, and concluded, 'the best lesson of Tetlock's book may be the one that he seems most reluctant to draw: Think for yourself'.
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 theworld they inhabit – the world we all inhabit – which is simply too complicated for anyone to analyse with much success.
So, if expertise is of such limited help in the face of our complex, ever-changing human society, what can we do to solve the problems we face? Perhaps we should look for clues in the success story we've already encountered: the amazing material wealth of modern developed countries.
4 The long, tangled history of failure
In 1982, just a couple of years before Philip Tetlock began his painstaking examination of expertise, two management consultants, Tom Peters and Robert Waterman, concluded their own detailed study of excellence in business. In Search of Excellence was published to great acclaim and launched Peters's career as one of the world's most recognisable management gurus. The two authors, working with their colleagues at McKinsey, used a mixture of data and subjective judgement to settle on a list of forty-three 'excellent' companies, which they then studied intensively in a bid to unlock their secrets.
Just two years later, Business Week ran a cover story entitled 'Oops! Who's Excellent Now?' Out of the forty-three companies, fourteen, almost a third, were in serious financial trouble. Excellence – if that was what Peters and Waterman really found when they studied the likes of Atari and Wang Laboratories – appears to be a fleeting quality.
It seems strange that so many apparently excellent companies could find themselves in deep trouble so quickly. Perhaps there was something uniquely silly about Peters and Waterman's project. Or perhaps there was something uniquely turbulent about the early 1980s – In Search of Excellence was published during a severe recession, after all.
But perhaps not. The 'who's excellent now?' experience is reinforced by a careful study from the economic historian LeslieHannah, who in the late 1990s decided to trace the fortunes of every one of the largest companies in the world in 1912. These were corporate giants that had survived a merger shakedown over the preceding few years and typically employed at least ten thousand workers.
At the top of the list was US Steel, a gigantic corporation even by today's standards, employing 221,000 workers. This was a company with everything going for it: it was the market leader in the largest and most dynamic economy in the world; and it was in an industry that has been of tremendous importance ever since. Yet US Steel had disappeared from the world's top hundred companies by 1995; at the time of writing, it was not even in the top five hundred.
Next on the list was Jersey Standard, which these days continues to prosper under the name Exxon. General Electric and Shell were also in the top ten both in 1912 and in 1995. But none of the other top-ten titans was in the top ten by 1995. More remarkably, none of them was even in the top hundred. Names such as Pullman and Singer recall a bygone age. Others, such as J&P Coats, Anaconda and International Harvester, are barely recognisable. It is hard to imagine just how large and powerful these companies once were – the closest parallels would be the likes of Microsoft and Wal-Mart today – and how permanent their success must have seemed. And while it could be said that Pullman and Singer suffered from being market leaders in declining industries, their fate was not inevitable. Singer made sewing machines, but Toyota's origins as a manufacturer of looms were no more promising. Other former titans, such as Westinghouse Electric, Cudahy Packing and American Brands, were in the same dynamic industries as the rare success stories General Electric and Procter & Gamble. Yet they failed.
(Continues...)
Excerpted from Adapt by Tim Hartford. Copyright © 2011 Tim Harford. Excerpted by permission of Farrar, Straus and Giroux.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
Contents
Title Page,One - Adapting,
1 'You could easily spend your life making a toaster',
2 Problem solving in a complicated world,
3 The experts are humbled,
4 The long, tangled history of failure,
5 A shifting landscape,
6 We are blinder than we think,
7 A failure to adapt,
8 Beyond Coca-Cola problems,
9 Why learning from mistakes is hard,
10 A recipe for adapting,
Two - Conflict or: How organisations learn,
1 'I watched them shoot my grandfather ...',
2 The ideal organisation,
3 Mr Rumsfeld's 'epiphany',
4 'A kind of family',
5 The Tal Afar experiment,
6 'How to win the war in al Anbar by Cpt. Trav',
7 'It's my job to run the division, and it's your job to critique me',
8 Drawing the wrong lessons from history,
9 'It was hard enough teaching computers to play chess',
10 'Knowledge of the particular circumstances of time and place',
11 Mission command and 'the enduring uncertainty of war',
Three - Creating new ideas that matter or: Variation,
1 'A most interesting experiment',
2 Lottery tickets, positive black swans and the importance of variation,
3 Skunk Works and 'freak machines',
4 The burden of knowledge,
5 The problem with patents,
6 'We are glad you didn't follow our advice',
7 '... even if it means uncertainty or the chance of failure',
8 '... for such person or persons as shall discover the Longitude',
9 Seekers and solvers,
10 'There's nothing else to do in Mojave',
Four - Finding what works for the poor or: Selection,
1 If at first you don't succeed, try again,
2 'As soon as the foreigner with a camera comes out ... kids get excited',
3 'We shall see how many Funerals both of us shall have',
4 'You must stop the trial at once ...',
5 'If we don't know whether we are doing any good, then we are not any better than the medieval doctors and their leeches',
6 'Our kids were abducted, helicopters overhead, but we had a very nice Christmas',
7 'We should not try to design a better world. We should make better feedback loops',
8 Explorations in 'product space',
9 'A formula for creating order out of chaos and prosperity amid backwardness',
Five - Climate change or: Changing the rules for success,
1 The Greenhouse Effect, 1859,
2 'It couldn't be simpler!',
3 A day in the life of a born-again environmentalist,
4 'If I ask my old man "What's the carbon footprint of a sheep?", he looks at me as though I'm mad',
5 The carbon-calculating cloud,
6 The unexpected consequences of the Merton Rule,
7 Economic bulldogs,
8 Tilting the playing field,
Six - Preventing financial meltdowns or: Decoupling,
1 When failure is unthinkable,
2 'Banking exceeds the complexity of any nuclear plant I ever studied',
3 Why safety systems bite back,
4 'The people who were operating the plant were absolutely, completely, lost',
5 'We had no time',
6 Dominoes and zombie banks,
7 Decoupling,
8 Slips, mistakes and violations,
9 'There was nothing in it for me to tell them the truth',
10 Making experiments survivable,
11 Deepwater Horizon,
Seven - The adaptive organisation,
1 Adapting as we go along,
2 'I don't want the people at head office to run the business',
3 'If you tell anybody what to do here, they'll never work for you again',
4 Google's corporate strategy: have no corporate strategy,
5 'Success is the number of experiments that can be crowded into twenty-four hours',
6 When companies become dinosaurs,
7 Built to fail,
Eight - Adapting and you,
1 'How did this happen?',
2 'Challenge a status quo of your own making',
3 'You know they're right',
4 Creating our own safe spaces to experiment,
Also by Tim Harford,
Acknowledgements,
Notes,
Index,
A Note About the Author,
Notes,
Copyright Page,