Why Learning From Your Mistakes Is Not Enough

It is well recognized these days to stress the impact that the methodology used for making decisions can have on the selection of those decisions. How one goes about making a decision and the structure within which the decision is made will have profound effects on what actions are considered and which is chosen. One approach will result in one set of options and decisions while another approach may yield an entirely different universe of values. Selection of an approach is very important to the eventual outcome and the probability of success. Regardless of the methodology, however, the recommended approaches seem to have some points in common that do not appear to be fully thought out. One of these is reviewing your past decisions and learning from them, in particular any mistakes that were made. While the importance and benefits of this is obvious, why would one wittingly screw up again, the importance of reviewing one’s successes curiously is not recognized. The stress is on not repeating past mistakes and using them to build up one’s base of knowledge and experience for future decisions rather than focusing in on how to perform at one’s peak. The hope is that future decision-making will be improved and fewer bad decisions made. The assumption of this approach is that successful decisions are their own reward and simply confirm the decision-maker’s ability. Such an attitude, however, can have very bad consequences. Just because a decision proves to be correct does not mean it will lead to correct decisions in the future. In fact, it may lead to precisely the opposite outcome. How can that be? In part the answer lies in how we perceive our ability to make correct decisions. Most of us flatter ourselves into thinking that we are better at making correct decisions than our track records warrant. If we are correct only 2 times out of 10 we will perceive that we were right more frequently and consequently be more confident in our powers of decision-making than is justified. We tend not to learn from our failures because it is our successes we focus on and magnify. It is a natural tendency to play down our failures and build up our successes, sometimes to the point of relying on a single success to rest our laurels on. Wall Street is replete with such “one hit wonders.” In general, people who make a lot of decisions believe they are doing better than they actually are, which can set the stage for bigger mistakes as confidence unwarrantedly increases. A second drawback in not evaluating our successes is that often we are right, but for the wrong reasons. If we do not examine how we arrived at the correct solution and that in fact our reasoning was valid, we will remember that we chose correctly and not that we did so for spurious reasons. When confronted with the same set of circumstances in the future we will remember that last time we got this right and repeat our same decision without much reflection. It is reminiscent of experiments with pigeons where researchers reward them with food when they make an odd body movement. Soon they walk around exhibiting this bizarre behavior “knowing” that will produce the desired results even though there is no real correlation with their behavior and the reward. This approach is fine if we got it all right the first time around and it truly is a similar situation, but a potential disaster if our reasoning process was flawed or the situation is altered somehow. Worse, since we have confidence in our decision-making abilities we are likely to raise the stakes, magnifying the potential damage. What are the real world implications of our delusions about thinking correctly? Recent history has been witness to financial disasters by investors and money managers who, after some extended period of success, have stumbled into financial disaster magnified by their inability to acknowledge their mistakes—Orange County, Barings Bank, the London Whale, and others. What they all seem to have in common are individuals convinced of the soundness of their capabilities as decision-makers and the fundamental rightness of their thinking as they sink further into a financial abyss. They see no reason to change their course because they “know” they are right. Other times the poor judgement manifests itself over an extended period and not in a spectacular flameout. Why is it that so few money managers can consistently do better than a monkey with a dart board? Funds that do well one year are dogs the next and over time do not do better than the average return. Could it be that initial success tends to straightjacket the thinking of these managers and so to repeat their “successes” with ever diminishing precision? The bottom line is that, just like learning from your mistakes, you should also learn from your successes. There are keys to success just as there are patterns of failure and both should be incorporated into one’s decision-making calculus. You should learn what allows you to perform at your best and repeat those patterns; you are looking to raise your performance level as well as keep it from dropping. A decision-maker also must evaluate whether the correct decisions in the past were due to luck or ability and whether or not conditions have changed so as to adversely affect previously correct decisions. Decision-makers must constantly recalibrate their thinking processes, fine-tuning their abilities with the latest available data on a regular basis. Otherwise, the stakes get higher, the mistakes bigger, and the headlines larger. The push for new modes of thought and approaches to decision-making carries with it the danger that they will not completely address the full series of challenges facing a business today. Even if implemented with the best of intentions and to the fullest extent possible, if these prescriptions are not complete they will at best buy time and at worst lead to spectacular failure. There are no magic bullets to ensure success. It takes hard work, discipline, and not a little daring to meet the challenges of the current and future competitive environment. Any new system or approach to decision-making must be examined carefully for incompleteness as well as to its perceived efficacy. If not, a decision-maker will mistakenly go confidently into battle with his flank exposed.

Thinking Outside The Box Is Just The Beginning

Another half-truth (See previous post on Why Learning From Your Mistakes Is Not Enough) about decision-making being promoted is “thinking outside the box.” Businesses want people who can think outside the existing structures, culture, and worldviews that govern the organization in the belief that such thinking will yield results that the firm can successfully exploit. Such entrepreneurial thinking is seen as allowing a firm to respond more nimbly to competition and not find it falling behind. The business can reinvent itself to meet the ever-changing environment and improve its chances of prolonging its existence. But is being able to “think outside the box” sufficient? Is that all that is required of the decision-maker? It would seem that the ability to think outside the box alone will not ensure success. All it may produce is a lot of ideas of unknown quality that the business, used to one way of operating, is ill-equipped to evaluate and successfully implement. What is required is that the process of thinking outside the box provide new structures, worldviews, and processes by which the ideas can be evaluated as to their quality and how best to implement them for maximum success. To construct a new box, in other words, in which to successfully move the business forward. Then you have to be able to think outside that structure for the inevitable turning of the cycle to a new environment. It is a constant state of destruction, construction, destruction, and on ad infinitum. A good analogy might be the relationship between a hitter and a pitcher over their opposing careers. When the batter gains the edge over the pitcher, the pitcher has to figure out a way to adjust his pitching to get ahead again. It is then incumbent upon the batter to adjust to the new pitching style to avoid striking out. As they face each other in a game and over the course of a season, they are constantly reworking their strategy to stay one step ahead of their competitor. Then they start all over again the next year. The danger of creating new structures is that, successful though they may be, they tend to focus thinking into the new paradigm and away from new ideas. The natural tendency is to push forward into new territory gradually and settle down to enjoy the fruits of one’s labors. If you do that, however, you risk being passed by those more willing to push into terra incognito and explore all its potential riches and dangers. Unlike the common wisdom that settling down and building a life in one place is the best course, modern businesses must be more like Daniel Boone, moving further into the wilderness as the neighborhood fills up. Modern businesses must be Pioneers of the Future and not Builders of the Pyramids. Apple may be the best representation of this phenomenon today, which is what has made them so successful. It is also why Apple takes a hit whenever the market thinks they’ve run out of new, transformative ideas. Apple cannot rest on its past successes – just ask Motorola, Nokia, or Blackberry if that is a viable strategy. Thinking outside the box is not always rewarded, though, as Microsoft can attest. Trapped by its legacy programs and customers unwilling to make the leap with it, the attempts by Microsoft to bust out of the Windows box have been largely unsuccessful. Microsoft, in order to break free, would have to do something entirely different, a leap forward past itself and its rivals. Depending on how and what it did, Microsoft could keep its legacy products or cannibalize the old lines as the new product takes over. If they kept the existing products there would have to be a commitment to upgrading and improving them to keep the old customers while the new line attracted different ones. Cannibalizing the old line may be the best long term strategy, but is fraught with the danger that the new line is less successful and leave Microsoft worse off rather than better. The push for new modes of thought and approaches to decision-making carries with it the danger that they will not completely address the full series of challenges facing a business today. Even if implemented with the best of intentions and to the fullest extent possible, if these prescriptions are not complete they will at best buy time and at worst lead to spectacular failure. There are no magic bullets to ensure success. It takes hard work, discipline, and not a little daring to meet the challenges of the current and future competitive environment. Any new system or approach to decision-making must be examined carefully for incompleteness as well as to its perceived efficacy.

Capital Punishment is Inherently Cruel

At the heart of the recently argued case by the Supreme Court, Moore vs. Texas, is a simple question, how smart do you have to be to be executed? It joins a stellar lineup of previous capital punishment cases with a long list of seminal, unresolved issues: , How young is too young, How crazy is too crazy, How racist is too racist a jury, How incompetent is too incompetent representation, How late is too late an appeal, How much brain damage is too much damage How much withheld information is too much information We are no longer arguing over the merits of capital punishment, we are arguing over the details of its demise. That extends to the current method of execution. Lethal injection has a long and illustrious list of predecessors: Burning at the Stake Crucifixion Stoning Drawing and Quartering Beheading Hanging Firing Squad Electric Chair Gas Chamber The early methods were not chosen for their justice, but for their cruelty. Capital punishment was meant to be cruel, else why were burning at the stake or drawing and quartering chosen? They were chosen to scare and intimidate, so they were brutal and public. While it is argued that capital punishment is a deterrent, its history suggests otherwise. Even when capital punishment was at its cruelest and most capricious, people still engaged in activities that would get them executed. How effective a deterrent can today’s humane, hidden executions be if these others failed? Throughout the arc of history, societies have searched for more acceptable methods of execution. It is an acknowledgement that what they want is something less cruel and less public for executing people. The current execution proponents have tried to shield us from this cruelty by hiding it away so that now it is safe from prying eyes in windowless rooms with a curtain that can be drawn whenever too much cruelty appears. They know this is the only way they can continue doing it. The current method of punishment is acknowledged to be cruel as a historical matter; it is also unusual in both senses of that word – uncommon and strange. Capital punishment is no longer used as a deterrent or even revenge. It is used when we’re shocked, disgusted, or outraged by a crime. The logical connection between crime and punishment has been severed; it has relevance only to our level of sensitivity to a crime. Given the rise of torture porn and its ilk, the level of desensitivity will continue to rise, leaving only the unimaginably shocking cases as acceptable. Even that may not last long and we will be executing only a disfavored few. Capital punishment long ago lost its legitimacy when executions were no longer held in public, when lynchings were rampant, when they tried to make it less cruel, when they tried to hide the executioners and their tools from scrutiny, when innocence was no longer theoretical but proven, when they continued to prosecute defendants when it was clear they were not involved. Capital punishment has also lost legitimacy because of the proponents seeming indifference as to the correctness of their convictions. They have chosen speed over justice as their goal, ignoring the questions that have bedeviled many convictions and pushed onward towards execution. Too much junk science Too much tainted evidence Too much misconduct Too incompetent the counsel Too late the appeal Too much contradictory evidence What of the victims, should they not have a say in whether to execute or not? That would add yet another layer of capriciousness to an already irretrievably capricious system of selecting who should be executed. And what if they change their minds later, do we change the sentence? What if they said no, would we then not execute the killer? Capital punishment is inherently cruel, what else could snuffing out a life be? Capital punishment is unusual – so few receive it and in increasingly bizarre ways. Capital punishment deserves to go, the question is very simple for the Supreme Court, “Are you smart enough to execute it?”

The Biggest Chicken(Bleep) President Ever

So, your GOP Senate friends are going to throw you a show trial where the fix is already in? I am elated. Elated, overjoyed, besides myself with glee, almost giddy with happiness. For this ensures that you will go down in history as the Most Chicken(Bleep) President Ever. You think they’re doing you a giant favor, but they aren’t doing this for you. They know if they allow any evidence and acquit you anyway, it’s they who will go down in infamy. They won’t allow witnesses. Why? Because they know the witnesses will show you’re guilty, you’re a cheat, incompetent at your job, a traitor, and a profoundly cowardly juvenile. Even if they lied it would be obvious to everyone. The thought of putting you on the stand makes them absolutely pee their pants in fright. It would be like watching a 5-year old with a roll of tape as you entangled yourself in your deceits and fantasies. Worse, you might tell the truth. So, you should say “Thank you, Mitch!” and “Thank you, Lindsay!” for cementing your legacy for posterity, the Biggest Chicken(Bleep) President of All Time, who had to have a rigged trial in order to get off. You’re always the one who leaves the suckers holding the empty bag, but this time you get left holding the bag of chicken (Bleep). I am absolutely agog with delight at the prospect.