Monthly Archives: July 2008

Jul 24

When “Widespread Fear” is a better story line than a fact

By kevin | Decision Making

Can anyone explain this to me. Markets, at least in theory, are supposed to represent all of what’s known about a stock discounted to a present value. So how is it that every major news outlet had a lead like this one from the NYT?

Widespread fear about the financial sector brought a dramatic end to the recent stock rally, as investors scrambled to take profits from bank shares and sent the Dow Jones industrials down more than 280 points, its worst loss in a month.

Investors are worried that the worst of the tight credit market still lies ahead. The nation’s banks have struggled to escape the cascading effects of paralysis in the debt markets and the decline in home values. Sales of previously owned homes declined in June at nearly double the rate that economists had expected, according to a report on Thursday.

The sell-off in financial shares brought down the broader market, with the Standard & Poor’s 500-stock index finishing down 2.3 percent. The Nasdaq composite index slipped 2 percent. All the major indexes headed downward at the opening bell and never recovered.

So the implication here is that there was some vast new treasure trove of information today that was beyond the ken of the smartest market players in the game. Yesterday that were feeling great about financial services firms, and today they’re racing for the doors.

A better explanation is this . . .

“We’ve had such a strong run especially in the financials,” Ryan Larson, a trader at Voyageur Asset Management, said. “A lot of people are taking money off the table.”

The problem here is that “taking money off the table” isn’t nearly as sexy sounding as shock, panic, and “widespread fear.”

kevin hoffberg

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Jul 21

Ford betting on small cars

By kevin | Decision Making

This is an example of big-time decision-making.

The Ford Motor Company, which devoted itself for nearly 20 years to putting millions of Americans into big pickup trucks and sport-utility vehicles, is about to drastically alter its focus to building more small cars.

The struggling automaker, reacting to what it sees as a rapid and permanent shift in consumer tastes brought on by high gas prices, plans to unveil its new direction on Thursday, when it will report quarterly earnings.

Among the changes, Ford is expected to announce that it will convert three of its North American assembly plants from trucks to cars, according to people familiar with the plans.

And as part of the huge bet it is placing on the future direction of the troubled American auto industry, Ford will realign factories to manufacture more fuel-efficient engines and produce six of its next European car models for the United States market.

American car manufacturers have never figured out how to make money on small cars, at least that’s what they’ve said, a feat that the competition from Japan, even building cars here, has somehow mastered. Sitting here today, it seems like a sensible bet, but make no mistake, it’s a bet the company move.

k hoffberg

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Jul 21

USAirways Puts the Lie to “It’s not our fault”

By kevin | Decision Making

by Kevin Hoffberg

It’s not a secret that airlines are in deep pudding, blaming everyone and everything for their miserable financial performance and even worse customer satisfaction ratings. It appears that USAirways decided to do something about it reports the WSJ . . .

The turnaround has been dramatic, especially considering that much of the airline’s service is in the Northeast where air-traffic congestion has been particularly brutal. But even at the nation’s worst airports, US Airways Group Inc. has run more or less on-time. At New York’s La Guardia Airport, for example, nearly 79% of all US Airways flights arrived on-time in May, compared with an abysmal 57% for AMR Corp.’s American Airlines and 58% for UAL Corp.’s United Airlines, according to the U.S. Department of Transportation.

And how did this miracle occur? Get employees focused on one goal and reward it. Spend money to fix up the systems mess left over from the America West Merger. Hire new managers and worker. Rework how planes and crews are scheduled (an amateur could see that one). Build a new baggage-screening area in super critical Philadelphia. Fill open mechanic positions. Little, obvious things that led to abraded travelers and horrible performance. And it’s working. Amazing. Amazing that anyone is amazed actually. The article goes on to say . . .

The US Airways experience this year shows that airline problems aren’t all the result of airport congestion, antiquated air-traffic control operations and summertime thunderstorms. Even under adverse conditions, airlines can run on-time if they are well-run. Travel woes today often result from weak airline leadership, disheartened and angry work forces, and poor coordination and communications inside companies.

Come on AMR and UAL, make a decision. I made the decision earlier this year to walk away from my million mile status on UAL because I was tired of playing the victim. Now its your turn.

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Jul 21

Beyond Data: Bringing judgment, intuition, and gut to the workplace

By kevin | Decision Making

by Kevin Hoffberg

I remember opening papers in college with a definition, a practice my professors universally regarded as lazy. But in this case, it is a useful place to start a discussion on judgment. Here’s what the American Heritage Dictionary has to say . . .

The act or process of judging; the formation of an opinion after consideration or deliberation.

a. The mental ability to perceive and distinguish relationships; discernment:
b. The capacity to form an opinion by distinguishing and evaluating:
c. The capacity to assess situations or circumstances and draw sound conclusions;

So when we talk about “judgment” as a quality we look for in a leader or manager, I think it’s all of what American Heritage says—distinguishing relationships, assessing situations, and drawing conclusions—and something more. It’s courage too: courage to seek and courage to act; the ability to see into the essence of a thing and then to act accordingly.

For example, I’ve heard judgment referred to in business as “being able to see past the numbers,” the idea being that while the numbers appear to add up one way, a more seasoned eye sees something else: perhaps a false positive, or a faulty correlation, or a missed connection, or a missed implication. Or better still, the ability to not get stuck into the numbers being presented and contemplate the numbers that aren’t on the page.

Another example could arise from almost any dealings between a very junior and a very senior person. Where the junior person may see one thing, the more senior, more seasoned person sees much more. His or her context and experience base is much richer, so relationships, direction, and causality that is not apparent to the untrained eye, are perfectly obvious to someone who has seen it all many times.

I found this example from the world of aviation . . .

You are an experienced pilot and you are about to tackle a tough winter flight in your Bugsmasher II which (except for pitot heat, carburetor heat, and a 5-inch by 7-inch “storm window”) has no icing protection. Being inexact as usual, the area forecast calls for occasional light to moderate rime and mixed icing in clouds and precipitation along your flight path, throughout the duration of your intended flight.

Understanding that you need to look beyond the literal language of a forecast to determine what is really going on, you have learned that the reason for the icing forecast is that a cold front is approaching from the direction of your destination. You also have ascertained that the cold front is moving more slowly than expected and that you can probably beat the front. You will be flying toward deteriorating weather, which will allow you at any time to reverse your course and land in more favorable conditions behind you. You decide that the forecast icing is a manageable risk and that you can take “adequate precautions” against that risk. You conclude that it is safe to take off . . .

Not being a pilot, none of the particulars are any more meaningful to me than to you, but you catch the drift of it. Icing is bad. It turns out in this case there may even be a legal issue: Taking off in these condition might be in violation of flight rules. But apparently it’s open to interpretation, which of course is another way of thinking about judgment

Each of these scenarios get at what I think of as judgment in the real world . . .

1.    The ability to find the essence of a thing: the important context, the critical connections, the true relationships between this and that, and what is cause and what is effect. That insight could come from experience, from inspiration, from instinct, from practice, from the Gods, from superior math skills . . .

2.    The courage and certainty to choose, to act, to speak up, or to offer an informed opinion.
In other words, insight plus action equals judgment. You need both.

The obvious problem here is that nothing beats life experience for developing judgment, particularly experiences that delivered unexpected outcomes. Note the absence of the word “bad” in this context. Good and bad are evaluative terms, but they’re not necessarily useful ideas when it comes to learning from experience. Why is that? Getting balled up in reactions and feelings about outcomes is a surefire way to block learning from happening.

So if judgment is to be prized, and waiting for it to accumulate in the full season of experience is an unacceptable strategy, then we should hope that judgment is something that can be taught and developed. And if it can’t be taught directly, we should hope that we can teach heuristics, tools, frameworks, or something that create the space and opportunity for purposefully “distinguishing relationships, assessing situations, and drawing conclusions,” the hallmarks of judgment in action. And along the way, through good practices, we would then hope that the new practitioner would learn judgment. How might we do that?

In a non-business setting, we might go after cultivating intuition and insight directly through meditation and other inward looking modalities. In a business setting, three strategies come to mind.

1)    Use a process or method to structure the first part—seeking insight into the essence of the decision—so that you can with confidence do the second part: take action. An ideal process would be one that covered off what was “necessary and sufficient” to feel confident that you’d gotten to the essence of the situation; that you really understood the direction and causality of the thing; that the important relationships were clearly understood. You’d also want to satisfy yourself that you hadn’t gotten stuck in your thinking about alternatives. Finally, you’d want to be sure that in making a choice, you were focused on what was really important, and not what was merely evident or perhaps just urgent.

2)    Explicitly access your, or other people’s, “non-linear” intelligence. You could describe this as engaging the right brain as well as the left (see following). That’s what happens when someone looks at something with “fresh eyes” and immediately knows that it’s right or wrong. Malcolm Gladwell tells an excellent story about this in his second best seller, Blink. It’s the story of the Getty Museum and the Kouros; a great read if you haven’t (see following). Examples could include doing a visual storyboard, using any one of many brainstorming exercises, mind mapping, and so on.

3)    Learn from others. In doing that, you would want to explicitly seek out people with divergent points of view, different experiences, and different levels of knowledge about the problem you’re trying to crack. Engage them not to prove yourself right, but to tap into their insights. Think of it as borrowing their judgment (it becomes your judgment when you act).

Where and how might judgment show up in a business setting? Here are some examples:

Figuring out the problem to be solved. Problems present themselves in all kinds of wrappers; some are shy, some are bold, and many show up in disguises. The thing we think is the issue might only be an indicator, an effect masking a cause. Knowing to dig, where to dig, and how far to dig is a matter of judgment. Some people, through experience, insight, or intuition, just know: they can look at what’s going on and see the real problem to be solved. Others need to be reminded to get out the shovel and dig. Either way, this is where we most need judgment as getting to the essence of the problem sets up the possibility of getting the rest right. The converse is also true.

Figuring out the right way to solve a problem. For example, if I were going to London and needed to pick a hotel in which to stay, how might I do that? I could ask someone who’d been there; I could ask my client to pick something for me; I could consult; I could call a travel agent; I could throw a dart at a map. And that’s just a few ways to make this decision. So which is the “best way?” Strictly speaking, there is no right answer to that question. So picking the way to solve the problem would be a matter of judgment. Depending on the scope and scale of the problem, this might be the most important part of the entire decision, a problem within the problem that warrants a big expenditure of time.

Exploring alternatives. This is a good example of points two and three: accessing non-linear intelligence and consulting with others. Some of us have the ability and/or training to widen our field of view and see alternatives where other people see nothing. More often, we get stuck into a single alternative, or perhaps a small number of familiar choices. In doing that, in failing to open our field of vision on the thing, we cut off access to judgment. In other words, the familiar is usually the enemy of insight. Going back to my London example, I could keep going back to the same hotel year after year, but is it really the same hotel year after year? Am I really the same traveler?

Understanding the uncertainties. It’s tempting to think this is where all the action is: If there were no uncertainties, there would be no need for this thing called judgment. Going back to the pilot and the potential for icing, if the sky were blue and the temperatures agreeable, what would there be to judge? So it’s two things. The first is having the wisdom to understand that there are uncertainties that matter. The second is figuring out what they might be and acting accordingly. With this in mind, there are a series of questions worth asking yourself.

1.    Do you have the knowledge, context, and experience to make this decision, or should you get help?
2.    Are you satisfied that you have “used good judgment,” meaning that you have a good story about what you’ve chosen to do, why, and how?
3.    Have you identified the critical uncertainty or potential failure factor?
4.    Who and what are you placing at risk if your judgment is faulty?

If all of this sounds like a lot of decision overhead, it is. But remember we’re talking about developing something that’s otherwise not available to us without either years of life experience, or access to insight, inspiration, or whatever word you want to use for non-linear intelligence. I happen to be a big believer in the value of that sort of knowledge. I also know that as a practical matter, it’s a hard place to start in a business environment. So that leaves us with the third alternative, which is the purposeful use of process, non-verbal thinking exercises, and consulting with others to hone both the quality of the decision and our own judgment tools.

So what would a piece of training look like: one that would increase a person’s awareness of the need and opportunity to exercise judgment, as well as some tools for usefully accessing and applying judgment. Consider the following:

When is Judgment Necessary? You could make the case that the answer to that question is, “always and everywhere” and you’d be right. As a practical matter, nobody can maintain that level of awareness and mental presence, so a more useful activity would be to spend time identifying specific instances where taking time to work a problem vs. simply making a snap decision would be appropriate. Some rules of the road could be:

1.    Situations where the cost of being wrong are unacceptably high.
2.    Situations where we have little or no practical experience.
3.    Situations where we’ve had unexpected experiences in the past.

In using the word situation, I’m not implying something about “situational ethics,” or actually anything about ethics at all. The idea is to identify situations before they come up where it would be useful to exercise judgment, so you’ll be able to respond more productively when they happen.

Noticing and Describing the Essence of the Thing (The problem in context).  I said before I don’t like the word “bad”, but let me use it here. When we think about a situation where someone used “bad judgment”, it is almost always the case that we are able to see something in retrospect that the person in question didn’t see at the time.  Conversely, the value of a barn full of life experiences is that we are able to see both more and less than someone else in the same circumstances. It’s in that tension of both more and less that the wise person can see the essence of the problem.

Absent native or accumulated wisdom, a useful exercise is to create a visual map of the problem to be solved. A simple way to do that is to do a mind-map. A more exotic solution is to engage in creating a storyboard or structured visual map. This is a specific example of accessing both left and right brains, both linear and non-linear wisdom, in this case, to create a more fully formed picture of the problem in context, or what I keep referring to as “the thing.”

If you’re willing, here’s another exercise (in two parts). Stop doing whatever it is you’re doing. Read the following instructions and then follow them:

  1. Close your eyes (after you finish reading).
  2. Notice your breathing. Don’t change it, just notice yourself inhaling and then exhaling. Now slow both down.
  3. Notice your head, your jaw, and your forehead. Notice if you’re holding any tension. Notice first, and then release it.
  4. Notice your shoulders. Are they tense? Are you holding them high? Notice first, and then relax.
  5. Notice your arms down to your hands. Are they tense? Notice first, and then relax.
  6. Notice your back. How are you sitting? Is your head forward or back? Notice and then let your posture shift. It will change by itself.
  7. Notice your legs. Feel your feet. Bring all your attention down your legs to your feet. Notice first, and then relax.
  8. Stay with that for a moment. Let your attention go anywhere in your body it wants to, but not outside.
  9. Come back to following your breath. Follow your inhalation and exhalation for five cycles.

What was the point of that? If we were in a classroom setting, the answer to that question would be worth a discussion. If nothing comes to mind right now, let me suggest two ideas.

1.    You’ve just practiced the fine art of noticing. You’ve consciously chosen to pay attention to something. This is not a small thing. We are awash in stimuli all day long, almost all of which we screen out so we can get through the day. It doesn’t take much of that to become desensitized to the point that we have to work to pay attention. To the extent that judgment begins with understanding the essence of the thing, we do well to train ourselves to pay conscious attention: To noticing.

2.    In this case, you were paying attention to yourself. There are many reasons why that’s a good thing. I keep dancing past the idea of accessing non-linear wisdom, or non-rational forms of intelligence. To speak directly to that point for a moment, we can’t hope to tap into that kind of wisdom when our attention is pulled and pushed by the chatter and noise. Consciously drawing attention inward, even for a few moments, creates a stillness, a space for insights and notions to emerge from wherever they live.

Verbalizing the problem. Powerful thinking can arise from either the left of right brain. Because we’re speaking about using judgment in a commercial setting, we ultimately need to move the problem into the realm of the verbal. As a practical matter, that means we need to use words with care and precision. We can’t think clearly if we can’t describe something clearly. This is doubly true if we intend to engage others in the process. In the example of the pilot and the ice, the problem statement could be any of the following . . .

•    Should I take off?
•    Should I take off now?
•    Should I fly the route I intended or pick a different route?
•    What should I do for fun today?
•    What’s the best way to get to Spokane?

They’re very different problems. A person stuck on one problem definition misses the opportunity to consider a whole range of other ideas in failing to widen, or maybe narrow, his or her view of the problem.

Wrestle with Uncertainty. In this context, I think “wrestle” is a wonderfully descriptive verb. More specifically, it’s probably “wrestle with the problem until you find the thing you really need to worry about.”  Go back to the example of the hotel room in London. What’s the big concern here? Assuming I’m not worried about mold or contracting Legionnaires Disease, it comes down to a single number: How many hours will I sleep every night? I’m not in my hotel room for any reason other than sleeping, so that’s where all the action is. Once I have a line of site on the BIG QUESTION, I can then go about the business of finding alternatives without having to juggle a zillion possible variables.  Or to put it another way, we learn judgment through focus: Focus on what matters and filter out the rest.

Develop Useful Alternatives. Often problems are presented in a way that suggests there are only two alternatives. Think about the pilot example: Take off or don’t. In other cases, the problem is bogged down with too many alternatives. Think about the problem of finding a hotel room in London.
Having identified the BIG QUESTION, it’s useful to think about culling your choices down to three: A conservative alternative, an aggressive alternative, and one that hedges both. From there, it may be useful to expand your field of choices (but it may not be). In thinking about these alternatives, you would want to identify them in relationship to not just the BIG QUESTION, but any other nagging uncertainties you can see, for example: potential impact on other people, financial consequences, and so on.

The last three elements, verbalizing the problem, wrestling with uncertainty, and developing alternatives, are all activities that lend themselves to process, the use of non-verbal thinking strategies (like mind mapping), and seeking the counsel of people with different life experiences.

So what do you do now? Judgment usefully shows up on the way to a choice, but in the end, you have to make a choice. You have to take action. You either run up the engine and take off, or you don’t. You make a reservation at this hotel or that.

It may be that you already know enough to decide  . . . the BIG QUESTION is the thing that most concerns you so you pick accordingly. It may also be the case that the choices aren’t as clear as you’d like. In that case, you may need to contemplate applying some additional values or priorities. For the sake of simplicity, we’ll leave that discussion for another day. The cleanest, simplest way to build your judgment muscles is to focus on solving for the BIG QUESTION. The hotel might not be as convenient as you’d like, but you know the beds are comfortable and the rooms quiet, and that’s what’s important.

Returning to the story of the Kouros (see following), the problem could be easily thought of as one of judgment. Everyone initially involved looked at some singular aspect of the statue: the documentation, the marble, the tool marks, and so on. Given a limited perspective, it was the considered judgment of each specialist, that what they looked at was consistent with what was being represented: That the statue was an authentic kouros. The problem, at least as the story is told, is that it was not until the very end that anyone laid fresh eyes on the thing and judged it as a whole. In seeing too much and in too much detail, they saw too little.

In retrospect, one strategy would have been to bring in these same experts earlier in the process. I spoke of this as a strategy early on: relying on the judgment of someone with greater life experience. Given the copious credentials of the people driving the acquisition of the statue, you can appreciate how they missed that one.

Another strategy would have been to follow some of what I’ve laid out here, which would have involved structuring a process that included specific steps to disprove the hypothesis. As it was, all the energy and efforts were directed at ascertaining authenticity. The difference between that and actively attempting to disprove authenticity is not subtle or unimportant.

So there you have it. Absent the accumulation of life experience (and even then) or the willingness and ability to access a deeper source of wisdom, the path to better judgment runs through three towns . . .

1.    Use process, tools, rules of thumb—something—to create time, space, and structure for thinking through a problem in a high quality way.
2.    Explicitly engage in activities that access your whole brain. Think differently.
3.    Engage others with more, different, and divergent experience.
The Story of the Kouros

Malcolm Gladwell, best-selling author and social commentator, likes to tell the story of the kouros owned by the J. Paul Getty Museum in Los Angeles. The tale goes roughly like this:

A kouros is a statue from archaic Greece meant to represent the ideal of male beauty, something much prized in those times. There are very few of these statues in the world today, so the Getty Museum was thrilled to be offered the opportunity to purchase a rare new find. Over a period of many, many months, the prospective owner subjected the statue to all manner of examination. A team of high-priced attorneys pored over the documentation and provenance of the find. Nuclear scientists examined the subatomic structure of the marble. Presumably experts in left sides looked at the statue’s left side, and experts in right sides looked at the right. Everyone came to the conclusion that from their individual points of view based on the subject each knew best, the statue was authentic.

Not long after making the financial commitment to purchase the statue, the Getty people showed it to Federico Zeri, a board of trustees member. His first instinct, within seconds of looking at the statue, was that it was not authentic. Next came noted art expert Evelyn Harrison. Then Thomas Hoving, former director of The Metropolitan Museum of Art in New York City. Same immediate reactions. Getty has this to say today about its purchase: “Neither art historians nor scientists have been able to completely resolve the issue of the Getty Museum kouros’s authenticity. Certain elements of the statue have led to this questioning, especially a mixture of earlier and later stylistic traits and the use of marble from the island of Thasos at a date when its use is unexpected. Yet the anomalies of the Getty kouros may be due more to our limited knowledge of Greek sculpture in this period rather than to mistakes on the part of a forger.”

Left Brain / Right Brain
Left Brain Functions
    * Uses logic
    * Detail oriented
    * Facts rule
    * Words and language
    * Present and past
    * Math and science
    * Can comprehend
    * Knowing
    * Acknowledges
    * Order/pattern perception
    * Knows object name
    * Reality based
    * Forms strategies
    * Practical
    * Safe
Right Brain Functions
    * Uses feeling
    * “Big picture” oriented
    * Imagination rules
    * Symbols and images
    * Present and future
    * Philosophy & religion
    * Can “get it” (i.e. meaning)
    * Believes
    * Appreciates
    * Spatial perception
    * Knows object function
    * Fantasy based
    * Presents possibilities
    * Impetuous
    * Risk taking

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Jul 19

Going There

By kevin | Rants and Raves

Going There. Those words go together nicely. You get on a motorcycle and you Go There. So why is it that all I think about is the going part?

I can’t speak for everyone who rides long distances, but my sense is that for the true Long Distance Rider, the going is more important than the there. There is the place you turn around and head home from. There is the place you finally turn off the motor and sleep. There is a waypoint on the GPS. There is incidental to the fine art of going. In this case, the going only appears to be the means, and the there only appears to be the end. It’s actually the other way around. Going is the whole point. It’s the means and the end. At least that’s how it works out for me.

Some years ago, when spending five hours chasing a little ball around a golf course still seemed like a good idea, I had the opportunity to play a round at Pebble Beach, the Valhalla of American golf (this is about motorcycle riding, so save your protestations). It’s a stunning track laid out along the headlands near Monterey.

The signature hole is arguably the 8th which plays with the Pacific Ocean along the entire right side. The approach shot is a blind up-hill to a landing area that unfolds one of the most spectacular views you’ll ever care to see. I remember standing next to my ball thinking, “What am I supposed to do? Hit the ball or gawk at the scenery?” Given the price of admission, I did the first, hitting the finest golf shot of my life and just missing the put for birdie. By rights the Gods’ should have struck me down for not lingering over the view. Two-putting for par hardly seemed like penance enough.

I’ve thought about that moment may times since. Hit the ball or notice the view? Later, when inhaling long distances on my motorcycle became my diversion of choice, I revisited the same dilemma. It happened first on a spring ride somewhere on the road between Fallon and Walker Lake in Nevada. I was head down with the big FJR in full gallop. The road was clear, the day was fine, and I was in the mood for speed.

It came to me not with the force of revelation. It was more like an epiphany lightly clearing its throat.  “Ahem. Notice anything? Like the heart-achingly beautiful scenery? No? Think you might want to take a look?”

I remember backing off the throttle and sitting up. “Whoa. Where did this come from?”

For the next hour or so I played this one back and forth like it was a zen koan: “You’re in a place of unlimited beauty and unlimited speeds. What do you do? Go slow for the scenery or go fast for the thrill? Is it about the going, or the there?”

For those of you who are groaning at the obviousness of the answer, I humbly submit you’re either far more evolved than I, or seriously kidding yourself. Perfect road and perfect scenery? You could stop every ten feet and take it in, but in doing so, you would upset the rhythm and flow of exquisitely linked turns and the uninterrupted stillness of arrowing down an endless straight from, through, and to an endless vista.

Perhaps the right answer is there isn’t a right answer. Either is fine and be happy with your choice. The last and dumbest thing is to do the one and kick yourself the entire time for not doing the other. Or kick yourself after or at all.

This self-inflicted tangle came to view yet again last week: When faced with a free day and fine weather, I couldn’t figure out where to ride. The puzzle came down to this: I had to be home (there) by a certain time which put the ride I wanted to do (going) out of reach. Everything else I could come up with seemed deficient for one simple reason: The ride wasn’t hard enough.

The attraction of my first choice ride, a route called the Four Pass ride through the Cascades, is hard in two dimensions: Big stretches of the road are tight and technical; it’s also well over 400 miles which, while not epic, is long enough to get your attention. Other rides I had in mind either didn’t seem long enough or technical enough or both/neither.

The question, and the one I finally put to myself was this: “Why does it have to be hard to be worth doing?” In coming to the answer, recall the context: I’m wired for the going, not the there; I like the feeling of riding (vs. sitting on top of the bike while it goes down the slab). So the idea of taking an easy, or relatively less-hard ride where the there was the point, was not an immediately obvious alternative. But it’s the one I finally took.

The ride from Seattle out to Leavenworth is pleasant and scenic. I’ve done it so many times that I’ve stopped noticing all there is to see, smell, hear and feel along the way. It hasn’t gotten less fetching over the past couple of years. It’s me that changed. So that was to be my new sense of going. Rather than tasking myself to ride with technical precision, I challenged myself to simply notice. Notice everything. Notice myself along the way: my hands, feet, back, arms, legs, neck, and back. What were they saying? How did they feel. Just notice. Notice everything around me: The sounds of the traffic, the slight differences in temperature, the big differences in temperature, the scents and smells, the shades of green, the color of the mountain fed river . . .

What a different ride it was. I remember almost nothing about the road and almost everything about the day. What was even more revealing was the precision of my riding. Crisp turn-ins, perfect apexes, and precise exit points: I never put a wrong foot the entire time. In the process of paying so much attention to the entire constellation of the day, picking good lines became an effortless point to point activity.

Midway through the ride I decided to stop at a local fruit stand for some lunch. Usually when I do this ride I stop long enough for gas and a Cliff bar and I’m off. This time I pulled off my gear, bought some food, and took out my nearly finished copy of Travels with Charlie by John Steinbeck. The priest of going was finally going to linger there for a time, watching the world stop in or go by, and read a book.

I didn’t stay forever. At some point I geared up and made the return ride across the Blewit Pass to Highway 90 and then over the Cascades for home. In the process, I didn’t shrink to three feet tall and turn green like Yoda. It was a small set of connected gestures, not a life changing event (at least not that I can tell), but those small gestures took hold. Today, faced with the same set of choices, I rode to a favorite pub not far from here, parked my bike, and ordered fish and chips. I’ve never understood why anyone would do such a thing given the alternative of apex clipping and back road silliness, but today I got it. 

I’ve got a 2500 mile ride laid on with best riding pal Ron in a couple of weeks and I can assure you, we will be all about the going. But it’s good to know that it can also be about the there.

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Jul 17

Drive-by Review: Underarmour heat gear

By kevin | Gear Reviews

I may be the last one to this parade, but I finally discovered the joys of underamour heat gear / compression gear. Those are a lot of words: Here’s what they mean.

Compression gear: I’ve been peripherally aware of the idea of compression gear most of my life from closely studying the Sears Catalog as a kid. Back then they were called girdles and women wore them. They were in the section right after the bras. I know this for a fact.

More recently, compressive gear has rocketed to semi-popular attention with the release of the revolutionary new speedo lzr racer swimsuit.

Basically the idea is this. When you start to tire, your muscle tone begins to fail. Muscles have to work harder to fire which makes you even more tired. Bad things happen. In the swimming pool, that idea is enhanced with a related idea which is selective reshaping of the body to improve fluid dynamics. Another discussion.

For the past year or so I’ve been wearing a pair of Andiamo Padded Skins under my riding gear. According to the blurbosity . . .

Padded Skin is just what the doctor ordered when it comes to sitting in the saddle all day on a motorcycle. Sweaty underwear is a thing of the past when you put on an Andiamo! Padded Skin because the Hydrotech coated polyester fabric transports moisture away from your skin keeping you drier and cleaner! The chafe free padded liner provides additional comfort and support and all seams are flat stitched for additional comfort. You’ll never wear cotton underwear on a ride again.

Actually the last part isn’t true. On a recent epic ride I did wear a pair of cotton briefs one day and I was as miserable as I could be. Never again. The Andiamo shorts perform as advertised: more comfort, no sweating, no monkey butt.

More recently, I was teaching a track day and noticed one of my fellow instructors standing around between sessions in what looked like long underwear . . . in 90 degree weather. What!!!! Well it turns out he was cool as a cucumber under his gear and the rest of us were dying. Which gets to the part about “heat gear.”

It turns out that the Heat Gear Underarmour fabric is both UV resistant and a superior moisture transport system. It’s uncanny stuff. If you can get any sort of airflow at all across the gear, the cooling effect is astounding: Much better than if you’re not wearing it.

So I bought some. Actually I bought a lot: tops and bottoms, short, medium and long. While I have yet to test the short stuff I’m ready to call the ball: Don’t waste your money: go straight for the long leggings and the long-sleeved top.

I tested my new gear recently on a 300 mile ride from Seattle, across the mountains to Leavenworth, and then home. I started the day in the seventies, got down to the low 60s in the mountains, up to the mid 90s on the other side, and then full cycle. It’s the real deal.

Putting the stuff on is a bit of a chore. You want it to fit tight. Once its one, it feels great. Every muscle from ankle to wrist to collarbone is under light compression and completely supported. The feeling doesn’t go away. I often get knotty muscles down the right side of my back when I ride long distances. Not this time.

When the temperatures got cool, I just cut off the airflow through my gear. Under those conditions, the underarmour is just like lightweight polypro. But once it heats up, even a small amount of airflow through my riding gear changed everything. It’s like the breeze enters through a vent and spreads up and down your entire body. Very cool in both senses of the word.

And like the Andiamo gear, there’s no monkey but. Your butt and private parts stay dry, vented, and comfortable.

It’s possible I’ll test the short pants and short sleeved shirt. It’s also possible I’ll give it away. The long stuff is just that good. Highly recommend.

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Jul 17

Leadership and Decision Making

By kevin | Decision Making

“Are you a good decision-maker?”

“And what about ‘we’? When you think of the group, do ‘we’ make good decisions?”

I will often start a decision workshop asking this series of questions. Given that the people in the room are typically senior managers and leaders of big organizations, the answers to the first question are different versions of “yes,” as you would expect. If you’re a senior person you’ve made a lot of decisions and a lot of results have been attributed to your choices and actions. It’s also true that you may have gotten lucky, but that’s a different discussion.

The answers to the second question tend to vary more. Once in awhile people think the collective is smarter than the individuals. Mostly the answers tend the other way. Why? When you dig, you find that people don’t trust each other, feel discounted in the decision process, or disagree with fundamental issues like the nature of the problem.

Problems in the first instance are attributable to a simple fact: While we are all used to making decisions and have made many of them, few of us have actually been taught how to make decisions. That seems like a subtle distinction, but it turns out to be a big deal as the stakes increase. The consequences show up in what we think of as “decision traps,” or what psychologists call “cognitive biases.” Put simply, we get predictably and repeatedly stuck, blind-sided, and waylaid as we try to make big decisions.

Problems in the second instance, the “we,” arise partly from the first problem, and partly from organizational issues that cause us to pack all the dialog and quality checking on big decisions way to the end when it’s too late, too hard, or too risky to dissent, diverge, or dig in.

If the stakes in a decision are low, process and method hardly matters. Usually taking the first good alternative works out just fine. An example of this is picking a movie to see. Read a review: If it sounds good, go. You’ll know soon enough if it was a good choice, and the costs aren’t that high if you’re wrong. That’s not a good way to figure out whether you should enter a new market or the best way to structure a multi-million dollar deal.

We are practitioners of something called “decision quality,” a discipline first laid down in the 1960’s at MIT with an eye towards making high quality decisions where there is a lot of uncertainty. In other words, decisions that required a mix of data and intuition, inquiry and dialog, and ultimately making a choice where the feedback loops are long and you simply don’t get to know beforehand how things will come out. Here are some of the key ideas to help you with those kinds of decisions.

A decision is only as good as the weakest link. Your decision making process is only as good as the weakest link. If you want to make consistently high-quality decisions, you need to “divide and conquer”: break the decision down and work it a piece at a time. Standardize your critical decision-making on a single model like the one we use. Put in place the training and tools necessary to create fluency with your people with the model and processes of declaring and working a decision. Weave decision quality into all your management and coaching dialogs so that your people come to understand the importance you place on high quality decision making.

How you frame decisions matters. As a leader or manager, make sure you focus yourself and your people on doing what it takes to properly frame decisions. As you begin the journey to improve decision-making in your organization, you should have a hand in declaring or inspecting every significant decision frame. Later, as people become more confident and fluent, you can turn them loose to do their own framing, with you standing by as coach and occasional gadfly.

You can’t judge a decision by the outcome. In the case of organizational decision-making, you should do the work necessary to install what we call a “decision dialog process,” one that is appropriately rigorous and flexible for the types of decisions you and your people make. With that in place, you will be able to judge decisions while they’re being made, particularly when there are significant uncertainties, by evaluating the quality of the work done at each of the Six Decision Points: frame, people, process, alternatives, values, and information.

Decisions are linked. It’s not possible to map the future with any degree of uncertainty. And yet making decisions in the face of uncertainty is what leaders and managers are paid to do. As much as possible, you need to think many moves ahead. You need to see how your decisions might link up, and how others might link them in ways you didn’t see, and then set your frame accordingly.  Build “future thinking” into your decision dialogs. Ask yourself and others, “What decisions will this decision likely influence?”

You can’t know everything beforehand. Identifying, understanding, talking about, and ultimately quantifying uncertainty are all part of good decision making. Help your people talk about and understand risk. In doing that, pay particular attention to identifying the “critical uncertainty,” the big unknown on which the decision really hangs. Seek information to take the mystery out of risk. Test you alternatives by looking for information that disproves and disconfirms what you think you want to do. Use your new insights to reframe the decision, identify alternatives, and hone your values so that you can with confidence choose a path, even though you don’t know for sure the outcome.

People have different risk profiles. Your tolerance for risk colors how you process each part of a decision process (frame, people, process, alternatives, values, and information). Be as explicit as you can at the beginning of every decision process how much risk you’re willing to take. In putting together decision teams, think about risk tolerance. In the case of a large, consequential decision, you might want to create a team of people with a broad risk profile. If you’re looking for breakthrough ideas or to get something, anything going, load up the team with people willing to take personal risks. If you’re thinking about something that seems too good to be true, bring in some of your worriers and see what they have to say. 

Organizational Decision Making is a Balancing Act. You can certainly make these sorts of balancing decisions on a case-by-case basis. As an alternative, create rules around the four paradoxes for the different types of decisions people in your organization regularly make.
•    Inclusion vs. Efficiency
•    Empowerment vs. Control
•    Rules vs. Method
•    Head vs. Heart

You can express this in terms of high/lows and let individual actors work out the specifics, or by being directive and prescriptive in how you want people to manage each paradox.

Decision quality must be built in step by step.  Build quality into your decision framework and into the processes by which you manage how your people make small and large decisions. Pay attention to every step. For smaller decisions, use tools, training, and technology to ensure quality throughout these shorter decision processes. Don’t wait until a choice is made to try and catch mistakes or poor reasoning. For larger decisions, build decision processes that create dialog and critical thinking at specific junctures like framing, values, and alternatives to ensure alignment and agreement on these critical components of decision-making.

It’s not a decision until you commit. Having worked a decision to a choice, lock it down, and do what it takes to get it implemented. Harvest the learning, and then move to the next decision. It seems simple, yet most organizations, by the admission of the people running them, do a poor job of turning intention into action. All it takes is attention. Yours. Make “irrevocable allocation of resource” your top priority.

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Jul 16

Decision Model Beats Experts at Predicting 2002 Supreme Court Outcomes

By kevin | Decision Making

A colleague alerted me to what I think is a startling piece of research into decision making dynamics. The specific instance in mind was a landmark attempt to predict the outcome of the decisions facing the US Supreme Court prospectively. In other words, before the term starts, to take a shot at calling the outcome of all the cases the Court intended to hear. Think about the magnitude of that one for a minute. Here’s a snip from the findings which were published by the Columbia Law Review . . .

What is notable, in light of all the attention focused on the Court, is that few have tried to systematically predict its decisions prospectively. Given the high economic, social, and political importance of the Court’s decisions, a model that could prospectively forecast decisionmaking at a high rate of accuracy would be an invaluable tool to litigants and Court-watchers, even if the model itself were incompletely theorized. But prediction also has the potential to advance explanation by verifying, undermining, or modifying preexisting conceptions of the best ways to study the Court and understand how the Justices arrive at their decisions.

Our study compares two distinct methods of forecasting Supreme Court action, each drawing on the insights and strengths of a different discipline. Thus, the two prediction methods diverge dramatically in terms of methodology, and in this sense embody many of the differences between law and political science discussed above. The most notable distinction inheres in the level of generality the two methods employ. The statistical model looks at only a handful of case characteristics, each of them gross features easily observable without specialized legal expertise, and builds on general patterns ascertained from all 628 cases decided by the Rehnquist Court since 1994 and prior to the 2002 Term. The model is indifferent to many of the specific legal and factual aspects of the cases, instead predicting outcomes based on the same six (and only six) observable characteristics of each case.19 The legal experts, by contrast, utilized particularized knowledge, such as the specific facts of the case or statements by individual Justices in similar cases. We did not constrain the experts to consider only “legal” factors that might drive the Court’s decision. But although many considered nonlegal factors such as the Justices’ policy preferences, the experts, unlike the statistical model, could (and did) consider particular case law and specific constitutional or statutory texts and were thus able to particularize their analysis with regard to single cases in a way that the model was not.

So if you just skimmed the previous, here’s the deal . . .

  • Before this, nobody had done a prospective study of the court. All study and commentary by both political science and legal experts was done historically.
  • The contest pitted a statistical model against the best and the brightest.

And the results? The model won going away.

The basic result of our study is that the statistical model did better by a fair margin in forecasting the outcomes of last Term’s cases: The model predicted 75% of the Court’s affirm/reverse results correctly, while the experts collectively got 59.1% right.

This experiment captures only one specific Term and only one specific group of Justices, cases, and experts. The results might well be different in a different Term or with different experts. But for the 2002 Term, the model achieved notable success by utilizing a set of factors that appear to correlate with the Justices’ decisionmaking. That a forecasting machine that is indifferent to specific doctrine and text can predict cases so well is interesting, surprising, and worthy of further thought.

It’s a long report and worth reading if you’re into this sort of thing. It turns out that the model did especially well in cases with economic activity and experts excelled with “judicial power” cases. The model did better at predicting the swing voters (Kennedy and O’Connor) and the exprts did better with the more ideologically extreme Justices.

What’s more interesting, and why you should care beyond your interest in the doings of the High Court, is that the model ultimately won for a simple reason. It focused on a small number of variables that were highly predictive: the “experts” thought about many more factors and tended to weight them unreasonably and inappropriately in relationship to their predictive value. So, to pick a really specific variable, cases that came through the Seventh Circuit Court of Appeals in California got reversed. So, if the answer to the question, “Where did the case come from?” was, “San Francisco,” there was nothing else you needed to know. You were a Hall of Fame shoe-in if you predicted that Supreme Court would rule to reverse.

We see this same phenomena at work all the time . . . people trying to make decisions, and a prediction is a class of decision, get all balled up thinking about and debating points that, while interesting, don’t really matter when it comes to driving the quality of the final outcome. The lesson, “Focus on what matters” is obvious, but hard to do. Even experts miss it. They outsmart themselves with all their knowledge. A “dumb” model built by smart people will reliably beat them assuming they are designed to seek out the levers and uncertainties that account for all the action (or variability) which this one did.

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Jul 15

Older people are happier than younger

By kevin | Decision Making

Here’s an interesting bit about happiness. At least according to one piece of research, happiness correlates positively to age. The finding? Older people are generally happier than younger people. Here’s a snip from a piece in the Seattle Times.

Since 1972, researchers have conducted 50,000 detailed interviews with Americans. The questions of the General Social Survey are repeated year after year to enable researchers to detect trends and to make comparisons among groups and to see how the same people changed over time. One asks whether they are very happy, pretty happy or not too happy.

“One important finding was people who were biologically older are happier than younger adults,” said Tom Smith of the University of Chicago, who is the director of the General Social Survey.

The study, conducted by researcher Yang Yang at the University of Chicago, used the granular detail of the survey to eliminate the possibility that older people seemed happier because they were raised in a generation that was taught from an early age to be content with its lot.

Rather, Yang found, in research published in the American Sociological Review, those older than 65 had not always been happy. It was being older that conferred the contentment that many of them reported.

“It is counter to most people’s expectations,” said Smith, who spoke about Yang’s paper because she was not available. “People would expect it to be in the opposite direction — you start off by saying older people have illnesses, deaths of spouses — they must be less happy.”

Smith said he and other colleagues had also examined the phenomenon from a different perspective, by asking people about their problems — including physical ailments, problems with relationships, losing a beloved family member and becoming the victim of a crime. Smith found that older people reported a larger number of health problems but tended to report far fewer difficulties overall — fewer financial, interpersonal and crime problems.

The younger adults, Smith said, had less trouble with their health but had many more of the other kinds of predicaments, and those, in the long run, tended to trump their better health.

Here’s what you need to know about the General Social Survey . . .

The General Social Survey (GSS) is one of NORC’s flagship surveys and our longest running project. The GSS started in 1972 and will begin its 27th round in 2008. For the last third of a century the GSS has been monitoring social change and the growing complexity of American society. The GSS is the largest project funded by the Sociology Program of the National Science Foundation. Except for the U.S. Census, the GSS is the most frequently analyzed source of information in the social sciences. 

The GSS contains a standard ‘core’ of demographic and attitudinal questions, plus topics of special interest. Many of the core questions have remain unchanged since 1972 to facilitate time trend studies as well as replication of earlier findings. The GSS takes the pulse of America, and is a unique and valuable resource. It is the only survey that has tracked the opinions of Americans over an extended period of time.  The GSS is also a major teaching tool. We know of over 14,000 research uses such as articles in academic journals, books, and Ph.D. dissertations based on the GSS and about 400,000 students annually who use it in their classes.

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Jul 15

Seattle School System in Need of Some Judgment

By kevin | Decision Making

I’ve been having conversations with a client about the idea of “judgment,” as in teaching people in business to use judgment in decision making. It’s an interesting idea given that many people in business bemoan the lack of “fact-based” decision making. To say it’s a rich discussion is an understatement. With that as a background, I found this item about the latest enrollment silliness in the Seattle School System to be an especially poignant example . . .

Annika and Nicole Jewett are twins who live in the same house, their beds just two feet apart. Their mother never dreamed they’d be assigned to different schools for kindergarten this fall.

Stephanie Jewett listed the same three schools in the same order on each girl’s application. Made a note that the girls are twins, and told the enrollment staff the same thing.

When Annika was assigned to Bryant Elementary, and Nicole to Wedgwood, Jewett initially thought it was a mistake.

It wasn’t.

In one of the stranger quirks in the Seattle School District’s convoluted student-assignment system, twins can be assigned to different schools, despite the district’s policy to keep siblings together.

Turns out the sibling-preference policy applies only when one child in a family already attends a school. In that case, a younger sibling is almost always a shoo-in if seeking the same school (and applying for an entry grade, such as kindergarten).

Twins do receive something called “sibling linkage,” a step down from sibling preference. The Jewetts didn’t even get that — but more on that later.

When I went to Kindergarten, a very long time ago, there was nothing to decide. There was a school down the street, around the corner, and up a hill. That’s where I went. When my parents moved between my first and second school year, I went to school about 8 blocks away. It seemed like it was across the universe at the time, but it was the neighborhood school and that’s where I went.

By the time I was ready to enter the fifth grade, the game had completely changed. In Rochester, New York, the solution was to bus kids from “white neighborhoods” downtown, and kids from downtown, to places like where we lived. The term was “Reverse Open Enrollment.” In my case, there was an additional wrinkle in that I was also in something called the Major Achievement Program which meant I got bussed to a school building that had been condemned but that’s another discussion.

Years on, school district in cities tie themselves in knots trying to comply with regulations and judicial opinions without end. Just last year the High Court weighed in on the topic, further frying everyone’s eggs. In the end, after all the politickin and posturing, it’s people like Annika and Nicole Jewett who get caught in the maw. Something will be sorted out but it will be messy and someone will be deeply unhappy. Changing the algorithm that caused the mess is a two year proposition. If you believe in assigning blame, there’s tons of that pie to go around. If you’re a systems person, it’s clear the system is all cocked up. It’s like the worst of all worlds.

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