Behind every one of us...

I came across a post on social media last week that I thought was interesting.  I was not able to verify that this story was actually true or not, so take it with the proverbial grain of salt.  The story involves Winston Churchill, the legendary Prime Minister of the United Kingdom from 1940 to 1945 during World War II (and again from 1951 to 1955) and his equally legendary spouse, Clementine Churchill.  Among all of the other things she did for her husband throughout their lives together, Clementine once even literally saved Winston's life (see the story here).  Here is the story, copied verbatim from the Internet:

One day, Mr. and Mrs. Churchill were walking through a smart neighborhood in London.  People greeted and exchanged a few words with the Prime Minister.

A street sweeper, however, greeted Mrs. Churchill in particular, and the two stayed aside for a while in familiar conversation.  Afterwards, Churchill asked his wife what had taken her so long to discuss with a street sweeper.

"Oh...he was in love with me once a long time ago," she replied.

Churchill smiled and said, "You see, if you had married him, you'd be the wife of a street sweeper today."

Mrs. Churchill looked at her husband in amazement and said the legendary words:

"But no darling, if I had married him, he would be Prime Minister today."

What a great story!  Leaders often take for granted how much their spouse or significant other influences their success.  I can't imagine where I would be today without my wife's influence, support, advice, and commitment.  Throughout my career, she has been the one person who has always been there for me, through good times and bad.  

Take a moment today (and every day) to thank that one special person in your life who has always been there for you.

"If you don't like problems, stay out of leadership"

Retired Marine Corps General and former Secretary of Defense James Mattis once wrote, "A leader's role is problem solving.  If you don't like problems, stay out of leadership."  Right on!  Of course, problems come in all shapes and sizes, and unfortunately not all problems can be easily, or quickly, solved.

I've read a couple of books and watched several online lectures by the University of Michigan Ross School of Business professor, Scott Page.  He uses a particularly useful metaphor (in my opinion) to describe the different kinds of problems that leaders may face.  The first kind of problem, and perhaps the most easiest to solve, is what he calls a Mount Fuji problem.  Take a look at a picture of Mount Fuji on the Internet (see here).  Mount Fuji is kind of like J.R.R. Tolkien's fictional Lonely Mountain (from his book, The Hobbit) - sorry, I couldn't resist the reference - in that it seemingly appears out of nowhere.  It is the single highest peak in all of Japan with an altitude of just over 3,776 meters, and it is just over 100 km outside of Tokyo and easily visible from there on a clear day.  Consider a problem as a landscape, with the highest peak representing the best, or optimal solution, to that problem. A Mount Fuji problem, with a single, solitary peak, is the most straightforward problem to solve.  

Let's use an example to further explain.  Page refers to a theory known as scientific management (first described by Frederick Taylor in the late 1800's and early 1900's (scientific management is also known as Taylorism - for a more in-depth explanation, please see my previous post A response to "Medical Taylorism").  In one of Taylor's classic problems, he was asked to find the optimal weight of a shovel.  At one extreme, you can use a stick, which is not very useful.  The amount of material you can pick up and move with a stick is very small (almost zero).  As you increase the size of the shovel, you can increase the amount of material that can be picked up and moved.  However, at some point, the shovel becomes heavier to lift, and the amount of material that can be picked up and moved actually decreases.  Graph this out on a chart (the x-axis is the size of the shovel and the y-axis is the amount of material that can be lifted and moved) and whola - you will see an almost perfect rendition of Mount Fuji.  To use Page's metaphor, Mount Fuji problems can be solved with the principles of scientific management.  Observe.  Measure.  Improve.  Repeat.

Unfortunately, not all problems are Mount Fuji problems - in fact, very few problems these days are Mount Fuji problems!  And most mountains aren't like Tolkien's Lonely Mountain, they are part of a mountain range.  So now we move to Page's Rugged Landscape problem.  Think of the Rocky Mountains or Appalachian Mountains.  Here you have several peaks and valleys, so finding the highest peak (which is analagous to the most optimal solution to the problem) is much more difficult.  Finding the solution to these kinds of problems often require a higher level of mathematical analysis (using my own analogy, if Mount Fuji problems can be described using a simple linear equation or binomial equation, Rugged Landscape problems often require polynomial equations with a much larger number of variables).

What makes a landscape "rugged"?  Usually these kinds of problems involve multiple variables.  I'm thinking right now of one of my business school classes on operations management (operations engineering) - think of your classic optimization problem (see this YouTube video for a really good explanation of this kind of problem).  Many of these problems involve literally hundreds of variables and complex mathematical formulas (think multiple regression on steroids), simulations (e.g. Monte Carlo simulations), and /or methods such as linear programming.  You don't have to know anything about these techniques and tools, but just realize that these kinds of problems can be solved for the best possible solution.  

Unfortunately, even with all of these techniques to solve Rugged Landscape problems, we are left with the simple fact that most problems are what Page refers to as Dancing Landscape problems.  Here we have a rugged landscape (again, think of the Rocky Mountains with multiple peaks and valleys) that changes from moment to moment - it literally dances!  We can use the tools and techniques of operations engineering to find the optimal solution to a problem, even one as complex as finding the right flight schedule that maximizes profits for an airline company (there are numerous examples and published articles on this topic available online, but I particularly like this 1990 article from the Chicago Tribune).  The important point that these optimization problems tend to neglect, however, is that there are other airlines that are trying to maximize their profits at the same time!  In other words, if Delta starts a new flight route from Chicago to San Francisco, United may do the same thing to compete with Delta!  The choices one company makes to maximize profits may cause (and frequently does) its competitors to act to maximize their own profits.  Dancing Landscapes add a whole new dimension to the Rugged Landscape problems, and as a result, they are almost impossible to find the best optimal solution.  

There are other analogies (which I will discuss in a future post) on the kinds of problems that leaders face, but I particularly like this one by Scott Page.  His area of expertise is in something known as complex adaptive systems, which is a fascinating area that encompasses Chaos theory, Systems theory, Complexity theory, and Network science, among many others.  If you are interested in just an introduction to this fascinating area of science, particularly as it relates to leadership and management, there are a number of free online courses provided by the Sante Fe Institute.  What is clear after this discussion (at least I hope it's clear), is that we live in a world today where simple decisions for leaders are no longer the norm.  It would seem appropriate for leaders to learn more about how we can make better decisions in a world full of complex adaptive systems.  And if you don't like solving these kinds of problems, it's probably best to get out of leadership!

How groups can make better decisions...

Several months ago, I read a really good article in Harvard Business Review called "Begin with Trust" by Frances X. Frei and Anne Moriss.  While the entire article is just outstanding, one of the statements really piqued my interest.  I've had the article in a stack of papers on my desk, just waiting for the time to dig in a little deeper.

Here is the passage that I wanted to learn more about (with my own editorial comments in brackets):

Diversity can be a tremendous asset in today's marketplace, and the companies that get it right often enjoy powerful competitive tailwinds [Okay, I've heard that and the research that I've seen definitely backs up that statement].  

But this advantage isn't automatic.  Simply populating your team with diverse perspectives and experiences doesn't always translate into better performance [Interesting...please tell me more].

In fact, the uncomfortable truth is that diverse teams can underperform homogenous teams if they're not managed actively for differences among members [Whoa - now I need to read more].

The authors are referring to something known as the common information effect.  Basically, whenever we are in a group (defined as two or more individuals), we tend to focus primarily (and at times, exclusively) on things we have in common.  Allow me to illustrate with an example.  Say there are three employees working in a group (#1, #2, and #3).  The group has been tasked with hiring a new employee for the team.  There are four candidates - A, B, C, and D.

All three employees interviewed the three candidates.  However, let's look at two different scenarios.  In the first scenario, each employee  knows as much about the three candidates as the other two.

Worker #1 - A, B, C, D

Worker #2 - A, B, C, D

Worker #3 - A, B, C, D

In other words, the collective information about each candidate is shared equally amongst the three employees.  In a perfect world, this would always be the case, but unfortunately we do not always have equal access to information as in this scenario.  From a decision-making standpoint, however, the group should be able to come to a collective decision, as they all have the same knowledge of each candidate.

Let's look at the more realistic case, where each employee knows something unique about one or two of the candidates, through either personal experience working with that candidate in the past or through a recommendation from a trusted colleague or friend.  Here is the breakdown of knowledge in this scenario:

Worker #1 - A, B, C

Worker #2 - B, C

Worker #3 - C, D, A

In this second scenario, information on candidate C is shared by all three workers, information on candidates A and B are shared by two workers, and only one worker (#3) has any personal knowledge or history with candidate D.  According to the common information effect, the group of workers will spend the most time talking about candidate C and the least amount of time on candidate D.  They will likely spend some time talking about candidates A and B, but it will be less than the time they spend on candidate C.

The four candidates in the first scenario, in which the group of workers is less diverse in their experience with the four candidates (they all share equal knowledge), will likely have the same chance of being discussed by the group during the hiring process.  However, where the group of workers are more diverse (different background knowledge on each candidate), the discussion will be skewed more heavily towards candidates A, B, and C, with candidate C likely receiving the most attention.

I've never really thought about the common information effect, but as I read more about it, it makes sense.  And I've perhaps witnessed examples of this group bias in my own experience.  The natural follow-up question is this - what can leaders do to avoid falling into the common information trap?  Surprisingly, increasing the size of the group only tends to make the common information effect worse!  A laboratory-based study based upon the exact model that I described above (in this case, groups of undergraduate students were selecting a class President), the three-person group discussed 46% of the shared information but just 18% of the unshared information.  Adding 3 more members to the group made this difference even worse.  

So, if increasing the size of the group doesn't mitigate the common information effect, what does help?  First and perhaps most importantly, team leaders have to be aware of the common information effect (and other group biases) and should monitor and manage the flow of information during group discussions.  Similarly, leaders should make sure that everyone has a chance to speak up and participate.  Studies have shown that in a five-person group, two people do more than 60% of the talking!  Even in larger groups, a minority of the participants do most of the talking (in a six-person group, three people do 60% of the talking, while in an eight-person group, four people do 80% of the talking!).  

Second, team leaders can help mitigate the common information effect by considering each alternative one at a time.  Using our scenario above, rather than asking a generic question at the start of a meeting ("Who did you like best?"), the team leader could make sure that the group discusses each candidate at the start.  Giving equal time to each candidate would help draw out more information on each one, particularly in the second scenario where not everyone shares equal information on the candidates.

Third, back to the article ("Begin with Trust") by Frei and Moriss, teams that are familiar with one another and, more importantly, trust one another typically make better decisions and avoid the common information effect.  One way to build trust is to flatten the hierarchy.  Team leaders should try to minimize status differences between individual members of the group - one of the best ways to flatten the hierarchy is to refer to each member by his or her first name, avoiding the use of titles as much as possible.  

Lastly, a meta analysis of 94 studies involving over 5,500 groups suggested that teams that met virtually, as opposed to face-to-face, were less prone to the common information effect.  In other words, holding a virtual meeting increased the sharing of unique information!  Given what we have learned over the course of the pandemic with holding most meetings virtually, I found that surprising!

Clearly, I have a lot to learn about how groups can work together more effectively.  It's not something that is taught in medical school for sure, but at least in my personal experience, it was not taught in business school either.  Given the importance of group dynamics in almost every aspect of medicine today, perhaps we should rethink how we prioritize and teach how to work well in groups?

Be like the Sequoia

As I mentioned in a recent post, my wife and I recently took a trip for our wedding anniversary.  Our typical vacations usually involve a lot of sitting on a beach and relaxing with a good book or two, but this time we checked out some great places to visit in Northern California.  One of the most impressive things we saw were the Sequoia trees in both Yosemite National Park and Muir Woods.  The term Sequoia actually refers to a genus of trees which includes both the Giant Sequoia (which I think is what we saw in Yosemite) and the Coast Redwood (which I think is what we saw in Muir Woods).  Regardless, these trees are massively beautiful and awe-inspiring!

The sequoia trees (here referring to both species) are massive - they grow to an average height of between 150-300 feet and trunk diameters approaching 25 feet.  The famous General Sherman tree living in Sequoia National Park is the largest currently living tree at 275 feet in height and 25 feet in diameter (at height - it's close to 37 feet in diameter at the base).  During our trip, we learned two fascinating things.  First, despite the fact that the sequoia trees are massive, the seed cones are surprisingly small relative to the size of other seed cones (see the photo below - the sequoia seed cones are on the right):

So, out of something very small comes something incredibly big!  Here we have a powerful metaphor for what has been said so many times in the past.  T.E. Lawrence famously said (at least he said it in the 1962 movie, Lawrence of Arabia starring Peter O'Toole in the title role), "Big things have small beginnings" (at the time referring to the impact of a small army of Bedouins in the war against the Turks).  The ancient Chinese philosopher, Confucius said, "The man who moves a mountain begins by carrying away small stones."  The ancient Greek statesman and orator, Demosthenes, said "Small opportunities are often the beginning of great enterprises."  The American writer, Mark Twain, said, "The secret of getting ahead is getting started.  The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks, and starting on the first one."

All of these quotes - and the story of the Giant Sequoia that begins with the tiniest of seed cones - are a powerful metaphor for leadership.  Even the biggest problems that seem like they will be impossible to solve can be broken down into smaller (and presumably easier to solve) steps.  Just as relevant, one person can have a tremendous impact.  As leaders, we have the opportunity and the privilege to help others and make that impact.

The second thing that we learned about the sequoia is that despite the height and girth of these trees, their root systems are surprisingly quite shallow.  As a matter of fact, they are so shallow that Muir Woods built an elevated wooden path around its redwood grove and the Yosemite park rangers ask that visitors not walk off the trial, so that these fragile root systems are not disturbed.  Apparently the roots only go about 6 to 20 feet deep into the ground before spreading out over an area of 200 to 300 feet.

Even more impressive is that these trees are so tall, and despite the shallow root system, they rarely fall over (e.g. with heavy winds).  Apparently, these trees share their root systems with one another!  As John Maxwell said, "Beneath the surface of these humongous, tall, statuesque trees are roots like a army of men who have their arms interlocked, standing and supporting each other. They are preventing the adversaries of life from knocking each other down. They are also making sure there is plenty of nutrients for growth to continue."  What an amazing metaphor!  We are stronger together than we are alone.  As the old African proverb says, "If you want to go far, go together!"  

We had a great time in Northern California.  And we learned a lot about the Sequoia trees - and like many things in life, there were lessons there in leadership!

The power of negative online reviews (?)

My wife and I recently booked a trip for our wedding anniversary (more about that in a future post).  We were checking out several online reviews of the hotels at our desired location.  There were a number of negative reviews which involved almost every single hotel we considered!  Most of these negative reviews were very recent (within the last month), and almost all of the reviews were focused on the timeliness and/or quality of service.  Some of the reviews seemed almost inappropriate or way over the top.  When you factor in that almost every industry right now, but especially the restaurant and hotel industry, is short-staffed due to lay-offs and cut-backs during the early COVID-19 pandemic, it seems that some of these reviews were a little unfair.  My wife and I ended up ignoring most of them, and we looked at the older reviews instead.

As it turns out, our anecdotal experience here has a solid foundation in research.  Psychologists call it the "just world" theory, which is a cognitive bias that the world is fair and that people will get what they deserve in life.  Applied to the current situation, we felt that the hotels were being treated unfairly - the guests who provided overly negative reviews weren't taking into consideration that these hotels were likely understaffed to deal with the increased demand for rooms and service.

Business leaders - including those of us in health care - have to manage negative reviews all the time. Studies show that more than half of all consumers refer to online reviews ("word-of-mouth" communication) before making a purchase, and three-fourths of consumers say that they trust an online review just as much as a personal recommendation from someone who they know.  And while positive reviews are great, negative reviews tend to be more impactful.  

But, what happens when these reviews are unfairly negative?  A group of studies ("Negative reviews, positive impact: Consumer empathetic responding to unfair word of mouth") published recently in the Journal of Marketing provides some answers.  In one of these studies, the investigators randomized 223 graduate students to read one of three online reviews from the same fictional company.  The reviews involved the timeliness of getting an answer from the company on a service query.  In the positive review, the customer was answered within 24 hours, while in the negative/fair review, the customer had to wait two weeks for a response.  However, in the negative/unfair review, the customer complained about not getting a response, even though it was Christmas Eve.  

What the investigators found might surprise you, but it does seem consistent with the anecdote I shared at the beginning of this post.  Study subjects who read the negative/unfair review were just as likely to say that they would purchase the product from the company as the subjects who read the positive review!  In subsequent experiments, the investigators made the negative reviews even more unfair - in these cases, the subjects were more likely to purchase the product than even those subjects in the positive review.

In other words, consistent with the "just world" theory, fairness matters.  Even if an organization receives a negative online review, it may not be the end of the world.  If the review is unfair, it may actually result in a positive gain for the organization.

I don't necessarily want to make this post about online reviews of physicians or hospitals.  However, one of the biggest concerns I hear about publishing patient/family experience scores or reviews online is that they may be unfairly negative.  It would be interesting to know if this "just world" theory applies to online physician and hospital reviews as well.

"Does leadership matter?"

We spend a lot of time reading and talking about leadership.  Just conduct a random search on Google or Amazon using the key word "leadership" and you will get an idea of just how much time we spend on reading or talking about leadership.  The natural follow-up question is whether all this reading and talking about leadership makes any difference.  In order to answer that question, we first need to ask, "Does leadership matter?"  At least in regards to health care, the answer to this particular question appears to be "Yes!"

A group of investigators at the University of Surrey School of Economics (Shimaa Elkomy, Zahra Murad, and Veronica Veleanu) published the results of a study ("Does leadership matter for healthcare service quality?") involving the National Health Service in England in the International Public Management Journal.  They determined the overall quality of leadership in 152 hospitals during a 5-year period from 2010 to 2014 using a previously validated leadership framework.  The quality of clinical care at each hospital was assessed using staff-rated quality of care ("How likely are you to recommend treatment here?"), patient-rated quality of care (based upon patient/family experience data), and clinical quality (age-standardized hospital mortality rates within 30 days of emergency surgery).  

Using what I like to call "fancy statistics" (multiple regression analysis), they showed convincingly (at least in my mind - read the article and judge for yourself) that the quality of leadership significantly and positively affected staff-rated quality of care, patient-rated quality of care, and clinical quality!  In other words, leadership matters!

Health care is going through a critical time right now.  The challenge of the COVID-19 pandemic has certainly affected all of us, but it has hit the health care industry particularly hard.  The pandemic has also illustrated, quite effectively, that having the right leader in place makes all the difference.

There are also a number of studies suggesting that hospitals with clinically trained executives generally perform better than those who do not have leaders with a clinical background.  I've posted about these studies in the past (see "My shoes are brown and those are wings of gold on my chest!"), so I won't repeat myself here.  Elkomy, Murad, and Veleanu also do a good job of reviewing the literature that consistently shows superior performance (clinical as well as financial) when hospitals are led by executives with clinical backgrounds.

I believe, and most of the relevant studies would support, that leadership can be taught.  Given then that (1) leadership has a positive impact on clinical quality, (2) hospitals do better when clinicians are leading them, and (3) leadership can be taught, we should spend more time talking about how to build up the leadership skills in our clinical workforce.  We need strong leadership at all levels of the organization - to borrow a phrase from Elkomy, Murad, and Veleanu, "Boards to Wards" leadership.  As we emerge (and despite the recent trends, we are still doing better now than at the start of the pandemic) from COVID-19, we should look again at how much time and money we are investing for leadership development.  With all of the concerns about our health care system, it seems like it would be a great investment!  

"A fox knows many things, but a hedgehog knows one big thing..."

I've been pretty hard on experts as of late.  Actually, to be more precise (maybe like an expert?!?!), I've been hard on experts who try to predict the future.  I've been writing for the past couple of weeks or so on Philip Tetlock's book, Expert Political Judgement in which he discussed the results of his 20-year study on forecasting (for a description of the book, see my post Dart-throwing monkeys or check out Louis Menand's review in The New Yorker).  Tetlock found that experts weren't all that good at forecasting the future.

Here's the part where I totally contradict everything I've said so far.  I am only kidding.  Taken as a whole, Tetlock's experts weren't very successful at forecasting future events.  However, he did find that there were some experts that were more successful than others - or perhaps it's better to say that some experts weren't as bad as the others!  He divided his group of experts into hedgehogs and foxes, based on the philosopher Isaiah Berlin's 1953 essay, The Hedgehog and the Fox.  Berlin's title is in turn borrowed from the ancient Greek poet,  Archilochus who wrote that "A fox knows many things, but a hedgheog knows one big thing."  As an aside, the management guru Jim Collins also borrowed from Berlin and Archilochus when he developed his own hedgehog concept in his book, Good to Great.  

Okay, back to Tetlock.  Tetlock describes hedgehogs as follows:

...thinkers who "know one big thing," aggressively extend the explanatory reach of that one big thing into new domains, display bristly impatience with those who "do not get it", and express considerable confidence that they are already pretty proficient forecasters, at least in the long term.

Conversely, Tetlock described foxes as:

...thinkers who know many small things (tricks of their trade), are skeptical of grand themes, see explanation and prediction not as deductive exercises but rather as exercises in flexible "ad hocery" that require stitching together diverse sources of information, and are rather diffident about their own forecasting prowess.

Importantly, Tetlock's hedgehogs performed worse in those areas in which they specialized!  He did find that when hedgehogs did make a correct prediction (which again was rare), they were spectactularly right!  They predicted really rare and at times society-changing events.  Tetlock further elaborated on these themes in his most recent book, Superforecasting.

So what's the take-home message here? First, remembering The Linda Problem, we should all spend more time learning about probability and statistics.  Second, perhaps we should all be more like foxes and less like hedgehogs.  Tetlock describes a few lessons on how to be a better fox:

1. Don’t believe the world can be explained by one or two ideas. Reality is more complex.

2. When forming judgments, consult a diverse range of sources.

3. As the facts change, change your mind.

4. Question that on which everyone seems to agree

All in all, excellent advice.  

The Matthew Effect

It seems that everytime you pick up a copy of the Wall Street Journal these days, some chief executive officer (CEO) is making headlines riding into outer space!  Just in the last month, Virgin Galactic's founder and CEO Richard Branson and Jeff Bezos, former (just recently) CEO of Amazon both flew into space.  Not willing to be left out of the fun, Elon Musk, CEO of Tesla Motors and Space X apparently signed up to fly into space in one of Virgin Galactic's spaceships.  It's a tempting question to ask - are these three gentlemen space explorers, entrepreneurs, or just attention-seeking media hounds?  The answer is that they are probably all three.  

We've grown accustomed to the high-profile, charismatic CEO.  We may even prefer leaders with charisma as opposed to ones who are just plain normal (whether charisma is a necessary leadership trait is a completely different matter).  Everyone seems to pay attention to former CEO's like Jack Welch, Bill Gates, Phil Knight, Robert Iger, or Howard Schultz.  Memoirs or leadership books by these CEO's and former CEO's are some of the most popular books on the market.  We just can't seem to get enough.

It seems like these CEO's have the proverbial Midas Touch, even when it involves risky ventures such as commercial space travel!  As the saying goes, nothing ventured, nothing gained (or my personal favorite, Fortune favors the bold).  Are these CEO's successful because they are willing to take risks? Or does society, in our love affair with charisma, simply reward these kind of individuals more than all of the rest?  The answer may surprise you.

Several years ago (see the original study here), the sociologist, Robert K. Merton described what he called the Matthew effect, which can be summarized by the old adage, "the rich get richer and the poor get poorer."  The name comes from the parable of the talents in the Gospel According to Matthew (Matthew 25:24-30) and the specific verse, For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.  The effect has been both well-documented and well-described in a variety of settings, and I have even posted a couple of times about the Matthew effect in the past (see "I wish you bad luck" and "The Year of Karen").  

I recently came across a study that suggested that the Matthew effect can impact how different leaders (specifically, CEO's in the telecommunications industry) make strategic decisions.  Building on my earlier comments about fortune favoring the bold, this study suggests that society rewards the high-profile, charismatic, risk-taking CEO's more when they succeed and penalizes them less when they fail. 

The investigators collected data (available to the public) on 53 CEO's and 29 different companies in the U.S. cellular telephone network industry over a 19-year time period (1991-2010).  They specifically examind the different kinds of investment decisions (e.g. mergers and acquisitions, research and development, physical infrastructure, and market expansion) that each CEO made during his or her tenure.  CEO's were rated by status, using variables such as awards received (e.g, "CEO of the Year" awarded by trade or business magazine, "Entrepreneur of the Year", etc) and stock market evaluations.

Using a complex statistical analysis (just trust me on this one), they found that high-status CEO's generally made more risky investment decisions (M&A) than their low-status counterparts, who generally preferred less risky investments (R&D).  Higher risk usually leads to greater returns on the investment if the decision ends up being the right one.  However, higher risk decisions can also lead to greater losses if the decision ends up being wrong.  

Consistent with the Matthew effect, the high-profile CEO's receive accolades ("CEO of the Year") when their risky investment decisions turn out to be correct.  More often than not, when they make the wrong decision, they are quickly forgiven.  Rather than being penalized in any way, their misfortune is often blamed on "bad luck" or external factors beyond their control.  As such, they are more likely to make these riskier decisions in the first place.

Fortune may favor the bold, but perhaps it's easier to be bold when there is more to be gained and less to be lost.  

The Chicago Cubs Firesale

I am and always will be a fan of the Chicago Cubs (see some of my posts in the past involving the Cubs - "The World Has Changed (Fly the W)" and "Lovable Losers Once More" for just a few examples).  Last week, in about a 48 hour span, the Cubs went through what can only be described as a "Fire Sale".  Jed Hoyer, President of Baseball Operations, traded away 8 players in that timespan, not including a player (right fielder Joc Pederson) that he traded away a week or so before the Major League Baseball Trade Deadline on this past Friday afternoon.  Here is who go traded:

Kris Bryant - 3B (Bryant actually played every position this year, except 2B, Pitcher, and Catcher)

Javy Baez - SS

Trevor Williams - SP

Craig Kimbrel - Closer

Jake Marisnick - CF

Anthony Rizzo - 1B (who even occasionally came in to pitch)

Andrew Chafin - RP

Ryan Tepera - RP

Never mind that three of the players, Kris Bryant (see The next MLB MVP from the greatest team in America uses "stretch goals"), Anthony Rizzo, and Javy Baez represented the core group for the past several years that won the 2016 World Series title (which was the first title the Cubs won in 108 years), the 2016 National League Pennant (which was the first pennant the Cubs won in 71 years), and three National League Central Division titles (2016, 2017, and 2020).  Add two more Wild Card play-off appearances in 2015 and 2018, and you can see why Cubs fans hold a special place in their hearts for these three players.

I will make a confession.  When I heard about these trades (and they came in rapid succession last Thursday and Friday), I was disappointed.  I will even say that I was angry - to the point where I told my wife that I was turning in my Cubs jerseys and becoming a White Sox fan (she told me not to get too emotional!).  After I have had a chance to calm down though and let the initial shock wear off, I can see that these trades - as painful as they were - probably had to happen.  All three players were going to be free agents at the end of this season, so rather than risk not being able to sign any of them (Baez reportedly was asking for at least a $200 million contract) and get nothing, Hoyer made the decision to trade them now and get something.  Only time will tell if he made the right decision.  

The issue I have is that things should have never gotten to this point, where the core nucleus of the 2016 World Series Champions, all still fairly young (Rizzo is 31 years, Bryant is 29 years, and Baez is 28 years) and arguably with several good years still ahead, became free agents all at the same time.  Take a look at almost any perennially successful sports team (the University of Alabama football team, the New England Patriots, the Los Angeles Dodgers, or the New York Yankees) and you can hopefully appreciate that (1) while teams certainly have dynasties and (2) all good runs do must eventually end, (3) these teams continue to compete on a very high level, year after year after year.  Naturally, looking at these teams leads to the question, "How do they do it?"  The answer is fairly simple and straightforward.  More importantly, the answer also applies to organizations outside of sports.  In one word - succession planning.

High-performance teams are always investing in talent.  People are highly mobile, and gone are the days when professional athletes (and coaches too, for that matter) and individuals in the workforce stay with one team or company for their entire career.  One of the principal jobs for leadership in every organization is to make sure that there is always a pipeline of talent that continually replenishes itself.

Ask yourself this simple question.  How many minutes do you spend in a normal day on mentorship, succession planning, or talent development?  I don't know what the right answer is exactly, but if you are in a leadership role, the answer you give better not be zero!  If you are in a leadership role, you should already have a list of at least 1 or 2 individuals who can immediately take over for you in an emergency (say, if you win the lottery tomorrow and decide to retire early) or within the next year, 2 to 3 individuals who can take over within the two to three years, and 3-4 individuals who you are working with to develop to take over in four to five years from now.  

There is simply no excuse not to develop a steady pipeline of talent.  The cold, hard fact is that organizations should never find themselves in the situation that the Chicago Cubs faced this year - the potential loss of three talented individuals and leaders at the same time.  Succession planning, mentorship, and talent development can and should go hand in hand.  The ultimate success of the organization depends upon it.

What are we mice or men?

I could swear that I first head the question, "What are we mice or men?" in an old "The Little Rascals" episode (the 1930's television show, not the really bad movie).  The origin of the saying probably comes from a line in the 18th century poem, To a Mouse, on Turning her up in her nest with a plough, by the Scottish poet, Robert Burns:

The best-laid schemes o' mice an' men

Gang aft agley..

The writer John Steinbeck used the phrase as the title of his 1937 novella, Of Mice and Men.  Regardless of its origin, this was the phrase that came immediately to mind when I was reading Louis Menand's review of Philip Tetlock's book, Expert Political Judgement in The New Yorker, which has been the subject of several of my recent posts.  Tetlock (followed by Menand in his review) talks about an old study comparing the performance of laboratory rats with a group of undergraduate psychology students at Yale University.  I have never been able to find the original published study, so it may be one of those studies that was only published in abstract form.  Who knows?  It tells a great story though.

The experiment involved what is called a T-shaped maze (which is apparently used frequently in research with laboratory mice).  Food is placed on either the right or left side of the maze.  The rat is rewarded when it selects the correct side of the maze.  The experimental conditions were manipulated in such a way that the food was placed on the left side of the maze 60% of the time and on the right side of the maze 40% of the time.  The rats soon figured out that if they traveled to the left side of the maze, they would get food the majority of the time (60% of the time is still over half, after all).  

The Yale undergraduate students had a slightly different task.  They were asked to predict the side that the rat traveled to each time.  The students tried to find a pattern for left-right food placement, and they ended up correctly predicting which side the rats would travel to only 52% of the time.  In other words, the rats did a much better job than the Yale students!

Menand suggests that the Yale students, like the experts who failed to accurately predict the future in Tetlock's studies, like all humans, "fall in love with our hunches" and "really hate to be wrong."  Tetlock further explains, "The refusal to accept the inevitability of error - to acknowledge that some phenomena are irreducibly probabilistic - can be harmful."  To summarize, perhaps we would do better by thinking less.

Experts try to live up to their name by overanalyzing and overthinking different problem sets.  We try to come up with complicated algorithms, when a simple decision rule may just be enough to do the trick.  Some times, we may find that the best strategy to solve a complex problem is to "Stop.  Step back.  Take a deep breathe.  And look at the problem again in a different way."  

The 14th century English Franciscan monk, William of Ockham wrote, “It is futile to do with more what can be done with fewer.”  Over the years, Ockham's quote has become known as Occam's Razor, which is often paraphrased as "the simplest explanation is the best one."  Experts, all too often forget this important principle.  They try too hard to be men, when a mouse would have been more than enough.