Last week I recorded the first part of a two-part special podcast with Tim Ferriss on my new book Loonshots: How to Nurture the Crazy Ideas that Win Wars, Cure Diseases, and Transform Industries (for the podcast and video see Tim’s blog).
We talked about a lot of things, including dating life (Tim and I go way back), plus stories of Isaac Newton, Steve Jobs, why I try to write FBR (Fast, Bad, and Rong), the two hats of reading, the three hats of writing, my transition from physics to biotech, and how mastering the False Fail earned Peter Thiel $1 billion.
But one of the things that seems to have attracted the most interest (and questions) was the #Loonshots life lesson I adapted from Garry Kasparov.
That lesson is key for any team or company that wishes to achieve excellence in both radical innovation and operational execution at the same time.
Maintaining the balance between the two is tricky. It requires a different style of decision making, a style that I’ve found is common among great companies and rare among the rest.
To see what I mean, read on below—or listen to the podcast [37:51].
For additional show notes and references (courtesy TF)—see below. If you have any questions about these topics you’d like answered, or would like to see additional references/links added, let me know and I can do that here.
For more brief thoughts on these and related topics see my recent Quora session.
And for the full story—the four rules for teams and companies who wish to innovate faster and better—plus Einstein, James Bond, U-Boats, Pan Am, the birth of modern science, and the fate of empires—see, of course, Loonshots.
Garry Kasparov was the world chess champion for fifteen years, the longest record in the history of the game. He described the key to his success as something we might call system mindset.
Analyzing why a move is bad—why pawn-takes-bishop, for example, lost the game—is an example of what we might call outcome mindset. It’s analyzing the outcome.
A higher level of strategy, for any team or company or even individual decision-making—something that’s helped me a lot—is to analyze the decision process behind a move: why you decided on that move, in that moment, in that context, and what that means for how you should change your decision-making in the future. That’s system mindset.
Here’s an investing example: You can analyze why some investment you made of your time or money didn’t work out. The product or company was flawed in some way. That’s outcome mindset. But you’ll gain much more from thinking through how you decided to make that decision in the first place. What mental checklist do you use? What are your triggers? Should you change that checklist in some way?
If you identify the trigger that causes you to reach for your credit card, maybe you can substitute something less drastic as a response to that trigger. Instead of reaching for your wallet, reach for some gum to chew.
What’s the benefit? Analyzing the one outcome might raise your game for a handful of future investment decisions that are very similar. But finding and fixing a flaw in your decision-making process might raise the level of your game for hundreds or even thousands of future investment decisions.
How does this apply to teams and companies?
After launching a product, for example, the weakest groups don’t even bother to step back and do a post-mortem at all. They just keep going. Most likely, they’ll repeat the same blunders and have similar poor outcomes until someone puts them out of their misery.
More commonly, though, groups will step back and analyze the outcome of the product launch. It didn’t go well, say, because this product feature sucked and customers were turned off. Or a competitor offered a better package at the same price. Or whatever. By focusing on the failure mode specific to that launch, they do improve their odds of avoiding similar mistakes in the future. But that’s it.
The best teams and companies will step back and analyze the process by which they arrived at the decision to launch that product, with those features, in that marketplace, at that timeL What was the flow of our decision-making? Who decided? What information was presented at the time of the decision? How were the options laid out and analyzed? Was it the right decision given the best available information (a intelligent risk, well taken) or was it not the best decision (avoiding the trap of hindsight)? Which aspects of the decision flow and opportunity analysis can we and should we improve? At an even deeper level: How did each person’s incentives affect the group’s decision-making? Are those incentives truly aligned with generating value or are there some perverse incentives or political conflicts that should be sorted out?
That’s system mindset. The mindset means carefully examining the quality of decisions, not just the quality of outcomes.
A failed outcome, for example, does not necessarily mean the decision or decision process behind it was bad. There are good decisions with bad outcomes. Those are intelligent risks, well taken, that didn’t play out. For example, if a lottery is paying out at 100 to 1, but only three tickets are sold, one of which will win, then yes, purchasing one of those three tickets is a good decision. Even if you end up holding one of the two that did not win. Under those same conditions, you should always make that same decision.
There’s one more crucial aspect of system mindset that great companies do and average companies almost never do: analyze successes as critically — if not more so — than failures.
Why? Because bad decisions may occasionally result in good outcomes. You may have a flawed strategy, but your opponent made an unforced error, so you won anyway. You kicked the ball weakly toward the goalkeeper, but he slipped on some mud, and you scored. Which is why probing wins is so important. Failing to analyze wins can reinforce a bad process or strategy. You may not be lucky next time.
You don’t want to be the person who makes a poor investment, gets lucky because of a bubble, concludes he is an investment genius, bets his fortune, and then loses it all next time around.
That’s why we learn system mindset.
SHOW NOTES FOR TIM FERRISS PODCAST ON LOONSHOTS (Prepared by Tim and his team)
- How Safi and I [Tim F] first met. [07:17]
- How the atypical lessons we learned in our respective Total Immersion Swimming experiences can be applied to other aspects of life. [09:36]
- How psychologist Daniel Kahneman changed economics by approaching it from a human perspective. [13:15]
- My own experience as a lab rat for Kahneman at Princeton. [15:12]
- What circuitous path led Safi from particle physics toward his work with cancer? [16:04]
- A digression: Safi’s Men’s Wearhouse story. [19:30]
- Back on track to cancer. [22:22]
- Some of the why: Nobody writes 15,000 page essays (except for Safi). [26:15]
- A lesson in the difference between active and passive voice — and why a Pulitzer winner’s advice regarding their use might differ from a schoolmarm’s. [29:32]
- How Safi began training himself to become a better writer by slowly dissecting paragraphs instead of succumbing to the more popular inclination of speed reading. [30:52]
- Two books that resonated for Safi during this period. [33:28]
- Have you heard the music of Nabokov? Safi has. [36:34]
- How did chess champion Garry Kasparov’s post-game analysis shift Safi’s mindset about the decision-making process? [37:51]
- How Safi has implemented this system versus outcome mindset to other areas of his life. [43:14]
- What other questions might someone ask in a business setting to decipher how they came to a certain decision — whether or not the outcome was ideal? [45:56]
- How might this process be applied to decision-making in a personal setting? [49:20]
- An aside about single life in Manhattan, SWAE and no BLC gatherings. [51:34]
- How Safi fell into an unfulfilling junk dating pattern during this time. [54:34]
- Upon prompting, Safi shares a little more personal detail about this pattern. [57:08]
- Two criteria for finding the right life partner from one of Safi’s well-practiced friends, and the one that became his system versus outcome litmus test for breaking out of the junk dating funk. [59:50]
- When he came to the decision to do so, how did Safi go about paring down his peer group? [1:01:47]
- How Safi met his wife and gleefully exited the dating world entirely. [1:04:09]
- Safi often uses acronyms as memory tools. So what does “Write FBR” stand for, and how might it help liberate you if you’re a writer with perfectionistic tendencies? [1:10:26]
- With creativity as with riding a bike, task switching is really expensive — from the perspective of effort as well as physics. [1:15:21]
- The two hats Safi wears for reading: RICLS and REAS. [1:11:22]
- Why a physicist biotech entrepreneur and I are having a conversation about writing, and what Safi has tried to convey with his first book. [1:21:14]
- The three hats Safi wears for writing: hunting, drafting, and editing, and how it’s a bit like the way director Robert Rodriguez makes a movie. [1:24:30]
- Possibly the nicest thing anyone’s ever said to Safi about his book. [1:27:50]
- How did Safi come up with the wacky stories that wound up in Loonshots? [1:28:42]
- Safi’s three rules of creativity: speed, attention, and courage. [1:29:46]
- Why the sequence of these hats and heuristics matter for giving purpose clarity, with a Tony Robbins exercise for the sake of illustration. [1:34:12]
- False failure and the difference between a loonshot and a moonshot with a case study of Friendster vs. MySpace vs. Facebook. [1:35:36]
- Who was Sir James Black, and how does his story connect with Safi’s? [1:41:34]
- The three deaths of the loonshot: how great ideas get killed easily and often — in spite of what revisionist historians will tell you decades after the fact. [1:44:45]
- The problem with Silicon Valley’s “Fail fast and pivot!” slogan. [1:46:19]
- The two types of loonshots: P (product) and S (strategy). [1:47:22]
- Robert Goddard’s universally ridiculed notion that a rocket could make it to the moon in 1920, and the Eiffel Tower’s initial opposition. [1:51:08]
- Mental reminders for ushering an aspiring loonshooter through the three deaths and the so many nevers. [1:55:29]
- Why does Safi have a Post-it note on his wall that says “The Adventures of Luke Starkiller,” and how does it tie in with a spy-fighting limey truck driver? [1:58:59]
- Why entrepreneurs and small teams should nurture loonshots and eschew the idea of “disruptive” innovation. [2:05:00]
- The differences in nurturing loonshots between larger and smaller teams. [2:08:19]
- A summary and parting thoughts. [2:14:00]
LINKS (Prepared by Tim and his team)
- Sundance Film Festival
- Total Immersion Swimming
- Rational Choice Theory, Investopedia
- Thinking, Fast and Slow by Daniel Kahneman
- What Is the Formula for Calculating Net Present Value (NPV)?, Investopedia
- A Crash Course on Derivatives by Rhett Allain, Wired
- McKinsey & Company
- Men’s Wearhouse
- Marlon Brando and Popcorn; Lessons on Leadership; And the Idea That Changed the Course of History by Safi Bahcall, LinkedIn
- Active vs. Passive Voice, Grammar Lessons
- The Stories of Vladimir Nabokov by Vladimir Nabokov
- Essays After Eighty by Donald Hall
- How Life Imitates Chess: Making the Right Moves, from the Board to the Boardroom by Garry Kasparov
- The Art of Learning: An Inner Journey to Optimal Performance by Josh Waitzkin
- Dana Farber Cancer Center
- Longwood Medical Galleria
- Why Director Robert Rodriguez Chose to Make Another $7,000 Movie by Cat Cardenas, Texas Monthly
- The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t by Robert I. Sutton
- Dutch Goose, Menlo Park
- Pan Am
- The Battle of the Atlantic: The U-boat Peril, BBC
- American Airlines
- Steve Jobs Discovers the Macintosh Project, Mac History
- Robert Hooke and the Wrath of Isaac Newton by Daryl Worthington, New Historian
- Meet The PayPal Mafia, The Richest Group Of Men In Silicon Valley by Charlie Parrish, The Telegraph
- Founders Fund
- The History of Social Networking by Saqib Shah, Digital Trends
- Statins: A Success Story Involving FDA, Academia, and Industry by Suzanne White Junod, PhD, FDA
- The Incredible Story Of Walmart’s Expansion From Five & Dime To Global Megacorp by Leah Goldman, Business Insider
- JFK Moon Speech
- The New York Times’ 1920 Editorial Mocking Space Travel Remains a Classic by Michael Byrne, Vice
- The Net and the Butterfly: The Art and Practice of Breakthrough Thinking by Olivia Fox Cabane and Judah Pollack
- Art or Eyesore? The Eiffel Tower History You Probably Didn’t Know by Lindsay Shapka, The Anthrotorian
- AgassiñSampras Rivalry, Wikipedia
- May 8th, 1963: Sean Connery Stars in His First Bond Movie, Dr. No, History
- Starkiller: The Jedi Bendu Script Site
- Star Wars
- History of Transistors, ROHM Semiconductors