Book Review: Adapt: Why Success Always Starts with Failure

“Adapt: Why Success Always Starts with Failure”, Tim Harford, Published by Farrar, Straus and Giroux, May 10, 2011, ISBN-10: 034100969

This book is listed on the 2012 Chief of Staff of the US Air Force Professional Reading Program

The book focuses on how Peter Palchinsky in Russia/USSR exemplified and codified 3 principals to successful projects and initiatives:

• First: seek out new ideas and try new things
• Second: when trying something new, do it on a scale where failure is survivable
• Third: seek out feedback and learn from your mistakes as you go along

The first idea is that true innovation and transformation need to be predicated by early and often experimentation. This idea for trying new things is obvious, only doing what has been done before gets the same results. In order to truly adapt, overcome challenges, changes are necessary. However, the key is to make changes at scales where failure is survivable.

This notion of survivable failure comes to a head when addressing centralized planned projects. He notes several problems with centralized planning, an overestimated the value of centralized knowledge. From that, he addresses how a central bureau’s information is unlikely to address the specifics on the ground, and when integrated over many parts, can tend to destabilize the whole project. He uses a quote that is more direct: "Your first try will be wrong. Budget and design for it," Aza Raskin, designer of Firefox.

Some corroborating evidence was used in citing a study between highly speculative research grants by Howard Huges Medical Institute (HHMI) and the centrally directed NIH MERIT scholarships, which were judged more conservatively in the scope of the whole NIH research portfolio. IN this study, projects selected by HHMI are more likely to be breakthrough and more likely to fail - but ultimately much more skewed to the upside in terms of importance and value to society.

Now, he is also an advocate of measuring the Ultimately, this is the third Palchinsky principal, because getting the feedback, knowing if you are doing any good, is how you will be able to learn from mistakes – and likely even know if you made a mistake at all. Key in the measurement is the controlled experiment nature of how the measurements were taken.

However, not all experiments can be controlled: there do exist "Fundamentally Unidentified Questions" (FUQ'd questions- neat acronym) - questions for when we can measure, calculate and extrapolate from our existing knowledge, but cannot conduct controlled experiments (such as does carbon dioxide cause global warming) - to defeat people claiming that questions are FUQ'd, scientists and innovators must have an identification strategy for what they are going to measure and control.

In his final chapter, Mr. Hartford sums up his application of Palchinsky’s principals thusly, "the ability to adapt requires this sense of security, an inner confidence that the cost of failure is a cost we will be able to bear. Sometimes that takes real courage; at other times, all that is needed is the happy self-delusion of a lost three-year-old. Whatever the source, we need that willingness to risk failure. Without it, we will never truly succeed."

While some management theories indicate that stress is good for innovation, the key here is to create survivable stress – eustress – by which innovation is driven, but avoids overly conservative behavior that generally inhibits the bigger innovations and adaptations.

Overall, I recommend this book for the ideas and perspective on how to innovate in systemic contexts. Large, sweeping initiatives will likely not succeed, but targeted and frequent innovations will explore the space of possibilities more quickly and are more likely to take hold. A good message for upcoming systemic leaders. Read More......

Systemic Views from the Web

I listen to IEEE Spectrum Radio (here). Often that podcast takes a broad view of issues in various marketplaces. The article below relates to our previous post about Black Swan Events.

"Mediocrity beats unpredictability", here, posted in January 2009. The article starts off with "The holiday shopping season was a disaster for retailers... Only a select few did better than last year, including Walmart and Apple. ...ask yourself: which is better—a store with lots of stuff, some great, some not, or a consistent experience?" This is a discussion on why people choose consistency (even if mediocre) over randomly great/not-so-good. Arguably, this demonstrates one way in which the normal group behavior of people seems to avoid risk and uncertainty. Read More......

Black Swan Part I

Just started reading Nassim Taleb's "The Black Swan: The Impact of the Highly Improbable." I picked the book up on Wednesday on my return trip from Los Angeles and talking with Frank. I was able to get through part one on the flight. This isn't so much a book review, as a discussion of how reading this book impacts thoughts on systemic approaches to leadership.

A "Black Swan Event" is something that is rare (specifically outliers), has extreme impact (changes world views), and has retrospective (but not predictive) predictability. In essence, Black Swan Events are those rare things that we never really thought would happen (because if we really thought that, we would have prepared), has a great effect upon us, and in retrospect we feel that the event was obvious in its cause and retrospective predictability. Examples given include: Europeans sighting their first ever black swan in Australia, 1980's market crash, 9/11, World War II, and others (the 2008/2009 "recession" could be viewed as a black swan event also). Taleb conjectures that the rate of occurrence of black swan events will increase as our systems become more complex, interconnected, and interdependent.

Taleb does an outstanding job in part one explaining the interplay between humans, statistics (randomness), and our limited ability to handle things that haven't happened before. This manifests itself in his addressing common logical fallicies that people engage in while talking about statistical concepts. For example, any cancer patient should know the difference between "No Evidence of Disease" and "Evidence of No Disease". The former is what doctors are able to determine after cancer treatments, the later is what an optimistic patient may (falsely) believe after being told there is no evidence of the cancer. Of course, the truth is we can never be sure that something doesn't exist, but we can say that we found no evidence that it does.

This brings us to our first concept from the book, that many acquisition program managers believe that they can determine that their program is healthy, while they really should be trying to determine if there is no evidence of severe problems. From talking with several very transactional oriented program managers, many state that their programs are healthy because "nobody has shown me any problem". And then a black swan event will occur, something that the transactional PM wasn't watching for in their carefully crafted list of risk items. Unfortunately, the PM in this case is likely to end up in the same emotional roller-coaster as the cancer patient, learning that "recurrence" really means that we didn't see the evidence earlier. Audit agencies will enter and determine that the black swan event was indeed predictable (but not admitting that the predictability is only with the benefit of hindsight), if only the PM had tracked some other metrics or made some other decisions.

In another example, Taleb discusses how at a conference on randomness at a casino that the casino indicated that none of their biggest 5 losses were due to anything their models had predicted. Indeed, problems such as kidnappings, attempted bombings, employees not sending in tax forms (hiding the forms), and others lost the casino more money than any other source, such as cheating. This brings up that although casinos understand and manage the risk of cheaters, whales (high limit gamblers), and other aspects around their principal statistical risk model very well, the real black swan events come from previously unexpected other sources.

To a transformational leader, obviously opening the aperture by developing subordinates to consider and lead proactive responses to those events that could be fatal to the project is a key idea. But the systemic leader must go further and identify ways to reward the team for identifying risks outside the principal project, learn how to handle information about risks with ultra-low probabilities, and restructure the network of of the program to more effectively contain or eliminate risks.

In our first paper (posted about here), we discussed the 1996 Ariane 5 launch failure. This failure can be ascribed to a black swan event of forms:

• Before the launch, everyone thought the probability of a software defect really causing a loss of that mission was very low
  
• During the boost phase, a software error caused the Ariane 5 to self-destruct (loss of mission) - truly an extreme impact on the mission
  
• And lastly, in retrospect, the failure cause was obvious, as well as the way to prevent that type of failure in the future

I think that using the constructs presented by Taleb about conceptualizing the highly improbable (which strangely enough, may be very probable in highly complex, interconnected, and interdependent systems) may be a good mental skill for a systemic leader to know.

More about this book next week, as I get to part two.
Read More......