Category: complexity

How to Take Action on Uncertain Opportunities

Following up on our post ‘How to be More Lucky in Life: the Luck Factor‘, one specific aspect is taking action on opportunities. Once one has increase the number of potential opportunities, remains the need to take action to benefit from the luck. And it is sometimes difficult – and often makes the difference.

It is always psychologically difficult to decide to enter an uncertain venture. It is a bet and there is no certainty as to its outcome. How can one be more comfortable taking those decisions?

Based on my experience here are some pointers. And I find that the stock market is an excellent teaching ground to determine behaviors that can later be applicable to many other fields :

  • the foreseeable worst case outcome should not impact substantially our well-being. For example for financial decisions its worst possible impact should be less than a limited % of our total assets, or the time involved should not burden excessively our calendar.
  • The possible best case outcome should produce substantial value
  • It generally boils down to the confidence we may have with certain people. How is the fit with those people, what is our hunch?
  • Do we have a portfolio of opportunities that spreads the risk and ensures that on average, there will be benefits and possibilities to enhance further lucky strikes?

In addition, one should be ready to stop losses when it becomes obvious that the opportunity does not work out (including in time and money involved), and the other aspect is not to be too persistent on luck: know when to fold on a lucky opportunity, it will not last forever.

Grab opportunities, act on them: the secret for luck to realize! Are there opportunities lying there where you did not take action? Go for it!

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How Creating Lateral Growth Opportunities Becomes Rarer in the Modern World

Following up from the previous post ‘How to Create More Opportunities in Your Life‘, I am concerned how modern technology rather tends to close us up to new opportunities.

Typical modern restaurant scene: everyone on their own screen!

This is extremely obvious in public transportation of even at restaurants: people are closing themselves in their own chosen world, sometimes including with headphones, and remain in their bubble. Human interaction and the possibility of chance encounters diminishes drastically.

In addition it is well known that most social networks tend to close us further in our bubble of interests and opinions. While they do give opportunities to meet with new people with similar interests on a global scale, they don’t encourage us to encounter contrarian opinions and views.

Therefore, there is a real premium to those that will know how to take some break off this modern addiction to create lateral encounters that can create substantial new opportunities and make oneself grow in new directions: read books that bring new ideas, participate and listen to meetings and presentations with new approaches, etc.

How much time to you take to create those lateral opportunities in your life?

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How to Create More Opportunities in Your Life

Following up from the previous post ‘How to be More Lucky in Life: the Luck Factor‘ inspired by the book ‘The Luck Factor: The Scientific Study of the Lucky Mind‘ by Richard Wiseman, let’s dwell on the specific issue of increasing opportunities in our life (whatever their luck content). When I read this book I realized I may need to do some effort in that respect.

In this instance, Richard Wiseman exposes 3 sub-principles:

  1. Lucky people build and maintain a strong ‘network of luck’
  2. Lucky people have a relaxed attitude towards life
  3. Lucky people are open to new experiences in their life

It is all about trying not to be closed-in in our usual world but be open to new ideas, new people, new encounters and welcome those inputs that may be outside our comfort zone. Richard Wiseman insists on the opportunity offered by meeting new people we don’t know and the need to be able to accept widely different worldviews to open our horizons and create new opportunities.

“Luck is when preparation meets opportunities”: the issue here is to create more opportunities, and then be prepared to act on them through openness and availability (in terms of time, mentally and emotionally).

For me, this acts as a useful reminder that it is extremely important to act laterally, meet people and go to meetings that may not be directly connected with what I am doing, but that allow to expand my worldviews; and also to try to take advantage of chance encounters as much as possible. I have tried to increase those opportunities in the last few months.

And you, what will you do to create more opportunities in your life?

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How to be More Lucky in Life: the Luck Factor

I read with great interest the excellent book ‘The Luck Factor: The Scientific Study of the Lucky Mind‘ by Richard Wiseman, a professional magician turned psychology professor. He studied scientifically, through a number of experiments, how “lucky people” differ from “unlucky people”. The interesting point is that it basically describes what are the behaviors to have in a random world where a number of events happen, that can be good or bad.

He describes 4 principles for a lucky life:

  1. Maximize your chance opportunities
  2. Listen to your lucky huches
  3. Expect good fortune
  4. Turn your bad luck into good

When looking at those principles, it is all about: 1 – increasing the flux of possible events (lucky and unlucky) in your life, 2 – based on your conscious and subconscious analysis, bet more on those that appear lucky, 3 – be open-minded and persist, 4 – do not persist in bad luck, and consider positively what you learn from bad luck to get more lucky the next time.

This is the application to life of the right behaviors to have for example when speculating on the stock market: increase the frequency of bets, try to bet more on stocks that have good fundamentals, be positive and persistent but cut losses when they appear.

The interesting part is that it seems that by applying those principles more consistently, it is possible to become more lucky in life. What about trying?

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How Electrical Mobility Can Spread Without Subsidy

In an interesting twist, this Bloomberg article describes how e-rickshaws are becoming the norm in India, despite the lack of subsidies and totally independently of any government initiative: ‘India’s Rickshaw Revolution Leaves China in the Dust‘.

“The South Asian nation is home to about 1.5 million battery-powered, three-wheeled rickshaws – a fleet bigger than the total number of electric passenger cars sold in China since 2011. But while the world’s largest auto market dangled significant subsidies to encourage purchases of battery-powered cars, India’s e-movement hardly got a hand from the state.”

It is just that e-rickshaws are easier to maintain and operate and generally more lucrative than conventional petrol-powered machines. And this creates great benefits in terms of atmospheric pollution which can already be measured.

This just shows that even if governments can try to influence markets through subsidies, progress can come from other places, and that the market does not wait when a product just becomes better. The issue for widespread electric vehicle adoption is thus not to subsidize more, but to make the vehicle more practical and usable than petrol-powered vehicles. Vehicle producers, you are warned!

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How Grit Is An Essential Ingredient for Success

Angela Duckworth’s book ‘Grit: The Power of Passion and Perseverance‘ describes how grit is an essential ingredient for success.

“Many of the people I talked to could also recount tales of rising stars who, to everyone’s surprise, dropped out or lost interest before they could realize their potential. Apparently, it was critically important— and not at all easy— to keep going after failure: “Some people are great when things are going well, but they fall apart when things aren’t.””

I increasingly observe that what makes a difference is not so much how we respond when successful, but rather how we respond under failure. Do we show determination and flexibility, or do we just become disheartened and stop making efforts?

Responding, rather than reacting, when we face failure, and making sure we learn our lessons and bounce back – that’s probably an essential element that distinguishes successful from less successful people. How do you fare under failure?

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How Traditional Decision-Making Tools Are Not Fit for the Collaborative Age

In his excellent book (in French) ‘Bienvenue en incertitude!: Principes d’action pour un monde de surprises‘ (Welcome in uncertainty: principles of action in a world full of surprises), Philippe Silberzahn explains that the decision tools that we are using have note changed since the 1970s while the world has become radically uncertain.

“Predictions become inevitably victim, one day or the other, of an unprecedented event that makes them obsolete. However the decision-making tools we use have not changed. They are based on a predictive paradigm. They date back to the 1970s for most of them and are anchored in the industrial revolution civilization born 150 years ago“. And for sure, most of the decision-making tools we use are based on a linear evolution assumption. And the invention of spreadsheets have worsened the situation, as it is so easy to compute extrapolations over quarters and years!

Take the typical business plan for example: how many of them consider really discontinuous events and events that change paradigms? In a world of complexity we really need to question what decision-making tools we use on a daily basis.

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How the Lean Startup Approach Should Not Be Used In All Instances

In this Quartz post ‘“The Lean Startup” is an unproductive legend‘ the authors denounce the excessive ideological weight of the concept – both for startup founders, investors and educators.

According to them, “The Lean Startup ideology has sown a lot of confusion in cohort after cohort of my MIT students for a decade. The recipes have all the right sounding words and slogans. They seem to make so much sense, so how could they not work?“. And they quote a number of instances where this approach has not made sense, or where it has been used in situations where it was not applicable (such as the scaling up of a startup), or where people quoted the approach to justify inadequate actions.

I really believe that the Lean Startup approach is on something. The main message – that it is essential to listen to the customer the earliest possible (on the basis of a Minimum Viable Product) and not spend excessive resources to develop what we believe is the best product – is needed and important.

Of course like any approach it has a domain of application and can’t be applied to all circumstances in life. This is not a reason to throw it in the trash: like any approach, let’s use it within its domain of validity and let’s be wise enough to recognize when it is not applicable.

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How Goodhart’s Law Makes Us Aware of the Downside of Measurement

Goodhart’s law basically says that ‘When a measure becomes a metric, it ceases to be a good measure’. This is quite powerful, and observable on a daily basis in all sorts of settings.

This law has profound implications about target-setting in organizations and many other situations. In the very recommended post ‘Goodhart’s Law and Why Measurement is Hard‘, the author explores measurement in complex situations. And in effect, complexity ruins the interest of measurement, because of the retro-actions of measurement on the system. Goodhart’s law is thus fundamentally an observation from complex systems that evolve as a result of self-measures.

Goodhart’s law is mostly important in organizational settings: it is important to measure, but as soon as a measure is in place, it becomes a target and therefore, drives behavior – sometimes in a unfavorable manner. The only response is either, to measure but not publicize the metric; or use some version of a balanced scorecards with several balances metrics.

In any case, beware the Goodhart’s law when defining metrics in your organization!

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How Changes from New Technology Will Lead to Unexpected Results

In this interesting article ‘Uber and Lyft Are Overwhelming Urban Streets, and Cities Need to Act Fast‘, unexpected consequences of new technology (more streets getting more car traffic) are discussed with recommendation for a single solution: more regulation.

For sure, apps like Uber, Lyft or even apps calculating less jammed drives such as Waze or the likes necessarily change the pattern of road utilisation (Waze for example typically increases the usage of smaller, previously underutilised streets). It thus creates change and possibly at a massive level.

The new apps and services do respond to a need, which normally should decrease individual automobile utilisation; but is also creates new usage for better and more comfortable transit than public transportation on a point-to-point basis.

The interesting lesson here is that when one would think that those new services would rather decrease congestion, the actuel effect, due to the complexity of the situation, is observed to be rather the opposite. Therefore, one should not attempt to forecast what a new service will do when it scales.

Also, expecting regulation to provide a solution may be a way to go, but it needs to be considered with care, because the impact of a regulation might be equally unpredictable and the outcome may not be as expected. Welcome to a complex world!

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How Life Is a Lot More Like Poker Than Like Chess

Following from previous posts ‘How Most of Our Decisions Are Bets‘ and ‘How We Constantly Underestimate the Role of Luck in Our Lives‘ I have received some reactions about the fact I was exaggerating wildly the role of luck in life.

Our education, vocabulary and most of the messages conveyed by role models would tend to demonstrate that success comes from hard work and commitment; and that success is deserved through an entitlement created by effort, rather than coming from luck – a terrible thought!

In her excellent book ‘Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts‘ Annie Duke makes a great comparison: life is much more like poker than chess. In chess, there is no unpredictability; rules are set, and it is only a competition between minds. In poker, there is luck, psychology and unpredictability.

Of course, hard work and dedication does help. I am not saying that it is not important. But believing that one is entitled to success because of hard work and dedication goes one step too far.

The more I think about it, the more I believe that the belief in success being owed to hard work, and that hard work entitles to success, is a society-stabilisation message conveyed through the previous ages.

A lot of what happens in our lives is down to luck. The bigger our decisions, the more they are bets in uncertainty. We need to concentrate on being more lucky, know how to catch opportunities, rather than believing that keeping our head down and working hard will be the only solution.

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How Colleges in the US Turn to Randomness for Assigning Roommates

To run contrary to an annoying trend in US colleges with students turning to like-minded students and shunning anything that might them feel uneasy (refer for example to our post ‘How Overprotecting from Different Points of View is a Moral Hazard‘), some colleges have turned to assigning roommates randomly to favour encounters and diversity. The title of this Quartz post says it all: ‘The life-changing benefits of living with a random roommate in college‘.

Increasingly students were choosing their roommate prior to year start through social networks. To curb this approach which united like-minded students, “at Duke, the roommate-selection process is back to being entirely governed by the university. Roommate pairings are made largely at random, while taking into account some lifestyle preferences or needs, like sleep patterns, disabilities, or medical conditions.”

The paper mentions a vast array of studies showing the decisive influence of the roommate – for better or for worse. “If college roommates can worsen your bad habits but also open your horizons, it’s no wonder that colleges have a stake in making sure that the experience benefits people as much as possible. And there’s a special authenticity that can only come from randomness; from the beauty of two complete strangers sharing the roller-coaster ride that is freshman year of college, for better or for worse.”

I find that this way of adding an element of randomness in the lives of student is quite a worthwhile experiment. It might not please students or parents – but certainly will create life-changing experiences.

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