Intelligent people are, somehow, more prone to making dumb decisions. I wrote about this in a previous article, and it happens because of the knowledge bias they already have. Intelligent people tend to fall in love with a particular metric and run all their decisions based on that.

We live in a digital world, and we have a tendency to make things scalable and efficient. This way of thinking had a big influence on the business world too. Why? Mainly because it helps to earn more money — fast and the “scalable” way. We are not into quality so much anymore, but rather: “Will it scale? No? Ok, let’s move on.”

You see, the digital world is a mathematical world. It runs on algorithms and metrics, which are effective and efficient in its own environment. But those algorithms might not resemble the human reality.

For example, the constant and fanatic desire for building faster and more efficient machines (products, software, you name it), which in some cases is great, can lead to bad practices. And it all starts with a flawed thinking about how to build a product or grow a company. We apply the same principle of “will it scale?” and “we must be efficient” everywhere and expect to have different results. It is like solving every problem you have in life only with a hammer.

One of the modern ways of problem — solving thinking in almost all companies is to divide a problem into smaller parts and hand it to different departments to solve it.

This approach was mostly borrowed from tech companies that improve the algorithms of their products the same way. You break a big problem into smaller chunks. Hand it to different teams, so they can be more efficient and effective and then at the end of the day glue everything together. This way you can get the problem solved faster and better.

Everybody does it, and it seems to work, why wouldn’t I do it too?

I agree. It works. But there’s one BIG problem here — you lose context. You get disconnected from the problem and its roots and become like a horse with eye-patches. You see only what’s in front of you and not what surrounds you. Until it gets to a situation such as in the picture from above, you cut down everything to make it scalable. In that case — human interaction.

The Sudoku way of solving problems

Take a game such as Sudoku, which is a logic-based, combinatoric number-placement puzzle. It shows that a problem sometimes can’t be solved if you divide it into pieces.

The objective of the game is to fill a 9×9 grid with digits so that each column, each row, and each of the nine 3×3 sub-grids that compose the grid contains all of the figures from 1 to 9. The puzzle setter provides a partially completed grid, which for a well-posed puzzle has a single solution.

An interesting part of this game is that if you divide the grid into half and hand it to different people so each can solve it individually, you won’t be able to finish it. Why? Because you have to see the entire picture to find a solution. So maybe we should look at the problem solving and improving our products the same way? Rather than hand it to an entire department the task of improving a like button.

Right behavior in the wrong context

The problem here is not only in the efficiency or the approach itself. But it’s more about the fact that we do the right behavior in the wrong context. Imagine it like going to preach christianity to a low-cost strip club near the road of nowhere.

It’s ok to divide a problem into smaller parts, but it does not mean you have to do it all the time. And some of you may say that it’s a rational thing to do. I agree. But don’t forget that when solving problems, we are biased towards certain solutions and against others. And if all the problems were solved only by being rational, then there would be no real progress in the world.

If the approach is broken, why do we keep doing it?

First of all — because it works, but in a broken way. And we are not eager to try more creative solutions.

Secondly, individual institutions, or if more specific, certain people thrive on a rational justification of actions of each other. So every committee/team/you name it has to explain to each other their actions rationally, rather than emotionally. Thus, biasing the organisation to stuff that is only obvious, direct or looks like first level solutions. People like to think that organisations and people work the same way machinery does.

Story Time: Squirrel Hunting

An example of this incentive comes from France, during the 18th century, when there were too many squirrels. And the government issued a bounty for killing squirrels and bringing their tails for a reward. More you brought, more money you got. And it seems like a logical and rational thing to do right? Until you realise that every year the amount they kept paying went up. But the squirrel problem was never solved, in fact, it was even getting worse. And then the government realised that people started farming squirrels to get more money. That is an excellent example of a perverse incentive.

And this leads to the thought that human behaviour or problem-solving mechanism is not the same as machines. If 1+1=2, then for humans it’s more 1+1 = Apples. And not only we ingrain a flawed way of thinking, but also motivate bad behaviours.

Losing Context

And my concern is that, by solving problems this way, we impose bad behaviour and thinking. This type of problem-solving is a lack of knowledge on how human decision-making process works. By not seeing the big picture, you are focusing on trivial metrics that only are a useless way of trying to save your current success position.

Companies are trying to improve their figures by cost cutting the wage bill, outsourcing to third countries, drive down supply costs, etc. But they are not spending enough time on innovation. Some brands haven’t brought out a meaningful innovation in years. Mainly because you are stuck fixing small things, like a share button.

Useless Obsession With Bullshit Metrics

And because of all these going on, we tend to focus our attention on metrics that mean nothing to most of us. A good description of the modern obsession with consumer electronics, and specifically their stats/metrics, comes from Adam Smith’s book The Theory of Moral Sentiments, written in 1759.

Smith spotted the “gadget-lover’s” tendency towards “measurebation”(a term coined by Sutherland). Let’s take as an example amateur photographers. In this case, a ‘measurebator’ is someone who obsesses about all the specifications of his camera — the megapixel count, the ISO range, the shutter latency, and so on — but never takes any good photographs. Same applies to smartphones and PC’s or laptops. We demand more technical power, but our output is as always of poor quality.

Rory Sutherland shared a great idea in one of his articles:

A watch, in the same manner, that falls behind above two minutes in a day, is despised by one curious in watches. He sells it perhaps for a couple of guineas, and purchases another at 50, which will not lose above a minute in a fortnight. The sole use of watches, however, is to tell us what o’clock it is, and to hinder us from breaking any engagement, or suffering any other inconvenience by our ignorance in that particular point. But the person so nice with regard to this machine, will not always be found either more scrupulously punctual than other men, or more anxiously concerned… to know precisely what time of day it is. What interests him is not so much the attainment of this piece of knowledge, as the perfection of the machine which serves to attain it .

“Measurebating” as a Form of Modern Thinking

And this craziness of trying to scale the unscalable and “measurebating” in front of colleagues is what drives some of the worst decisions possible. Rory Sutherland also tells a story about how he rang a company’s call centre, and the experience was great: helpful, knowledgeable, charming. The firm was a client of theirs (Ogilvy). So he asked what they did to make their telephone operators so unbelievably good. To which they said ‘Um, to be perfectly honest, we probably overpay them.’

Their call center was 20 miles from a large city. Staff didn’t have to travel for an hour each day to find reasonably paid work, so they stayed for decades and became highly proficient. Training and recruitment costs were negligible. And it wasn’t just me they impressed: customer satisfaction was astoundingly high. The staff weren’t really a ‘cost’ — they were a significant reason for the company’s success.

Alas, modern capitalism dictates that it will only be a matter of time before some beady-eyed consultants notice that a few employees are still enjoying pleasant jobs and reasonable wages and so pitch up at a board meeting with a PowerPoint deck entitled ‘Rightsizing customer service costs through offshoring and resource management’ or similar $250-an-hour MBA ejaculate.

Within months, the entire operation will be moved to a country with low wages (you name it). Soon nobody will phone to place orders because they can’t understand a bloody word that person is saying. But that doesn’t matter because when the company next presents its quarterly earnings to analysts at JPDeutscheSachs one chart will have a nice little bullet point saying: ‘Labour cost reduction through call center relocation or downsizing.’ — Source

A Story About Perspective

Andre Malraux in his novel Hope writes about the Spanish Civil War. And there is an episode, where a peasant approaches the Republican forces to tell them that the Fascists have built a secret airfield hidden in the woods. But the peasant is illiterate and unable to read a map. He volunteers to be a guide, and a Republican bomber takes off with him on board in search of the secret airfield.

The peasant knows his village inside out. Everything about the land, soil, whether the crops are growing or not. But when the plane took off, the change of perspective made him blind. The peasant pressed his nose against the window so hard that it looked like it might break it. So he still couldn’t see the village he lived in for twenty-eight years, or the streets he travelled countless times. Malraux writes that if people ever died from trying to look for something, then this farmer would surely have been dead.

Only thirty meters above the earth, the pilot took his plane as low as possible, in an attempt to give the peasant a more familiar perspective on the land he knew so well. As they nearly creased the tops of the trees in the forest, the view was almost like that from an automobile. So once you work for three decades only from one perspective, it becomes harder for you to see things differently than others.

The Big Picture

I understand this is not a significant cause on why we don’t innovate or why we have lousy company cultures and politics or bad products. But this behaviour, of thinking and solving problems, plays a big part in it. Also, add to the equation the obsession of being efficient and scalable and you are doomed to create a bad product in the long term. To quote a song — “You ain’t number one, just another one”.

We put people into a cycle that does not allow them to think from a more prominent and broader perspective (of course, does not apply to everybody). If you are continually focusing on a damn search filter with three other people, how can you even see if your product is flawed in the first place or not?