Super Freakonomics

Freakonomics & Super Freakonomics by Steven Levitt and Stephen Dubner takes our normal life, look at it in a strange way, and then make us realise that not everything is so normal. Combining statistics (sometimes this can be fun), economics and the powers of deduction the books make you look at the world in a new way.

Are you more afraid of sharks or elephants? You have probably said the former, but statistics state that the latter is actually more dangerous. How? You are probably asking, well it is all about perception. When someone is attacked by a shark the whole media circus arrives and you are sure to know that it has happened. But when an elephant attacks a person this is mostly not noted in the media, and by the way, are elephants not really cute (e.g. Dumbo). Now onto the real numbers, on average 5.9 people die a year from shark attacks, about 200 die from shark attacks (that is more than 30 times as much!).

This example is only one of the many featured in both books. Chapters bear titles like: “Why should suicide bombers buy life insurance?” and “The role legalized abortion has played in reducing crime, contrasted with the policies and downfall of Romanian dictator Nicolae Ceauşescu”. In their research, the authors come across all kinds of places in the world. Investigating the role of pimps and hookers (they are better off with pimps) takes them to lunch with prostitutes on their Saturday morning. And explore the topic of why removing foreskin could help reduce the risk of HIV transmission.

A topic of special interest for parents is the chapter on the effect parenting has on their children. When looking at other factors like economic and social status of the neighbourhood the effect of parenting almost completely disappears. The amount of books you have in your house is a good predictor of the reading proficiency of your child, have read them does not add anything to the predictive value. Does this mean that you as a parent have nothing to add? Of course not, you are of great influence on which neighbourhood you decide to live in, how many books you buy and how you raise your children. But sometimes there are things at play you do not think of instantly.

Steven Levitt and Stephen Dubner are one rogue economist and one extraordinary writer on the loose. Since 2003 they have been working together and have not only produced two most interesting books but have built a whole Freakonomics empire including podcasts and a regular blog. Their two books are easy to read and perfect conversation makers, they should be the next two on your list.

Think Like a Freak

“The key to learning is feedback. It is nearly impossible to learn anything without it.”  – Steven D. Levitt

Lessons learnt: Sometimes say “I don’t know”. Question if you are asking the right question. Stop once every while… just to think.

After the success of Freakonomics and Super Freakonomics, Steven D. Levitt and Stephen J. Dubner are back for their third book. In Think Like a Freak, they take a meta-look at how to think, how we conceive the world around us, and how to do a better job at this. Still loaded with stories, this book takes a more theoretical approach than the last two. For anyone who is questioning how to think like a freak (or just how to think smarter) this is your book. But also if you are just here for the great examples, some applied psychology or want to know what King Solomon and David Lee Roth have in common, be sure to give this book a try.

In the very first chapter, the authors explain how they have written (Super) Freakonomics. They had four main ideas. Four ideas that may sound very simple, but ideas that many of us neglect to consider (ever):

1. Incentives are the cornerstone of modern life
2. Knowing what to measure, and how to measure it, can make a complicated world less so
3. The conventional wisdom is often wrong
4. Correlation does not equal causality

On a practical level, they do the following things. 1) Use data, it is much better than gut feelings (but see Blink). 2) Admit that you do not know… but that you can go and find it out. 3) Ask the right question… and then do step 2 again. In relation to questions, they propose us to ask small questions. You can answer these with much more precision, there are less intervening/complicating factors, and it is much easier to understand. Then when you are asking the question, do not be afraid to ask about something obvious – maybe you will find out that the real answer is not that obvious after all.

Thinking like a freak alas, also involves some basic (behavioural) economic understanding. This is that people are driven by incentives. Incentives can be money, but often do not need to be. An incentive is something that matters to a person, so go ahead and place yourself in their shoes and think what incentive would motivate them. Sometimes these incentives are not what we say they are (e.g. I care about global warming and will turn the heat down; declared preference), but turn out to be something else (e.g. I want to be a better energy saver than my neighbours; revealed preference). The authors state that it is crucial to first think about what the revealed preference is. Only then can you use incentives to your advantage.

“Would a diet high in omega-3 lead to world peace?” -Steven D. Levitt

The last two chapters discuss 1) persuasion and 2) the upside of quitting. Both take on interesting view on the respective subjects and give another great illustration of how a freak thinks. After reading the book you may wonder where the time has gone. Although you probably have learned a lot, it feels nothing like a boring textbook. In their third book, Steven D. Levitt and Stephen J. Dubner have succeeded in writing another thought-provoking classic. Thinking Like a Freak may not be for everyone, but if anything has caught your attention, be sure to read it when convenient!

Just Babies

“We can create the environments that can transform an only partially moral baby into a very moral adult” – Paul Bloom

Lessons learnt: Morality is innate. Morality needs to be shaped, strengthened and expanded by your experiences. Put yourself in other people’s shoes to expand your moral circle.

Just Babies

Thomas Jefferson once wrote to a friend “The moral sense, or conscience is as much part of man as his leg or arm. It is given to all human beings, in a stronger or weaker degree, as a force of members is given them to a greater or lesser degree.” Now, more than 200 years later, Paul Bloom confirms this earlier insight in his brilliant book Just Babies: The Origin of Good and Evil.

Just Babies follows the path laid by Predictably Irrational and Thinking, Fast and Slow, by combining fundamental research with understandable examples. The book also relies on cutting-edge discoveries and brain scanning techniques, as well as philosophical ideas pondered by Adam Smith, Sigmund Freud and Thomas Jefferson. In the end, it tries to answer the question: Where does morality come from?

Paul Bloom takes a strong stance about this at the beginning of the book: morality is innate. Babies are born with a feeling for right and wrong, they know the basics without having to learn them. But, and this is a big but, they do need training, feedback and exercise to further develop their moral senses. Let’s find out how!

Moral Insights and Moral Studies

First, what is morality? Morality is concerned with right and wrong (judgemental elements), and with generosity, humanity, kindness, compassion and friendship (altruistic elements). Morality is partially universal (e.g. to love thy neighbours) and partially cultural (e.g. whether to bury or burn the deceased). In essence, morality is the appreciation of the difference between right and wrong.

So how do you figure out why a person is moral? One way of doing this is by studying people that are clearly amoral, psychopaths for instance. Interviews with them have established that they can empathise with another person (and are actually master manipulators). But when they were asked about the suffering of their victims, all of them could not get their minds around the problem, they lacked compassion.

Research nowadays has made it possible to peak into the human brain. This has allowed us to find the mechanisms that are responsible for many of moralities underlying principles (e.g. compassion). One way this works is via mirror neurons. These are neurons that light up in your brain when you see someone experiencing something, as they would do if you engaged in it. In psychopaths, they didn’t fire when they saw people who experienced fear.

Paul Bloom states that compassion and empathy are two different mechanisms of morality. Both can exist independently of each other and without the one or the other you can still be a moral person. But, without caring for other people there would be no morality.

Other ways of studying the morality of mankind are through experiments. On the subjects of fairness, status and punishment many experimental games have been played. These games often offer participants the choice of sharing, giving away or taking away money (or coins) from other players. In most variations, it’s best for the whole group to work together, but best for the individual to have everyone cooperate and then sneakily take away all of the gains.

Through games like this and other games and experiments more suitable for babies, we can study the development of morality. Where babies at a very young age already get upset by seeing injustice done (e.g. not dividing candy appropriately), only at a later age do they see that they themselves also have to adhere to these rules. So without going through the book word for word, it suffices to say that morality is both innate and learned.

“Morality is not the doctrine of how we may make ourselves happy, but how we may make ourselves worthy of happiness.” – Immanuel Kant

How to be Good

Many seemingly altruistic (moral) acts actually serve a self-interested purpose. But whilst the rich man gives away money, he also improves his standing in society. And the volunteer at the homeless shelter truly helps but also gets renewed energy from the people he’s helping.

At the same time, there are people who give away their money without letting others know. People even sacrifice their lives to defend their loved ones. Although our morality is not innately perfect, we can make it better, we can enhance our morality.

One way to do this is to convert thoughtful moral behaviour into mindless habits. Intertwine your moral virtues into your daily life. For instance, make it a habit to always help people who are in need. Or if you are donating, make it an automated payment. Or say to yourself, every day I’m going to make the world a little better.

Another way to enhance your morality is to increase your moral circle. This is the circle, or range of people, you care (or even know) about. You can make this circle larger by meeting new people (i.e. via a meetup group). Another way is to read books that offer another perspective on life/politics/religion (fiction or non-fiction). And a third way to become more moral is to reason once every while, just to sit and think…

The Alliance

“Our goal is to provide a framework for moving from a transactional to a relational approach.” – Reid Hoffman

Lessons learnt: Employer & employee goals can be aligned, but you have to be very clear about it.

Work relations have changed dramatically over the past few decades. Where once a person was likely (and expected) to work at one company for his whole life, nowadays no-one considers you crazy if you’ve worked at 3 employers in the past 10 years. In The Alliance Reid Hoffman, Ben Casnocha and Chris Yeh present a framework on how to consider this new paradigm. In less than 200 pages they introduce The Alliance, what it means for different stakeholders and how to apply the framework in a different situation.

The problem that The Alliance tries to solve is the budged relationship between an employer and employee. The authors state that from the start the conversation between the two parties is dishonest. The employer expects an employee to be loyal to them forever, but at the same time will be most likely to lay off the new employees when things don’t go their way. In short, the authors want to restore trust.

Employers and employees should make an alliance and set synergetic goals for a set period of time – or in their lingo; Tours of Duty. Because of the finite term of the tour of duty both parties have a crisp focus. It also faces the reality that an employee might leave afterwards. Because of this, it’s up to the employer to convince the employee to stay and be challenged once again at his present company.

In The Alliance we are met with three kinds of tours of duty:

1. Rotational – not personalized and highly interchangeable
2. Transformational – personalized for a specific mission
3. Foundational – a permanent relationship

All are explained in their own right. Each one is for a different stage in a person’s career and picking a tour should be done with great care. And each additional tour of duty should further align the core mission and values of the employer and employee.

“Tours of duty have to be systematic, consistent, and transparent.” – Reid Hoffman

The latter few chapters discuss how you can best implement tours of duty in your own company. They also stress the importance of networking and how your relationship doesn’t (have to) end when an employee leaves a company. The book is easy to read and chock full of information, so please read it when you have the time.

The Hard Thing About Hard Things

“That’s the hard thing about hard things – there is no formula for dealing with them.” – Ben Horowitz

Lessons learnt: There are no rules in Entrepreneurship. Take care of people, products, profits – in that order.

Many books start with titles such as ‘How to cook a meal in 5 minutes’ or ‘With these 3 steps you will succeed in life’. Ben Horowitz has chosen the exact opposite, in The Hard Thing About Hard Things he argues that there are no simple solutions. In entrepreneurship, he states you have to figure out everything as you go along.

This doesn’t mean his book is without advice or practical tips. The latter chapters contain many guiding questions and thought activating statements. But these are all based on his own experience, express his view and don’t – in no way – pretend to be a one-size-fits-all solution. So let’s get to it.

Lessons from my 20’s-40’s 

The first chapters of the book deal with Ben Horowitz’s own life experiences (from boyhood to selling Opsware). In it, he describes how he made a friend (“Do not judge things by their surface”) and what he believes leadership is (“The ability to get someone to follow you even if only out of curiosity”). And only shortly after introducing us to his life he jumps into business.

One of the sub-chapters is called “If you are going to eat shit, don’t nibble”, so that was it for the niceties. With this Horowitz means to say that you should face the facts, don’t hide behind beautiful projections, see what is going on and adapt! In the chapter “I will survive” he motivates the reader to ask different questions – which relates perfectly to a recently reviewed book, A More Beautiful Question. He argues not to reconsider set rules and see how you can serve your customers in non-traditional ways.

From having 60 days of cash left to selling his business to HP, Horowitz describes the roller-coaster in all its honesty. Whilst reading it you will be stunned by how resilient (or ignorant) he was the whole time. With his vision, he turned nothing into $1.65 Billion. So what did he learn on the way there?

It’s Still Very Difficult

The Struggle – fighting for your company, being alone, the land of broken promises – is where greatness comes from. It is through hardship that you learn the most. But going through hardship is not easy and many people would rather give up. For them Horowitz has no advice to give, there are no shortcuts.

So “spend zero time on what you could have done, and devote all of your time on what you might do”. Don’t worry, be productive. And do this with other people at your side. These can be friends, but ideally are people who are specifically suited for the job you need to be done. And when looking for people hire for strength (being the best at a job) rather than lack of weakness (no bad qualities).

How to be a CEO (sort-of)

The most difficult skill Horowitz acquired (or is still learning) is managing his own psychology. He states that he has become better at this by running a company, there is no other way. As CEO you have to be somewhere in between the following two extremes: 1) taking things too personally, and 2) not taking things personally enough. So yeah, that’s that.

““Well Get on with it Mothe—-.” – Russell “Stringer” Bell

Noways Horowitz runs one of the largest Venture Capitalist funds in the world. With it he invests is many companies such as Facebook and Skype. And when he meets new entrepreneurs he looks for two qualities – brilliance and courage. So once again I leave the question to you – do you have the guts?

Thinking in New Boxes

“Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things”. – Steve Jobs

Lessons learnt: To be creative, change your perspective. Diverge, converge and reevaluate – again, and again.

Think outside the box is a common saying, it’s also wrong. Thinking outside the box leads us to scout the horizon of what we are currently doing. It allows for discovery of related concepts, but won’t protect you from new innovations. Thinking in New Boxes, on the other hand, is focussed on changing your mind and sparking the next big idea. Join me in an analysis of this great book by Luc de Brandere and Alan Iny.

We people make sense of the world by using mental models. We fit things into categories (e.g. mammals, cars, friends and foes). And we tend to think in these mental models, or boxes. We use them to make the world manageable, it’s something we can’t do without. It reduces uncertainty, and people love that.

Thinking in boxes doesn’t sound like a recipe for creativity, and it isn’t. Thinking outside the box is a good first step, it asks a person to challenge the current but it lacks guidance on how to proceed. Thinking in new boxes does provide this guidance. It changes your thinking from deductive to inductive.

The framework (a box in itself) explains thinking in new boxes in 5 steps: (this may already challenge your thinking about creativity as a non-rigid exercise)

1. Doubt Everything – All your ideas are hypotheses – they are not set in stone
2. Probe the Possible – Ask questions to define the issues you want to address and objectives you want to accomplish
3. Diverge – Brainstorm on how to tackle the challenges
4. Converge – Test your ideas
5. Reevaluate Relentlessly –  Go back to step 1

Some 300 pages later you will know all there is to know about thinking in new boxes. The authors take their time to explain how each (relatively easy) phase works and use real-life examples and a fictional case to bring their point across. The last few chapters consider how to apply the framework (again, box) to creative problems and business strategy.

“Progress is impossible without change, and those who cannot change their minds cannot change anything”. –  George Bernard Shaw

Thinking in New Boxes is a must read whether you are innovating, strategizing or leading change of any sort. It will let you doubt everything you do – in a good way.

huh

If you stop searching, you create the possibility that you discover you are already there

huh?! The Technique of Changing your Thinking by Berthold Gunster is all about taking a novel approach to situations that seem to be hopeless. It is not about the glass being half-full or half-empty, it is about a 3rd alternative. As one of the few Dutch (no translation available) books I have read recently it is certainly one of the more inspiring. In short chapters, full of funny examples, Berthold Gunster gets us out of the comfort zone and into change!

The five techniques on which the plenty applications are based read as follows.

1. Stop with thinking in the same direction as you used to; the reality can (and should) be shaped, it is not set.
2. Accept the reality; some things cannot be changed – stop fighting the wind.
3. Observe carefully; we see what we think – not what there is (it is biased).
4. Start with the premise that problems do not exist; problems are in our head – in reality there are only facts.
5. Learn to live with stress and instability; thinking in terms of satisfaction is troublesome – good is the enemy of greatness.

With these five techniques, you are now ready to change your thinking.

Of the 15 applications that are explored in the book I will explore only one. The technique of remembering (thinking back). The chapter concerning this technique starts with an urban legend. During the space race, the Americans were looking for a way to write in space, but their conventional pens did not work in space, so they invested millions in inventing a pen that could work in zero gravity. At the same time, Russia was faced with the same problems, they used a pencil. The key message is that a solution does not have to lay in the future, the answer may already be hidden somewhere in the past. The same applies when you have invented something new, you do not have to think about the future needs of people, but how can you satisfy a current need with your new product.

All 15 techniques

1. Wait

2. Accept

3. Validate

4. Respect

5. Persist

6. Focus

7. Remembering

8. Eliminate

9. Import

10. Collaborate

11. Seduce

12. Showcase

13. Change Roles

14. Unsettle

15. Invert

Each of the techniques has its own effect, timing and way it works. Together they can tackle almost any difficult situation and make your life a whole lot easier (and unstable, see the second paragraph). Not every technique is as clear-cut as the next. There is a strong key message: Changing your habits can have a tremendous positive effect. As a trainer for more than 300.000 people, Berthold Gunster has established a great reputation in this field. As his third book, this one gives actionable advice to people who want to implement the different techniques. Reading a chapter every few days is the recommended way to get the most out of it.

The Book:

huh?! de techniek van het omdenken – Berthold Gunster – ISBN-10: 902299404X| ISBN-13: 978-9022994047

More on huh?!:

http://omdenken.nl/ – The Official Website (Dutch)

http://www.ja-maar.nl/winkel/artikel/boeken–magazine/omdenken-in-relaties – Changing your Thinking in Relationships (Dutch)

http://www.ja-maar.nl/ – The Official Website of Ja Maar… (Dutch)