Among the slices of my life I’m grateful for are the bits and pieces of wisdom KJR’s subscribers share with me that enrich my understanding of How Things Work.

This week, a tip o’the hat to Nelson Pardee for pointing me to a nice article by a gentleman named Morgan Housel titled “Common Causes of Very Bad Decisions.”

It’s so nice that this week I’m just going to share some snippets to whet your appetite, paraphrased into KJR-speak because I have to add some value somehow, after all:

  • Virtue is, for most people, negotiable. With a sizeable enough incentive we’re all capable of behavior we wouldn’t want headlined in the local newspaper. And for most of us, it’s the disincentive of being caught out that keeps us from succumbing, not our native integrity.
  • Mistakes are multiplicative, not additive. Imagine, that is, we’re manage to create a badness metric. Next imagine you have three colleagues who, on the badness scale, measure 2, 3, and 5. Their combined impact on overall organizational badness isn’t 10 (2+3+5). It’s 30 (2 x 3 x 5).
  • Probability is hard but accurate. Binary is easy but wrong. When our local meteorologist predicts a 70% chance of rain and rain doesn’t happen, we don’t review the last 100 rain forecasts to see if the meteorologist’s 70% chance of rain turned into actual rain in 70% of the forecasts. We gripe about the meteorologist being wrong.
  • Your opponents aren’t always playing to outscore you. Many are playing a different game than you are altogether. If you can’t figure out what game they’re playing you’ll never figure out why they do what they do, let alone what you should do about it.
  • The world is a jigsaw puzzle. It consists of a few million pieces. The information available to us and the knowledge we have about it constitute no more than a few hundred of those pieces. The moral of this story: No matter how much we think we know, we’re always mostly ignorant.
  • Success is more dangerous than failure. We can learn from failure. When we succeed we’re more likely to take credit for brilliance we don’t have than to understand that in a random world, winning the lottery isn’t a meritocratic outcome. This makes us vulnerable to overconfidence.
  • Learning from the successes of others is almost as fraught as learning from our own. Most people who succeed, most of the time, owe a lot of their success to dumb, random luck too. Sorting out what they did that actually factored into their success from everything else they did that had nothing at all to do with it is an unending challenge.

Bob’s last word: In KJR I’ve written a lot about the importance of creating a “culture of honest inquiry.” One aspect of this culture is insisting on evidence and logic and not just “trusting your gut.”

But just as importance is for each of us to recognize where our personal logic is vulnerable to sources of illogic, including but not limited to those so admirably summarized by Mr. Housel.

You might consider making a list and keeping it handy for those times you’re called on to make consequential decisions.

Bob’s sales pitch: This being the holiday season and all, what could make a better gift for those you’d like to enlighten than a book by yours truly? No, no, no, don’t answer that question. It’s rhetorical, not an actual inquiry!

Once upon a time I thought leading well mattered more than managing well. Then I wrote a book about how to lead well.

Funny thing about writing a book. I think I know exactly what I think about a subject. Then I start to explain it and discover that exactly what I think about the subject doesn’t hold up very well.

As is the case with geometrical proofs, even the act of writing definitions can be enough to trigger a complete change in perspective.

My definitions of leadership and management did that: Leadership is the art of getting others to follow. Management is getting work out the door through the efforts of others.

Imagine you’re making a business case to your company’s CEO. You say, “We have a choice. We can either get more of our employees to follow us more enthusiastically, or we can get them to get work out the door more effectively.”

The CEO asks, “What’s the return on investment for getting employees to follow us more enthusiastically?” You reply with various statistics about engaged workforces and such. “Okay,” the CEO continues. “What’s the ROI for getting work out the door more effectively?”

“Hmmm,” you reply. “If employees get work out the door, say, ten percent more effectively then I guess it would improve our margins by, say, ten percent.”

The CEO’s expression tells you it’s time to stop taking advantage of her open door policy and start getting work out the door more effectively.

It isn’t that leadership doesn’t matter. Leadership is one of the most important skills managers can develop, because if employees follow you where you lead, then you can lead them to the promised land of improved organizational effectiveness. They’ll get there under their own power, too. You won’t have to drag them there kicking and screaming.

Bob’s last word: Leadership consists of eight tasks: (1) Setting direction; (2) delegating; (3) making decisions; (4) staffing; (5) motivating; (6) building and maintaining teams; (7) establishing culture; and (8) communicating.

Improving at these eight skills might not make you a great leader. They might not even make you a good leader.

They’ll definitely make you a better leader.

And while managing is what pays the bills, leading effectively sure makes managing easier.

Bob’s sales pitch: Want to know how to improve at these tasks? Buy the book! Want your managers to improve at these tasks? Buy them the book!

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I’m trying out a new format this week. I don’t know if I like it or not. More important, I don’t know if you like it or not, and won’t know unless you tell me. So send me your thoughts, or share them in a Comment. Thanks!

– Bob