"There are three essential steps to using the principles of adapting in business and everyday life, and they are in essence the Palchinsky principles. First, try new things, expecting that some will fail. Second, make failure survivable: create safe spaces for failure or move forward in small steps. ... And third, make sure you know when you have failed, or you will never learn."
- Adapt, page 243
"We will have to make an uncomfortable number of mistakes, and learn from them, rather than cover them up or deny they happened, even to ourselves. This is not the way we are used to getting things done."- Adapt, page 22
Published studies are about the experiments that worked, not about the trial and error. Often the news we receive from social media highlights others successes, not their failures. We filter our environment to observe achievements without knowing the process behind them. This results in the tendency to mistrust those who fail and doubt ourselves when we fail. Our brains have conditioned us to notice and celebrate success by making us feel good.
Although it is counter-intuitive, failure is how we learn to succeed. Learning success through trial and error means accepting problems caused by errors as they happen. Whether caused by bad luck or misjudgment it is important to take the problems in stride. Rather than denying the failure occurred, evaluate and recalculate before proceeding. This produces much better results. The key is learning to see failure as a positive opportunity instead of a shortcoming.
Take learning from mistakes one-step further and challenge your beliefs. Seek honest feedback even when the viewpoint of others is different from your own. Consider expert opinion but think for yourself. Ask what works instead of focusing on what sounds good especially in situations where the problem is at a distance. The more ways you look at a problem, the more likely you will be to produce a workable solution. Once we are comfortable with failure, we are ready for the next step, evolve.
"Evolution is effective because, rather than engaging in an exhaustive, time-consuming search for the highest peak – a peak that may not even be there tomorrow – it produces ongoing, ‘works for now’ solutions to a complex and ever-changing set of problems."- Adapt, page 17
Evolution is a success through the failure of the least fit. It weeds out the adverse selection and leaves us with the best option. This means we need to be flexible and try new things when ideas fail and realize what worked before may not work now. I imagine this is like being an octopus that can change its color and shape as it goes to adapt to changes in its environment. If we cannot change, we cannot be our best self in changing circumstances.
To evolve, we need to think counter-intuitively. Effective planning is rare partially because of our internal bias to believe changing our minds is a sign of weakness. Willingness to adjust our plans as circumstances change increases our chance of success. We have all experienced the pain of failure. We often choose leaders who reassure us that they are consistent, they have an exemplary record of achievement, and they will never change their mind. It seems to be a guarantee of success. We do not vote for people who say they will explore some ideas and see what works. A willingness to experiment is the most efficient strategy historically. Success in business mirrors evolution and is the result of trial and error.
Consistency seems safer than evolution on the surface. Honesty and intelligent evaluation and experimentation are qualities that produce excellent results over time. Instead of valuing these qualities, we tend to favor charming, charismatic leaders and agreeable followers with whom we identify. It is hard to distinguish between innovative genius and insanity because both states of mind are different from most people. We feel safer, choosing people who are consistent, it is more attractive. It is hard to identify with and accept those who seem different. It takes practice and courage to challenge our beliefs, to distinguish results-oriented, innovative leadership.
As we learn to accept failure and practice evolutionary style creative decision-making, it is important to remember failure also increases our tolerance for risk and might provoke risks that produce a catastrophic loss.
"Faced with a mistake or a loss, the right response is to acknowledge the setback and change direction. Yet our instinctive reaction is denial. That is why ‘learn from your mistakes’ is wise advice that is painfully hard to take."- Adapt, page 37-38
We are more emotionally vulnerable if we have just suffered a loss. We are likely to keep our bets small while things are going well. Once we take a loss, our bets may become overly aggressive in an attempt to compensate for the loss. The right strategy is to recalculate after the loss and adjust the plan accordingly. Instead, we tend to react with denial; we often cannot let go of the memory of what we had, and the goal is to regain what we lost instead of look for new possibility.
Be willing to take risks and try new things but do not take catastrophic risks. Some things will fail. Take the time to understand the failure and learn from it. Harford uses gambling as an example. When poker players lose, they are more likely to make bigger bets to cover their losses. The show Deal or No Deal illustrates the same behavior; contestants who make an unlucky choice are unlikely to accept an offer from the Banker. In both cases, the initial loss often triggers a string of larger losses. The player is viewing their situation from their starting point instead of from the position they are in after the loss. If we do not take the time to reevaluate, we are likely to risk what we cannot afford to lose.
After reading this book, I have found it practical to use these ideas to develop a working strategy for managing problems inside and outside my realm of influence as the issues present themselves. I may not be able to control everything that happens in my life, but it is reassuring I have the tools to make effective decisions.
Tim Harford is the author of the bestseller The Undercover Economist and The Logic of Life and a member of the editorial board of the Financial Times, where he also writes the “Dear Economist” column. He is a regular contributor to Slate, Forbes, and NPR’s Marketplace. He was the host of the BBC TV series Trust Me, I’m an Economist and now presents the BBC series More or Less. Harford has been an economist at the World Bank and an economics tutor at Oxford University. He lives in London with his wife and two daughters.
