Reid Givens

Thoughts from a few decades of marketing, management, and music

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Make Better Decisions
By Proving Yourself Wrong

Einstein once said the most powerful force in the universe is compound interest.

An 18 year old that invests $100 a month into an interest bearing account for 10 years and stops will end up with more money by age 65 than if they invested the same $100 a month for 20 years between ages 45 and 65. How does the 10 years of investing produce more overall wealth than 20 years later on? Compound interest.

compound-interest

Each year the interest earned from an investment is added to the total which will then earn interest itself in the next year. It's a multiplying effect where your interest starts earning interest. Time, more than interest rate, is what really makes compounding interest so powerful. Retiring a millionaire isn't that hard if you start saving and investing early enough.

Money, in theory, is not the only thing where this compounding affect happens. James Clear talks about a similar effect in accomplishment and productivity. The basic idea is to get just 1 percent better everyday. Getting 1 percent better everyday compounds to an increase of being 37 times better by the end of the year. Over two years time those gains compound to 1,427 times better. If the theory is true, the question becomes how do you get 1 percent better everyday? The answer: Practice.

Malcolm Gladwell, in his book 'Outliers' argues that 10,000 hours of deliberate practice is what it takes to become an expert. By dedicating 8 hours a day to developing a skill, 10,000 hours can be reached in about 3 and a half years. At only 1 hour a day that same level of mastery will take about 30 years to achieve. To get the most out of compounding, intensity matters to take advantage of time.

This is why doctors who spend 30 years in their profession practicing their craft for 8 or more hours a day get so good at what they do.

All this seems pretty obvious, but unfortunately, it isn't true.

Studies have found that doctors and nurses don't really get better the further into their career they get. After getting up to speed with their profession, they settle into their jobs and stay the same throughout most of their career. Most don't actually get better over time. Health care professionals are not unique in this. Most professionals are this way. Research suggests that near the end of a career, most professionals don't end up with 30 years of experience, but one year of experience they repeated 30 times. In short, just putting in the 10,000 hours isn't enough to get 1 percent better everyday.

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Becoming and expert and getting better everyday only happens if the right skill are developed. Peeling potatoes 8 hours a day will certainly make someone get really good a peeling potatoes, but it won't help them to become a better chef. Just being in a kitchen using a knife on food isn't enough.

We get better at what we practice, so if we practice the wrong thing we become an expert at being wrong. That's not getting 1% better everyday, it's getting really efficient at being the same thing. That's not progress and there is no compounding of the investment. This is akin to earning interest the first year then spending the rest of the time shining the pennies instead of rolling it back into the investment total to earn more interest off of.

So how do you make progress and not just shine the same pennies over and over? Science can help here.

Science is a frequently misunderstood concept. Often, people treat science like it is a list of immutable facts. That's not really what science is. Science is a discipline, an approach, not a book or library.

Most people are familiar with the scientific method they were taught it in school. Develop a hypothesis, run tests and gather observations and analyze the data to either confirm or refute the hypothesis. Science is a methodical, evidence based quest for the truth. This same approach can be used to try and determine the origin of the universe or to determine which pair of shoes to wear today.

Using this methodical, evidence based approach to help build success is very powerful. The focus on proving a hypothesis causes the practice to be deliberate and focused which counts toward the 10,000 hours. Once a hypothesis is proven or refuted a new hypothesis is created and worked toward which causes the interest to accrue and compound. The scientific method is a powerful tool to use toward progress, but its application often falls victim to some common traps.

Confusing correlation and causation is one of the big ones. While a methodical look at past performance may provide evidence that big milestones are often met while wearing a red tie, that doesn't suggest that wearing red ties are the cause of success. This confusion often occurs, especially in personal development and learning, by missing an important subtlety in the scientific method.

Stop trying to prove yourself right. Try to prove yourself wrong instead.

Confirmation bias is the tendency to prioritize information that supports already existing beliefs over information that may challenge them. If you have a hypothesis and you try to prove it right, there is a good chance that you will only seek out or prioritize the information that supports the result you want, even if only subconsciously. To overcome this bias its important to try and prove the hypothesis wrong as well.

Start by taking an assumption you have, your hypothesis, and think about what would make it not true. Then go look for evidence of that. If you can't prove an assumption false, then it is safer to assume that it is true based on the evidence you have. This process is good to use on existing ideas and conventional wisdom as well as new ideas. By looking at already established ideas and processes in this light can lead to innovation.

Applying this approach to examine things that are already mastered, the things you are good at and sure of, is the difference between compounding interest and shining pennies.

On the journey to mastery, “rules of thumb”, best practices, and conventional wisdom are discovered. To really supercharge your mastery and turn your efforts into compounding growth, try and prove your rules of thumb wrong. What would have to be true in order for your ideas to be wrong? Considering that is true learning.

Diversity has been proven to increase the quality of decision and the effectiveness of teams when compared to less diverse groups. The reason for this is simple, more unique view points can better control for biases as assumption are more readily challenged. The clash of conventional wisdom from all the differing perspectives cause only the real good ideas to make it through while the false assumptions fall away. To put it another way, what is correlated and what is causal gets straighten out. Getting to this heightened level of effectiveness and efficiency requires more than just getting a diverse group of people together because exposure to new ideas isn't what makes diversity powerful. True consideration of the ideas is.

Research shows that people have a tendency to increase the strength of their believes when confronted with information that runs counter to those beleifs. It takes much more than a few new facts or perspectives to get someone to change their stance on a topic. It's more accurate to say it takes an overwhelming amount of information because the existing belief has to be overwhelmed in order to change.

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This makes perfect sense considering the way we learn. A high amount of what we believe is based on personal experience and adopting the views of people we respect. To overturn things that feel true to us is difficult and requires a large amount of proof.

Consider for a minute what color the sun's is. Most of us would reply yellow or gold based on how we see it. When a kindergartener is asked to draw the sun, it's the yellow and orange crayons that come out. Many people are surprised to know how green sunlight actually is. The reason that plants of all shapes and sizes any where in the world appear green is due to high amounts of green light emitted from the sun. That fact is not easily discoverable based on regular day to day observations so being skeptical of the claim that the sun is green is understandable.

The downside of needing so much information to change our minds is that it makes us pretty stubborn often without us even realizing it. When we hear new information that is counter to our current beliefs we immediately and subconsciously reject it as being invalid. We judge the validity of the new information based on our world view and existing beliefs, so inevitably contrary information will seem less credible or valuable. We just don't trust the data. The fact that we evaluated it at all is enough for us to believe that we gave the idea a fair chance even if we actually don't. Exposure to ideas isn't really enough. To really learn, we need to try and remove our existing biases from evaluating new ideas. We need to try new ideas on and see how they fit.

Just like using the scientific method to not only look for evidence that our ideas are right but to also look for evidence that they are wrong, the same care should be taken with new ideas. While it's natural to start from a position that what we already believe is right, we need to allow new ideas to start from the same position. Assume an idea is right, then try and prove and refute them to see what's left standing. By using a similar approach to look at new and old ideas, it becomes more likely to actually evaluate the merits of each to compare them to each other rather than pitting ideas against our biases.

This approach to learning is the difference between building compound interest on your time investment and simply shining the pennies. Getting better is about real learning, and that requires trying on new ideas and truly evaluating different view points. Simply listening to new ideas or surrounding yourself with diverse people isn't enough - you also have to actually consider them.

When confronted with a new idea, or while challenging an existing idea, start by asking what would have to be true in order for the concept to be correct. Then ask, what would half to be true in order for the concept to be incorrect. Then, go look for those things.