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Cognitive diversity and the value of reading December 15, 2008

Posted by aengus in decision-making, diversity, reading.
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Following up on my last post about diverse thinkers vs. specialized thinkers and the benefits of diversity, I found this quote in an interview with Charlie Munger, Warren Buffet’s business partner:

Q: What are your work styles like?
A: We have certain things in common. We both hate to have too many forward commitments in our schedules. We both insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think. So Warren and I do more reading and thinking and less doing than most people in business [emphasis mine].

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Foxes vs. Hedgehogs December 14, 2008

Posted by aengus in decision-making, diversity, mental models.
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Here’s a metaphor that you should throw in your backpack if it isn’t in there already.

“The fox knows many things; the hedgehog one great thing.”  In other words, is it better to be a specialist or a generalist?  Or both?  The political philosopher Isaiah Berlin used this distinction as the basis of an influential essay published in 1953, and lately the question has come into vogue as a research subject.  The following are excerpts from the introduction to More Than You Know by Michael Mauboussin.  Maubiossin favors the fox approach, or at least feels it’s under-developed and under-appreciated in today’s culture.  I agree and I think that libraries and bookstores are the places to go when you need to sharpen your fox instincts.

The majority of us end up with pretty narrow slices of knowledge.  Most occupations encourage a degree of specialization, and some vocations, like academia, insist on it.  And there are the time constraints.  We’re all so busy talking on the phone, answering emails, and going to meetings, that we don’t have any time left to read, think, and play with ideas….Many [people] view diversity as something that’s nice to have, not something that’s essential to success.  In contrast, I have come to believe cognitive diversity is crucial to solving complex problems.

In his book The Difference social scientist Scott Page demonstrates the logic of diversity.  He shows, using mathematical models, how and why diversity is necessary to solve certain types of problems….Notwithstanding Page’s theoretical contributions, you might ask whether there’s any actual evidence for diversity’s value in predicting the outcomes of complex problems.  The answer, a resounding yes, is based on psychologist Phil Tetlock’s remarkable research summarized in his book Expert Political Judgment.  Tetlock asked hundreds of experts to make thousands of predictions about economic and political events over a fifteen year span.  He then did something quite rude.  He kept track of their results.

Expert forecasters were, on balance, deeply unimpressive.  But Tetlock found some were better than others.  What separated the forecasters was how they thought.  The experts who know little about a lot –  the diverse thinkers – did better than the experts who knew one big thing.

[….]

Charlie Munger’s [Warren Buffet’s business partner] long record of success is an extraordinary testament to the multidisciplinary approach.  For Munger, a mental model is a tool — a framework that helps you understand the problems we face.  He argues for constructing a latticework of models so you can effectively solve as many problems as possible.  The idea is to fit a model to the problem and not, in his words, to torture reality to fit your model.