Competently Incompetent

Confidence is attractive because it suggests insight into bewildering complexity. Admitting you are lost doesn’t feel like, or often translate into, a great sales technique. 

I find the strength, and patience, of Arya in Game of Thrones more appealing. Where she goes through the stage of “a girl has no name”, and she learns to find her way when she is blind. 

We can get overly attached to the story we tell ourselves about our lives. The narrative. Life has had a way of humbling me. When things change dramatically, I have to edit my story. I grapple with life trying to control me. 

I do have moments where I feel a sense of freedom through insights. But then the waves come back again, and I go back to grappling. An H-like furrow between my eyes from taking life very seriously. 

Repeatedly coming back to a very basic practice can provide a solid foundation. A dependable place of return, before you have to go back to the madness. 

Truth be told, I love the madness. Free will is 100% dependent on madness. A complicated world means we can be seduced by specialisation, and forget how to be competent at life. To be competent at being incompetent. 

Our bodies, minds, and relationships are use it or lose it, so the systematic practice of yoga means you do a body scan to notice where you are carrying tension. Like climate change, slow significant changes can only become apparent too late, if you don’t consciously build in ways to notice the gradual but compounding consequences of little choices.

Containers for Exploration

Part of risk management is creating limits. Self-imposed limits. Investment managers will disclose their investment restrictions. The things they do, and the things they don’t do. Warren Buffett calls this the “Circle of Competence”. We have a nasty societal habit of thinking that a smart person can do anything. That when someone has proved themself in one area, we should take their opinion seriously in areas far removed from that because of the Halo effect. 

Creating limits helps you form little containers for your exploration. I am a creature of habit. I am at my most productive when I have made up some rules. Often very arbitrary rules.

When I was studying, I would take a very structured approach to learning. I would do 50-minute study sessions, then 10-minute breaks. I would have budgeted total time required, time available, and allocated by priority to the various subjects. I would record my actual learning, relative to the plan. Allowing for disruption, and breaks. 

These rules were self-imposed. I could, and did, break them. No one else was making me do it. The rules provided a structure that worked for me. I was also glad to eventually put that kind of structure behind me. It worked for a period, and then that period ended. “Everything in moderation, including moderation.”

Choosing Decision Makers

To outsource your decision-making, you need to develop trust. I like to believe in a world where we can have open conversations. The reality is that you can’t just decide to be honest, and vomit truth on someone. Truth needs unpacking. Trust is built. Both need time. It is dangerous to outsource decision-making, in part because we attach responsibility to the decision-maker. We attach identity to the decision-maker. We attach respect and blame. To outsource decisions, you need trust and confidence. Trust that the other decision-maker has your best interests at heart. Confidence that they have the competence to do what it is that they claim they will do. The decision about who to hand over responsibility to, is as important as the actual skill and knowledge required to make the relevant choice. Evaluating decision-makers is a skill in and of itself. Badly evaluating decision-makers allows you to pass on responsibility, and have a target to pin blame on should things go wrong. It does not solve the problem. 

"The Scapegoat"

William Holman Hunt (1854)

 

Sharing Interests

People are interested in people who are interested in them. I have a deep reserve of inner confidence, partly because my Mother was always fascinated in, and supportive of, anything (and everything) I found interesting. My curiosity always had an army of motherly reserves. The South African bubble I grew up in has some resistance similar to British reserve to faking and overenthusiasm. I didn’t read the book “How to win friends and influence people” (Dale Carnegie) for years because the title sounded very “American” and fake. It is, I discovered, a brilliant text with some very practical observations on reality. One of those realities is we respond to people who show interest in us. Who are interested *because* we are interested. We recognise that indicates a deeper level of loyalty and willingness to put effort in, in order to share our worlds. If you want people to be genuinely interested in you, be genuinely interested in them. Yes, that takes effort. It shows.

Got my Back

Trusting the Container

The Holy Grail is a direct, sustainable, relationship with decision makers with money, where you have their trust and confidence. Trust that you intend to solve their problem. Confidence that you can. Relationship building is one of the strongest barriers to entry. Trust is built from multiple layers and signals to show that the words and ideas being exchanged mean the same thing to both people. A lot is lost in translation between worlds. This is why nepotism and prejudice are so powerful. In a world of complexity, friendship, community, and emotional connection are a way of cutting through the noise. A lot of business has nothing to do with business. The specific problem being solved is far less relevant, than the sustainability (and containability) of the connection. Building trust in the container of the relationship.

"The Damsel of the Sanct Grael"

Rossetti (1874)

Projecting Demons

Projected confidence and imposed binaries. If, like me, you feel ill-equipped to make sense of the world… where do we start? There is no shortage of (confident) people claiming to know the truth, who are really frustrated that “other people” aren’t willing to listen. There is no shortage of public and private (binary) duels, where “you are either with me, or against me”. I don’t see a lot of evidence of considered, empathetic, and skilful mediation, arbitration, reconciliation and community building. I see a lot of preaching to the choir. I don’t see a lot of mirrors. I see a lot of microphones. Many of the people with the appropriate skills are in the Mental Health Space. Unfortunately, many of them are really busy trying to create businesses out of Mental Health. In survival mode. Unfortunately, most of us are really busy. Occupied. Distracted. Full. Rushed. Before you can do anything of value, you need to still the waves. Creativity starts from a place of silence.

Giovanni Fontana (1420)
Figure with Lantern Projecting a Winged Demon

Mapping Ignorance

It is important to map ignorance. Here be dragons. My impression is that we don’t have the necessary tools to unpack many of the complicated issues we are currently facing. There is far too much false confidence and debate going on. I have been part of “Men’s Groups” and “White Men’s Groups” trying to create containers for conversations to self-reflect. One common thread has been the over use of challenge. Like in the public debate, there seems to be limited ability to genuinely listen and gather information. Superficial curiosity is often strategic, still anchored to a particular pre-packaged conclusion the questioner is looking to confirm. It is like we are still engaged in the long history of Crusades and Civilising Missions. Having not learnt the lessons of the unintended consequences of true believers pushing into worlds they don’t understand. New tools are required. New rules of engagement. New honest map building.

Psalter World Map

Share of Wallet

The hardest part of making money is finding customers. It is the same thing as getting a job. It is preferable to get to come back tomorrow rather than looking for new employers every day. Ideally you are able to get a “share of wallet”. This is the amount of a customer’s regular spending they will direct to the problems you solve for them on a regular basis. Like a salary. That’s where relationship building and trust come in. We all specialise. We have to. So we are incompetent in an almost infinite number of ways. But we understand our problems. Especially our problems that are recurring. If we know someone can solve them, there is no reason to look for greener grass. Particularly if the problem is not the thing we are passionate about, but a distraction from our true purpose. If the relationship with the problem solver makes us better at the things we care about. A “Target Market” is a group of people (1) with money, (2) with the problem you have the skills and knowledge to solve, and (3) who you understand well enough to see the world from their perspective. It’s no coincidence that people with wallets get seen.  

Beware the Tail

Always throw half the CVs of applicants away without reading them. You don’t want to hire someone who is unlucky. There is an existential problem with investing if your goal is to outperform a benchmark. There is always the risk of massive underperformance wiping out even the best of track records. Tail Risks are high impact, low probability events. They can carry the only information that matters, and if you miss them… you didn’t add any value. Two of the most intelligent, clearest thinking, stock pickers I know don’t pick stocks anymore because of mistakes carved into their souls. That lifts them in my esteem. I also know unextraordinary stock pickers with the gift of the gab and political skill. Confidence sells. Wisdom often stays silent. I don’t believe in Gods of investing. I think you make sensible choices and let the cards fall. Manage the risks and do something else that inherently adds value in and of itself. Take ideas like Meritocracy with a pinch of salt. There is normally too little information to see clearly, or so much that it is stale. Our lives, and particularly our working careers, are just blips in the time scales of long-term wealth creation. The key is custodianship, not immortality.

Slow Down

I am a slow learner. Always have been. I started walking late. My Mother says that is because my older brothers carried me everywhere. I started talking late. Maybe I can blame my brothers for that too. It’s nice having someone to blame. When I was 7 years old, I was put in a Speech & Drama class for people who were struggling with school. When I was 9, I got a teacher who suddenly got me. Mrs Rae changed my course. As the foundations set in, things started making sense. I have never been afraid of looking like a Moron. Of asking the dumb questions. Of appearing to try too hard. I regularly get lost in the grass of things I don’t understand, think aloud, and make mistakes in public. We live in a world that rewards false confidence. That thinks those who understand cause and effect are worth putting in charge. The truth, I think, is that no one knows. We are all lost in the grass. The world changes too fast to understand. There is too much noise, and we see whatever we are looking for. The best we can do is choose what we pay attention to. What we give relevance to. What we build meaning from. Slowly.

Prove or Build

Conspicuous allows you to justify yourself. Something you can count. In a world that is complex, ambiguous, and random, having a cause for every effect gives you something to hold on to. An explanation. This inhibits foundational investing. A need to prove swamps the need to build. It makes ego and confidence our primary focus. The most powerful investment forces are time and compounding. The time frames we think in are too short. This means the real impact of what you do is only felt after you are gone. Unless you live hand-to-mouth. Then what you do is felt now. That is the problem. You need a genuine sense of ownership to be willing to reinvest rather than consume. For that to become a habit, until the amount reinvested makes the amount consumed a rounding error. Until you are a custodian. What you see is not all there is. Don’t prove. Build.

Deafening Silence

For any business, but particularly a small business, a hiring decision is a big decision. Meeting Payroll is the primary stress of most owners I know. The caricature of fat cats is not one that resonates with my experience. Rational people will work at big Institutions where their contribution is amplified by the success of those who have come before. Most small businesses are in the survival period before significant growth kicks in. It is long term belief in potential growth that keeps the owner going. The most successful entrepreneur I have met said it took him 7 years post pulling the trigger to earn what he was getting as a salary man. And he was the definition of an outlier jumping over aligned stars. The rational approach is to be an underconfident overachiever and let someone else stress over payroll. A salary is like a bond. You are lending your labour to the owner in exchange for a predictable, consistent, income. But that income is normally pass-the-parcel. The owner has to get the money to pay you from the customer. To commit to the risk that the customer will be there. Even Big Institutions can over commit to how many parcels they can pass. Going to zero is a reality when the music stops. Silence is deafening.

If You Care

I did Marketing courses at University, but I didn’t learn Marketing there. My approach comes mainly from following Seth Godin. I was once told by a client (who actually liked me) that I am “the worst salesperson they know”. This is because I don’t play the game. In a world that is complex, ambiguous, and random, the product is normally confidence. Clients are confused and are looking for someone to provide clarity in the form of Point A (here, problem) and Point B (there, solution). I believe in relationship building (which takes time), trust (which takes competence, vulnerability, and time), and expectation management (which takes honesty, and time). Three key pillars of Seth Godin’s approach are Storytelling, Permission Marketing, and Tribe Building. You need to understand the story of the listener for your story to resonate. The stories need to merge. You need to see each other. You need to get to a stage where if you weren’t there, you would be missed. Your voice and help isn’t interrupting, it is desired. Good marketing isn’t a transaction with the pressure on one party to deliver. It is a relationship. The word may seem dirty, but if you care about something, you are a marketer.

Seth's Blog

Wafer Thin

“The market can stay irrational longer than you can stay solvent” warned John Maynard Keynes. “When there is nothing particularly clever to do, the potential pitfall lies in insisting on being clever” adds Howard Marks. I am a big believer that the Emperor is wearing no clothes in many parts of the investment industry. The world is ambiguous, complex, and random. We seek out heroes who ooze confidence that is unwarranted. Many investors names are made or destroyed on a handful of decisions. Either these buy a decade or two (a career) because of something going well, or they have a failure carved into their souls. Extreme success may mean 60% of their decisions are right. A coin gets 50%. The margins are wafer thin. So regularly remembering that investing is more like dieting and exercising than a “how smart are you” contest is important. Everyone eats. Everyone moves. Make sure you are one of the people building towards something, rather than against someone.

Create

In a lot of cases, the generic product people are selling is Confidence. The world is confusing, ambiguous, complex and random. When someone can paint a simple picture with an aura of certainty, that is attractive. We think in stories. One of our storytelling devices is numbers. Being able to simplify complexity down to a number allows us to compare, prioritise, and decide. It helps us manage the craziness. The challenge is to always remember that numbers aren’t answers. They are questions. The best we can do is build endurance and resilience to help stay in it for the long term, and handle the bumps and dips. No one knows, and only you know what it is you want to create. Only you know what the point is. The answer to that isn’t a number.

Complex Numbers

False Confidence

My abiding lesson of the last three years is that there are no Adults. It is tempting to think someone else knows what is going on. That the other people in the room have done the reading, and understand more than you. That Presidents, Prime Ministers, CEOs, Head Teachers, Professors, Nobel Prize winners and every other Big Cheese you can think of know what they are doing. Just because you dress a bunch of Dudes in suits, and pop them round a wooden table, doesn't mean they know what they are doing.

In reality, it is still one big game of Play Pretend. Some people, "Fooled by Randomness", have extra strut in their steps believing that their success is hard earned because they are more meritocratic than their unlucky Doppelganger. They are still making it up as they go along. The Emperor is wearing no clothes.

Most of the stories we use to make sense of the world are just that. Stories that have grown more elaborate over time, as their success has snowballed. Right up until the snowball reaches the bottom of the hill. The world is far too complex, ambiguous, and random for anyone to understand. 

Even Emperors need Generals and Lieutenants. They sleep, eat, and have limited capacity, faulty memories, and patchy understanding. Everyone.

At some point, we need to stop trying to spread our answers, and start making space for as many answers as possible.

Selling Discontent

Negativity sells. We have a bias toward drama and extremes. Talking about slow, long-term, progress doesn't lead to the sense of urgency normally required to spark action. Marvelling at our creativity, resilience and improving ability to cooperate seems to belittle all the areas we know this isn't true.

That is why Bosses have to create fake deadlines to get us to do stuff. 'I need this on Monday morning' gets followed by two weeks till they read it. That is why opposition politicians need to convince us that the current Government is destroying our mortal souls. Until it is their turn to do stuff.  Discontent is our biggest selling product. 

I am not buying. I far prefer doing a little bit every day, and starting really early, to a mad panic near a deadline. It is almost never worth rushing. It is almost never worth being forced to make a decision. I far prefer us learning to talk to each other, to seeing which ideological stone throwing team has the biggest biceps.

This may appear like weakness. We love Strong Men who can be decisive in the face of uncertainty. We love Confidence in a world of ambiguity, uncertainty, and complexity. We define leadership by people taking confident strides so we can follow in their footsteps.

No.

What if what we have now is the best it will ever be? Tomorrow isn't better. It is just different. This doesn't mean inaction. It just means that perhaps we are already living in Utopia. Utopia isn't a world with no imperfections or challenges. All the horrible things in life provide us with opportunities to learn and grow. Perhaps the goal is the daily growth, not the destination.

From here. From now. From as things are.

'it takes all the running you can do,

to keep in the same place' The Red Queen

Pattern Seekers

Human Brilliance is partly over-confidence, the ability to make and tolerate mistakes, and the ability to believe things the evidence doesn't support. Computers still just crunch the numbers, and are just starting to learn to learn. For the first few years of our lives, we are thrown into a confusing world that just carries on regardless. Without us knowing the rules. We just have to catch up. 

Our magic is Self-Hypnosis. We all live in constructed realities based partly on the genuine rules of the universe, but mostly on our interpretation of those rules and how they have worked out for us. Repeated trial and error until our self-delusion that we understand kicks in. Till we 'crack the code' and see the underlying pattern.

Patterns are simplifications. There are patterns in everything. We attribute meaning to those patterns. Cause and Effect. If we get the pattern and know what reliably follows an action, we don't need to know anything more. Even if the story we tell ourselves about it is 'wrong'. Even if there are lots of unnecessary bits to our story.

Our leaders are typically the best at pretending they understand. The best at falsely projecting confidence. Through trial and error, we have learnt to follow those who appear to know what they are doing. The strongest. The loudest. The fastest.

Beautiful messy creatures. Full of emotion, frustration, desires, dreams, and alternative realities. Bumping into a world that just carries on regardless.

De (Chinese)

Pronounced like 'Duh' in American, De (德) is something like charisma and confidence... but deeper soaked and with less to prove. Someone with De radiates an infectious and effortless sense of calm. It is a dancing partner of the Chinese concept of Wu Wei. Action through Inaction. It starts with deeply embracing things as they are. Letting go of the gap/chasm that normally exists to how we want them to be. Replacing the intense effort to cross that gap. Embracing spontaneity, suddenly everything that seemed to be a struggle starts to flow.

Expertise and Resilience

Confidence is attractive in a world that is complicated, uncertain and ambiguous. The idea that even though there are tough problems in the world, there are creative geniuses who can solve them creates a sense of hope. The hopeful idea that what we need is great leadership. Someone to save us. I am sceptical of expertise. Not in the support of the popular anti-intellectual wave, but sceptical that individuals, or small groups, can have a superior disinterested understanding of the public good. I am sceptical that leadership beats empowerment. That answers beat questions. My hope lies in strong connections. In understanding that our identity, and understanding, lies in the individual links rather than the individuals. The more links, the deeper and wider the expertise. Expertise defined by resilience rather than answers.

Resilience