Action and Consequence

As our decision-making scales, it also has consequences that ripple. I find it incredibly disheartening when I have done a lot of work, and then a decision gets made that means none of that work is used. Scale also means disconnection between where the work is done, and where the consequences are felt. If the decision maker is doing the work, they can be doing constant triage on marginal effort. Once outsourced, if the work goes done a different path, you need to wait till check-in points to find that out. 

Outsourcing work without outsourcing decision-making requires very clear questions. For anything to actually happen, late-stage decision-making often involves closing down options. Accepting constraints and shipping. Making choices in the face of ambiguity. Reducing the number of things that will make you change your mind. In a world of practical decisions, you can never make the perfect choice. There are always trade-offs. 

“An ounce of practice beats a ton of theory” requires loops of action and consequence. Consequence that can be felt in a reality that is complex, ambiguous, and uncertain. We have to engage with the world. Learning to build consensus is how the interconnected scale works. Unstated rules that allow us to go deeper, but when those rules break... require engaging in difficult unlearning and relearning. 

There are very few areas where we can be the only decision maker. Where it doesn’t matter what other people think. In most cases, we are forced to engage in the messy process of joint decision-making. That requires skills like social, cultural, and emotional intelligence and an awareness of, and interest in, other people’s stories. It requires acknowledging the challenge we face by only being able to judge from our context, and our need to expand our context to see and resee.

Feeling Consequences

Erosion gully caused by introduction of Rabbits as game animals

Found Wanting

When you are thinking “I don’t deserve to be at this table”, “I don’t know enough to apply for this job”, or “I am really confused and feel incompetent”... you don’t know how the other people are (also) beating themselves up constantly. 

Even if people do open up, we only get the words they choose, and only in the way we interpret them. We are only exposed to projections. We are only exposed to how those projections land on our internal projections. 

Working on these interpretations is not something that is obvious. Good business ideas are things you can count, and deep work is often not countable. You may need to pragmatically focus on good business ideas to build the internal capacity for work that doesn’t have (obvious) payback. 

I avoided reading “How to win friends and influence people” because the title made me cringe. It seems manipulative. The books surprised me with the well-articulated truth that we are interested in people that are interested in us. 

Truth sits in a feedback loop, as an invited and trusted evolving conversation. 

Feedback is best received when we don’t feel like it is a tool of destruction. When it isn’t a disguise for being “weighed, measured, and found wanting.” When there is a long-term commitment to each other’s well-being. Where there is a foundation of respect and kindness. 

Then feeling incompetent and not enough is the only starting point in every new endeavour, rather than a fearful admission of permanent inadequacy.

What Makes Money

Income and money operate at a very explicit level. Pay for what you see. Fully acknowledging what makes money and what doesn’t, and not using force to get your way, allows you to go deeper and wider. 

You can shift to embodied learning. To things we can’t explain. To the tacit knowledge that is held by people on the very front lines with zero distance from decision making. Knowledge built through immediate and repeated feedback cycles and real wrestling with real problems. Understanding that is impossible to pass up the chain. 

Research and development can take a lot of time and become a part of you. Where the payback is hidden. 

Competitive advantages I like are ones you can do in the open. In “The Art of Learning”, Josh Waitzkin talks about his jiu-jitsu teacher publishing his training videos. This surprised people, because he was freely giving away his secrets. His answer lay in his confidence that if you were concentrating on what he was doing, he would be a step ahead, because he had gone deeper. 

If you have to safely guard a secret, it’s not really a competitive advantage. It is a fragile wall. 

With an enduring advantage, you can tell people what to do, but the time, commitment, and effort will scare them off. Particularly if that mastery doesn't make money. They will head towards the six easy steps to financial freedom in six months. Not the life of hard graft that will set up the next generation.

Time - Commitment - Effort

Learning to Sit

In Yoga classes you can see students who are incredibly stiff, partly because they are fit and strong. Forget the forward bend, a lot of athletic people will struggle to simply sit at 90 degrees with their legs out straight. Releasing that tension requires unlearning. Kids are very flexible, and over time because of a lack of holistic movement, adults gradually become stiff in very specific ways. When we specialise our use-it-or-lose-it bodies. To learn, you must support your capacity to deal with change. Creating space for honest feedback cycles and reflection. Understanding yourself well enough to know how you best receive feedback. 

When I wasn’t working (for money), I was part of a Men’s Group (surrogate colleagues?) where we provided support to each other. It was difficult because we saw the world very differently, and discussion could descend into unproductive debate. One way we attempted to overcome this was developing “Cards” or tools, where you could say explicitly what you are asking for. Sometimes you want advice (what would you do?). Sometimes you just want to talk (just listen and ask exploratory questions)… we called that the “Vulnerability Card”. When you expose yourself, but you don’t want to be punched. 

There are other times when you want very direct solicited challenge. The scariest card was “Invisible Man”, when you invite others to talk about you behind-your-back in front of you, while remaining silent (and NOT defending yourself).

Meaningful Creation

You can meet conspicuously successful people, who have got a lot to say about their ideas, with not much space for conversation and exploration. They hold court. That is not impressive because their (and all of our) ideas are limited. Everyone we engage with presents an opportunity to learn, unless what you are really doing is promoting your own ideas. Evangelising. Civilising. Imposing. 

David Attenborough asks us to take more seriously the power of the wild and biodiversity. Rather than scaling up our ideas and creating vast mono-cultures. The goal is not knowing the solution. It is about trying different things and having capacity to adapt, adjust, and accommodate a dynamic environment that is chaotic, nuanced, and deeply complex. An environment we know we do not have capacity to understand. If we let go of the attempt to scale control, while still engaging with an active feedback loop, the goal shifts to building a practice. 

Risk tolerance is not simply a trade-off. Return is not a reward for taking extra risk. Snap that idea. Risk tolerance is the capacity to listen, unlearn, learn, and create. It is meaningful creation you are rewarded for.

Holding Court

Deeply Applied

We carry on. Through reflection we can think about what short cuts we put in place to make our decisions. We can not avoid short cuts. Short cuts allow us to relax and act. Reflection is hard, slow, and taxing. We do not always want to be reflecting. Reflection allows us to embody our decision-making. 

You don’t have to think about how to walk. This means walking can be a small part of much more complex actions. If you get hurt and need rehabilitation, then you do need to think about walking. Slowly rebuilding to the point where it is automatic again. Acting freely. Acting intuitively. 

Magnus Carlsen at his best, plays chess like Roger Federer at his best. Trusting their bodies. Trusting their decisions. It seems magical and is beautiful to watch. Yogis call this Siddhis. When mastery seems supernatural. It is dangerous to be that brilliant, because the ego lurks. In the sense that you are godlike and above anyone else and in control... which is an invitation for a fall.

The real mastery comes with cycles of lightly held, deeply applied, reflection. 

Bold because Secure

We see based on the experiences we have had. We build an interpretation of the world. We filter the noise and interact with it as best we can. Which makes a feedback cycle essential. We can not help but constantly make mistakes unless we either don’t do anything, or don’t venture very far from what we know we can hold onto. Boldness is built on nurtured insecurities. Boldness is built on a capacity to not only confirm what you already know. With security and a feedback loop, we can act in micro-ambitious ways. Have a go. See what happens. If you have confidence that you have the capacity to unwind mistakes, depending on the unintended consequences, you can be more adventurous. If you are wrapped in fear, you will seek perfection that doesn’t exist, before you act. You will seek the correct way. If you accept that your way is just an interpretation, you can move. Embrace a sense of wildness, and diversity of attempts in which beauty exists. Where we can be open to the chaos of noise, silent periods, bright colours, dull colours, contrast, light, dark, and in all of that find the bits that resonate with us. 

Bold

(because you are secure)

 

Feedback Loop

Seek out mentors. Read stories. See what mistakes others have made. Be curious. Add a pinch of salt. Recognise that you cannot avoid constraints. You can only become more aware of them, dismantle some, and choose others consciously. You are not going to understand everything. That is fine. Every decision you make will close doors and open doors. That is fine. There is a balance between acceptance and constant learning. Returning to your purpose, your values, and self-reflection. Working on your feedback loop. Be micro-ambitious. Do stuff. Accept the world, deeply. That does not mean you are not trying to tweak and influence reality. But you need to be able to hold on to what your values are. What are your cornerstones? What is your story? What are your drivers? What are your self-imposed constraints? What are the rules you put in place for yourself to guide your decision-making? Come back to those anchors. Have people you trust that can tell you things that are hard to hear. Make sure you support their ability to tell you those things. Construct an environment in which you can thrive. 

Always Listening

 

Allowing for Bull

It is worth reading the book, “How to win friends and influence people” by Dale Carnegie. The name sounds terrible. I put off reading it for years because the title seemed repulsively insecure and insincere. I was wrong. There are very valuable principles clearly articulated. One of those key ideas is building on what people say. We want feedback. But we want feedback in a way that we actually believe that the person giving it wants us to move forward. We want to feel like they are being constructive. If you are constantly niggling at someone, and tearing them down, what you are not doing, is allowing a Bull Quota. A Bull Quota is when you suspend your disbelief. Allowing a buffer for things that can distract you from the important stuff. That quota can eventually be full, but not allowing it prevents deep listening. Like when you are watching a movie. If you are intent on critiquing each word and pointing out the holes, you won’t be able to enjoy the story. Are you looking for the truth in the story? Are you even looking for something that contributes? Because everything has gaps and holes, as we clumsily try to communicate from one grasp at reality to another. Don’t live in the holes.

Don't prematurely call Bull

 

Messy Decisions

One huge advantage of being an Investment Analyst is yogic sage level detachment. You pass judgement on the value of a business, but active investors are still not activist investors. They stand apart. Management, customers, suppliers, competitors etc. need not even be aware of the investor’s existence. I remember one young (at the time) analyst moaning about what he was supposed to do with the next five years. The time it would take to get a sense if 50-60% of his decisions were “correct”. Like a dentist can fix a tooth in a couple of minutes, or take hours just for the sake of it, the main “job” of active investors isn’t the investment, it is the business of raising capital to invest. One huge disadvantage of being an Investment Analyst, is thinking you can make the same detached decisions in the real world. The real world has momentum and morale. Decisions do impact other people. Changing track has a real cost. There is no such thing as an independent decision. We must engage in the messy interplay of coordinating with other real people who see differently, want differently, and do differently.

Muddied Decisions

Connecting Us

I have done lots of formal presentations. Despite that, I always put in hours of preparation. Each one is brand new, crafting a clear message. A cardinal sin of presenting is apologising to the audience that you were busy, “I did not have time”, and so “slapped a few slides together.” Like arriving late for a meeting, that is the same as saying your time is more important than theirs. Except, you can multiply that by the number of people giving you their attention. I did lots of dry runs. As many as I could with dummy audiences. Ideally people who give good feedback, and are anal in slightly different ways. Some about typos. Some about visuals. Some about facts. The key to communication is realising that how you intend to say something, and how it is heard… is not the same thing. Listening is a part of sharing information. That is why we are all wired to detect the difference between a conversational tone, and someone vomiting their world view on us. The only world view that matters is the one that connects us.

Learn about presenting with Garr Reynolds

A Grave Man

“Science progresses one funeral at a time,” pointed out Max Planck. One way of looking at science is formalised trial and error. Bold statements followed by rigorous testing. Knowledge progresses not by confirming what we thought we knew, but by finding out ways we were wrong. Through surprising results. Death of an idea becomes a feature rather than something to overcome. Our bodies largely replace themselves every 7-10 years. We quite literally, are what we eat. The way we interpret the world depends on what we know, and that changes as we learn. We are what we think. But even these “are”s are temporary. If we eat tomorrow. If we think tomorrow. The reason I think of Finance in Yogic terms is money is not about you. You are something deeper. You cannot base your identity on temporary things. Money is about problem solving, and if you are genuinely interested in actually solving the problem rather than making yourself irreplaceable… then you don’t want to define yourself by your job. You are not your job.

Max Planck's Grave

Navigating the Madness

Decisions aren’t made in isolation. Value is relative and dependent on both how we see the world, and how the person we are interacting with sees the world. Our options depend on their options. There are trade-offs and unintended consequences. Actions have reactions. One thing changing means everything else ripples. How do we end up navigating our way through this complexity? One way is empowering decision makers and reducing the size of those decisions. More decisions. Smaller decisions. More awareness. More transparency. More commitment to a feedback loop. The world is noisy and ambiguous, but we can each adapt and adjust to accommodate change if it is small and we are willing. The beauty of markets, trade, and prices are they don’t reflect permanent value. They reflect agreement. When two informed decision makers engage and consensually support each other through exchange. Voluntary, autonomous, sustainable relationships.

Complex Decisions

Handle the Truth

Senior Management often bemoan the lack of useful information in references and exit interviews. The tendency is for most letters of reference to reduce to confirming the dates someone worked there. For fear of litigation. Other obstacles to honesty are that people don’t want to impede the chances of being hired. Which includes the next job. If you leave a job because you are unhappy, being honest about the reasons can burn bridges when looking for a fresh start. Particularly if the honesty affects the quality of reference being received. Money is made in containers. Meritocracy with the caveat of loyalty and natural self-interest. Protecting the container, and the individual’s space in that container, comes first. In an ideal world you could let it all hang out. Honest reflection on toxic behaviours, structural cultural obstacles, and areas for personal and corporate development. In reality, honesty only comes when there is an existing commitment to each other. An interest in each other’s futures and willingness to do the work. Honesty is built on a shared ownership of the future. Don’t moan about not receiving the truth, if you can’t handle the truth.

Old You

In theory, a contrarian stock picker picks a business listed on a stock exchange they think is “incorrectly” priced. This means they think the price is significantly less than the stocks “intrinsic value”. Price is not value. Intrinsic Value is a fuzzy estimate of what the normal price of the underlying business “should” be. Normal tries to take out the noise of excess short-term pessimism, and looks at the business over a more reasonable time frame. Say the next 3-5 years. Price is a balance of supply and demand, and both change. Lots of profit may mean supply adjusts up as competitors are attracted. Not much may mean competitors exit. Similarly, lots of new demand without new competitors can mean better than normal profits. The analyst doesn’t know the correct price. They do their work, buy, and then wait. While waiting, everything will change. This delay in feedback makes it hard to be honest about whether you were right/wrong. The world of business is complex, and so even if a stock does well, it might not be for the reason they thought. Valuing well requires building processes and feedback loops. Valuing well is a practice. A practice in learning from an old you, and a time, that no longer exists. In a context that won’t be repeated.

Time to Chew

I like to think of myself as someone who is very open to feedback. I think I search it out. A friend even affectionately called me a feedback slut. Yet, I know I also wrestle with stubbornness. Which is where my blog (www.swartdonkey.com) gets its name… stubborn, noisy, and ignorant. The nut of the issue is when my self-perception and the feedback clash. When I still feel I have the right of it, even if I don’t have the skill set to be able to articulate a path. From where the clashing alternative is to mine. We only have access to our own narrators and back stories. The feedback we get is as faulty a path. We might not even hear it in the way it was intended. Perhaps another aspect of Donkeyness is appropriate. Wikipedia says “equids evolved as grazing animals, adapted to eating small amounts of the same food all day long, traveling significant distances each day in order to obtain adequate nutrition”. Feedback and change is easier when you have faith in your endurance, and time to chew.

Equine Digestive System

Making Sense

Prejudice isn’t something you can just let go of, any more than you can suddenly decide to speak a foreign language. We only take in a small fraction of the information around us. The rest is incomprehensible, meaningless, noise if we are even aware of it. The reason we use categories is to gradually make sense of things. It is how we learn. Josh Waitzkin (author of “The Art of Learning”) describes this as “Numbers to leave Numbers, Form to leave Form”. In both chess and martial arts, he created a structure to add meaning, then embodied that knowledge to the point it wasn’t conscious anymore. Prejudice isn’t simply whether we like something or not. It is a way we soak in the chaos of the world till we feel we start to make sense of it. Free Will and Understanding is possible. It is just hard. It requires slowing everything right down and rewiring the way you see, hear, feel, and connect. We will always be prejudiced. The best we can do is build a feedback loop to unlearn and relearn.

Endless Knot

Actions have consequences. Some are intended. Intention and incentives matter, but the world is so complicated (and getting more so) that we don’t, and can’t, have a strong grasp on cause and effect. The stories we layer on the world are glitchy and built on our own personal faulty understanding. Then thrown into the mix is a double helping of randomness that tends to swamp our efforts. The only thing you can truly plan for is that things won’t go according to plan. Build in a feedback loop. A little lesson from each step. Realise that each step taken changes the world. The lesson you learnt applies to a world that no longer exist. And is only relevant to one of the ways that world could have played out. Complicated. Ambiguous. Random. In a way that is empowering. No one understands. Don’t expect yourself to. The main goal is to create an environment that gives you time. Then the ability to adapt, adjust, and accommodate. Then create. Do something meaningful to you. Build. Learn. Rebuild. Every day.

On Loop

I enjoy the series Westworld. It fits with my sense of how we live in “controlled hallucinations” at different levels of awareness. How much of our experience seems impacted by our founding stories, driving ambitions, and ingrained habits. Our loops. When my wife asks what I am doing today, I often respond that I am “On loop”. As a creature of habit, I really like the idea of micro-ambition. Building a daily practice I have confidence in. Where I feel like each day is a nibble forward. Not towards a specific goal. The world is too complex, ambiguous, and random for that. I don’t like the idea of the destination being more important than the journey. I prefer a process of story enrichment. Adding feedback to my loop. As quickly as possible. So today, builds on yesterday. Building endurance to create space for time. Building resilience to manage and thrive off the risks. Building creativity to gradually compound learning. Building my loop.

           

Möbius strip

Complex Web

What you see is not all there is. Even if you know more than the average bear. No one understands. No one can. We live in a complex web of relationships, where every action has knock-on effects and unintended consequences. In a pass-the-parcel economy where we live hand-to-mouth, there is reduced capacity to pause. The strength of a business to survive isn’t evident in the size of their offices, and the image of success presented by their sales staff. You have to look at the Balance Sheet. The Cash Reserves. The Cash Flows. The Pipeline of Sales. The endurance and resilience of their suppliers, customers, competitors, and regulators. The laws can change. The technology can change. The people involved can change. Sustainable Creativity doesn’t exist in a vacuum. It starts by shifting from a consumer mindset to a custodial one. How do you maintain awareness of a complex environment? Gentle trial and error with fire breaks and retreats for when you misstep. A balance of conserving what you love and chipping away at obstacles that aren’t completely understood.