Category: Life Lessons

Surprises Make You Stronger

A popular Kelly Clarkson song, “What Doesn’t Kill You Makes You Stronger,” contains the age-old message that dealing with adversity builds resilience and character. A more in-depth and nuanced understanding of this notion is presented in a recent book by Nassim Nicholas Taleb, Antifragile: Things That Gain from Disorder. Antifragile is not quite resilience or robustness, but really connotes something that gets inherently stronger under pressure.

 

Taleb argues that antifragility is the secret to success in a world full of uncertainty. Using nature as a model, he points to evolution as a system in which seemingly random mutations lead to a lasting advantage. To be sure, “bad” events often contain useful information that enables future advantage. Pain teaches us to avoid things that might cause more serious injury. Business start-up failures steer those who learn the lessons from making the same mistake again.

 

Most interestingly, he argues that trying too hard to avoid shocks is a big mistake. The argument goes as follows: Long periods of stability allow risks to accumulate until a major disaster occurs, while volatility means that things do not get too far out of kilter.

 

Examples are plentiful. Eliminating forest fires leads to large-scale ones. Economies that cut interest rates store up more trouble for later. In markets, getting rid of speculators means that prices are more stable in general, but any fluctuations cause major panic. In political systems, artificial stability brought about by autocratic regimes can lead to instability once a credible challenge to the status quo is mounted. Career choices also demonstrate the principle: A secure job in a large company disguises a dependency on a single employer, but losing that job will cause a sudden and steep drop in income.

 

The heart of antifragility is that being in a position where the unexpected allows improvement, where the potential gains from surprising events, outweigh the potential losses. I listen very carefully to how people articulate the situation when confronted by a significant challenge. That enables me to better understand how fragile or antifragile they are. I reach my determination as follows:

  • If someone calls a challenge a “problem,” he or she seems to define the challenge as being counter to an existing structure that needs to be preserved; defending that structure becomes the goal, which limits the opportunity to change and grow. This person, therefore, is “fragile.”

 

  • If someone refers to it a challenge as an opportunity, I interpret that as a revealing insight into his or her ability to adapt and change. This person definitely is antifragile.

 

Nobody needs me to tell them that not only is change a constant in the business world, but the rate of change continues to increase. Attitudes that embrace change as a means to morph into what they want to become will be winners. Those who doggedly defend the status quo, and yearn and plan for the return of the good old days, will almost certainly become extinct much sooner.

 

Where are you on the fragile/antifragile scale, and are you satisfied with your positioning?

 

This article is excerpted, in part, from “The Economist,” November 12, 2012, page 76.

Self-Education; Growing in Importance

 
There is an age-old argument of school smarts versus street smarts; that is, theory versus practice. In a provocative book, The Education of Millionaires, Michael Ellsberg argues that, especially in the ever-flattening world, formal education as a ticket to success is less of the sure thing it once was. He further argues that informal education is more important than formal education on a cost-benefit basis.

 

Ellsberg argues that succeeding in the 21st century requires soft skills and attitudes like motivation, networking, passion, comfort with failure and persuading others to believe in you more so than what schools generally emphasize: content-focused information[HK1]  and, in some rare cases, reasoning. Cutting through the hyperbole of why college is a poor investment in time and money, which on its face is somewhat supportable, his real point is that every person should take responsibility for their own self-education. The approach Ellsberg recommends can be summarized as: Don’t show me your transcript or resume; instead, tell me who you are, what your attitudes are, how you can adapt, and what you can do. He argues that the grand bargain of getting into a good school and achieving good grades no longer is enough to guarantee success in the emerging world. Other skills that have always been important, he states are now the key factors in attaining success, especially in business.

 

The bottom line in the college/advanced degree-or-no-college/advanced degree question is more relevant now, in a changed and rapidly changing business environment:  School should be approached as the student’s opportunity to be exposed to ideas, get inspired and gain basic, mostly theoretical, knowledge only. Ellsberg offers important – and, I think, valid – critiques of our educational system and how it establishes unproductive patterns that do not serve students well, especially in business:

  • Start-ups, in particular, are creative endeavors by definition, yet our classrooms are geared towards preparing students to take tests on narrowly defined academic subjects. This stifles students’ creativity.
  • Learning from failure, when not fatal, is reported by some successful people to be one of the key experiences that lead to future success. However, our educational system encourages students to play it safe and retreat from the first sign of failure, because we assume that failure will look bad on one’s college applications and on future resumes.

Of course, such fields as medicine, law and engineering must continue to be highly regulated and licensed, and the educational and training paths leading to them must remain well-defined and rigorous. For most other fields, however, the notion that formal education is the only path to stable employment is misguided. As both an employee and a business consultant, I have worked closely with some excellent business minds. These were people lacking in formal education, whose other skills might have been ignored and neglected to a company’s very real detriment. Fortunately, those companies recognized the person’s brilliance and experience for what they were – vital assets – rather than typecasting based on limited formal education. On the flip side, educational credentials have a lower correlation with real business success than our venerated educational institutions would lead people to believe.

 

In our highly chaotic, unpredictable economy, learning entrepreneurial skills will be more valuable than in the past, even for some highly regulated fields. This is because of the informal job market that employers know about and tap into, the one that operates thus: You need a position filled, so you ask employees and colleagues to recommend someone they know. In this market, one’s resume and SAT score, or the quality of school attended, actually is much less important than one’s enthusiasm, ability to work as a team member and creativity.

 

Ellsberg’s book does not come close to settling the argument of education of theory versus other real-world skills and experience, but it does challenge some tightly held, historical assumptions and offers suggestions for developing “success skills.” It is a must read for college students (and their parents) and future entrepreneurs who need to understand that the content of their informal education could be a critical factor in contributing to their ultimate success.