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Poker, Safety, and Rationality
Lessons from adventures in binge reading
Since I got an Audible subscription a couple of months ago, I’ve been cranking up the playback speed and inhaling books at the rate of about two per week. I listen when I’m washing the dishes, commuting, walking the dog, whatever.
Listening to books at such a high rate I’ve observed a couple of things:
There’s definitely a lot of material that I don’t retain, but also plenty that I do. Gratifyingly, I tend to remember more when the content is higher quality.
What I lose in linear recall, I gain in a kind of lateral connection-making. The books I’ve been reading are hardly a random sample, but it’s still thrilling to make connections between a book on decision-making and one or prediction, or one about negotiation and another about successful businesses.
What I’ve been reading
It’s becoming quite an expensive habit! As you can see from the list below, it’s a mix of books about product management, leadership, organisational design, business case studies, decision theory, personal work optimisation, and applied psychology.
Good to Great
The Manager’s Path
Measure What Matters
The Culture Code
Never Split the Difference
No Rules Rules
The Fearless Organisation
Thinking in Bets
The Innovator's Solution
Trillion Dollar Coach
The Design of Everyday Things
The Hard Thing About Hard Things
Turn the Ship Around!
The Lean Startup
It’s all about how people think
I had originally structured this section as a selection of different learnings from these books. But as I started writing it I realised that really, there is just one thing: it’s about people, and how they think.
In particular, three things stood out: people are irrational, people are social, and people are bad at probability. Nearly everything else in the books above followed from these three things.
People are irrational
It was incredible the number of the books above referenced the work of Daniel Kahneman and Amos Tversky. Their groundbreaking research was well explained in Thinking, Fast and Slow by Kahneman (not in the list above, but I have read it).
Kahneman and Tversky pioneered a field of research that knocked on its head previous notions that human beings are logical, rational actors. In fact, they are systematically (or as per the title of Dan Ariely’s book, predictably) irrational.
The part of the human brain that is associated with conscious, logical, symbolic thought (the prefrontal cortex) is the most recent to evolve. Rather than replace older subsystems, it is just layered on, and the role it plays (though critical) is not the only or even dominant factor in how we perceive the world and make decisions.
Understanding the ways in which people think and make decisions is really important because:
You are a person
Other people are people
If you are able to anticipate how you will think and act, and how others think and act, you will be able to be able to make much more sense of the world.
People are social
Arguably this is not a separate point from the previous one, but deserves some of its own attention. Humans are social animals, and the way we make decisions and interact with the world is unavoidably through a social lens.
Social cues such as group membership and social reciprocity can be used and abused to influence people to make certain decisions. The insights about humans as social beings drive much of the advertising and sales professions, for both good and ill.
Just as importantly, any organisation that ignores the social cues that enable humans to feel a sense of belonging will get in the way of its own success.
The world is uncertain (and people are bad at dealing with that)
Life is poker, not chess. We have to constantly make decisions based off incomplete information and unpredictable outcomes. And yet, human beings are terrible at making decisions in the face of uncertainty. Even worse, they are very bad at learning from the outcomes of probabilistic decisions.
One of the things that stuck with me from Thinking in Bets is the practice poker players refer to as resulting: the tendency to assume that a decisions that resulted in a good outcome was a good decision, and that a decision that resulted in a bad outcome was a bad decision. In fact, in a statistical setting neither of the above are necessarily true. Combined with the way humans update their beliefs (generally selectively making use of evidence to reinforce existing beliefs) and we have a very dangerous mix.
This is, incidentally, where superstitions come from.
We only get to go through life once, and yet we have to learn the right lessons from what we observe. Understanding statistics and probability, and how to use them to learn well, compounds over the years to massive advantage or disadvantage.
It seems sort of obvious once I’ve written it. In the modern world, the physical challenges have largely been tamed. The most complex things in our environment are other people (and ourselves). And yet, many of the traditional ways of understanding how humans think and behave are out of step with what research now shows to be the case. Hence, much of learning how to master our human-dominated environment comes down to gaining greater insight into the strengths, weaknesses, and biases of that most human of organs: the brain.
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