Product Development Archives - Page 6 of 11

💎 On problem solving using variation, survivability and selection (Palchinsky principles)

What Palchinsky realised was that most real-world problems are more complex than we think. They have a human dimension, a local dimension, and are likely to change as circumstances change. His method for dealing with this could be summarised as three ‘Palchinsky principles’: first, seek out new ideas an try new things; second, when trying something new, do it on a scale where failure is survivable; third, seek out feedback and learn from your mistakes as you go along. The first principle could simply be expressed as ‘variation’; the third as ‘selection’.

Excerpt from: Adapt: Why Success Always Starts with Failure by Tim Harford

💎 On behavioural economics being an odd term (it’s just economics)

Behavioural economics is an odd term. As Warren Buffett’s business partner Charlie Munger once said, ‘If economics isn’t behavioural, I don’t know what the hell is.’ It’s true: in a more sensible world, economics would be a sub-discipline of psychology. Adam Smith was as much a behavioural economist as an economist – The Wealth of Nations (1776) doesn’t contain a single equation. But, strange though it may seem, the study of economics has long been detached from how people behave in the real world, preferring to concern itself with a parallel universe in which people behave as economists think they should.

Excerpt from: Alchemy: The Surprising Power of Ideas That Don’t Make Sense by Rory Sutherland

💎 On how tolerating big mistakes can create the biggest learning opportunities (hypercorrection effect)

One of those desirable difficulties is known as the “generational effect.” Struggling to generate an answer on your own, even a wrong one, enhances subsequent learning. Socrates was apparently on to something when he forces pupils to generate answers rather than bestowing them. It requires the learner to intentionally sacrifice current performance for future benefit.

Kornell and psychologist Janet Metcalfe tested sixth graders in the South Bronx on vocabulary learning, and varied how they studied in order to explore the generation effect. Students were given some of the words and definitions together. For example, To discuss something in order to come to an agreement: Negotiate. For others, they were shown the only definition and given a little time to think of the right word, even if they had no clue, before it was revealed. When they were tested later, students did way better on the definition-first words. The experiment was repeated on students at Columbia University, with more obscure words (Characterized by haughty scorn: Supercilious). The results were the same. Being forced to generate answers improves subsequent learning even if the generated answer is wrong. It can even help to be wildly wrong. Metcalfe and colleagues have repeatedly demonstrated a “hypercorrection effect.” The more confident a learner is of their wrong answer, the better the information sticks when they subsequently learn the right answer. Tolerating big mistake can create the biggest learning opportunities.

Excerpt from: Range: How Generalists Triumph in a Specialized World by David Epstein

💎 On expert predictions (beware)

The average expert was a horrific forecaster. Their areas of specialty, years of experience, academic degrees, and even (for some) access to classified information made no difference. They were bad at short-term forecasting, bad at long-term forecasting, and bad at forecasting in every domain. When experts declared that some future event was impossible or nearly impossible, it nonetheless occurred 15 percent of the time. When they declared a sure thing, it failed to transpire more than one-quarter of the time. The Danish proverb that warns “It is difficult to make predictions, especially about the future,” was right. Dilettantes who were pitted against the experts were no more clairvoyant, but at least they were less likely to call future events either impossible or sure things, leaving them with fewer laugh-out-loud errors to atone for — if, that was, the experts had believed in atonement.

Excerpt from: Range: How Generalists Triumph in a Specialized World by David Epstein

💎 On the difficulty of making predictions (even by experts)

In separate work, from 2000 to 2010 German psychologist Gerd Gigerenzer compiled annual dollar-euro exchange rate predictions made by twenty-two of the most prestigious international banks — Barclays, Citigroup, JPMorgan Chase, Bank of America Merrill Lynch, and others. Each year, every bank predicted the end-of-year exchange rate. Gigerenzer’s simple conclusion about those projections, from some of the worlds most prominent specialists: “Forecasts of dollar-euro exchange rates are worthless.” In six of the ten years, the true exchange rate fell outside the entire range of all twenty-two bank forecasts.

Excerpt from: Range: How Generalists Triumph in a Specialized World by David Epstein

💎 On dangerous unintended consequences that hamper vital (medical) innovation

A second, ironic, problem is that companies fear that if they produce a truly vital technology, governments will lean on them to relinquish their patent rights or slash prices. This was the fate of Bayer, the manufacturer of the anthrax treatment Cipro, when an unknown terrorist began mailing anthrax spores in late 2001, killing five people. Four years later, as anxiety grew about an epidemic of bird flu in humans, the owner of the patent on Tamiflu, Roche, agreed to license production of the drug after very similar pressure from governments across the world. It is quite obvious why governments have scant respect for patients in true emergencies. Still, if everybody knows that governments will ignore patents when innovations are most vital, it is not clear why anyone expects the patent system to encourage vital innovations.

Excerpt from: Adapt: Why Success Always Starts with Failure by Tim Harford

💎 On attributing success to being committed rather than involved (in professional tennis)

Martina Navratilova was described as “the greatest singles, doubles, and mixed doubles player who’s ever lived.”

That was some compliment, coming from former World Number One player Billie Jean King.

This is what Marina had to say about commitment:

“Other players are involved in tennis, but I’m committed. It’s like ham and eggs. The chicken is involved; the pig is committed.”

Excerpt from: The Smart Thinking Book: 60 Bursts of Business Brilliance by Kevin Duncan

💎 On the advantages of making small changes, rather than big ones (cheaper, faster, reversible)

Big doesn’t necessarily mean good. It could even be bad.

By contrast, there are tremendous advantages to making small changes.

Behavioural science has shown that tiny variations in phraseology can cause huge change.

Small changes are usually less costly, and often free.

Small changes attract less attention from bosses and meddlers, so they are easier to implement.

Small changes are easier to rectify if they don’t achieve their original objective.

So bear in mind that the ‘next big thing’ could be small.

Excerpt from: The Smart Thinking Book: 60 Bursts of Business Brilliance by Kevin Duncan

💎 On idea generation (5 simple steps)

A guy named James Webb Young, a copywriter from the 1940s, laid out a five-step process of idea generation that holds water today.

1. You gather as much information on the problem as you can. You read, you underline stuff, you ask questions, you visit the factory.

2. You sit down and actively attack the problem.

3. You drop the whole thing and go do something else while your subconscious mind works on the problem.

4 . “Eureka!”

5. You figure out how to implement your idea.

Excerpt from: Hey, Whipple, Squeeze This: The Classic Guide to Creating Great Ads by Luke Sullivan and Sam Bennett

💎 On how easy it is to forget we see the world from one particular perspective (when driving)

Naive realism suggests an answer: they do. It calls to mind a famous line of George Carlin’s: “Have you ever noticed that everyone driving slower than you is an idiot, and anyone going faster is a maniac?”

Excerpt from: Mindwise: How We Understand What Others Think, Believe, Feel, and Want by Nicholas Epley

💎 Don’t confuse movement with progress (busyness is not a measure of productivity)

Some people, and businesses generally, love having lots of people rushing around.

It makes them feel productive.

Regardless of what they are doing, all the frenetic activity suggests that much helpful work is being done.

People even say sometimes that they like the buzz.

But it’s a bit like a goalkeeper diving to save a penalty.

He might be just as effective staying exactly where he is.

So movement doesn’t necessarily mean progress.

Don’t confuse the two.

Excerpt from: The Smart Thinking Book: 60 Bursts of Business Brilliance by Kevin Duncan

💎 On the cumulative benefits of a simple idea across an entire ecosystem (saving chickens to inventing a new economy)

Paul Seward runs an NGA in Kenya called Farm Input Promotions (FIPS-Africa), dedicated to increasing the productivity of the local smallholder farmers, many of whom have just a quarter-acre of land. Seward discovered that if you paint the chicks blue, the eagles and hawks don’t realize what they are, and don’t try to eat them. The biodegradable paint washes off in ten weeks, by which time the chicks have enough yard-smarts to run for cover when they see a shadow overhead.

Because the farmers are losing fewer chicks to birds of prey, it is now more worthwhile for them to inoculate the young birds against disease. Through both of these measures, they have gone from a survival rate of 20 percent to close to 85 percent. Because the farmers have more chickens, they are eating more chickens themselves — and better nutrition means a healthier family. And because it is now a better business, more people are taking up chicken farming. Oh, and the idea has created an entirely new profession: chicken painters, who charge three Kenyan shillings to paint each chick. A fascinating example of the cumulative benefits of a simple idea across an entire ecosystem.

Excerpt from: A Beautiful Constraint: How To Transform Your Limitations Into Advantages, and Why It’s Everyone’s Business by Adam Morgan and Mark Barden

💎 No such thing as new ideas (only new combinations)

There is no such thing as a new idea. It is impossible. We simply take a lot of old ideas and put them into a sort of mental kaleidoscope. We give them a turn and they make new and curious combinations. We keep on turning and making new combinations indefinitely; but they are the same old pieces of coloured glass that have been in use through all the ages.

Excerpt from: Hello World: How to be Human in the Age of the Machine by Hannah Fry

💎 Goodhart’s law and the unintended consequences of targets (in the former Soviet Union)

Consider Gosplan, the agency charged with central economic planning for the Soviet Union for most of the twentieth century. Their plans often involved setting economy-wide target amounts for commodities (wheat, tires, etc.), which broke down into production targets for specific facilities. In 1990, economist Robert Heilbroner described some of the complications with this system in “After Communism,” published in The New Yorker.

For many years, targets were given in physical terms — so many yards of cloth or tons of nails — but this lead to obvious difficulties. If cloth was reqarded by the yard, it was woven loosely to make the yarn yield more yards. If the output of nails was determined by their number, factories produced huge numbers of pin like nails; if by weight, smaller numbers of very heavy nails. The satiric magazine Krokodil once ran a cartoon of a factory manager proudly displaying his record output, a sing gigantic nail suspended from a crane.

Goodhart’s law summarizes the issue: When a measure becomes a target, it ceases to be a good measure.

Excerpt from: Super Thinking: The Big Book of Mental Models by Gabriel Weinberg and Lauren McCann

💎 On the dangers of focusing on short-term efficiency (and the waggle dance)

There is a parallel in the behaviour of bees, which do not make the most of the system they have evolved to collect nectar and pollen. Although they have an efficient way of communicating about the direction of reliable food sources, the waggle dance, a significant proportion of the hive seems to ignore it altogether and journeys off at random. In the short term, the hive would be better off if all bees slavishly followed the waggle dance, and for a time this random behaviour baffled scientists, who wondered why 20 million years of bee evolution had not enforced a greater level of behavioural compliance. However, what they discovered was fascinating: with out these rogue bees, the hive would get stuck in what complexity theorists call ‘a local maximum’; they would be so efficient at collection food from known sources that, once these existing sources of food dried up, they wouldn’t know where to go next and the hive would starve to death. So the rogue bees are, in a sense, they hive’s research and development function, and their inefficiency pays off handsomely when they discover afresh source of food. It is precisely because they do not concentrate exclusively on short-term efficiency that bees have survived so many million years.

If you optimise something in one direction, you may be creating a weakness somewhere else.

Excerpt from: Alchemy: The Surprising Power of Ideas That Don’t Make Sense by Rory Sutherland

💎 On the power of simplicity (in aviation and beyond)

The French aviator and author Antoine de Saint-Exupery once offered a definition of engineering elegance: “A designer knows he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away.” A designer of simple ideas should aspire to the same goal: knowing how much can be wrung out of an idea before it begins to lose its essence.

Excerpt from: Made to Stick: Why some ideas take hold and others come unstuck by Chip Heath and Dan Heath

💎 On the dangers of relentlessly seeking cost-savings and efficiency (the doorman fallacy)

Business, technology and, to a great extent, government have spent the last several decades engaged in an unrelenting quest for measurable gains in efficiency. However, what they have never asked, is whether people like efficiency as much as economic theory believes they do. The ‘doorman fallacy’, as I call it, is what happens when your strategy becomes synonymous with cost-saving and efficiency; first you define a hotel doorman’s role as ‘opening the door’, then you replace his role with an automatic door-opening mechanism.

The problem arises because opening the door is only the notional role of a doorman; his other, less definable sources of value lie in a multiplicity of other functions, in addition to door-opening: taxi-hailing, security, vagrant discouragement, customer recognition, as well as in signalling the status of the hotel. The doorman may actually increase what you can charge for a night’s stay in your hotel.

When every function of a business is looked at from the same narrow economic standpoint, the same game is applied endlessly. Define something narrowly, automate or streamline it — or remove it entirely — then regard the savings as profit.

Excerpt from: Alchemy: The Surprising Power of Ideas That Don’t Make Sense by Rory Sutherland

💎 On decision-making quality decreasing as the stakes rise (small versus large purchases)

After my first lecture, Binmore offered a version of the “low stakes” critique. He said that if he were running a supermarket, he would want to consult my research because, for inexpensive purchases, the things I studied might possibly matter. But if he were running an automobile dealership, my research would be of little relevance. At high stakes people would get stuff right.

The next day I presented what I now call the “Binmore continuum” in his honor. I wrote a list of products on the blackboard that varied from left to right based on frequency of purchase. On the left I started with cafeteria lunch (daily), then milk and bread (twice a week), and so forth up to sweaters, cars, and homes, career choices, and spouses (no more than two or three per lifetime for most of us). Notice the trend. We do small stuff often enough to learn to get it right, but when it comes to choosing a home, a mortgage , or a job, we don’t get much practise or opportunities to learn. And when it comes to saving for retirement, barring reincarnations we do that exactly once. So Binmore had it backward. Because learning takes practice, we are more likely to get things right at small stakes than at large stakes. This means critics have to decide which argument they want to apply. If learning is crucial, then as the stakes go up, decision-making quality is likely to go down.

Excerpt from: Misbehaving: The Making of Behavioural Economics by Richard H Thaler

💎 On the folly of hunting for a guaranteed formula for business success (because one does not exist)

Hunting for a guaranteed formula for success is a fool’s errand. As Phil Rosenzweig, Professor of Strategy and International Business at IMD wrote in The Halo Effect:

“Anyone who claims to have found laws of business physics either understands little about business, little about physics or little about both.”

Excerpt from: The Choice Factory: 25 behavioural biases that influence what we buy by Richard Shotton

💎 On unpicking complex problems (using Post-it notes)

I visited a very high-powered consultant friend with hundreds of degrees and a CV to die for.

Yet his desk was littered with Post-it notes.

I asked him what he was doing. He said he was solving a problem by writing down the key themes on separate notes, then simply grouping and rearranging them until he saw a pattern emerge.

My first reaction was that this was a hopelessly analogue and ‘scattergun’ way of working — until I had a go myself.

I’ve never looked back.

Try it.

Excerpt from: Now Try Something Weirder: How to keep having great ideas and survive in the creative business by Michael Johnson

💎 On how to have good ideas (throw away the bad ones)

The American writer and scientist Linus Pauling famously said: ‘The best way to have good ideas is to have lots of ideas and throw away the bad ones.’ He was right. Stop staring at a blank screen, waiting for a ‘Eureka!’ moment. Start scribbling. Stick thing on the wall. Create stuff. Share it with others. It’s amazing how often just talking about your ideas leads to new, better ones.

Excerpt from: Now Try Something Weirder: How to keep having great ideas and survive in the creative business by Michael Johnson

💎 On the human desire to meddle ever so slightly (an old presentation trick)

This is an old presentation trick, but it’s good.

It was started by an advertising agency that would produce carefully worked-out presentation concepts, but always include a blue duck somewhere in the visual. When it came to the feedback, clients would say: “We love it, apart from just one thing — can you take the duck out?”

The creatives would sign a little, make a brief but lacklustre defence of their ultramarine mascot, then agree to the change — knowing everything else was going through. And they used this trick for years.

It’s a simple bit of psychology, really, reflecting the human desire to meddle ever so slightly. The clients would feel they had made a crucial intervention, little knowing that they had been deceived into approving everything else.

Excerpt from: Now Try Something Weirder: How to keep having great ideas and survive in the creative business by Michael Johnson

💎 On P-hacking leading to the most ridiculous conclusions (the emotions of dead salmon)

A classic demonstration was an experiment carried out by reputable researchers in 2009 which involved showing a subject a series of photographs of humans expressing different emotions, and carrying out brain imaging (fMRI) to see which regions of the subject’s brain showed a significant response, taking P < 0.001.

The twist was that the ‘subject’ was a 41b Atlantic salmon, which ‘was not alive at the time of scanning’. Out of a total of 8,064 sites in the brain of this large dead fish, 16 showed a statistically significant response to the photographs. Rather than concluding the dead salmon had miraculous skills, the team correctly identified the problem of multiple testing – over 8,000 significance tests are bound to lead to falsepositive results. Even using a stringent criterion of P < 0.001, we would expect 8 significant results by chance alone.

Excerpt from: The Art of Statistics: Learning from Data by David Spiegelhalter

💎 On staying within your circle of competence (when not to bet)

In his far from mediocre book Risk Intelligence, Dylan Evans describes a professional backgammon player by the name of J.P. “He would make a few deliberate mistakes to see how well his opponent would exploit them. If the other guy played well, J.P. would stop playing. That way, he wouldn’t throw good money after bad. In other words, J.P. know something that most gamblers don’t: he knew when not to bet.” He knew which opponents would force him out of his circle of competence, and he learned to avoid them.

Excerpt from: The Art of the Good Life: Clear Thinking for Business and a Better Life by Rolf Dobelli

💎 On how too much data can make us overconfident in our predictions (rather than boost their accuracy)

The problem of more data was investigated by Paul Slovic, Professor of Psychology at the University of Oregon. He ran an experiment with professional horseracing handicap setters in which they were given a list of 88 variables that were useful in predicting a horse’s performance. The participants then had to predict the outcome of the race and their confidence in their prediction. They repeated these tasks with access to different levels of data: either 5, 10, 20, 30 or 40 of the variables.

The results were illuminating. Accuracy was the same regardless of the number of variables used. However, overconfidence grew as more data was harnessed. Experts overestimated the importance of factors that had a limited value. It was only when five data points were used that accuracy and confidence were well calibrated.

Marketers face a similar set of problems. They have access to more data than ever before and many believe that because the information exists they should use it. The Slovic experiment suggests otherwise. We shouldn’t harness data just because we can. Instead, as much time should be spent choosing which data sets to ignore as which to use.

Excerpt from: The Choice Factory: 25 behavioural biases that influence what we buy by Richard Shotton

💎 Having an idea isn’t enough, you’ve got to persuade others to act (an extreme example)

One morning in 1984 Barry Marshall skipped breakfast and asked his colleagues to meet him in the lab. While they watched in horror, he chugged a glass filled with about a billion H. pylori. It tasted like swamp water”, he said.

Within a few days, Marshall was experiencing pain, nauseam and vomiting — the classic symptoms of gastritis, the early stage of an ulcer. Using an endoscope, his colleagues found that his stomach lining, previously pink and healthy, was now red an inflamed. Like a magician, Marshal then cured himself with a course of antibiotics and bismuth (the active ingredient in Pepto-Bismol).

Even after this dramatic demonstration, the battle wasn’t over. Other scientists quibbled with the demonstration. Marshall had cued himself before he developed a full-blown ulcer, they argued, so maybe he had just generated ulcer symptoms rather than a genuine ulcer. But Marshall’s demonstration gave a second wind to supporters of the bacteria theory, and subsequent research amassed more and more evidence in his favor.

In 1994, ten years later, the National Institutes of Health finally endorsed the idea that antibiotics were the preferred treatment for ulcers.

Excerpt from: Made to Stick: Why some ideas take hold and others come unstuck by Chip Heath and Dan Heath

💎 On the importance of successes and failures (not case studies and anecdotes)

Other people conjecture based on case studies and anecdotes. Because so many of the most popular YouTube videos are either funny or cute — involving babies or kittens — you commonly hear that humor or cuteness is a key ingredient for virality.

But these “theories” ignore the fact that many funny or cute videos never take off. Sure, some cat clips get millions of views, but those are the outliers, not the norm. Most get less than a few dozen.

You may as well observe that Bill Clinton, Bill Gates, and Bill Cosby are all famous and conclude that changing your name to Bill is the route to fame and fortune. Although the initial observation is correct, the conclusion is patently ludicrous. By merely looking at a handful of viral hits, people miss the fact that many of those features also exist in content that failed to attract any audience whatsoever. To fully understand what causes people to share things, you have to look at both successes and failures. And whether, more often than not, certain characteristics are linked to success.

Excerpt from: Contagious: Why Things Catch On by Jonah Berger

💎 On the Knowledge Illusion (how do zippers work?)

How does a zipper work? Rate your understanding on a scale from 0 (no clue) to 10 (easy-peasy). Write the number down. Now sketch out on a piece of paper how a zipper actually works. Add a brief description, as through you were trying to explain it very precisely to someone who’d never seen a zipper before. Give yourself a couple of minutes. Finished? Now reassess your understanding of zippers on the same scale.

Leonid Rozenblit and Frank Keil, researchers at Yale University confronted hundreds of people with equally simple questions. How does a toilet work? How does a battery work? The results are always the same: we think we understand these things reasonably well until we’re force to explain them. Only then do we appreciate how many gaps there are in our knowledge You’re probably similar. You were convinced you understood more than you actually did. That’s the knowledge illusion.

Excerpt from: The Art of the Good Life: Clear Thinking for Business and a Better Life by Rolf Dobelli

💎 On how Pixar’s most original and successful films started out (as “Ugly Babies”)

Originality is fragile. And, in its first moments, it’s often far from pretty. This is why I call early mock-ups of our films “Ugly Babies”. They are not beautiful, miniature versions of the adults they will grow up to be. They are truly ugly: awkward and unformed, vulnerable and incomplete. They need nurturing — in the form of time and patience — in order to grow.

Excerpt from: Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries by Safi Bahcall