What Everyone Gets Wrong About This JFK Story
What Everyone Gets Wrong About This JFK Story
How to play (and win) long-term games
I’m going to tell you a short story. Pay close attention to how it makes you feel.
I think you’ll be surprised where this leads.
During the heady days of the space race, President Kennedy visited NASA headquarters. There, he bumped into a janitor. Ever mindful of a PR opportunity, the President started chatting with the broom-wielding worker.
“What’s your job here?” JFK inquired.
Without missing a beat, the janitor responded:
“I'm helping put a man on the moon.”
Inspiring, right? A heartwarming tale of how people in all parts of an organization can unite in service of a common purpose.
Well, not according to my returning guest, Luca Dellanna.
In fact, Luca hates this story.
Not because of its stodgy sentimentalism.
Nor because of its potentially apocryphal origins.
No, Luca hates this story because the lesson that it imparts to leaders — motivate your staff by getting them to focus on your grandiose ultimate aim — is, in most cases, precisely the wrong approach:
“In real life, the janitors will not be motivated by the idea that they send the ship into space.
They will be motivated if the people who use the toilet […] tell them, "Thank you for keeping the toilet. That's the cleanest toilet I've ever seen."
So you need to bring it back to things which are relevant to the very specific audience that you're talking about.”
It’s a surprising perspective, isn’t it? But it’s indicative of Luca’s unwavering commitment to making the abstract, concrete.
This basic principle came up time and again in today’s conversation with Luca (now available on YouTube and all the usual podcast providers), which primarily revolves around his excellent new book, Winning Long-Term Games: Reproducible Success Strategies to Achieve Your Life Goals.
Why should you care? Because long-term strategies consistently deliver better results. In other words, being able to identify, play, and win long-term games is, quite literally, the secret to success.
With examples ranging from cathedral bricklayers to Stonehenge spray painters, we discuss how to successfully identify reproducible long-term strategies and how to persuade others to buy into them.
We also explore how hypotheticals can be an insanely powerful tool for ensuring our short-term actions remain consistent with our long-term goals (and yes, before you ask, my beloved premeditation makes an appearance).
Here’s the full transcript. As always, if you like what you hear/read, please leave a comment or drop us a review on your provider of choice.
Transcript
Jim O'Shaughnessy:
Well, hello, everyone. It's Jim O'Shaughnessy with another Infinite Loops. I'm very excited to welcome back today's guest, Luca Dellanna. My children are in Italy right now where I used to go every year. And I really need to get back, Luca, because I love all things Italian. You as well. Today we're going to be talking about your wonderful new book, which I'm holding up for those who are watching the video. And for those just listening to me, the title of the new book is Winning Long-Term Games: Reproducible Success Strategies to Achieve Your Life Goals.
So Luca, as I was getting ready for our conversation today, I was rereading parts of your book and I remembered an old tale. But I can't remember where it came from, but it concerns three bricklayers. And when they were asked what they were doing, the first bricklayer that they asked looked up and griped, "I'm breaking my back and working my fingers to the bone for a boss who doesn't really care about me." The second bricklayer said, "I'm earning a living to support my family who I love." And the third bricklayer looked up and said, "I'm helping to build a beautiful cathedral." Now, which bricklayer are you advocating that our listeners and viewers should be in your book?
Luca Dellanna:
Well, definitely not the first one. I think personally, that both the second and the third one is fine, as long as it derive a meaning from it, and as long as it lets you work in a way that you get something from your work other than just the salary. So, I can see the third bricklayer would be ideal because since he's building the cathedral, he has this long-term, and he cares not just about following the plan and doing what's on his to-do list. But he only cares about today's to-do list in the function in which it helps him achieve the long-term goal. So he needs to build the pillar. He doesn't care about building the pillar per se. He cares about building something that can sustain the cathedral. And once you get this long-term focus, this focus on the ultimate goal, what you do will be much better.
Because again, you will not stay superficial, but you will make sure that it works, which means that you will maybe change what you're doing, you will adapt it so that it works best. You don't fall into the trap of following the plan even when it's the wrong plan. You won't fall into the trap of doing something just to check the box, even if it's not effective and so on. The reason why I'm not necessarily against the second bricklayer, I think it depends. It depends if he's doing it as, "I'm just getting my paycheck." And in that case, it's not very good. Or if he's doing it with the focus of, "I want to sustain my family, which I love very much." In that case, he also has a good long-term focus. Because one problem that the third bricklayer might have, if he only cares about the cathedral, that's great if that's everything he really cares about.
But if for example, he cares both about the cathedral and his family, for example, he needs to balance both. He needs to make sure that he builds the cathedral in a way which is safe enough so that he doesn't get injured. He needs to make sure that he doesn't get sucked up in the pursuit of the cathedral, to the point in which even if he manages to achieve the cathedral, he will feel unhappy because he sacrificed too much of the family, for example. So it really depends on whether there is this long term and broad focus on.
Jim O'Shaughnessy:
That's an excellent point. Because some things that might appear short term to people looking on, like the people inquiring of the bricklayers, might look at the... the way you put it, think, "Oh, this guy's just working for a salary," whereas that's not the truth at all. He wants to be able to support and sustain his family over a long period of time, and he also maybe wants to build a beautiful cathedral. So I think that's a good exception to the second bricklayer's response, which many people might say, "Oh, that's just short term. That's not sustainable if all he cares about is his job," right?
Luca Dellanna:
Yeah, exactly. This is something that I've noticed a lot with some of the companies I work with. You cannot pretend that the all bricklayers in your company are of the third type. You cannot tell all, "You're here because we're working for the cathedral." Because I mean, if you hire specifically for bricklayer of the third type, it will work. But if you are like most large companies where you have a lot of the bricklayers of the second type, you cannot just use these grandiose visions if what they care is sustaining their family. You need to accept it that it's a worthwhile goal, but of course not if they do it in the way of I just do the bare minimum.
But the question is how do you engage them in such a way that they feel engaged at work and yet you understand that work is just a part of their life. How do you give them the possibility of bringing purpose, even if they care, let's say, only about their job. And once you try to engage the second type of bricklayer, you do a lot of good things that if you don't do, you leave a lot on the plate.
Jim O'Shaughnessy:
That's an interesting observation because I've seen that oftentimes, when companies get really, really big, they lose the ability to attract the... or third type of bricklayer and attract a lot more of the people who are paycheck-oriented. How would you go about... If I hired you and I was a huge company, and I put the problem to you in exactly this way? I would say, "Luca, most of the people who work here are these second type of bricklayers. How can you help me get more out of them for the larger, longer term, more sustainable and, in this case, more beautiful goal of a gorgeous cathedral?"
Luca Dellanna:
Yeah, I think that the key is to show them the impact of their work, but the impact that they have now. So not the impact that they will have in a century once the cathedral is finished, but the impact that they have now. Let's make the example Starbucks. We all know about Starbucks. They hire so many people. They have so many employees, they cannot just get the bricklayers of the third type. So what I would do if I were a manager of Starbucks, I would observe my team working for five minutes, and then I will call a small timeout. Like basketball style, everyone in a circle for 10 seconds. And then I will point out all the impact that I've seen over the last five minutes. I would say, for example, "John, the art that you made on the flat white was beautiful. Michelle, when you smile to the customer and you call their name, you really brighten them up. Francis, great job helping the new trainee, Mark, operating the coffee machine."
And you do this for 30 seconds, one minute. The point is you show them, one, that their actions have impact, two, that the impact is going noticed. Then you ask them to do more. And what will happen ideally is that during those five minutes, the next five minutes, people will feel great and maybe they will do more of those actions. Now the question is what will happen over the next 10 minutes? Because if someone puts more effort in than normal and it goes unnoticed, they will learn the lesson that putting effort is not worth the... is not worth it. So what you do is that you observe again all the improvement that you see over those five minutes, and then you call a second time out. And again, you make them notice that you notice that the impact that they created with the extra thought they put, and that will really solidify it.
And I've seen people doing that. Not at Starbucks. I've seen it in other context. And sometimes it can really bring some people to tears because for the first time, they see that the small things that they do are actually noticed. It's going to be the best day at work that they have, and they will be super motivated and super engaged and they will keep doing all the small things. And it costs nothing. But again, the key is to see the impact that people have today. And then the other thing, because I've talked about this example a lot of times. People usually know about it and they do it, but they do it with a timeframe which is too long.
For example, they have a weekly meeting. They do the first part in the weekly meeting and then they think, "Okay, next week I will tell my people all the good things I've noticed during the week." That's too long. Because maybe on Tuesday, they start putting more effort. On Wednesday, they're like, "Ah, but yesterday my boss didn't notice." And so by Thursday, they will have lost all motivation. And instead, the right timeframe is really five or 10 minutes, five or 10 minutes. You do it two times, you do it three times, it stays.
Jim O'Shaughnessy:
I think maybe even inspired by our first conversation, one of the things that I do now is I don't do any type of annual or even quarterly review for people who work with me. I give them immediate feedback. If I see them doing something that I think that is really great for the team, I immediately tell them. And I have found that that is actually quite extraordinary. The whole idea, I think we've often get it exactly backwards. I learned in many of the companies that I started and ran, the value of a annual review was negligible to negative because it had no real impact. People aren't thinking about, "Oh, yeah, that great thing you did nine months ago." It doesn't conform to the way our human OS works.
And the other thing I would love for you to do is set up for our audience of listeners and viewers. Someone's out there listening and they are filled with ambition and they really want to have what you say, a great long-term strategy, play the long-term game versus sequentially playing shorter term games, which a lot of people do. Take us through... If you were consulting with them, how would you help them set up a system, a process for succeeding at playing the long-term game?
Luca Dellanna:
Yeah. So first, I want to explain what's usually the wrong thinking about it. The wrong thinking usually is the idea that if I get the most out of each day, I will also get the most out of the year. And this is wrong because to get the most out of the year, you also need to take some actions that have no immediate return today. This is one of the mental switches that we need to do. And then before I answer this question, I presented this thought experiment, which I found very useful, which is that imagine that you want to become... I don't know. Let's say that you want to become a millionaire. But today, you only have bad options. You go to Las Vegas and you gamble everything on the 36, or you sell your kidney. They're all terrible options. Let's imagine that you give yourself two years to become a millionaire.
You have some better options. I don't know, you start a startup, something like that. That's much better. Now, let's say that you give yourself 20 years to become a millionaire. You have great options that are not that risky, that do not bring you the sacrifices that are excessive. So one of the keys about winning long-term games is to switch from how do I achieve my goals as fast as possible, which makes you think about bad solutions or solutions that might work but are unlikely to work, or solutions that work but have negative externalities on the rest of your life. And instead, you switch to how can I succeed as certainly as possible? Of course, you always want to have a reasonable timeframe. You don't want to get too lazy or whatnot. But you can give yourself, I don't know, 10 years, 15 years, 20 years.
Then of course, if you can do it better, but you start from a longer timeframe. And that opens up your options and gives you strategies which are much better. Because nowadays, we're talking... I don't know if you've heard yesterday or the day before yesterday, there were an activist group put some painting on Stonehenge. So, my critique to that activist group is that it's trying to solve the problem as if it must be solved today. If the climate change problem must be solved today, then of course you need to do the most attention- seeking action. What's the problem? That's the action that gets the most done today, but it achieves the limit because if you antagonize the population that doesn't like you vandalizing things, you cannot achieve that much if you don't have the support of the world population, especially for something like climate change that requires the support of everyone. What would be more effective would be if the activist group ask themselves, "How can we solve the climate change problem in 20 years?" That opens so many better options. Some options are like some people become engineers and find some advanced green tech. Some other people is build trust, become a respected person and use your platform to change some habits in the population, and so on. So this is the idea. If you shift from succeeding as fast as possible to succeeding within a reasonable timeframe, as certainly and with as much impact as possible, you open up great options.
Jim O'Shaughnessy:
That basically describes the fundamental philosophy with which I ran all of my asset management companies. One of the first things you notice when you're studying investor behavior is that they are hyperbolic discounters. They focus on what a stock is doing today or if they're seemingly longer term in a quarter or a year. And that is mostly noise. One of the things that I often say is if you change your focus, you could change your future. And changing your focus requires, as you advocate, a longer term period of time. Because a very short time horizon reduces your aperture. It's like blinders on a horse. And you only see very, very limited options. And as you point out, most of those options tend to be not very great. Selling your kidney if you want to become a millionaire, that has horrible externalities for you over long periods of time.
And the get rich quick mentality leads often to get poor quick. But that seems to be such a guiding... It seems to be in the base code of our human operating system that we look for, and thus the popularity of all of the how to make a million dollars in a year or how to trade your way to prosperity through these high risk investments. In fact, a shorter term focus leads you, necessarily, to things that are much riskier because the payoff on a really crazy one-off bet might be super high, but the chances of that bet paying off are super low. I loved your example of the immediate feedback using Starbucks as the example. What other ways can people who are playing longer term games, but do have employees who maybe aren't playing those long-term games... What other examples can you give for the person trying to inspire them to get them to at least elongate their focus from just the here and now?
Luca Dellanna:
Yes. I think there are two parts to this answer. And they are both necessary to work. So the first thing is you should make extremely clear that you will not accept any objective that is achieved in a way that compromises the long term, that has negative externalities over the long term. You need to make extremely clear that you will not consider that the objective achieved, even if based on a metric or a KPI, it has been achieved if it's been detrimental to the long term. Now, little parenthesis. If you just say that, people might not trust you. You need to make either an example... Either that has to be an example. For example, “that's what happened to John two years ago. He came with me with a huge contract and still I didn't give him any bonus because he obtained that contract lying to the client." Something like that. Or you make a thought experiment, like you make it a hypothetical. So you say, for example, "If you come to me with a great contract, but you obtain it lying to the client and that has negative externalities, you will not get your bonus for that", so that it's crystal clear. This is the first part.
Then the second part is, people will not believe you if you do not show with your actions that you truly believe it. Not only that, but the costlier are your actions, the more people believe you. So the question is, what are actions with which you can signal that you truly have a long-term focus? These shouldn't be cringe actions, or actions that are purely for virtue signaling, but they should have a true business value for them.
I don't know, off the top of my head, it could be something like investing in the education of your employees, even if you have a high turnover. That's a way of signaling we are here for the long term. Or things such as, whenever you have a meeting, you spend a bit of your precious time asking, " What are the long-term impacts of these actions?" And if they are negative, you say no, even if there is a short-term. Or it could be things such as commitments that some investments are held for at least some period, even if it would be more beneficial to sell them in a certain moment. It could be anything. But the idea is something which is costly, so it's not easy, but it's also not virtue signaling, it has real value. That really brings the point across to your people.
Jim O'Shaughnessy:
If I'm recalling it correctly, the book, The WEIRDest People in the World, talks about that extensively. Costly actions unify people to a degree. I think in the book they use martyrs in religion. You can't take a more costly action than to give up your life for something that you deeply believe in. Now, obviously we're not advocating anyone takes such a high cost signaling in business. But the other thing that you talk about was something that I learned from my grandfather. He called it premeditating, and you call it a pre-mortem, which is the more common term.
Let's talk a little bit about that, because what my grandfather taught me was A, writing is very important, writing is thinking, and to put your thoughts and ideas on paper engages a whole different creative process than just letting them splash about in your head. But one of the things that really helped me that he taught me was, you've got to do a decision tree that is, "Here's what I want, here's what happens in my life if I get what I want that's good." But then he also insisted that you do, "Here's what happens in my life if I get what I think I want that could be bad." Then he also has you do it for the other way, "Here's what happens that could be good if I don't achieve this thing that I think I want. And here's what happens that could be bad if I don't achieve this thing that I don't want."
I think it helps with some avoiding common mistakes like quitting too early. That's something that, I mean, everybody knows that when you interview somebody who's a great podcaster, one of the first things that you most often hear is, "Yeah, I recorded 400 podcasts before people even noticed who I was." Right? That is one of the most common things. People say, "Well yeah, I tried podcasting." "How many did you record?" "Uh, three." And when you look at the empirical data, it bears that out. Most people who want to take a hand at podcasting never even get to 20. So the people that you're looking at have done things very, very differently. The challenge there is that that also gets a lot of hindsight bias, a lot of survivorship bias, because you don't necessarily know just by looking at say, a Senra, who does The Founder's Podcast, you don't necessarily know what it took to get him there when you are just looking at what he's doing.
Another thing, and this is something you specifically point out, and a lot of people I know fall into this trap, and that is thinking that you're smarter than you actually are. I love to quote the philosopher, Jed McKenna, who says that, "Stopping being smart was the smartest thing I ever did." Talk to us a little bit more about ways that people can avoid the common mistakes. Another one you mentioned is insisting that you achieve this goal in just one specific way, and/or envying people for short-term successes, or big scores or whatever, that aren't reproducible. Give us a couple more ideas along those lines.
Luca Dellanna:
Yeah, I think the key is the last word you use is reproducible. I think that this is the key, because there are a lot of strategies which might work, but not necessarily. These are non-reproducible strategies. The problem is that if a hundred people use a non-reproducible strategy, maybe you have 10 of them which will succeed, and that might make you think that it's a reproducible strategy. But you are only one person, and so if you want to succeed, you cannot afford using a strategy which is non-producible. So the question is not only you need to think about finding a strategy which might lead to success, but once you have it, you might also do what you mentioned before, what your grandfather called premeditating, premeditating about all the ways in which you do your strategy and still you fail, and then you take action on all those possible things.
I make an example. I am an author, most authors, at least at the first book, they think, " If I write a great book, I will become a great author." And then they discover that writing a great book is necessary, but it's not sufficient. You also need to have a great audience, you need to have great distribution. Sometimes you need to stay there for some time, because people will not read the book the first time you put it in front of their face. You need many things.
So one way is that you become an author, you do a first book, you fail, you learn from it, you do a second book, you fail again, you learn, and eventually you succeed. Or the more efficient way is that you ask yourself, "Let's imagine I write a great book and still it's not a success. What could be the reason?" And then you think, "Ah, maybe because I don't have an audience." So you add this to your strategy. Now, let's imagine that I have an audience and I write a great book and still I'm not successful. What could be the reason? " Oh, maybe I need to find a great publisher." You keep building on that.
So the key is to learn from your failures and from the failures of others. You can also ask yourself, "What are other authors that wrote a great book and yet didn't become a successful author?" So you learn from your failures and you learn from the failures of others, but ideally before the failure happens, with this premeditating, or with this pre-mortem.
Jim O'Shaughnessy:
The author, Douglas Adams, who wrote Hitchhiker's Guide to the Universe, had a great quote, which is, "Human beings, who are seemingly are unique in their ability to learn from others, are also defined by their disinclination to do so." Why do you think that we have a problem from learning from the failures of other people and/or strategies? I myself think that that is some of the most rich material that you can analyze, because it also points out some of these other shortcomings.
For an example, in investment strategies, I gave an example of an investment strategy that had done remarkably well over a five-year period, and it was a single line strategy. Buy the 50 stocks with the greatest percentage gain in revenues, right? Then it's got a five-year period where it goes three times better than the market, it sounds reasonable. Yet when you elongate your study period, and you include a 45-year look at buying the strategy of the stocks with the best revenue gains, it does worse than T-Bills.
So that ability to be enticed by the short term, that's one of the things that I find when I'm talking to people about this, and I would love to hear the way you do it, is that we find it so inexorably intoxicating, and it seems to make sense. I recall Mikhail Gorbachev was once asked about a decision that he made that turned out to be bad, and he said to the questioner, "Your question doesn't really make sense, because it's abstract. I had to make decisions in the full-blooded and very emotional reality of the here and now." How do people get around that?
Luca Dellanna:
Well, first, let me answer the question of why it's difficult to learn from our mistakes and the mistakes of others. I make the example of driving. There was a survey made a few years ago in which 93% of American drivers said that they were better drivers than average, which is a statistical impossibility. Why though? The reason is because, if I drive too slow, I think that I'm a safe driver. If I drive too fast, I think that I am a good driver, because I'm able to drive fast. If I make an emergency braking, because I was driving too fast, I was putting myself in danger, and I make an emergency braking, and I don't have any accident, I think that I am very good at slowing down, at making emergency braking. So all possible mistakes, until it produces real pain, there is a possibility of seeing it as evidence that you are good at surviving, even though you're not. So this is one thing, one component. For me, the answer is to always see near misses as an evidence of an underlying problem. So this is part of the thing.
Then the other question which you mentioned is the problem of, we know things in theory, but then we need to get to make those decisions here and now in the emotion of the moment, like Gorbachev. I think that now it seems a bit idealistic, but one big step forward is to try to make the least amount of decisions in the here and now. For example, even if you're a president, which is a job which necessarily requires you to do a lot of emotional decisions and so on, you can always write before some guidelines, you can always war game a few scenarios. You can always pay someone to remind you of your guidelines.
I think I've heard, don't know if it's true or not, but I heard that in Switzerland there is a law for investors that they need to write down the motivations for buying a stock to one of their partners before they are allowed to buy. Which, if true, is a wonderful way to make sure that, even in an emotional moment, there is a limit to how emotional your decisions can be. So I think that you can start thinking about all of those systems.
Then anyway, I think that it just goes to understanding that making the wrong emotional decision will be one of the most common failure modes. Once you internalize that, and you truly internalize it, I think that it gets a little bit of shift in your decision making. Sadly, it's hard to internalize just theoretically, usually takes a real loss in life somewhere.
Jim O'Shaughnessy:
The survey of drivers in the United States, that replicates everywhere.
Luca Dellanna:
Yes.
Jim O'Shaughnessy:
And there's even a name for it, they call it the Lake Wobegon effect. The humorist, Garrison Keillor, who had a radio program on national public radio in the United States, always joked about Lake Wobegon, "Where all the children were above average and all the people were good-looking", which of course doesn't work that way. But also, sometimes I think it's a feature and not a bug in the human operating system. And by the way, it doesn't seem to be easy to educate it away. For example, when you look at PhDs in an elite university in a particular department, and you ask them, "What chance do you have to be the head of this department?" They fall into the exact same trap. "Well, I think I have a very, very good chance of becoming the next head of the department." Then when you ask them about a colleague who potentially has a much better CV, has a much better history of publishing impactful articles, "Oh no, no, no. No, they don't have this, this or this." It leads one to understand the idea of, it's very difficult for us to see our own flaws, and yet we seem to be pretty good at seeing the flaws in others. And it's led to a lot of maxims, like, "If you want to know what your own deficiencies are, simply look at what irritates you in other people and that's going to give you a pretty good example of what your own flaws are."
How do you get around that? The way I got around it in my asset management career was protocols and processes, and doing everything I could to avoid the emotional decision. Because one of the findings of looking at long periods in investing that I found, was that successful investors don't really comply with human nature, they defy it. And they defy it by looking and thinking historically, as opposed to what I read in the newspaper this morning. There's a whole host of things that they can do, but they're hard and they can really overwhelm even the most persistent person. What other ways would you advocate? Let's say I hired you in to be a consultant and I said, "Okay, with all these verticals at O'Shaughnessy Ventures, I want the film division to ultimately be making really positive, great films that inspire people. And in the publishing division, I want to only publish great books like yours." And you notice that we were publishing... Well, let's not make it obvious. Maybe we were doing a lot of short-term things that didn't get to those goals. Other than just pointing them out, what kind of process would you advise me to put in place so that everyone on the team is like, "Oh, okay, I get it. This is where he wants to go with this."?
Luca Dellanna:
Usually, I use a three step process. The first one, which really doesn't have to be long, it can really be just a few minutes, is to explain extremely clearly what your vision is and what will be the things you will not do, and the sacrifices that will be necessary to make that vision. Something like, "We aim to publish great movies, which means that sometimes we will have", I don't know... " Which means that we will have to be extremely selective with how we choose, and we are very willing to have, I don't know, months in which we don't publish something", for example. It's not necessarily the trade-off you want to make, but I mean, clarify what are the trade-offs you want to make, what will be some of the negative consequences of the focus you want to have, and make clear beforehand that you're willing to have those. That's the first point.
Then the second thing I find extremely, extremely effective, to make hypotheticals. That's the fastest way in which you can train someone on something which is not necessarily a process, like something which requires a bit of personal judgment and maybe a bit of agency, it's hypotheticals. Which means you sit half an hour, one hour with them, or with a group, and you go through scenarios. Which could be something along the line, for movies, for example, what I would do is we spend maybe half an hour together reviewing some submissions, and you explain to them your judgment, for example, what you like here, what you don't like here, and then you ask them with the next example to give their judgment, and then you comment on their judgment. "Good point, because you're missing this fact." Something like that.
Then you move to the next step, which is, you make them take decisions and you give them feedback on the decision. Usually, most companies, they do this in real life. Problem is that in real life, maybe takes two years to take a hundred decisions. You can shorten it in half a day if you make hypotheticals. So you can train faster. Why does it work? Since it's active training, it has a very strong emotional component that you do not get in classroom training. Since it's immediate feedback, it's also more stronger feedback. So that's feedback that is more likely to remain in the moment when some people have later to take emotional choice, rushed choices, when they're on their own, and so on.
Then the third thing which is important is, again, don't let months pass without feedback. Let's say that on Monday you did the hypothetical exercises, on Tuesday, maybe you let them half a day, and then at lunch break there is a little bit of debrief, and we check, "How did it go? Great job doing this and that decision. You forgot to practice this thing that we practiced yesterday." Something like that. Then you do it Tuesday evening, and then you do it on Wednesday evening, and then you do it on Friday evening, and then it starts to fade out. But the beginning has to be extremely, extremely tight. And that really works.
People, sometimes they tell me, "Luca, but that takes a lot of time." And I'm, "No, no, it takes a lot of time the first week, but then you save so much time. And then it's the other managers, who tried to save time the first week, and as a result, every month they need to spend time on it. And even worse, they don't get results, despite spending time all the time."
Jim O'Shaughnessy:
I love the idea of hypotheticals, it's something I do quite a bit when I'm thinking about things. One of the things that I've been doing increasingly is using AI to generate hypotheticals that I can then consider. I'm a big believer in what they call the centaur model of AI, which is human plus AI. In my opinion, people who just think, "Oh, AI is going to solve everything." I don't think so. I think it's a very, very useful tool that a human being can interact with and iterate with. And it also can, for example, one of the ideas that we had that illustrates this is, it's not part of our human nature to go and try to find a null set. A null set is, you have a hypothesis that you test, and then it proves that your hypothesis was incorrect. It's part of our human nature, because we want to get published, we want to have an innovative new discovery.
Arthur Kessler said once that, "The more profound a discovery, the more obvious it appears afterwards." And so that's in our nature. We fail to learn via negativia about all the things that didn't work. When we were at OSAM, O'Shaughnessy Asset Management, we had what we called a research graveyard. And it was all the things that we researched that didn't work, and it was extremely valuable.
And so, one of the ideas for AI that we have is just have an AI publish via negativia, come up with hypotheses that lead to null sets. Because humans don't want to do it, but the machine doesn't care. It can come up with some brilliant hypotheses that seem compelling, a little bit like my, "Hey, just buy the stocks with the biggest percentage gain in revenues and you're going to do really, really well." Well, you learn via negativia, that that's not true, but you also need time.
And I'm wondering how you would get people who don't really think about this strategically the way you do, in addition to the instant feedback, doing the week of intense training that leads to greater longer term results over time. What other ways could you help somebody who's trying to inspire that group of people, who may be more short-term oriented, maybe not thinking about it the right way, what other tricks of the trade, I guess I would ask you, would you use to help bring them along?
Luca Dellanna:
Yeah, so before I answer that, I just need to add a little clause, that everything I will say now, is absolutely my opinion, is absolutely not a substitute for what I mentioned before, so the hypothetical. And generally, most of the people who think that they need an additional tool, because the hypotheticals are not bringing results, usually it's because they're not doing the hypotheticals well enough, or they're not doing them tight enough in time, as I described, because it's really just so important. So that said, I think that some of the things you can do, one, if possible, is to bring people in conduct with people who already demonstrate the values or the thinking that you want them to have, and you watch them in action. I know this because I used to work for a few years for the consulting division of a large manufacturing company. And sometimes you had clients which were resistant to implement what we were suggesting to them, because they thought, "Yeah, sounds good, but maybe it's not really worth it," or "I don't believe that you can really, that you can..."
For example, we were suggesting people that are site managers, that they go, that they do a certain things, like on the operations floor, every week. And they were like, "There is no way that people really do it. You're just saying this." And so we would bring them half a day to a manufacturing site that our company owed, and immediately they would be changed.
Because the moment that you see someone that is actually doing it, you get it. Not only because you see the result, you see that the factor is working well, but also because you see that the person, because she's putting the very senior person, she's putting the time to do the things by the book. Or for example, to think in writing, the moment you see someone that thinks in writing, then you get it.
So for example, I can imagine that there would be a few leaders that are listening to this, and say like, "Oh, Jim says that he thinks a lot by writing, that he sees the value, but I wonder how he is? I wonder if he really does it." But I swear that if they come to see you one morning, and they see you that you actually do, it will click. The moment that they see someone as busy as Jim O’Shaughnessy taking some time to write, they will get it and they will do it.
So this would be one thing, putting them in contact, even just for an hour, with someone who's already practicing, and living the values, and the judgment, and the valuations you want them to do. They will get it. So this would be one thing I suggest.
And then if not, the other thing is to understand how anti fragility works. So I expect that most listeners, probably they know that term anti fragility, from Nassim Taleb's book. It's basically, what benefits from problems, what gets stronger from problems, from variation, from stresses, and so on is anti-fragile.
And the typical example is our muscles. If we go to the gym and we give problems to our muscles, for example, weights to lift, our muscles get stronger. However, and this is the key, there are some people which seem that they cannot go to the gym. Why? For example, that was the case for me many years ago.
I never really trained my muscles when I was 16, 17 years old. I had a few health issues. And it seemed to me, that if I go to the gym, I injure myself, like I will have a little bit of tendonitis, something like that. And it seems like everything is too much. Or I lift something which is too light to produce any results.
And we see these results at work. There are some people, that if you give them problems, they feel like they're demotivated, because every problem is either too trivial to bring any positive outcome, or too big and they lose motivation, and they don't even start working on it, and so on.
But the key, if you go back to the gym example, to the muscle example, it's obvious that there is a range of weights that is between those two groups, which is light enough so that it doesn't cause any injury, and it's significant enough so that I can grow my muscles.
So maybe I lift 10 kilos, I injure myself. I lift five kilos, it's not enough. But there is that seven weights, seven kilos weight, which produces some gain, and those gains make me stronger. And the same applies to students, to employees. They look demotivated because we are only giving them big problems or small problems. There is a task of the right size that they're willing to do. And if they produce significant outcomes, that can start the virtual circle of reinforcement.
So a lot of management, whether you are a personal coach at the gym, whether you are a teacher at the school, or whether you're a manager in the company, is finding that range that produces anti-fragile reaction. Not too small that it produces no reaction, not too big that it produces a fragile reaction, but the right range that it produces an anti-fragile reaction.
So going back to the example I gave, the idea is to find a task that is the right size so that your employees feel like they can do it, and they do it and it produces a positive outcome that you can reward without being fake, that you reward something trivial. And it starts a feedback of, I can do it, learning is good, putting effort is good, this thing leads to something, and so on.
Jim O'Shaughnessy:
So it's a bit like the Goldilocks solution, if you will. The, this one's too hot, this one's too cold, this one's just right. And then the earlier example you gave is to make the abstract concrete.
In other words, I heard Jim thinks by writing, that's abstract. People are like, "Yeah, I don't know so much." But then the minute you actually see that happening, that engages the emotions, makes it concrete for you. And then that locks in their understanding of that type of behavior.
Where does that leave big, what's the term that many people use, big hairy audacious goals? And I think for example of NASA landing Apollo 11 on the moon. So you could look at that one of two ways, right? You could look at it as, "Yeah, okay, so we landed it on the moon, big deal. It was a one-off." Well, it wasn't, there were subsequent landings. But it could lead people to say, "Well, that's just a waste of taxpayer money, and why aren't they spending that money on ameliorating the problems down here on earth?"
And you would then miss, of course, all of the innovations that came from that single, or series of events of landing on the moon. How do you calibrate it so that, using your example of getting them in that sweet spot, of you're becoming anti-fragile by doing something that's hard, but that you can in fact do? How do you get them to also take in that there are certain one-offs, like the moon landing, that are worthwhile because of all of the secondary and tertiary advancements that spring from it?
Luca Dellanna:
I think that one necessary thing is, again, this concept is sometimes abstract, and I will make it as concrete as possible. So for example, if you tell people just, "There are advancements," kind of abstract. If you tell them, "We invented this, this, and that," including this thing, which is for example, I don't know, maybe in the microwave that you used to cook breakfast this morning, that already brings the point much closer. So this is one thing.
And then you need to repeat and repeat the thinking, because you say it only once, people will forget. If I were, for example, I don't know, the President of the US, justifying NASA. Or the President of NASA, I will keep repeating that. Every single press conference I go, "We are doing this because of that, this is the tangible benefit for the population." And then you try again to bring it to timeframes which are compatible for the population. Like because of NASA, or SpaceX, or so on, they are place which gets people which are more ambitious than usual.
So you can give them cathedral type objectives. But when you talk to the general populations, and you need to justify the existence of NASA, the general population is like the second type of bricklayer. You need to give them, and explain what's the benefit that we will have in the short term, and the benefit that we get to you.
I have another example related to NASA, which is the story which I don't know if it's true, or if it's hypocritical, of President JF Kennedy, that goes to NASA and talks to the janitor. And he asked the janitor, "What's your job here?" And the janitor says, "I'm helping sending rockets to space." And I hated that example because it produced a set of CEOs, or leaders, which think that you need to, that that's the way in which you motivate everyone, by giving grandiose goals.
In real life, the janitors will not be motivated by the idea that they send the ship into space. They will be motivated if the people who use the toilet, they tell them, "Thank you for keeping the toilet… that's the cleanest toilet I've ever seen." So you need to bring it back to things which are relevant to the very specific audience that you're talking about.
So for example, it would be like, sure, thinking about going to the moon brings results, but if today we spend one day brainstorming ideas for the moon, what's the benefit that you will get from this today that will motivate?
Jim O'Shaughnessy:
What role does things like intuition play in being able to successfully play long-term games? And I bring that up because most of my history was essentially very empirical. I was very empirically driven. I wanted evidence for any particular thing I was going to do. I would gather that evidence by looking at super long periods of time, as much as I had access to.
And yet one of the things that I've noticed is that if you look at the same sort of pattern time and time again, again your repetition, what happens is you get a saturated or imbued intuition when you see that pattern again. How would you fit that into your framework for succeeding at long-term games?
Luca Dellanna:
Well, I think that in the book I mentioned this saying, that car brakes are not to go slow, but to enable driving fast. And I think that the same applies here, that you want to collect data, and to make critical research, but that doesn't mean that maybe there is not space on intuition. But the problem is that if you using intuition alone, you are at a high risk of a crash, because you might have a lot of blind spots. But once you have strategies to cover the blind spots, and to cover what can go wrong, then you free up space to use intuition.
Jim O'Shaughnessy:
So that also leads us into the idea of how can somebody pursuing these long-term games and goals increase their surface area of luck? That fascinates me.
Luca Dellanna:
I think that this is super important, and it's something that we definitely don't talk enough in society, I think. Like maybe there are some groups of Silicon Valley, and whatnot, that are more familiar, but it's completely absent from a huge part of society, this discussion. I think that it's extremely important, one to talk about it, and two, to give concrete examples, concrete stories, explain.
The problem is that it's so easy to do it superficial. You can say something like, ah, there's this entrepreneur that, I don't know, they increase their surface area. Or for example, I don't know, something like, you move to Silicon Valley, you increase your surface area because you can meet many more people. I think that if you stay so superficial, you get people who listen to you, they're nodding during the conversation, but then they go back to their normal lives and nothing really changed.
And I think that we need to go a bit deeper, which means going very concrete about what they actually did. So it's not just you go to Silicon Valley, because then the problem is also maybe you get people who go to Silicon Valley, and then they live their life as normal, and nothing really happened.
Then you also need to explain, you need to be able to like, you need to increase the surface area, but it was not sufficient. Because the surface area only increases the chance that an encounter happens, but then you also need to have the skills, so that when the encounter happens, you can get something out of it. So you need to have maybe a track record that you can give to the other people so that they trust you. You need to have an idea of what you can suggest to the other people, that we can do now or that they can recontact to you.
And so I think that it really pays to go in the concrete. I think you can have a 10 minutes conversation with someone about increasing the surface area, and you can spend your life having 10 minutes conversations and you will not change much. Or you can have a few 30 minutes conversations, where you go more concretely, and you will really, really change people.
Yeah, so for example, for listeners, the question is, really think about what are your goals? What needs to happen for your goals? Which people, for example, you need to meet. And then you ask yourself, how can increase the chances that I meet those people? And then, once I meet the person, how do I increase the chance that something happens out of it? You need to think about everything, not just what's necessary, but you need to have a set of actions which is sufficient.
Jim O'Shaughnessy:
The other part of human nature, it seems to me that I've had a challenge trying to get people to understand that changing their focus could change their future, is that I believe that uncertainty is where most of the alpha resides. And we have, as part of our human nature, just a real hatred of unpredictability. The idea of seeking out black swans is anathema to many people because they're very highly risk averse.
Because you do talk about risk a lot, and you should. In your book, for example, that you don't want to do hole in one strategies. You don't want to do things that have a very, very limited ability to pay off. But if they do pay off, it's like winning the lottery, right? Lottery strategies are a really, really bad idea. And many people tend to equate that with, well, that's very unpredictable, so that equals bad.
How do you deal with the idea of getting people to see a way toward... Well, for example, we often are limited by our own past. So I often use the example with that GE, the company, was in a position to immediately commercialize transistors. And they didn't do it. And they didn't do it because they had a long history of their vacuum tube division being the biggest revenue generator.
How do you get over those blind spots that something might appear, at least originally, like, oh, that's going to be costly, or that isn't going to work, that's not sustainable? And things like the internet, people said that about the internet, "That's crazy. It's not going to be, that's never going to catch on." They said it about PCs, smartphones, gene editing. Gene editing especially, super expensive to map the human genome. But now we're at a point after that had been done, to where the cost of having your own genome mapped is now pretty affordable and reachable by many, many people.
How do you get them to understand that balance, and seek out the black swan, even if every part of their being is like, why would I ever do that?
Luca Dellanna:
Yeah, I think that one thing to differentiate is the risk of this tactic versus the risk of the strategy. Certainly you mentioned lottery strategies, so playing the lottery can be a good tactic if you are guaranteed that within your timeframe in which you will play the lottery, you have a high chance of winning.
So let me make the example, entrepreneurship for example. Maybe if you do something that has a 5% chance of succeeding, but a hundred times payoff, is it a good bet or not? My answer is, it depends on how many times you can take that bet. If you can take that bet only once, you have a 95% chance of losing. Doesn't matter the payoff, you have a 95% chance of losing. If you can take that bet 20 times, you have a very high chances of succeeding eventually. So it becomes a very good bet.
So very often, we evaluate the risk based on the single time. So for example, let's say you publish a book, you decided to publish a book. Is it a good idea? Well, if you're going to write one book only, unless you are already successful and famous so that you can kind of guarantee success, probably it's a bad idea. But if you're willing to write five books, that's probably going to be a good idea, because the strategy of writing five books is going to be good.
And once you start thinking on this, you discover that a lot of things which look risky, they actually are much less risky. So I think that this is a very important shift to make.
Then the second thing is, as you said, we are bonded by our past in many ways. You mentioned some companies which missed some new technology, and part of it is what... like the classic innovator dilemma. You're missing because what you are doing is already so profitable.
But part of it it's also because success in an area makes you restrict your definition of what you do. So I make an example. If Facebook said, "We are a social website," they would've missed the transition to mobile. If Facebook says, "We are a way for people to connect online," then moving to mobile becomes almost a natural shift.
So the thing is, if you think about your career, if I think of myself, for example, I don't know, as a consultant who trains management, then I will miss a lot of things, maybe. If I think about myself as a consultant who helps companies get successful, I will miss fewer things. And I think that this is a very important component.
Jim O'Shaughnessy:
I love that distinction because the way that you are defining it for yourself provides your own guardrails, and I think that's an absolutely brilliant way of looking at it, especially with the Facebook example. The more you spend time defining a mission statement or a north star or what have you, that allows for the greatest flexibility. In your example, "We are a way of connecting people," does not preclude being on mobile, does not preclude all of the various permutations that they could take to form those networks of people.
So how would you practically get, let's say, again, you're working with a management team and you read their mission statements and what you see is exactly what you just gave as a bad example. Let's stick with GE. "We make vacuum tubes because we're the best at making vacuum tubes. And they're so profitable for us and we're going to continue to strive to make the absolute best vacuum tubes that the world has ever seen." How do you get them to reorient the idea and make it much more, "We empower technical innovation"? You're going to be better at this than me.
Luca Dellanna:
Yeah. So one thing is to make the mission statement as customer-focused as possible. So if you say like, "We make vacuum cleaner," you're focusing on yourself. I would make it on like how you help customers and you're going to get... And this by the way is not my idea. Like I've read it in Simon Sinek's book, which the title similar to mine. I didn't know about his existence. People started telling me after I published my book, and that was my main takeaway from his book was this idea of like broad mission statement. Then the other thing I will do is mission statement is only the first part. Every employee in your company needs to have a mission statement, which is not the mission statement of the company because, again, you cannot go to the janitor of GE and tell them, "You're making vacuum cleaners." You are telling him how he helps people, but then again, you want to have a broad focus. So maybe it's not going to be necessarily, "You clean the toilet," because if you tell him you clean the toilet, maybe he will not clean the office, I don't know, something that spills out of the toilet. But you want to be something like, "You help having the rest of our employees having a clean environment," or even better, "You don't focus on clean, you focus on like a conducive work environment."
Then you need to do this job for each single role in your company. It needs to be relevant to them.
Jim O'Shaughnessy:
What you mentioned is also one of the most common errors that I've certainly seen as I look at companies that execute successfully versus poorly and persuasion as well. If you focus on what you are getting out of it, that's generally not a good way to have a mission statement. It's not a good way to persuade people what your idea is, the vastly better idea. In other words, let's focus on what the customer gets out of it and that entirely changes your focus again.
So how would you go about... I'm going to ask you to do the impossible. You're setting up a new company and you are retained by the people who are backing that company and they say, "Luca, what we want you to do is build this in so that from day one before we hire anyone, this is going to be a company that is completely dedicated to long-term goals and being as anti-fragile as possible."
I know that this is very unfair of me, but just give me some examples of how you would proceed to do that for those people starting that company.
Luca Dellanna:
Yeah, one thing I would do is to tell them that you cannot do it in day one. You can do it in maybe day 14. So again, if you ask me to do it in day one, I will only come back with bad solution. Like now I don't know it's exactly 14, but like a reasonable timeframe.
The reason is because first thing, you need to hire a good CEO that is on board with the long-term focus, that has the skills not only to run the company, but also to drive those attitudes and those characteristics you want to have.
And you train him. So again, not maybe too long, et cetera, but you want to explain very clearly what you want to them. What is different from the usual job and what's the trade-offs you want? You are okay with him make, then you play some hypotheticals with them.
Then you move to the next step, which is " Okay, we hire a few other people at the next level." And then again, you train those people because those people, they will be the ones hiring next and you want to be training them before they hire, otherwise, you will get into some problem.
Now I've put it a bit magical. Probably there will be people hiring those people helping the CEO, et cetera. They need to be on board. So again, you need to train them, you need to make it clear what are the trade-offs and so on. So again, it cannot be like the worst mistake is to go into checklist syndrome, which is the idea I write a mission statement, done. Like you do it as an independent task. Okay, that's done, which is with purpose. Is self-contained? It's doing the task. No, the purpose is not self-contained. It's about how that changes the future. So hiring the CEO is not something that you do, "Okay, I hired the CEO, done." No, the question is I hired the CEO in a way that it makes everything else easier so you cannot take shortcuts that will make the next thing harder and then again.
Now I don't want to give the impression that it has to be a super structured and super slow process because you have the process, like you do it in day one, then you have the process, which done perfectly and so on. Maybe we do it in 30 days and then probably the sweet spot is about 14. So you don't necessarily do all the things all the time as if you wanted to achieve a hundred percent. You do a lot of Pareto prioritizing and so on. But I think that's still some of the principles have to be followed.
Jim O'Shaughnessy:
One of the things that I've noticed about especially younger enterprises is that the agility of the management team is quite important. And by that, I mean you can have everyone bought in on the goals, you can have everyone bought in on the mission, so to speak, but then how do you reward, because I think that's what you've got to do, them? And this gets back to the costly signaling. Do you just do that by costly signaling yourself that people need to be agile? Or is there some other method that you can, I guess, give permission to people within your organization? "Hey, we value your ability to say, 'Ooh, that changes a lot of things. We might have to pivot here.'"
It's kind of like David Deutsch talking about how science is always searching for better and better explanations, but how would you do that in the business setting?
Luca Dellanna:
Yeah, so this is very tricky because on one side, companies need agility, they need a higher operational cadence, they need to be able to go fast and all those things. However, there are also plenty of ways in which you can do it wrong so you need to balance those two things.
The long way to balance is you start with just agility and then at some point someone will take some, we go too much into agility, we take a shortcut they shouldn't have taken, and then you have a hard conversation with them. But that is a bit frustrating because you will be like, "Yeah, I get your point, but you are the one telling me that I should be agile. Why didn't you..." That's a bit frustrating. Then that's a bit limiting. A lot of times we have this conversation and then the person like overcompensate and lose his agility. You get lot of problems.
Again, what I'm a really big believer in is when you tell people that agility is a core value of your company, for example, you need to make three to five hypotheticals, which drive the point of the trade-offs that you're okay, what you're not okay, what's too much, what's too little? And you do this balance using a few examples. Once it's clear, like once you consider that a few, then not only the other person would be ready to and more likely to do as you do, as you wanted, but if they do something that you didn't want, the conversation will be so much more constructive because there was clarity before. The less things are clear, the more conversations are distracted. There is blaming, there is frustration, and the more things are clear before, the more the conversations will be constructive.
So I think it really pays to take, again, it doesn't seem agile to take 30 minutes to explain with a few example what really you mean by agility, but you do it once and you save a lot of problems down the way.
Jim O'Shaughnessy:
Interesting. You don't have to name any specific company, but is there a good example right now that you could give of an industry or a company, you can make it a hypothetical company if you want, that everyone is like, "Wow, they're killing it. They're just knocking the ball out of the park," that is actually basically the result of them playing short-term games and just getting really, really lucky?
Luca Dellanna:
Well, one example that comes to mind, and this is tricky, would be Tesla in the sense that Tesla has a very long-term vision, but lot of their operations, or at least their operations a few years ago, was relatively short term-based. It's quite complex because Tesla does very well some things long-term, like the plan and the fact that they understood that to get there, it won't be a straight line, but they need to get some building blocks and they focused on building. So I don't want to bring it only as a negative. So they did a lot of good things, but they also a lot of risks, which in my opinion were avoidable. And I really think that in 10 parallel worlds, we have five worlds in which Tesla is successful as it is now, and five worlds where something major happened earlier in Tesla history, and it went bankrupt or got acquired and so on.
Sometimes when people read about my book, they're saying, like "Luca, you are advising like take a bit less risk, but we need more people like Elon Musk." And I'm like, "Yes, we need more people like Elon Musk, and the reason why we don't have so many people like Elon Musk is because there are a lot of people who could become like Elon Musk and they're taking a little bit too much risk, or don't have enough long-term focus to get there."
So I'm not saying you shouldn't be like... like you should be the opposite of Elon Musk. I'm just saying like my ideal thing is Elon Musk with 10 more percent of his time spent on derisking a few key things.
Jim O'Shaughnessy:
That's a fascinating example, and Elon Musk is the perfect example almost, because I find that people take a very either/or, yes/no view of him. He seems to be, quite deliberately almost, getting the people who love Elon versus the people who hate him.
And I love your example because what you're saying is, "Yeah, great long-term goals. Yeah, we need more people like him." But the nuance here is, "Hey, if he had spent maybe 10 or 15% more of his time on these short-term risks," in your parallel world example where there are 10 Elon Musks and only five succeed with Tesla, "you might be able to push that up to eight succeeding with Tesla."
I love that example because it brings out something that I think we have lost a lot of in our more modern way of looking at things, which is nuance and the ability to say, "Yeah, no, it's not 100% this or that. What you've got to understand is they're probably to stick with Musk, he's probably at 90% of getting all of those tremendous things happening. But if he could just change these parts here," I love that because then you can increase the base rate in parallel worlds in which Elon succeeds.
Well, my producer always gives me the metaphorical hook on my phone, so I could talk to you forever about this stuff. I absolutely love the work you're doing, and I hope that many people buy your book. I loved it. I think it's very helpful for people who understand that longer term goals and methods to get them are probably going to be a lot more rewarding for them just in their life in general, not just in some specific career goal.
Well, as you might recall from your last visit to Infinite Loops, we are going to wave a magic wand, and we are going to make you the emperor of the world. You can't kill anyone, Luca, you can't put anyone in a reeducation camp, but you can speak two things into a magical microphone that will incept the entire population of the world. Whenever their next morning is, they're going to wake up and they're going to think, "I've just had two of the greatest ideas of the world, and unlike all the other times I'm going to actually start acting on these today," what two things are you going to incept in the world's population?
Luca Dellanna:
Yeah, the first one... This time I can answer faster than last time because I knew that the question was coming.
So this time one would be long-term thinking, so a lot of what we've talked about, but simply the idea of start doing things which take a bit of time to get results. Because there are so many people who are stuck because they only do things that bring results within a maximum of one week and they would benefit from taking long-term action. I'm not talking about 20 years. I'm talking even three months. Because, for example, going to the gym, you need three months to see results. It's not too long, but if you only do things that bring results one week, you will not do it. Learning a skill, you can learn a good quantity of each skill.
I know people, for example, like in my 20s, I had quite a few friends who had problems dating because they would spend every evening going out to the bar or so on, instead of taking one month off from the bar to work on themselves. If they took one month off, went a bit to the gym, bought a bit more clothes, learn a few social skills, and then went back to the bars, their success rate would elevate. But we keep thinking that we get the most out of the year by getting the most out of every day and really meet ourselves. So this will be the number one thing.
Then the second thing, well, it would still be the concept of opportunity cost, which I mentioned the last time, and if we want to say something new, the idea that thinking about the risk doesn't make you go slow, but it enables you to go fast. And you do not need to bring the risk to zero. You just need to take out the five biggest risks and bring them down 80% of the five biggest risks that you have. That probably takes a few hours and it has a dramatic impact.
Jim O'Shaughnessy:
Perfect. I think both of those are excellent recommendations. I loved your book. I highly recommend that all my listeners and viewers pick up a copy. Luca, thank you so much for coming back on Infinite Loops.
Luca Dellanna:
Thank you, Jim. It was such a pleasure.