Get The Basics Right

Skip the esoteric stuff. Good decisions come from good fundamentals.

I’ve been a journalist observing organizations and societies for almost 30 years and I’ve been writing about psychology and decision-making for something like half that time. And I’ve noticed that, increasingly, my thoughts about how to improve decisions are boring.

Get the basics right. Consistently. That’s what I keep coming back to. See what I mean about boring? It’s painful.

But dammit this is what I see over and over again. Get the basics right, consistently, and you will roll in clover. Look at Warren Buffett and Charlie Munger. As value investors, they’ve ignored a long list of dazzling theories and complex techniques that came and went over the many decades of their long careers. They just got the basics right. Consistently. For all those decades.

It works the other way, too. Fail to get the basics right and nothing else matters. You’re screwed.

Name a big bloody mess and there’s a good chance that the root of the disaster is a failure to get the basics right. Remember the conclusion of the long investigation of the 9/11 commission? “A failure of imagination.” That’s pretty basic.

Now we have another illustration — a little story that should have received a lot more attention than it did.

“On January 6, 2021,” begins a Senate report released at the end of June, “rioters attacked the U.S. Capitol in an unprecedented effort to disrupt the certification of the 2020 presidential election and our nation’s long history of peaceful transitions of power.” Why did law enforcement fail to stop it? And if they couldn’t prevent it entirely, why were they so badly prepared to deal with it?

It wasn’t for lack of intelligence, the report noted. Law enforcement had heaps of intel. Many sources warned the FBI and other agencies directly. Even if they hadn’t, law enforcement would have heard all about various plans to bring guns and other weapons, to establish depots, and provide direction because the rioters talked about it all on social media. They couldn’t have been more explicit. There was so much open talk that reporters wrote lengthy stories about it in major newspapers. Far from a putsch planned by whispering figures in secret drawing rooms, the January 6th attack was, as the report’s title put it, Planned In Plain Sight.

Imagine that a week before the attack on Pearl Harbor American newspapers had run a “Japanese Plan To Attack Pearl Harbor” headline — and the Navy had still been caught by surprise. That’s how bad the failure on January 6th was.

The Senate report pins the blame squarely on the FBI. The agency “failed to seriously consider the possibility that threatened actions would actually be carried out…"

But the report doesn’t really delve into the obvious next question: Why not?

I think a big part of the answer can, nonetheless, be gleaned from the report itself. And it is depressingly simple.

The attack was, as the report noted, “unprecedented.” Nothing remotely like it had ever happened, not even in the lead-up to the Civil War.

If you’ve taken Psych 101, or read Daniel Kahneman’s Thinking Fast and Slow, or even just listened to the occasional podcast about the psychology of decision-making, you have heard of “the availability heuristic.” It’s a simple rule of thumb we use intuitively — quick and easy, no conscious thought required — to judge probability.

How likely is this bad thing to happen? You’ll try to think of an example of it happening. If one leaps instantly to mind, meaning it’s highly “available,” the thing will feel highly likely. If you struggle to think of an example, the thing will feel unllikely. And if you struggle and come up with nothing, well, that thing is unprecedented. It has never happened. Which strongly suggests it won’t happen. Or so it will feel.

Now, let’s say you’re an FBI intelligence analyst. You have a growing number of reports that suggest an attack on the Capitol is possible on January 6th. How bad is the threat?

You realize immediately that the purported threat is something that has never happened before. To a bad intelligence analyst, that’s a reason to belittle or even dismiss it.

A good intelligence analyst, however, understands Psych 101 and is careful to apply it to his or her own mental states. Here, Psych 101 says people are likely to unreasonably belittle or dismiss unprecedented events. Which means your own feelings are likely skewed. Conclusion? Be on guard for this bias and push back hard in the opposite direction. Ramp up your skepticism. Doubt yourself. Ask more probing questions. Maybe even set up a “red team” whose job is to poke holes in the dominant view and prove that the threat is real.

This is all standard advice based on simple psychology. You know the “basics” I referred to above? This is a chunk of it.

And it sure looks like the FBI got it badly wrong. The intel accumulated but the agency kept dismissing it, item by item. Bayesian updating — “how much should this new bit of evidence move the needle?” — is another of the basics of good decision-making. The FBI seems to have done precious little of it. Analysts apparently started with the belief that an attack on the Capitol was preposterous and they didn’t budge until the attack happened.

More evidence? As the Senate report notes, the FBI was concerned with the possibility of violence on January 6th, just not an attack on the Capitol: The FBI worried that the pro-Trump protest would draw counter-protestors and the two camps would clash. The reason for the fear was recent experience. These sorts of clashes had happened repeatedly at protests since 2020. Run that through the availability heuristic and you get “this will happen again. Obviously.”

As a result, the report notes, the FBI’s focus was on “potential clashes between protestors (eg, the Proud Boys) and counter-protestors (eg, Antifa) based on its experience with previous demonstrations, at the expense of focusing more attention and reporting on the growing threat to elected officials and the Capitol itself.”

The mistake here couldn’t be more basic. There’s even a hoary old saying that expresses it perfectly: “Generals are always prepared to fight the last war.”

It’s the basics, people. Focus on the basics.

If I’m right, you may ask, why don’t we hear that message more often? I suspect it’s because it’s not in anyone’s interest to say it.

Consultants pay for their Porsches by insisting that the key to good decisions is arcane knowledge they possess and you may hire for a price. Researchers aren’t interested in the basics, either. Almost by definition, they are focussed on the margins of knowledge. It’s not even in the interests of writers like me because “focus on the basics” is so painfully boring. It’s the equivalent of “eat your broccoli and get some exercise” — excellent advice that will never sell books.

And yet, it’s true.

Focus on the basics. Eat your broccoli. Get some exercise.

You’re welcome.

BONUS TRACKS

How Was The Fishing? Don’t Ask

A couple of weeks ago I said I’d be off for a work trip too fun to be called work.

So, you may ask, how’d that go?

Not so great.

Ah, well. C’est la guerre. The caravan keeps rolling.

Farewell, Florida

A while ago, I wrote a piece about how randomness is often a potential explanation for events but we routinely fail to even consider it. Nowhere is that more true than in sports. I used the play-off run of the Florida Panthers — which started when they narrowly beat the seemingly invincible Boston Bruins — to illustrate.

I wrote that before the final round, in which Florida played the Las Vegas Golden Knights. And guess what happened? Florida collapsed. Vegas beat them easily.

Which is hard to square with the various explanations sports writers were offering for Florida’s success. But it is precisely what we might expect if Florida simply got lucky.

I’m not gloating, sports writers. I’m saying you need to start thinking about, and saying, the “R” word.

American Debt

Imagine you knew nothing whatsoever about the United States. Then you saw this chart.

What would you conclude?

Well, World War Two was bad for debt. No doubt about it.

But the real turning point was 1981. There’s no mistaking that. It was all down or flat until then. Then it’s all up, save for brief periods.

No imagine you — for the first time — listen to American politicians talking about American debt. What do you hear? One of two themes. It’s not a problem. Or, it’s a huge problem and rampant program spending (“program” often being preceded by “socialist”) is to blame.

What you almost never hear is anything about 1981. And why it’s the hinge point.

So what happened in 1981? Well, Francois Mitterrand became the first Socialist president of France. But that seems a touch unrelated. And Post-it notes were introduced. That’s a bit of a stretch, too.

Anything else? Oh. Yeah.

Now, one last chart:

Nobody’s Fool

Even if you don’t know the names of psychologists Daniel Simons and Christopher Chabris, you know their invisible gorilla.

In a 1999 paper, Simons and Chabris reported on an experiment in which observers were asked to watch a video in which people wearing white or black t-shirts passed a basketball back and forth. Observers were asked to count how many times people wearing white shirts passed the ball. Mid-way through the ball-passing, a person dressed in a gorilla suit walks through the group, pauses to beat his or her chest, and carries on. Simons and Chabris found a startling number of observers were so focussed on counting they literally didn’t see the gorilla. This famous experiment became the basis for a subsequent best-seller, The Invisible Gorilla.

Simons and Chabris have just released a new book called Nobody’s Fool that looks at how scammers and charlatans use basic psychological processes to sucker their victims. I haven’t read it yet because — big sigh — have a must-read-immediately stack of books taller than I am. But Simons and Chabris are a safe bet. And given the proliferation of manipulation empowered by social media, which threatens to go exponential with AI, Nobody’s Fool sounds like timely preventive medicine.

It’s Not Even Past

The British Empire has no official date of death but whatever moment we might select to put on the tombstone — from the handover of Hong Kong to the decolonization of Africa to the independence of India — it expired long ago. And yet.

“The past is never dead,” as William Faulkner wrote. “It’s not even past.” In a thousand ways, ranging from the blatant to the invisible, institutions long returned to dust continue to shape thoughts and deeds.

Take the United Kingdom, Canada, Australia, and New Zealand. Someone who doesn’t live in those countries, and knew nothing about them, and looked at them only as they are today, might imagine that they have little or nothing in common aside from a shared language. And yet, the same person is head of state in each. They cooperate closely in countless ways, including in such tough-minded, unsentimental matters as national security: Together with the United States, they are the members of the closely guarded “Five Eyes” intelligence alliance.

Observed strictly from the present, that’s bizarre. But consider history and the penny drops. A century ago, the UK was the mother country and Canada, Australia, and New Zealand were the “white dominions.” India may have been the jewel in the crown but these semi-independent countries, following the British lead in foreign affairs, were the pillars of the empire. They saw themselves as close family. The empire may be gone, leaving only its Commonwealth shadow. Conscious memory of what once has faded. But familial ties linger in the collective subconscious.

Perhaps inevitably, proposals to revive and build on these old relationships surface every now and then. A new Canadian entry to this genre, with a foreword by the British historian Andrew Roberts, is The Enduring Crown Commonwealth, by Michael J. Smith and Stephen Klimczuk-Massion. I haven’t read it yet but it looks promising. “This book evocatively tells the whole story of where we are, what’s possible for the future, and not least how we got here. In today’s age of global instability and raw power politics, this renewed Anglosphere Crown Commonwealth alliance is more important and relevant than ever.”

The clever sorts who typically handle international relations usually smile and roll their eyes at suggestions like this. It reeks of gin and tonics at the club. But both the realists who care only for calculations of national interest and the liberal internationalists who promote values both miss something. History as deep and profound as that shared by the UK, Canada, Australia, and New Zealand inescapably continues to influence perceptions of self-interest and values.

Because the past isn’t even past.

What The Neighbour Saw

As longtime readers know, I’ve always found old people fascinating. (Although they grow increasingly less interesting as one ages. I dread to imagine the old folks home filled with Gen Xers muttering half-remembered lines from The Simpsons.) And I love stories like this one, from The New York Times, about a woman who discovers her elderly neighbour is a treasure-trove of stories from vanished worlds.