Author: Karthik Suresh

How you look at a situation usually defines how you analyze it and the kinds of solutions you come up with as a result.

The problem is that quite often it is only after you have spent some time on the analysis that you find out that the way you were looking at the situation in the first place was wrong.

The maxim “Invert, always invert” was a favourite of the German mathematician Jacobi who believed you could solve many hard problems by thinking about them upside down.

Take a famous example from Edward de Bono about the problems of pollution. Factories along a river were taking in water, using it and putting their polluted water back into the river. The last factory received the most polluted water.

The question asked was how to ensure that factories cleaned their water first before putting it into the river. Did it need a legislative solution? A technical one?

de Bono’s simple idea was to invert the input and output and require all factories on the river to have their water intake pipe downstream of their output. This means that they would be the first to suffer from their own pollution and give them a strong incentive to clean up.

Charlie Munger, the Vice-Chairman of Berkshire Hathaway, has talked about the importance of inversion in making investment decisions.

The secret to being smart, he says, is to avoid doing dumb things.

If you avoid doing dumb things for long enough, like taking drugs and racing trains to the crossing, then eventually the decisions you do take will result in good outcomes, and you will look smart as a result.

Inversion, or upside down thinking, can be applied to many situations in life and business.

If you have a goal you want to reach, thinking about the things that will stop you achieving that goal can help you take the right decisions on what to do and what not to do.

If you are facing a business challenge, re-stating the problem may create new approaches that you hadn’t thought of before.

For example, if your car park is too full, you might consider how to increase its capacity – and that leads to solutions like buying more space, expanding and investing more money.

Instead, asking how you can reduce the number of cars in the car park may result in different solutions – encourage car sharing, moving to other locations or encouraging home working, getting to the same point but with less investment.

In investing, after you have come up with all the reasons why you should buy something, it is a good idea to list out the reasons why it is a bad idea to buy it as well.

Looking at things the wrong way round, or upside down, can expand the way in which we think about problems and create a richer set of solutions for us to pick from – increasing our chances of making good decisions time after time.

You know the old saying – if you want to get something done, give it to a busy person.

But what if you are that busy person, how are things working out for you?

John Cutler takes an interesting approach to this issue, using the word “promise” instead of action to describe what we commit to doing every day.

You probably take down lots of actions every day. Even a few a day quickly mounts up. In a year, you might commit to 600-900 action items.

Even if you get 20% of them done, that still leaves hundreds left incomplete at the end of the year.

This is the problem with productivity systems such as David Allen’s Getting Things Done. You could collect everything that has your attention and get it onto a list and out of your mind. But very quickly, the overhead of collecting and listing and processing can get overwhelming.

When the difficulty of managing the list outweighs the benefit of having it, you have two options. Either abandon the system or get very tired.

This isn’t how things were meant to be.

John Maynard Keynes, writing in 1930, imagined a future where technology would be so advanced that people would have little to do. They might work just because they wanted to, and surely no one would want to work more than three hours a day – and so he projected a 15 hour work week for most of us.

Instead, we now work longer hours than ever. Why is this?

There are two reasons.

First, some jobs don’t pay enough to live. Some people are trapped in low wage jobs where they are paid by the hour and so they have to put in the hours to get enough to get by.

The second is that some jobs pay too much. For many people, being paid a lot per hour makes it hard to give up that hour of work and the associated money that comes with it.

For example, you could perhaps work two days less and live comfortably. If the lost day’s pay is high enough, however, you might be reluctant to lose it and so the amount of money creates a real disincentive to working less.

Going back to John Cutler, one way to manage life better is to be more choosy about the promises you agree to. Make less. Keep more.

A more radical solution is Rutger Bregman’s proposal to give everyone a minimum basic income and change the rules to a 15 hour working week and open borders and let anyone move anywhere.

You may instinctively shy away from such ideas, especially the part about open borders. But many people, including Elon Musk, support initiatives like a minimum basic income and it is being trialled in places.

The thing to notice is that the way we live and what we do is results from choices we make as individuals and societies.

You can choose what to get done.

Did you know that the chances of your company still being successful in 50 years is probably just 10 to 15%?

Just over 12% of companies that made up the Fortune 500 list of America’s largest corporatations in 1955 were still around in 2014.

A staggering 88% had failed, merged or fallen from fortune, without enough revenue to be listed.

This is the impact of the “success trap” that lies in wait for strong and profitable companies that dominate their markets, like dinosaurs lumbering towards a tar pit.

Bill Gates once said that “Success is a lousy teacher. It seduces smart people into thinking they can’t lose”.

And from Robert Kiyosaki, “The biggest trap, the biggest dungeon in life is isn’t laziness or bad luck, it’s comfort.”

Great companies got there by doing something different. Ford Motors is named after a man who changed the entire structure of transportation using new techniques of mass production and creating a practical affordable car for the masses.

He didn’t get there by listening to his customers. If you had asked them what they wanted, they would probably have said “a faster horse”.

By creating something completely different in the mass-produced car and making it possible for many people to afford it, Ford sounded the death knell for horse-drawn carriages, stagecoaches and buggies.

Yet now, a hundred years later (the Model T came out in 1908), an upstart electric car manufacturer that should not need naming is valued at more than the venerable automaker.

The main problem is that successful companies got there by being good at doing something new. So, they focus and improve those aspects of their business until it becomes business as usual.

They are also under pressure to deliver results, so they focus on the decisions that will produce immediate and visible returns.

In doing so, they forget that what made them successful were the innovative things they did in the past. If they stop innovating, then someone else will come along and do that instead.

When that happens, the market changes around the company, even though it still looks like it’s doing just fine. But eventually, things have changed so much that the company just becomes irrelevant.

So, how do you deal with the success trap?

First, if you are already in it and want to get out, you have a job ahead of you. You need to transform your company, cutting costs and pruning back heavily to the core of your capability. Then you need to invest in the future, innovating and exploring.

It’s not easy, but you can do it. Lego went from being a moribund toy producer in 2003 to taking significant portions of parents’ disposable incomes with its product launches such as Ninjago and tie ups with film franchises such as the Avengers.

To avoid the trap altogether, you may want to reflect on the title of a book written by Andy Grove, a former CEO of Intel, called Only The Paranoid Survive.

The way in which modern society is organized tends to drive people and organizations towards specialization.

Our economic system is based on the idea of division of labour. Virtually all the products we use are the result of myriad activities carried out in different parts of the world by different people.

Very few things are made by people completely in isolation from everyone else.

Mathematically, it is more effective to split up work between two parties, even if one of the parties can do everything better than the other.

So, surely specialization is the obvious and good thing to do?

But there are problems with specialization. Charles Roxburgh in this McKinsey article on scenario planning, writes about what he calls the “sabre-toothed tiger” problem.

A sabre-toothed tiger evolved to catch large land animals, able to sink its fangs into creatures like pre-historic horses.

As the climate changed around 12,300 years ago, however, the megafauna of the Americas died out and the sabre-toothed tiger became extinct, its specialist jaws unable to catch the smaller creatures that survived.

Sharks, on the other hand, have been around for over 400 million years and are virtually perfect predators.

Roxburgh argues that the shark evolved to be a generalist killing machine and therefore survived.

So does that mean you should be a generalist?

Specialization in itself is not a bad thing – the challenge is adapting when the environment that fostered that specialization changes.

If you are trained to do one thing well, and that thing you do is no longer needed, then you have a big problem.

You may run a company like Nokia, with a near monopoly on the supply of phones with keypads and what seems to be an impregnable market position.

Then along comes Apple with the iPhone and within a decade, keypads have disappeared, and with them Nokia’s market share.

It may be that the question in the title itself is flawed.

Maybe it’s not about choosing between being specialist or generalist.

It’s about choosing whether to be adaptable or rigid.

One approach will help you evolve with the environment and survive.

The other will leave you behind.

How do you know when to keep going on a project and when to quit?

You may have spent years and invested large sums on a particular strategy. Can you just walk away or should you just try for a little longer?

One approach put forward by Chase Jarvis, the CEO of Creative Live, is to ask yourself two questions.

1. Is it working?
2. Do you still believe in it / does it bring you joy?

The first question seems relatively easy to answer – it should be possible to measure it in many cases.

For example, are prospects interested, are you able to get appointents, are sales growing, are you reducing costs, have you started to do something quicker or is your team happier with the changes you have put in place?

The second question is a little more fuzzy – what does it mean to believe in something?

Soon after Jack Welch became the CEO of General Electric (GE), one of the largest companies in the world (with a history back to Edison, the inventor of the lighbulb), he decided that each of GE’s businesses would either rank number 1 or number 2 in its global market or they would exit it.

Five years later, GE was a more focused group and remains a global powerhouse of a company now.

Could this be stretched to mean that Jack Welch decided to stick with businesses he belived in?

What about hiring? Some top consultancies have policies where they routinely invite the people that rank in the bottom 10% of their performance assessments to leave.

Does this mean that they stick with the people they believe in?

Some might argue that this is a actually an absence of belief – these companies are getting rid of the ones they don’t believe in rather than keeping those they do.

Regardless of the exact meaning you ascribe to the second question, if the answer to both is no, then you should probably quit. And soon.

If the answer to both is yes, then you should probably increase your commitment, double down in betting terms, and put more effort into the project.

When you have a mixed yes/no set of responses, you need to consider things a little more carefully.

If you believe in something but it isn’t working, you need to figure out whether you’re right and everyone else is wrong, or whether the market is right and your approach is flawed.

This is a hard place to be, especially if you are personally invested in an idea.

This is often when you need to “pivot”, the term adopted by Silicon Valley to mean a change of strategy and direction.

Sometimes, pivoting is essential to succeeding. For example, did you know that You Tube was originally a dating site, Nokia was a paper maker and Nintendo made playing cards?

Then finally there is possibly the hardest quadrant, one where things are working but you don’t believe in it.

That is a time for questioning.

If you operate in an environment that is unethical, where you have forms of corruption or where you need to compromise your principles in order to make money, do you carry on because the returns are so good?

Or, in a less malign setting, what if the principles that underpinned your original entry into the project are no longer valid?

It seems like the most powerful use of this framework is when it helps you choose what to retain rather than what to discard.

It may not be easy, but you would think that doing more of what works and what you believe in is the way to maximise your chances of eventual success.

Conversely, changing direction or quitting may be essential before you can move forward once again.