Monthly Archives: September 2020

FAILING WELL CAN BE THE KEY TO SUCCESS

You’ve probably heard the story of what’s arguably the biggest movie disaster of all time.  The script required a massive set built in the middle of an even more massive body of water, even though water is both difficult and dangerous to work with—if you’ve ever had a bathroom flood, you can imagine what thousands of gallons can do to a set.

The budget marched rapidly north of $200 million, which in the mid-1990s made it the most expensive picture ever made.  The sheer scale of the project attracted guffaws and predictions of doom from the gleeful press.  To top it off, the picture was plagued by production delays and a postponed release date.

The film finally debuted four months late, in Tokyo, to a reception that the New York Times described as “tepid,” “muted,” and “subdued.”  By that time, the studio heads had privately started saying things like, “If we can just break even…”  The director himself admitted—well after the release—that he “labored on” for the last six months “in the absolute knowledge that the studio would lose $100 million.  It was a certainty.”

Journalists and movie buffs across America had by then already spent months wallowing in schadenfreude.  How could anyone have thought this was a good idea?  Which just goes to show why so few journalists end up making millions in Hollywood.

Titanic went on to become the top-grossing picture of all time—at least until its director, James Cameron, went on to make the even more successful Avatar.  Perhaps you were expecting me to name Waterworld, the Kevin Costner extravaganza that cost almost as much as Titanic, and grossed just $85 million before an ignominious close.  That’s certainly what many people wee expecting when Titanic hit movie screens in 1997.  The 1995 Waterworld debacle was still a fresh memory when Titanic debuted, and the parallels must have chilled even James Cameron.

All of which illustrates William Goldman’s famous observation about Hollywood: no one knows anything.  Until you put a movie into a theater, there’s no way to tell for sure what’s going to happen.

But there’s something else our exercise illustrates even more compellingly.  It’s easy to believe, especially in hindsight, that you can reason your way to a good prediction.  I fooled you a bit by telling you that it was arguably the greatest movie disaster of all time, rather than the greatest disaster movie.  But the reason I was able to get away with this is the that the line between the two is much thinner than we realize.

We like to think that there’s a plan—that failure comes when you do not prepare.  But if you actually look at the marketplace, that’s not what you see.  Let me tell you about a product that was really well planned.

Once up on a time, an old soft drink company was being threatened by a hot, young competitor.  The Coca-Cola company was frightened that customers had begun taking the “Pepsi Challenge” and seemed to prefer the taste.  So Coke started a top-secret project to develop a replacement.  These men weren’t stupid: they knew that this was risky.  And so they went out and commissioned the biggest market research study in history.  Even before they had finished developing the new project, teams were criss-crossing the country conducting surveys, assembling focus groups, and offering free samples to determine how people might feel about the change.  It turned out people loved it.

The company decided to repeat the process, commissioning the biggest market research study in history again.  The results showed that while a minority of customers were resistant, the overwhelming majority couldn’t wait to get their hands on this new creation.

Once it hit store shelves, however, New Coke lasted less than three months and nearly took the company down with it.  What happened?  The problem was that the executives at Coke didn’t understand the limits of their experiments.  The question they thought they were asking was “If we replace Coca-Cola with this new soda, will you buy more of it?”  But the only question their test could answer was “Which of these small samples would you prefer to drink, if I gave it to you for free?”  That’s not even clos to the same question, but it’s the best they could do.  In short, there is ultimately no way to know whether something works until you put it out there and see how your target audience reacts.

The universe is an inherently uncertain place.  We tend to think that we can somehow engineer failure out of the system, but we can’t.  It strikes me when I read stories about entrepreneurship that they all tend to follow the same narrative:  Genius inventor comes up with brilliant idea and is now standing, arms crossed, on the cover of a business magazine.,  But when you actually talk to entrepreneurs, that’s not the impression you get.  They are basically like baseball players.  A great batter fails to hit the ball 7 out of 10 times.  If you take a group of people who want to start a successful business—let’s say they all have solid business plans, good venture capital support, and won’t run into imminent cash crisis—those people will succeed only 3 times out of 10.  Most entrepreneurs fail.

Not long ago, a guy named Peter Skillman, who was head of user experience for Palm, assembled a variety of groups—from American students to Taiwanese telecom engineers—and gave them each 20 pieces of spaghetti, a meter of tape, a marshmallow, and a piece of string.  The teams had 18 minutes to create the tallest freestanding structure that would support a marshmallow.

Unsurprisingly, the engineers did very well.  MBA students finished dead last because apparently they spent too much time arguing about who was going to be in charge of the spaghetti.  Lawyers didn’t do well either.

The most successful group, however, was kindergartners.  How did they beat the engineers?  By the simple process of experimentation and iteration.  They didn’t follow rules: the kindergartners were the only group to ask for more spaghetti.  And because they had more spaghetti, they just dove in and started creating.  They ruthlessly called out what didn’t work and discarded it.  With that process—what Silicon Valley calls “failing fast”—these five-year-olds ended up with structures that were on average a full inch taller than what the engineers had achieved.

This is how evolution works, it’s how the economy works, and frankly it’s how most learning works.  If you think about tennis, nobody learns how to play by developing an elaborate theory of tennis ball physics.  You learn first by hitting the ball and watching it go into the opposite direction you had hoped.  Over time, you begin to hit it in the right direction and your brain learns through repetition of those rare events.

When you talk to Europeans who have done business in America, and vice versa, they tell you the same thing: a European executive who works for a company that has failed is an executive who no longer has a career.  In America, by contrast, the assumption is that in your failure, you’ve learned a lot of valuable lessons on somebody else’s dime.

In the business world, we are very good at recognizing the fact that failure holds an enormous amount of critical information.  We are not so good at recognizing this in the prison system.  In fact, the United States is much worse than any other country in the world, having essentially wrecked the lives of two million young men by making them unemployable.  Most of the people in prison have done things they shouldn’t have done.  But it’s a phenomenal waste—both for them and for society—that we’ve thrown away all of that human capital.

In a certain sense, the genius of America’s economic system is that it is so forgiving.  The United States is far and away the bankruptcy capital of the world.  Most of us don’t realize how uniquely generous it is.  But it’s a system that fosters innovation and risk taking, encourages entrepreneurship, and helps folks who make mistakes, even bad ones, get back on their feet.  Everywhere else, bankruptcy is a stigma, an enduring disgrace, a permanent stain.  Here it’s just as likely to be the doorway to a business empire.  By wiping old debt off the books, we help the economy by speeding up the redeployment of capital—both human and financial.

For small-time entrepreneurs, easier personal bankruptcy mitigates the considerable risks of starting a business.  But that’s not the only way easier bankruptcy laws encourage entrepreneurship.  Taking entrepreneurial talent and strapping it to old debt is an enormous waste of a scarce resource.  By freeing people from the sunk costs of their failed business, we free them up to try again.

You might say that all this is worth it if we’re punishing the profligate—keeping people from running up bills they can’t pay on foolhardy ventures.  And it’s true: making bankruptcy more difficult probably does prevent some of that.  But the price tag of easier bankruptcy is surprisingly cheap.

The pain from failure should be short, it should be sharp, and it should incentivize us to overcome without tearing us away from the social fabric of society.  It’s not enough to encourage people to fail.  It matters as much, maybe more, what we do next.  How easy do we make it to recover?

Failing well means learning to identify mistakes early.  It means learning to understand those mistakes so they can be corrected.  Most of all, it means overcoming our natural instincts to blame someone whenever something goes wrong.  Societies and people fail best when they err on the side of forgiveness.

America spent several centuries being really good at failure, and somewhere along the way we built the biggest, riches country in the world.  We did it mostly because we were willing to risk more, and forgive more easily, than most other countries in the world.  We lend more freely and let debtors off the hook; we regulate more lightly and rely on a hit-and-miss liability system instead.  These things are often painted as weaknesses, but in fact they are great strengths.  They are the sign of a country more invested in the future than the past.

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ANTI-ZIONISM IS RACISM

Anti-Semitic attacks that kill Jews in a synagogue are fundamentally no different than attacks on Zionism—Israel’s right to exist.  They’re both racist acts of hate.

Anti-Semitism calls for the annihilation of the Jewish people—whether that is by murder or destruction of the Jewish state.  Those who call for endangering or eliminating any ethnic group—by either the political right or left—are guilty of racism.

What are the facts?

Zionism is the belief that the Jewish people have a right to self-determination—to the State of Israel in their millennia-old homeland.  According to the U.S. State Department, anti-Semitism is a form of racism directed at Israel using demonization, delegitimization or double standards.  This form of anti-Semitism appears in numerous guises—usually false accusations—from both the radical right and radical left.  The objective of anti-Zionist attacks is to deny the right of the Jewish state, among all the world’s nations, to exist.

Attack #1: Israel is a colonial state.  This assertion bespeaks a double standard, as well as lie.  No campus demonstrators protest Turkey’s military colonization of Cyprus, nor China’s occupation of Tibet.  Yet Israel is falsely accused of colonizing its own ancient homeland.  In fact, Jews are the indigenous people of Palestine—survivors of the oldest sovereign state in this land more than 3,000 years ago, with continuous residency since then.  Indeed, Zionism is an anti-colonialist movement, having fought Roman, Crusader, Ottoman, British and Jordanian imperialism.

Attack #2: Israel stole Palestinian land.  This attempt to delegitimize Israel ignores the fact that aside from private land holdings, the Palestinians have never had sovereignty over any territory.  Therefore, they do not “possess” public lands in present-day Israel or Judea or Samaria (the West Bank).  The territory controlled by Israel today was settled on land that Jews owned or purchased, was public land granted by the British Mandate for Palestine, or was captured when Israel defeated invading Arab armies from Jordan and Syria in 1967—all legal acquisitions under international law, to be resolved by negotiations.

Attack #3: Israel’s claims to the Holy Land are religiously based.  Many oppose the claim by some Jews and Christians that Israel’s right to exist springs from biblical authority.   Yet Zionism is largely a secular movement, and Israel’s right to exist is also supported by indisputable legal, historical and humanitarian rights.  While Israel’s state religion is indeed Judaism—and it is the world’s only Jewish state—it joins 40 other nations, mostly Muslim, that designate a state religion, also including Costa Rica and England.  Above all, Israel is not a theocracy, like Iran, but a secular democracy.

Attack #4: Israel is an apartheid state.  This attempt to demonize Israel is false on its face: Israel is the most diverse state in the Middle East.  Its citizens of all races, genders, ethnicities and religions enjoy equal civil rights—more freedom than in most of the world’s nations.  Arabs serve in Israel’s legislature, the Knesset, and Supreme Court.  Yet who criticizes the Palestinian’s apartheid demand that all Jews be cleansed from their ancient biblical homelands of Judea and Samaria?  Double standard?

Attack #5: Jews are members of a religion, not a real “people.”  Whereas Jews have always been united by a belief in Judaism, the Bible speaks of Am Yisrael—the people of Israel—ancient Hebrews who built a sovereign nation, as well as legal, economic and social systems.  Jews are also united by the Hebrew language.  Contrary to this delegitimization attempt, Jews are a distinct people who also share a religion.

Attack #6: Some Jews oppose Israel, so that can’t be anti-Semitic.  Just as blacks, Muslims or any group can express unjust racial or ethnic bias against their own people, so can Jews.  Jewish ultra-orthodox Neturei Karta sect members oppose a Jewish state before the Messiah arrives.  Other Jews, such as members of Jewish Voice for Peace in Palestine, object to Zionism based on the false and slanderous accusations listed above.  The fact remains that specifically targeting Jews—and the world’s only national refuge for Jews—is a form of racial bias, in this case anti-Semitism.

Attempts to delegitimize Israel—whether in the United Nations, college classrooms or by the Boycott, Divestment and Sanctions movement—are markers of racist anti-Semitism.  Good people will heed the 1967 exhortation of civil rights leader Martin Luther King, Jr.: “The whole world must see that Israel must exist and has the right to exist and is one of the great outposts of democracy.”

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IGNORANCE IS NOT BLISS

By Bill O’Reilly Staff

“Thomas Jefferson was well into his 70s when he founded the University of Virginia and issued this warning: ‘Self-government is not possible unless the citizens are educated sufficiently to enable them to exercise oversight.’

“Wow.  If only President Jefferson could take a glance at the country he helped create.  43% of Americans are unable to define the Bill of Rights, conceived in large part by Jefferson’s fellow Virginian James Madison.  Meanwhile, the same number of people actually believe the U.S. government may have known about 9/11 in advance.  That’s a pithy summary of modern America—equal parts ignorance and looniness.

“The question about the Bill of Rights was included in a survey taken by ‘Newsweek,’ 29% of the native-born respondents could not identify our vice president, 40% did not know our adversaries in World War II, and 67% were unaware that our economic system is a capitalistic one.  That’s a total, unadulterated disaster!

“So what’s going on?  It’s clear that the public school system is one major culprit.  Schools are no longer teaching history, geography or civics in an effective way.  Too many curricula are more focused on America’s alleged past sins, not on the wonders of this grand experiment.

“Number two, the Internet and popular culture have created a generation of self-absorbed, distracted and ignorant people.  The allure of texting, watching cat videos, and keeping up with the Kardashians has diverted a lot of Americans away from real life.  Simply put, millions of us are wasting a huge amount of time pursuing trivial things, and if a citizen is not interested in the outside world, he or she will simply not be equipped to make intelligent decisions.

“More than two-thirds of Americans lament that we are a country in decline, and that is partly because citizens just aren’t paying attention.  They do not seem to be interested in the welfare of their country.  Those of you reading this column are almost surely not in the ‘ignorant’ category.  But if you add up all the Americans who watch TV news and read the newspaper, it is a minority.

“If there is one small bright spot, it’s that 93% of those applying for U.S. citizenship pass the test, meaning they get at least six out of the ten questions correct.  We are not talking about the hordes of desperate people now coming across the Rio Grande into Texas, but immigrants who take the legal route to citizenship.  They generally know the workings of this country better than native-born people who were ‘educated’ in our woeful public schools.

“Unfortunately, Americans’ ignorance does not stop at the water’s edge.  Just this week the intrepid Jesse Watters asked some New Yorkers to describe what’s happening in the Middle East.  ‘I know there’s a lot of stuff going on,’ one woman told Jesse, ‘but I don’t like to pay attention to it.’  Another man said this: ‘I gotta be honest with you, I haven’t been up to date.’  Hey, at least he was honest.

“Some accuse Watters of picking the dumbest, most ill-informed people to interview.  Sure, he seeks out folks who look ‘interesting’ and are willing to talk to him, but their ignorance is in no way surgically enhanced for the cameras.  To verify that, just read some of the polls that seek to determine what Americans know, and what they don’t know.

“If Thomas Jefferson stood in for Jesse Watters one day (and he did have kind of a turned-up collar), he would probably be severely unhappy.  After all, Jefferson also said this: ‘If a nation expects to be ignorant and free…it expects what never was and never will be.’  America is in danger from without, faced with a host of enemies wishing to do us harm.  But we are also in danger from within, the result of our growing obliviousness.  Which threat is more frightening?”

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THE OPIATE OF EXCEPTIONALISM

By Scott Shane, writing from Washington for the N.Y. Times

“IMAGINE a presidential candidate who spoke with blunt honesty about American problems, dwelling on measures by which the United States lags its economic peers.

“What might this mythical candidate talk about on the stump?  He might vow to turn around the dismal statistics on child poverty, declaring it an outrage that of the 35 most economically advanced countries, the United States ranks 34th, edging out only Romania.  He might take on educational achievement, nothing that this country comes in only 2th in the percentage of 4-year-olds enrolled in preschool, and at the other end of the scale, 14th in the percentage of 25-to-34-year-olds with a higher education.  He might hammer on infant mortality, where the United States ranks worse than 48 other countries and territories, or point out that, contrary to fervent popular belief, the United States trails most of Europe, Australia and Canada in social mobility.

“The candidate might try to stir up his audience by flipping a familiar campaign trope: America is indeed No. 1, he might declare—in locking its citizens up, with an incarceration rate far higher than that of the likes of Russia, Cuba, Iran or China; in obesity, easily outweighing second-place Mexico and with nearly 10 times the rate of Japan; in energy use per person, with double the consumption of prosperous Germany.

“How far would this truth-telling candidate get?  Nowhere fast.  Such a candidate is, in fact, all but unimaginable in our political culture.  Of their serious presidential candidates, and even of their presidents, Americans demand constant reassurance that their country, their achievements and their values are extraordinary.

“Candidates and presidents generally oblige them.  It is permissible, in the political major leagues, for candidates to talk about big national problems—but only if they promise solutions in the next sentence: Unemployment is too high, so I will create millions of jobs.  It is impermissible to dwell on chronic, painful problems, or on statistics that challenge the notion that the United States leads the world—a point made memorably in a tirade by the dyspeptic anchorman played by Jeff Daniels in the HBO drama ‘The Newsroom.’

“‘People in this country want the president to be a cheerleader, an optimist, the herald of better times ahead,’ says Robert Dallek, the presidential historian.  ‘It’s almost built into our DNA.’

“This national characteristic, often labeled American exceptionalism may inspire some people and politicians to perform heroically, rising to the level of our self-image.  But during a presidential campaign, it can be deeply dysfunctional, ensuring that many major issues are barely discussed.  Problems that cannot be candidly described and vigorously debated are unlikely to be addressed seriously.  In a country where citizens think of themselves as practical problem-solvers and realists, this aversion to bad news is a surprising feature of the democratic process.

“‘I think there’s more of a tendency now than in the past to avoid discussion of serious problems.’ Says Allan J. Lichtman, a political historian at American University.  ‘It has a pernicious effect on our politics and on governing, because to govern, you need a mandate.  And you don’t get a mandate if you don’t say what you’re going to do.’

“American exceptionalism has recently been championed by conservatives, who accuse President Obama of paying the notion insufficient respect.  But the self-censorship it produces in politicians is bipartisan, even if it is more pronounced on the left for some issues and the right for others.

“FOR instance, Democrats are more loath than Republicans to look squarely at the government debt crisis indisputably looming with the aging of baby boomers and the ballooning cost of Medicare.  Republicans are more reluctant than Democrats to acknowledge the rise of global temperatures and its causes and consequences.  But both parties, it is fair to say, prefer not to consider either trend too deeply.

“Both parties would rather avert their eyes from such difficult challenges—because we, the people, would rather avert our eyes.  Talk to any political pro about this phenomenon and one name inevitably comes up: Jimmy Carter, who has become a sort of momento mori for American politicians, like the skulls in Renaissance paintings that reminded viewers of their mortality.

“Mr. Carter, they will say, disastrously spoke of a national ‘crisis of confidence’ and failed to project the optimism that Americans demand of their presidents.  He lost his re-election bid to sunny Ronald Reagan, who promised ‘morning in America’ and left an indelible lesson for candidates of both parties: that voters can be vindictive toward anyone who dares criticize the country and, implicitly, the people.

“This is a peculiarly American brand of nationalism.  ‘European politicians exercise much greater freedom to address bluntly the uglier social problems,’ says Deborah Lea Madsen, professor of American studies at the University of Geneva.  An American politician who speaks too candidly about the country’s faults, she went on to say, risks being labeled with that most devastating of epithets: un-America.

“The roots of this American trait are often traced to the famous shipboard sermon the Puritan lawyer John Winthrop preached on his way to help found the Massachusetts Bay Colony nearly five centuries ago.

“‘We must consider,’ he said, ‘that we shall be as a city upon a hill—the eyes of all people are upon us.’  Winthrop’s metaphor has had a long life in American speechifying, prominently quoted by both President John F. Kennedy and Reagan.  But if, for Winthrop, the image was something the colony should aspire to, for modern politicians it is often a boast of supposed accomplishment, a way of combating pessimists and asserting American greatness, whatever the facts.

“Could a presidential candidate today survive if he promised to wage a war on poverty, as President Lyndon B. Johnson did in 1964?  It seems unlikely, and one reason may be that Johnson’s effort fell short, revealing the agonizing difficulty and huge cost of trying to change the lives of the poor.

“Indeed, in the current fiscal environment, promising an ambitious effort to reduce poverty or counter global warming might imply big new spending, which is practically and politically anathema.  And given the increasing professionalization of politics any candidate troubled by how the United States lags its peers in health or education has plenty of advisers and consultants to warn him never to mention it on the stump.

“‘Nobody wants to be the one who proposed taking the position that got the candidate in trouble,’ says Martha Joynt Kumar, a political scientist at Towson University who studies presidential communications.

“Of course, the reason talking directly about serious American problems is risky is that most voters don’t like it.  Mark Rice, who teaches American studies at St. John Fisher College in Rochester, N.Y., said students often arrived at his classes steeped in the notion that the United States excelled at everything.  He started a blog, Ranking America, to challenge their assumptions with a wild assortment of country comparisons, some sober (the United States is No. 1 in small arms ownership) and others less so (the United States is tied for 24th with Nigeria in frequency of sex).

“‘Sure, we’re No 1 in gross domestic product and military expenditures,’ Mr. Rice says.  ‘But on a lot of measures of quality of life, the U.S. ranking is far lower.  I try to be as accurate as I can and I avoid editorializing.  I try to complicate their thinking.”

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