Machiavellian framing

MIKE

“The thing that makes The Prince such a timeless and scandalous work,” explained Stacy Vanek Smith, “is the same exact thing, Machiavelli removes morality from the situation.”

Smith is out to talk about her book, Machiavelli for Women and the book’s seed came about when Smith was stuck on her salary. Rather, her salary disparity. In her first job out of college, Smith and two classmates both ended up at the same organization in roughly the same jobs. But, not with the same pay. Rather than plead her case, pound the table, and present data, “I was in an emotional spiral of unjustness and upset and I never asked for a raise.” Smith needed some unemotional advice.

“What Machiavelli does is remove all that. He would probably look at (the salary disparity) as great information to use. Now what’s the best way to go about getting a raise? What’s the best way to ask? What do I do now? That’s why it is timeless, because it’s so smart.” – Stacy Vanek Smith, September 2021

Good framing is a design choice that affects behavior. We can frame self talk by having multiple ‘jobs’. We can frame vaccines as better than being bulletproof. We can frame decisions by asking, would I want this even if it were free? Each prompt changes the reference point and possibly the behavior.

As needed then, maybe some people should be Machiavelli Bayesians. Be slightly more princely, if that works do it again until it doesn’t.

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Just a monkey with a fasting app

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The Matrix (1999):
Kung Fu

This came to mind when a friend asked my advice on fasting. I told her what worked for me, what I thought were best practices, and suggested the Zero fasting app.

The app has 330,000+ ratings. It’s in the top 100 Heath and Fitness apps. Which is kind of crazy because, it’s a timer.

Designs matter a lot in our actions. Using the app I make probably 90% of my fasting goals. Days without the app and the number is probably 25%.

One design theory is to consider appropriate information. If fasting is new to someone they need baby steps: an app that shows how much time has elapsed, guides to the ‘right’ fast, and advice, tips, community, etc.

Appropriate information feels like a weird concept until we see it. It’s like, oh, this other way of describing the world exists too Huh. Temperature is one of these areas. What’s the best way to convey information about thermal energy: Celsius, Fahrenheit , or Kelvin? It depends! What’s the gap between the individual and the information? Celsius and Kelvin work great for science and scientists because the information-individual gap has been narrowed by years of education. For the consumer though, Fahrenheit rules the day as the most legible.

Another is how to classify an avalanche. What’s the gap between an individual and the information? The US and Canada, for instance, use different systems. In the States avalanches have five levels according to “the path”: sluff, small, medium, large, major.

“These categories are in relation to path size, so a size or class number is not so meaningful without information on, or familiarity with, the path.” – Avalanche Institute

Locals have a small information-individual gap because they know the area. Compare the American system to the Canadian system, which also has five categories: relatively harmless, could bury or kill a person, could destroy a small building, could destroy a rail car, and largest known. There’s no information-individual gap when the warning is largest known.

It makes sense then that “just a timer” works for so many people. It’s not just a timer. It’s a tool to close the information-individual gap. Oh, I get it now. And even though the gap seems small (Siri set a sixteen hour timer), it’s large enough to matter.

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per avalanche-center.org there’s also an international classification system.

the “just a monkey with a…” idea comes from Erik Jorgenson’s Navalmanack curation.

No bad habits, no gold stars

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We know nothing about venture capital!

“Correct, we have no bad habits. We were total outsiders. And, we weren’t kids that went to ivy league schools and worked at Goldman Sachs, so we weren’t accustomed to getting gold stars for painting in the lines. We were accustomed to doing things creatively outside the lines.” – David Fialkow, September 2021

People enter situations with a culture which can influence how they act. In society, and wearing a mask. In conversation, as debate structure. In politics, or anytime there is leadership.

People enter situations with incentives which can influence how they act. In music, ship platinum, receive gold. In football, three star recruits. In startups, what OKR? In horse racing, to race or to sell?

One of the tricky parts of life that covid revealed is the heterogeneity in life. Like, A LOT of variation. This same effect exists in the more mundane world of organizations. There’s no set of incentives or culture that always works. But there is a culture and there are incentives and each matter.

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Have a nice day.

Show the way or in the way

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One common mistake in our understanding of “how the world works” is to think that lack of action is due to a lack of information. If people just knew how important X was they would definitely do it.

One form is seen in the social media question: What would you add to the high school curriculum? Answers tend to hover around statistics instead of calculus, personal finance, or decision making.

Those are well intentioned suggestions, and on net, students would be better off if we could download a stats module in place of the first derivative. But information is not action.

Orlando Marriott hand washing sign

Geez. We’ve looked at hand washing (twice!) and there’s probably a well designed study that notes signs like that, in bathrooms such as this, change a proxy for health in some-such-way.

But, there’s a better example. It’s a real life example. It’s been tested on thousands. It’s also in Orlando. Arrange hand sanitizers to be avoided. To hijack Ryan Holiday: the obstacle is the way. But after two days people watching in the theme parks it’s very clear, this works.

And the reason for signs showing the way and not sanitizer stations in the way is incentives.

Back to Twitter. Some schools offer personal finance. From Kris’s nephew.

“I have this assignment for school where I have to invest $1,000 into a company’s stock. And I know you’re a stocks person so I was wondering if you know a good company i should invest in. Because the winner gets a prize of who makes the most money.”

Just give every twelfth grader $200. But there’s no action in that. There’s no standards or benchmarks or assessments about net learning in the second quarter of the school year. So in a way, Kris’s nephew is getting exactly what the system incentivized.

This is the system. In education it’s hard to measure “financial literacy”. In public health it’s hard to measure “healthy place”. In these systems optics are rewarded. Theme parks are in the optics business too, but for them results like: Person Gets Sick at World Famous Theme Park matter more. It’s important to know the rules if we want to play the game.

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In finance there’s paper returns and there’s “moolah in the coola”, that’s another analogy. Paper returns are optics. Money in the pocket is an outcome.

The day the *hobbies* died. Bye, bye thanks-to-America-Online…. (To the tune of American Pie)

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One way to notice change is to notice the words people use to talk about changes. The online shopping of the 90s became just shopping. The online banking of the 00s became just banking. The online dating of the 10s became just dating. The online communities of the 20s, well you see where it’s going.

“The Internet has just killed hobbies. They’re dead. They’re gone. The concept doesn’t exist. The concept of ‘having a hobby’ died at the exact same time as the concept of ‘going online’. This was a phrase you heard constantly from 1994 to 2005. You get home and you ‘go online’. The big company was AOL, America ‘online’. Around the mid-2000s people stopped ‘going online’. Why? Because we were online all the time. The idea of not being online is now the weird thing.” – Marc Andreessen, CSPI podcast, August 2021

I remember this! You got home from school and you signed into instant messenger and entered the Yahoo euchre room. Good times good times.

Having a modifier doesn’t mean something will become the new thing, but it does mean it’s different and may be worth our attention. A few others: autonomous driving, crypto currency, digital wallet, online learning, distance education, internet friend, gig economy.

This time is different happens with technology changes and the descriptions offer a cutting edge hint.

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Being (even more) Bayesian

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Bayesianism has become my favorite math-idea-that-doesn’t-involve-math. It’s three simple steps. Step 1: have an idea about a thing. Step 2: observe the thing. Step 3: have a new idea based on the observation. (repeat)

There are two tricks to make this work for you. The first is how much to update. Being Bayesian means changing your mind in proportion to the change. Try the expression, “I’m slightly more sympathetic to X,” for example. Saying this acknowledges the new information and massages the ego.

The second trick is where to start (Step one), and we have to start somewhere.

“By not taking advantage of the accumulated knowledge that we have as a scientific community, we are artificially leveling the playing field. We are giving theories with no basis in scientific fact too great of a chance to prove themselves through the data.” – Aubry Clayton, The Conversation, August 2021

Clayton’s context is Covid19, but he touches on a larger point too. How much coordination and decentralized command a system allows.

A decentralized command iterates quickly. From the front lines of fast food to fashion to fights. If an organization wants to move fast, the decentralized command structure works better than coordination.

But while individual agents may be fast, the whole may be slow. Why? No coordination. The scientists in a medical research lab will do more experiments with no oversight or collaboration but they may not make more progress.

Coordination and decentralized command apply to both knowledge and people. Having accurate base rates and priors means coordinating our existing knowledge with the accumulated.

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Bayesians even frame things beautifully. It’s not “changing your mind” bur rather it is “updating your beliefs”.

Base rate and mean reversion structure

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One decision making suggestion is to start with the base rate, to find a set of comparable circumstances and ask, ‘what typically happens?’

In investing it is to find the price of, say Amazon, and ask how often a company of those characteristics grew at an expected percentage. Rather than start with the idea that Amazon is a great company that does a bunch of things well and so on – we can ask, for companies like this how many have grown at 15% a year? Zero.

Another example is (large, but maybe all) construction. The “base rate” is not good, fast, and cheap but overpromised, over-budget, and underwhelming. You cannot compare this to that people protest. Boloney says Bent Flyvbjerg, the cost overruns and benefit shortfalls are so consistent they are comical.

So starting with the base rate can help. What else?

On Wharton Moneyball the hosts discussed the 2020 Olympics and noted that the United States (men especially) have underperformed compared to years past. Is it culture? Training? Commitment?

“Is the U.S. doing badly or are other countries proportionally better?” – Shane Jensen, Wharton Moneyball, August 2021

Yes, says cohost Cade Massey, “Give Shane credit for the most parsimonious explanation we suggest for most any situation, try regression to the mean on for size and see if that can explain it.”

The idea behind regression to the mean is that performance varies up and down. There are many causal explanations for why this happens, think about talking heads for sports or stocks, but sometimes the mechanism is just old fashioned randomness.

But, ugh, we do no like this. Give me a reason man. So we assign reasons, which may be more comfortable than they are accurate.

We can make easier decisions. Easy decisions are designed. What designing a decision does is it shifts the information people use. Simple starter explanations like, the base rate or mean reversion, both create a decision making structure that will often help people get pointed in the right direction first. Start in the ballpark or base rates and then move towards your unique situation. Start with mean reversion as the mechanism and the adjust for other factors.

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Mean reversion, said Cliff Aeneas (Bloomberg) is basically value investing, “they’re almost synonymous.”

Forever communicating well

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One way to think about good communication is to think about information theory. Or copy machines. Each copy of a copy loses information.

We usually use words as the idea delivery vehicle. Works work, but maybe not as well as we sometimes hope. We can do better.

One way to communicate better is to prioritize trust over understanding. The world is as you say, I don’t have to understand because I trust you. That communication tool works best in time restricted situations.

Another way to communicate well is to consider what ‘language’ the listener understands:

“If you look at (Boris) Johnson’s speeches during the Brexit campaign, they are almost all carefully framed entirely in AngloSaxon words because he knew damn well who he was talking to. That’s always been the key in English or American politics. The idea that someone can speak to the ordinary people not as some quasi foreign elite, but as one of us, is deeply potent to the English and their American cousins.” – James Hawes, The Spectator’s The Book Club podcast, November 2020

But ‘one of us’ isn’t just the words we use. Visuals, emotions, and figurative languages matter too. Sport analytics, for instance, works better visually.

A third aspect is the culture around communicating well. For instance, part-of-the-reason the English language changed was the culture of London. Stable relationships offer little wiggle room for new expressions. But, “In an area like London, where there is a less tight-knit society and consequently lower societal pressures, it opens up language (and other cultural factors) to extensive change.”

To communicate well in that London meant expressing oneself in new ways. I wonder if they would have pronounced it gif or jif?

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Modern English is only five-hundred years old and that change in London is why elementary students have to learn about homophones like meet and meat.

The itty-bitty-shitty-committee

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The itty-bitty-shitty-committee is that voice in your head. It’s the chatter.

“The chatter is the zooming in really narrowly on a problem and getting stuck and spinning over and over in ways that are dysfunctional and destructive. We want to get rid of the chatter that gets in the way of your job, your relationships. and your physical health.” – @Ethan_Kross on Armchair Expert

I’ve been in that loop, in that cartoon whirlpool. I’m the bumbling sea captain. I see it. I try to avoid it. I can’t get out of my own way. Which is kind of wild, being the captain of this ship of one. Kross suggests reframing during rough seas.

It’s not a free bag, it’s a bag that’s been paid for. It’s not a free coffee, it’s a free coffee that’s been paid for. I used to advise college students that anytime they saw the word FREE on campus they could interpret that as “Your tuition pre-paid this for you.”

Time is also a good way to reframe a situation. Do I remember a situation like this from three years ago? No. Then I probably won’t remember this one three years from now. This kind of framing was especially good when my daughters were young. My wife used this too only her mantra was: this too shall pass.

Kross’s specific suggestions echoes Jenna Fischer‘s career advice. Fischer said she looks at herself as the CEO and the product. The boss Fischer said that headshots had to be done by a professional. The talent Fischer had to tell her photographer friend.

“Distance self-talking involves coaching yourself through a problem using your own name like you’re talking to someone else. We are much better at advising other people than ourselves…when we use a name to talk to ourself it changes the perspective, it’s a psychological jujitsu move.” – Kross

That’s incredible reframing. And it works!

If we remember. Usually when someone cuts us off on the road they’re an idiot. When we do it it’s because we’re late. Maybe that’s part of it. We see things differently when the information changes and a simple switch in internal dialogue can create big switches outside in our actions.

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Dax Shepard and Kross talk about the IBSC around 31:20. The distant self-talk reframing is known as Solomon’s paradox.

This time is different: 70s airlines

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This time is different is an attempt to understand when this time is different rather than when it’s not. Our working model is that TTID when the system changes.

In the high jump, things were different because the landing area went from wood chips to soft foam, allowing athletes to land on their back.

In startups like Uber, things were different because the technology costs like AWS and GPS fell. Similarly is Ben Thompson’s question: what happens when marginal costs are zero?

A systemic change was the case of airline deregulation in the 1970s:

“Something else happens and you can see it in the airline route maps. Look at one in 1978 and you don’t see that many red lines but in 2017 it’s an explosion of red all over the country and there will be these spots where they’re very dark: Atlanta, Chicago, Minneapolis. These are hub airports. Hub and spoke activity really takes off after this (airline deregulation) legislation.” – Bruce Carlson, My History can Bear up Your Politics, August 2021

Prior to deregulation, the average flight was 55% full and a ticket from New York to Los Angeles cost $1482 in inflation adjusted dollars compared to $268 in 2021. Carlson points out too that a number of companies like Pan Am went out of business after the deregulation.

Pan Am

Those idyllic phots are temping. Those were the days. But that’s like someone fifty years from now looking at Instagram and thinking that was life. Hey, everyone was beautiful and always on vacation.

These posts are an attempt to categorize when TTID. So far it’s when a fundamental aspect changes how a business creates value and captures value.

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In 2019 one billion people flew in the United States. One in six 2019 flyers were on a Southwest flight. One in twenty went through Atlanta.