Helping the Chronically Overworked Find Life Balance

What You Can Learn From Black Swans, Forecasting, and Idolatry

Chapter 9 Paint Your Environment Part 8

In this chapter I’ve told several stories about forecasting, because so many dysfunctional companies live and die by the forecast because they can’t seem to agree on anything else they stand for.  I am drawn to the topic because it reminds me of an extensive commentary by the medival Jewish philosopher known at the Rambam which is shorthand for Rabbi Moshe ben Maimon, (AKA) Maimonides.

The Rambam argued that soothsaying, fortune telling, divining and related “black arts” are forms of idolatry perpetuated by unscrupulous leaders as a means to control other people by fear. The Rambam said that “It is not fitting for the Jews who are wise sages to be drawn into such emptiness. ”[i]  To put it in a more kindly and general context, he was saying that educated people should know better.

In a similar way, I think that people in the business world should know better than to blindly follow forecasts or other business means of predicting the future, which is exactly what Professor and former hedge fund manager Nassim Nicholas Taleb argues in his book The Black Swan.  Taleb, like the Rambam, marvels that people seem to ignore the terrible track record of those who routinely predict the future and get it wrong.

Taleb uses the example of the black swan as a metaphor.  For hundreds of years, bird experts said that Black Swans do not exist, because one had never been seen. Which was true until Europeans reached Australia, and found them in plenty.  Taleb shows that financial analysts have a terrible track record at predicting the future – they are no better than someone who looks just at the last quarter’s data and extrapolates.  In fact, the analysts tend to follow the herd, and are unlikely to make predictions that are outliers.[ii]  But the biggest events that change history, like September 11 or the Arab Spring are almost never predicted.

If the wall street experts can’t get it right, what chance has the average forecast in an average company?

You might be wondering what this has to do with your quest for a more balanced life. There is a right and wrong way to use forecasts.  Taleb suggests that forecasts are a good way of charting possible outcomes, what is a potential large seller, but the actual outcome can’t be predicted, which is why every company should have a diversified portfolio of high risk and safer projects.  (And why a one-trick pony startup is inherently risky.)  But many companies, (like Sabina’s),  even if they have the proper portfolio mix, act as if the forecast is a real prediction of the future.

Companies with too much emphasis on forecasting and making the numbers have a higher risk of an idolatry prone culture, that devalues people as individuals. And Sabina allowed forecasting to have too large an impact on her self-esteem.

Someone looking for balance in a numbers first environment has a few options.  1. Play the politics to gain the power to set your own boundaries.  2. Take a lower profile product or project that will bring lower stress.  3. Become an expert at sandbagging the forecast.

Another option, which I will explore in the next post, is to find another company with a different, longer term and more flexible approach to doing business.

What is your experience with forecasts and numbers-first cultures?

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[i] Mishneh Torah Volume 3: Hilchot Avodat Kochavim. By MaimonidesEdited by Rabbi Eliyahu Touger.  Moznaim, (1990) P.212-213

[ii] The Black Swan by Nassim Nicholas Taleb. Random House (2007) p 148-150.

 

A Mistake You Can’t Afford To Make

Chapter 2: Idolatry Then & Now Part 14

There was a time when I thought my work in the genomics industry was going to revolutionize medicine.  The products I managed were going to help scientists find all the genetic predispositions for disease, and usher in an era of personalized medicine, where an individual would be prescribed the most appropriate medicine based on his or her genetic makeup.  My mistake, however, was thinking that anything the company asked me to do was in service of this laudable goal.  In other words, I had made an idol of my company, in that I let it be the mediator of my altruistic aims.

The Rambam, one of the great medieval Jewish philosophers, explained the origin of pagan idolatry as a similar error. “At first men believed in one God who governed the world through intermediary forces” like the stars and other heavenly bodies.  They worshipped the intermediaries as a way of bringing honor to the creator, and then made statues to give their worship a point of focus.  After a few generations, people forgot that the statues and heavenly bodies were only intermediates, and thus began to worship the idols outright. [i]  And the values associated with the statues began to drift and diverge from God’s values.

Intermediaries distort the original message.  This can be an innocuous process, like a child’s game of telephone, or may constitute deliberate manipulation by unscrupulous individuals.  Karen Armstrong, international expert on comparative religion and TED Prize winner gave the following example “Often when people talk about God, we attribute to Him the thoughts and feelings and opinions we have ourselves.  … It is often noticeable that the opinions of the deity coincide with those of the speaker.  This is a form of idolatry because what you are doing is worshipping a deity in your own image.”[ii]

Take a moment to reflect on your values, goals, and passions.  Now, reflect on how you are spending you time.  What is the biggest influence on how you spend you time?

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[i] Maimonides: Torah and Philosophic Quest  by David Hartman the Jewish Publication Society (1976) p 54-56

[ii] NPR Talk Of The Nation: Interview with Karen Armstrong January 10, 2011 about her book Twelve Steps To a Compassionate Life. Listen here.