Thursday, February 25, 2021

Book Notes: Thinking, Fast and Slow

Continuing my journey to make better decisions, I decided to read the book Thinking, Fast and Slow by Daniel Kahneman. The author takes us on a groundbreaking tour of the mind and explains the two systems that drive the way we think. System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical.  

Who is this book for?

This book is a recommended read for everyone. It helps us understand how we think and how to avoid falling into traps that lead us to making bad decisions. 

Disclaimer: This post is by no means a summary of the book, I would encourage everyone to go ahead and grab the book and give it a go.

Book Notes


Introduction

When faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution. The spontaneous search for an intuitive solution sometimes fails - neither an expert solution nor an heuristic answer comes to mind. In such cases we often find ourselves switching to a slower, more deliberate and effortful form of thinking. This is the slow thinking. 

Fast thinking includes both variants of intuitive thought - the export and the heuristic - as well as the entirely automatic mental activity of perception and memory, the operations that enable you to know there is a lamp on your desk or retrieve the name of the capital of Russia. The intuitive System 1 is more influential than your experience tells you, and it is the secret author of many of the choices and judgements you make. 

The Characters of the Story

There are two systems in the mind System 1 and System 2. 

  • System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control.
  • System 2 allocates attention to the effortful mental activities that demand it, including complex computations.
System 1 continuously generate suggestions for System 2: impressions, intuitions, intentions and feelings. If endorsed by System 2, impressions and intuitions turn into beliefs, and impulses turn into voluntary actions. When all goes smoothly, which is the most of the time, System 2 adopts the suggestions of System 1 with little or not modification. 

When System 1 runs into difficulty, it calls for System 2 to support more detailed and specific processing that may solve the problem of the moment. System 2 is mobilised when a question arises for which System 1 dos not offer an answer. System 2 takes over when things get difficult, and it normally has the last word. 

The division of labor between System 1 and System 2 is highly efficient: it minimises effort and optimises performance. The arrangement works well most of the time but System 1 has biases, systematic errors that it is prone to make in specified circumstances. Another limitation of System 1 is that it cannot be turned off. 

Conflict between an automatic reaction and an intention to control it is common in our lives. Because System 1 operates automatically and cannot be turned off at will, errors of intuitive thought are often difficult to prevent. Biases cannot always be avoided, because System 2 may have no clue to the error. Even when clues to likely errors are available, errors can be prevented only by the enhanced monitoring and effortful activity of System 2.

Attention and Effort


The response to mental overload is selective and precise: System 2 protects the most important activity, so it receives the attention it needs; "spare capacity" is allocated second by second to other tasks. The sophisticated allocation of attention has been honed by a long evolutionary history. Orienting and responding quickly to the gravest threats or most promising opportunities improved the chances of survival. 

As you become skilled in a task, its demand for energy diminishes. Studies of the brain have shown that the pattern of activity associated with an action changes as skill increases, with fewer brain regions involved. A general "low of least effort" applies to cognitive as well as physical exertion. People will eventually gravitate to the least demanding course of action. In the economy of action, effort is a cost, and the acquisition of skill is driven by the balance of benefits and costs. Laziness is built deep into our nature. 

System 2 is the only one that can follow rules, compare objects on several attributes, and make deliberate choices between options. The automatic System 1 does not have these capabilities. A crucial capability of System 2 is the adoption of "task sets": it can program memory to obey an instruction that overrides habitual responses. 

The Lazy Controller


The maintenance of a coherent train of thought and the occasional engagement in effortful thinking also require self-control. Frequent switching of tasks and speeded-up mental work are not intrinsically pleasurable, and that people avoid them when possible. This is how the law of least effort comes to be a law. A state of effortless concentration so deep that people lose their sense of time is called as flow. Flow neatly separates the two forms of effort: concentration on the task and the deliberate control of attention.  

System 1 has more influence on behaviour when System 2 is busy. People who are cognitively busy are also more likely to make selfish choices, use sexist language, and make superficial judgements in social situations. Self-control requires attention and effort. 

An effort of will or self-control is tiring; if you have had to force yourself to do something, you are less willing or less able to exert self-control when the next challenge comes around. This is called ego depletion. After exerting self-control in one task, you do not feel like making an effort in another, although you could do it if you really had to. Ego depletion is not the same mental state as cognitive busyness.

Those who avoid the sin of intellectual sloth could be called engaged. They are more alert, more intellectually active, less willing to be satisfied with superficially attractive answers, more skeptical about their intuitions. The psychologist would call them more rational. System 1 is impulsive and intuitive; System 2 is capable of reasoning, and it is cautious, but at least for some people it is also lazy

The Associative Machine


System 1 provides the impressions that often turn into your beliefs, and is the source of the impulses that often become your choice and your actions. It offers a tacit interpretation of what happens to you and around you, linking the present with the recent past and with expectations about the near future. It contains the model of the world that instantly evaluates events as normal or surprising. It is the source of your rapid and often precise intuitive judgements. It does most of this without your conscious awareness of its activities. System 1 is also the origin of many of the systematic errors in your intuitions. 

Cognitive Ease


Cognitive Ease has a range between Easy and Strained. Easy is a sign that things are going well. Strained indicates that a problem exists, which will require increased mobilisation of System 2. This is called cognitive strain. Cognitive strain is affected by both the current level of effort and the presence of unmet demands. When you are in the state of cognitive ease, you are probably in a good mood, like what you see, believe what you hear, trust your intuitions, and feel that the current situation is comfortably familiar. You are also likely to be relatively casual and superficial in your thinking. When you feel strained, you are more likely to be vigilant and suspicious, invest more effort in what you are doing, feel less comfortable, and make fewer errors, but you also are less intuitive and less creative than usual. 

The experience of familiarity has a simple but powerful quality of "pastness" that seems to indicate that it is a direct reflection of prior experience. The familiarity of one phrase in the statement sufficed to make the whole statement fell familiar, and therefore true. People can overcome some of the superficial factors that produce illusions of truth when strongly motivated to do so. But on most occasions, the lazy System 2 will adopt the suggestions of System 1 and march on. 

A good mood is a signal that things are generally going well, the environment is safe, and it is all right to let one's guard down. A bad mood indicates that things are not going very well, there may be a thread, and vigilance is required. Cognitive ease is both a cause and a consequence of a pleasant feeling. 

Norms, Surprises, and Causes


A large event is supposed to have consequences, and the consequences need causes to explain them. We have limited information about what happened on a day, and System 1 is adept at finding a coherent causal story and links the fragments of knowledge at its disposal. 

People are prone to apply casual thinking inappropriately, to situations that require statistical reasoning. Statistical thinking derives conclusions about individual cases from properties of categories and ensembles. Unfortunately, System 1 does not have capability for this mode of reasoning; System 2 can learn to think statistically, but few people receive the necessary training. 

A machine for Jumping to Conclusions


When uncertain, System 1 bets on an answer, and the bests are guided by experience. The rules of the betting are intelligent: recent events and the current context have most weight in determining an interpretation. When no recent event comes to mind, more distant memories govern. Jumping to conclusions is efficient if the conclusions are likely to be correct and cost of an occasional mistake acceptable, and if the jump saves much time and effort. Jumping to conclusions is risky when the situation is unfamiliar, the stakes are high, and there is no time to collect more information. These are the circumstances in which intuitive errors are probable, which may be prevented by a deliberate intervention of System 2. 

How Judgments Happen


System 1 carries out many computations at any one time. Some of these are routine assessments that go on continuously. No intention is needed to trigger this operation. But there are other computations which are undertaken only when needed. The occasional judgements are voluntary. They occur only when you intend them to do so. However, the control over intended computations is far from precise: we often compute much more than we want or need. This excess computation is called the mental shotgun

Answer an Easier Question


If a satisfactory answer to a hard question is not found quickly, System 1 will find a related question that is easier and will answer it. This operation of answering one question in place of another is called substitution. the target question is the assessment you intend to produce. The heuristic question is the simpler question that you answer instead. 

The Law of Small Numbers


The law of small numbers is a manifestation of a general bias that favours certainty over doubt. System 1 runs ahead of the facts in constructing a rich image on the basis of scraps of evidence. A machine for jumping to conclusions will act as if it believed in the law of small numbers. It will produce a representation of reality that makes too much sense. 

Anchors


Anchoring effect occurs when people consider a particular value for an unknown quantity before estimating that quantity. The estimates stay close to the number that people considered. The effects of random anchors have much to tell us about the relationship between System 1 and System 2. System 2 works on data that is retrieved from memory, in an automatic and involuntary operation of System 1. System 2 is therefore susceptible to the biasing influence of anchors that make some information easier to retrieve. Furthermore, System 2 has no control over the effect and no knowledge of it. 

The Science of Availability


The availability heuristic, like other heuristics of judgement, substitutes one question for another: you wish to estimate the size of a category or the frequency of an event, but you report an impression of the ease with which instances come to mind. Substitution of questions inevitably produces systematic errors. The ease with which instances come to mind is a System 1 heuristic, which is replaced by a focus on content when System 2 is more engaged. 

Availability, Emotion, and Risk


All heuristics are equal, but availability is more equal than the others. An availability cascade is a self-sustaining chain of events, which may start from media reports of a relatively minor event and lead up to public panic and large scale government action. We have a basic limitation in the ability of our mind to deal with small risks: we either ignore them altogether or give them far too much weight - nothing in between. 

Tom W's Speciality


System 1 generate an impression of similarity without intending to do so. We rely on representativeness when we judge the potential leadership of a candidate for office by the shape of his chin or the forcefulness of his speeches. Prediction by representativeness is not statistically optimal. 

There are two ideas to keep in mind about Bayesian reasoning and how we tend to mess it up. The first is that base rates matter. The second is that intuitive impressions of the diagnosticity of evidence are often exaggerated. The combination of WYSIATI - (What You See Is All There Is) and associative coherence tends to make us believe in the stories we spin for ourselves. 

Linda: Less is More


The word fallacy is used, in general, when people fail to apply a logical rule that is obviously relevant. Conjunction fallacy, is what people commit when they judge a conjunction of two events in direct comparison. Representativeness belongs to a cluster of closely related basic assessments that are likely to be generated together. The most representative outcomes combine with the personality description to produce the most coherent stories. The most coherent stories are not necessarily the most probable, but they are plausible, and the notions of coherence, plausibility and probability are easily confused by the unwary. 

In most situations, a direct comparison makes people more careful and more logical. But not always, sometimes intuition beats logic even when the correct answer stares you in the face

Causes Trump Statistics


Statistical base rates are facts about a population to which a case belongs, but they are not relevant to the individual case. Causal base rates change your view of how the individual case came to be. The two types of base rate information are treated differently: 
  • Statistical base rates are generally underweighted, and sometimes neglected altogether. 
  • Casual base rates are treated as information about the individual case and are easily combined with other case specific information. 

Regression to the Mean


Regression to the mean is due to random fluctuations in the quality of performance. Regression effects are ubiquitous, and are so misguided casual stories to explain them. Our mind is strongly biased towards causal explanations and does not deal well with "mere statistics". When our attention is called to an event, associative memory will look for its cause-more precisely, activation will automatically spread to any cause that is already stored in memory. Causal explanations will be evoked when regression is detected, but they will be wrong because the truth is that regression to the mean has an explanation but does not have a cause

Taming Intuitive Predictions


We are capable of rejecting information as irrelevant or false, but adjusting for smaller weaknesses in the evidence is not something that System 1 can do. As a result, intuitive predictions are almost completely insensitive to the actual predictive quality of the evidence. When a link is found, WYSIATI applies: your associative memory quickly and automatically constructs the best possible story from information available. 

Intensity matching yields predictions that are extreme as the evidence on which they are based, leading people to give the same answer to two quite different questions

Correcting your intuitive predictions is a task for System 2. Significant effort is required to find the relevant reference category, estimate the baseline prediction, and evaluate the quality of the evidence. The effort is justified only when the stakes are high and when you are particularly keen not to make mistakes. Furthermore, you should know that correcting your intuitions may complicate your life. A characteristic of unbiased predictions is that they permit the predictions of rare or extreme events only when information is very good. If you expect your predictions to be of modest validity, you will never guess an outcome that is either rare or far from the mean. 

The Illusion of Understanding


A compelling narrative fosters an illusion of inevitability. The core of illusion is that we believe we understand the past, which implies that the future also should be knowable, but the fact we understand the past less than we believe we do. 

Hindsight bias has pernicious effects on the evaluations of decision makers. It leads observers to assess the quality of a decision not by whether the process was sound but by whether its outcome was good or bad

The Illusion of Validity


Subjective confidence in a judgment is not a reasoned evaluation of the probability that the judgment is correct. Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it. It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true. 

Intuitions vs. Formulas


To maximise predictive accuracy, final decisions should be left to formulas, especially in low-validity environments. Whenever we can replace human judgment by a formula, we should at least consider it. 

Expert Intuition: When Can We Trust It?


Intuition is nothing more and nothing less than recognition. The mystery of knowing without knowing is not a distinctive feature of intuition; it is the norm of mental life. The confidence that people have in their intuitions is not a reliable guide to their validity. In other words, do not trust anyone-including yourself-to tell you how much you should trust their judgment. Intuition cannot be trusted in the absence of stable regularities in the environment.  

The Outside View


When forecasting the outcomes of risky projects, executives too easily fall victim to the planning fallacy. In its grip, they make decisions based on delusional optimism rather than on a rational weighting of gains, losses and probabilities. They overestimate benefits and underestimate costs. 

The Engine of Capitalism


The people who have greatest influence on the lives of others are likely to be optimistic and overconfident, and to take more risks than they realise. When action is needed, optimism, even of the mildly delusional variety, may be a good thing. The optimistic risk taking of entrepreneurs surely contributes to economic dynamism of a capitalistic society, even if most risk takers end up disappointed. 

The consequence of competition neglect is excess entry: more competitors enter the market than the market can profitably sustain, so their average outcome is a loss. The outcome is disappointing for the typical entrant in the market, but the effect on the economy as a whole could well be positive. 

Premortem has two main advantages: it overcomes the groupthink that effects many teams once a decision appears to have been made, and it unleashes the imagination of knowledgeable individuals in a much-needed direction. The main virtue of the premortem is that it legitimises doubts. It encourages even supporters of the decision to search for possible threats that they had not considered earlier. 

Prospect Theory


In the utility theory, the utility of a gain is assessed by comparing the utilities of two states of wealth. Many of the options we face in life are "mixed": there is a risk of loss and an opportunity for gain, and we must decide whether to accept the gamble or reject it. In the mixed case, the possible loss looms twice as large as the possible gain. In the bad case we become a lot more risk seeking. The prospect theory and utility theory also fail to allow for regret. The two theories share the assumption that available options in a choice are evaluated separately and independently, and that the option with the highest value is selected. This assumption is certainly wrong.

The Endowment Effect


Tastes are not fixed' they vary with reference point. Second, the disadvantages of a change loom larger than its advantages, inducing a bias that favours the status quo.

Bad Events


Loss aversion refers to the relative strength of two motives: we are driven more strongly to avoid losses than to achieve gains. A reference point is sometimes the status quo, but it can also be a goal in the future: not achieving a goal is a loss, exceeding the goal is a gain. the aversion of the failure of to reaching the goal is much stronger than the desire to exceed it. 

The Fourfold Pattern


The decision weights that people assign to outcomes are not identical to the probabilities of these outcomes, contrary to the expectation principle. Improbable outcomes are overweighted-this is the possibility effect. Outcomes that are almost certain are underweighted relative to actual certainty. The expectation principle, by which values are weighted by their probability, is poor psychology. 

People attach values to gains and losses rather than to wealth, and the decision weights that they assign to outcomes are different from probabilities. This is called the fourfold pattern. 



Rare Events


The emotional arousal is associative, automatic, and uncontrolled, and it produces an impulse for protective action. System 2 may know that the probability is low, but this knowledge does not eliminate the self-generated discomfort and the wish to avoid id. System 1 cannot be turned off. The emotion is not only disproportionate to the probability, it is also insensitive to the exact level of probability. The hypothesis suggest that the focal attention and salience contribute to both the overestimation of unlikely events and the overweighting of unlikely outcomes.

Risk Policies


It is costly to be risk averse for gains and risk seeking for losses. The attitudes make you willing to pay a premium to obtain a sure gain rather than face a gamble, and also willing to pay a premium to avoid a sure loss. Both payments come out of the same pocket, and when you face both kinds of problems at once, the discrepant attitude are unlikely to be optimal. 

Decision makers who are prone to narrow framing construct a preference every time they face a risky choice. They would do better by having a risk policy that they routinely apply whenever a relevant problem arises. A risk policy is a broad frame that embeds a particular risky choice in a set of similar choices. The outside view and the risk policy are remedies against two distinct biases that affect many decisions: the exaggerated optimism of the planning fallacy and the exaggerated caution induced by loss aversion. The two biases oppose each other. Exaggerated optimism protects individuals and organisations from paralysing effects of loss aversion;  loss aversion protects them from the follies of overconfident optimism. 

Keeping Score


The disposition effect is an instance of narrow framing. The decision to invest additional resources in a losing account, when better investments are available, is known as the sunk-cost fallacy, a costly mistake that is observed in decisions large and small. 

Decision makers know that they are prone to regret, and the anticipation of that painful emotion plays a part in many decisions. Intuitions about regret are remarkably uniform and compelling. The key is not the difference between commission and omission but the distinction between default options and actions that deviate from the default. When you deviate from the default, you can easily imagine the norm-and if the default is associated with bad consequences, the discrepancy between the two can be the source of painful emotions. 

Reversals


The emotional reactions of System 1 are much more likely to determine single evaluation; the comparison that occurs in join evaluation always involves a more careful and effortful assessment, which calls for System 2. Rationality is generally served by broader and more comprehensive frames, and joint evaluation is obviously broader than single evaluation. Of course, you should be wary of join evaluation when someone who controls what you see has a vested interest in what you choose. 

Frames and Reality


Tendencies to approach or avoid are evoked by the words, and we expect System 1 to be biased in favour of the sure option when it is designed as KEEP and against that same option when it's designated as LOSE. Reframing is effortful and System 2 is normally lazy. Unless there is an obvious reason to do otherwise, most of us passively accept decision problems as they are framed and therefore rarely have any opportunity to discover the extent to which our preference are frame-bound rather than reality-bound.

Two Selves


System represents sets by averages, norms, and prototypes, not by sums. We want pain to be brief and pleasure to last. But our memory, a function of System 1, has evolved to represent the most intense moments of an episode of pain or pleasure (the peak) and the feelings when the episode was at its end. A memory that neglects duration will not serve our preference for long pleasure and short pains. 

Life as a Story


Caring for people often takes the form of concern for the quality of their stories, not their feelings. Indeed, we can be deeply moved even by events that change the stories of people who are already dead.

Experienced Well-Being


The percentage of time that an individual spends in an unpleasant state is called the U-index. An individual's mood at any moment depends on her temperament and overall happiness, but emotional well-being also fluctuates considerably over the day and the week. The mood of the moment depends primarily on the current situation. 

Thinking About Life


The graph shows the level of satisfaction reported by people around the time they got married. 




This graph reliably evokes nervous laughter from people, the nervousness is easy to understand: after all, people who decide to get married do so either because they expect it will make them happier or because they hope that making a tie permanent will maintain the resent state of bliss. On their wedding day, the bride and the groom know that the rate of divorce is high and that they incidence of marital disappointment is even higher, but they do not believe that these statistics apply to them. This is called affective forecasting. 

Any aspect of life to which attention is directed will loom large in a global evaluation. This is the essence of focus illusion. The word mis-wanting describes bad choices that arise from errors of affective forecasting. The focus illusion is a rich source of mis-wanting. In particular, it makes us prone to exaggerate the effect of significant purchases or changed circumstances on our future well-being. The focusing illusion creates a bias in favour of goods and experiences that are initially exciting, even if they will eventually lose their appeal. 


Conclusion 


I feel this book needs to be read multiple times to fully grasp all the learnings from it. It might feel like a big book, but stick to it and finish it, its totally worth your time!

Friday, January 29, 2021

Book Notes: Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

Our mentor suggested that we should read "Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts" from Annie Duke. The book would help us make smarter decisions. 

Who is this book for?

This book is for everyone absolutely everyone! Each individual makes numerous decisions during the day and if we can improve the process of making the decisions even slightly the final outcome can be vastly improved. 

Disclaimer: This post is by no means a summary of the book, I would encourage everyone to go ahead and grab the book and give it a go.

Book Notes

Life Is Poker, Not Chess

Humans have a tendency to equate the quality of decisions with the quality of its outcome. Poker players have a word for this: "resulting". 

  • Why are we so bad at separating luck and skill? 
  • Why are we so uncomfortable knowing that the results can be beyond our control? 
  • Why do we create such a strong connection between results and the quality of decisions preceding them? 
If we are asked to list down our best and the worst decision in the previous year, most of us would remember the best and the worst results rather than the best and the worst decisions.

Hindsight bias is the tendency, after an outcome is known, to see the outcome as having been inevitable. We say this all the time "I should have known this would happen", or "I should have seen it coming", while doing so we are succumbing to hindsight bias. Those beliefs develop from an overly tight connection between outcomes and decisions. This is typical of how we evaluate our past decisions.

When we work backwards from results to figure out why those things happened, we are susceptible to a variety of cognitive traps, like assuming causation when there is only a correlation or cherry-picking data to confirm the narrative we prefer. 

Many decision-making missteps originate from the pressure on the reflexive system to do its job fast and automatically. Most of what we do daily exists in automatic processing. The challenge is not to change the way our brains operate but to figure out how to work within the limitations of the brains we have.

Poker players have to make multiple decisions with significant financial consequences in a compressed time frame, and do it in a way that lassoes their reflexive minds to align with their long-term goals. This makes the poker table a unique laboratory for studying decision-making.

Chess on the other hand, is a well defined form of computation. It contains no hidden information and very little luck. If you lose a game of chess, it must be because there were better moves that you didn't make or didn't see. Chess, for all its strategic complexity, isn't a great model for decision-making in life, where most of our decisions involve hidden information and much greater influence of luck. 

Poker, in contract is a game of incomplete information. It is a game of decision making under conditions of uncertainty over time. Valuable information remains hidden. There is also an element of luck in any outcome. You could make the best possible decision at every point and still lose the hand. 

The quality of our lives is the sum of decision quality plus luck. 

Wanna Bet?

When you are betting, you have to back up your belief by putting a price on it. By treating decisions as bets, we can explicitly recognise that we are deciding on alternative futures, each with benefits and risks. All decisions are bets. In most decisions we are betting against all the future versions of ourselves that we are not choosing. Whenever we make a choice we are betting on a potential future. 

We bet based on what we believe about the world. Part of the skill in life comes from learning to be a better belief calibrator, using experience and information to more objectively update our beliefs to more accurately represent the world. The more accurate our beliefs, the better the foundation of the bests we make. 

We form beliefs in a haphazard way, believing all sort of things based just on what we hear out in the world but haven't researched for ourselves. This is how we form beliefs:
  • We hear something;
  • We believe it to be true;
  • Only sometimes, later, if we have time or the inclination, we think about it and vet it, determining whether it is, in fact, true or false. 
Once a belief is lodged, it becomes difficult to dislodge it. It takes on a life of its own, leading us to notice and seek out evidence confirming our belief, rarely challenge the validity of confirming evidence, and ignore or work hard to actively discredit information contradicting the belief. This irrational, circular information processing pattern is called motivated reasoning

Fake news isn't meant to change minds. As we know, beliefs are hard to change. The potency of fake news is that it entrenches beliefs its intended audience already has and then amplifies them. Internet is a playground for motivated reasoning. Many social media sites tailor our internet experience to show us more of what we already like. 

When someone challenges us to bet on a belief, it triggers us to vet the belief, taking an inventory of the evidence that informed us. "Wanna bet?" question triggers us to engage in the third step of belief formation i.e. validating the belief. 

We would be better served as communicators and decision-makers if we thought less about whether we are confident in our beliefs and more about how confident we are. What if, in addition to expressing what we believe, we also rated our level of confidence about the accuracy of our belief on a scale of 0 to 10? Forcing ourselves to express how sure we are of our beliefs brings to plain sight the probabilistic nature of those beliefs. 

Bet to Learn: Fielding the Unfolding Future

Experience can be an effective teacher. But, clearly, only some students listen to their teachers. People who learn from experience improve and advance. The future we have bet on unfolds as a series of outcomes. As the future unfolds into a set of outcomes, we are faced with another decision: Why did something happen the way it did? 

As outcomes come our way, figuring out whether those outcomes were caused mainly by luck or whether they were predictable result of particular decisions we made is a bet of great consequence. If we determine our decisions drove the outcome, we can feed the data we get following those decisions back into belief formation and creating a learning loop




Actively using outcomes to examine our beliefs and bets closes the feedback loop, reducing uncertainty. The bets we make on when and how to close the feedback loop are part of the execution.

The way our lives turn out is a result of two things: the influence of skill and the influence of luck. Any outcome that is a result of our decision-making is in the skill category. If an outcome occurs because of things that we can't control the result would be due to luck. Chalk up an outcome to skill, and we take credit for the result. Chalk up an outcome to luck, and it won't be in our control. The updated learning loop looks like this




Outcomes don't tell us what's our fault and what isn't, what we should take credit for and what we shouldn't. This makes learning from outcomes a pretty haphazard process. We take credit for the good stuff and blame the bad stuff on luck so it won't be our fault. The result is that we don't learn from experience well. This is called "Self-serving bias". This pattern is a deeply embedded and robust thinking pattern. Understanding why this pattern emerges is the first step to developing practical strategies to improve our ability to learn from experience. 

We blame our own bad outcomes on bad luck, but when it comes to our peers, bad outcomes are clearly their fault. Our own good outcomes are due to our awesome decision-making, but when it comes to other people, good outcomes are because they got lucky. 

Be a better credit-giver than your peers, more willing than others to admit mistakes, more willing to explore possible reasons for an outcome with an open mind, even, and especially, if that might cast you in a bad light or shine a good light on someone else. 

The Buddy System

We need to find only a handful of people willing to do the exploratory thinking necessary for truth seeking. Being in a group can improve our decision quality by exploring alternatives and recognising where our thinking might be biased, but a group can also exacerbate our tendency to confirm what we already believe. Interacting with similarly motivated people improves the ability to combat bias not just during direct interactions but when we are making and analysing decisions on our own. 

Accountability improves our decision-making and information processing when we are away from the group because we know in advance that we will have to answer to the group for our decisions. To get a more objective view of the world, we need an environment that exposes us to alternate hypotheses and different perspectives. To view ourselves in a more realistic way, we need other people to fill in our blind spots. Accuracy, accountability and diversity wrapped into a group's character all contribute to better decision-making, especially if the group promotes thinking in bets. 

Dissent to Win

Be a data sharer. That's what experts do. In fact, that's one of the reasons experts become experts. They understand that sharing data is the best way to move towards accuracy because it extracts insights from your listeners of the highest fidelity. 

When we have a negative opinion about the person delivering the message, we close our minds to what they are saying and miss a lot of learning opportunities. Likewise, when we have a positive opinion of the messenger, we tend to accept the message without much vetting. Both are bad. 

Our brains have built-in conflicts of interest, interpreting the world around us to confirm our beliefs, to avoid having to admit ignorance or error, to take credit for good results following our decisions, to find reasons bad results following our decisions were due to factors outside our control, to compare well with our peers, and to live in a world where the way things turn out makes sense.

Skepticism is about approaching the world by asking why things might not be true rather than why they are true. A productive decision group would do well to organise around skepticism. 

Adventures in Mental Time Travel

When we make in-the-moment decisions (and don't ponder the past or future), we are more likely to be irrational and impulsive. This tendency where we favour our present-self at the expense of our future-self is called temporal discounting. We are willing to take an irrationally large discount to get a reward now instead of waiting for a bigger reward later. When we think about the past and the future, we engage deliberative mind, improve our ability to make more rational decision. 

Moving regret in front of a decision has numerous benefits. First, obviously it can influence us to make a better decision. Second, it helps us treat ourselves more compassionately after the fact. We can anticipate and prepare for negative outcomes. By planning ahead, we can devise a plan to respond to a negative outcome instead of just reacting to it. 

By working backwards from the goal, we plan our decision tree in more depth. The most common form of working backward from our goal to map out the future is known as backcasting. In backcasting, we imagine we've already achieved a positive outcome. Then we think about how we got there. Backcasting makes it possible to identify when there are low-probability events that must occur to reach the goal. 

Premortem is an investigation into something awful, but before it happens. Backcasting and Premortems complement each other. Despite the popular wisdom that we achieve success through positive visualisation, it turns out that incorporating negative visualisation makes us more likely to achieve our goals. Imagining both positive and negative futures helps us build a more realistic vision of the future, allowing us to plan and prepare for a wider variety of challenges. 

Conclusion 

Overall it was a good read and I am implementing the learnings from the book to become a better decision maker. 

Wednesday, January 20, 2021

Book Notes: Extreme Ownership: How U.S. Navy SEALs Lead and Win

After reading rave reviews about the book Extreme Ownership: How U.S. Navy SEALs Lead and Win I decided to give it a go. 

This book deserves - no not deserves but - commands respect. It teaches various leadership principles and how to apply them in different situations. Authors Jocko Willink and Leif Babin - who were both U.S. Navy SEALs - teach us the leadership principles using real life examples from numerous combat operations executed in Iraq. 

This book is for everyone who is stepping into any sort of leadership position, in business or personal life or absolutely anything. 

Disclaimer: This post is by no means a summary of the book, I would encourage everyone to go ahead and grab the book and give it a go. I am sure you will learn a ton about leadership!

Book Notes

Extreme Ownership

When things go wrong - which they will - it is responsibility of the leader to take full and complete ownership. It's very easy to blame others for the failures, but it always results in suboptimal and dysfunctional teams. The buck stops at the leader, there is no one else to blame. 

This will ensure that the team is not busy playing "the blame game" and focuses their energy onto the things that matter and gets the job done. Once this principle gets embedded into your standard operating procedures, it becomes easier for the teams to talk more constructively about the failure, they will learn what did they do wrong and what should they do better in the future.

There are no bad teams, only bad leaders.

Leaders who want to achieve higher standards of performance for the team, must recognise - what really matters is "it's not what you preach, it's what you tolerate". 

If substandard performance is accepted and no on is held accountable - the poor performance becomes the new standard. Leaders must always keep learning and improving, they must also build this mind-set into the team.

Believe

In order for your team to accomplish a mission, the leader must truly believe it. If the leader doesn't believe in the mission, he or she will not be able to make the team believe in the mission. 

If the team doesn't believe in the mission then, the team is setup for failure. They will not take the risks required to overcome inevitable challenges necessary to execute the mission. 

Leave the Ego behind

Ego clouds and disrupts everything: the planning process, the ability to take good advice, and the ability to accept constructive criticism. The most difficult ego to deal with is your own! 

When personal agendas become more important than the team and the overarching missions success, performance suffers and failures is ensured. Admitting mistakes, taking ownership and developing a plan to overcome challenges are integral to any successful team and Ego is an enemy to all that.

Cover and Move: Teamwork

All elements within the greater team are crucial and must work together to accomplish the mission. Teams should mutually support one another for that singular purpose. Departments and groups within the team must break down silos. If the teams starts operating independently or work against each other, the results can be catastrophic.  

The leaders should continually keep perspective on strategic mission and remind the team that they are part of the greater team and the strategic missions is paramount. When different teams use the language "us versus them" it's a giant red flag. The leader must guide the team to overcome this mentality and work together, mutually supporting one another. 

Simple - KISS - Keep It Simple Stupid

The plan has to be simple. It should be simple enough so that each and every team member understands the plan and has complete clarity on it. This is essential because, when things go wrong and they always do go wrong, complexity compounds issues that can spiral out of control into a complete failure. 

It is critical that leaders enable the team members to ask questions about things that they do not understand about the plan or their responsibilities. Leaders must encourage this communication and take the time to explain, so that every team member fully and completely understands the plan. Without this failure is almost always guaranteed. 

Prioritise and Execute 

At times there are many important problems to tackle simultaneously. Even the most competent of leaders can be overwhelmed, if they try to tackle all of them simultaneously. Instead, leaders must determine the highest priority task and execute. When overwhelmed, fall back upon this principle: Prioritise and Execute. 

It is crucial for leaders to step back and maintain the strategic picture. This is essential to help them correctly prioritise. These are the steps to do it effectively

  • Evaluate the highest priority problem
  • Clearly state the highest priority effort for the team.
  • Seek inputs from key leaders and build a solution 
  • Execute the solution, focus all resources towards this priority task.
  • Move to the next problem. 
  • Repeat.
  • When priorities change, make sure to pass the information up and down the chain.
  • Keep an eye on other problems that are building up.
Decentralised Command

Humans are generally not capable of managing more than six to ten people, particularly when things go sideways and inevitable contingencies arise. Teams must be broken down into manageable smaller groups with a clearly designated leader. Subordinate leaders must be empowered to make the decision on key tasks necessary to accomplish that mission in most effective and efficient manner possible. 

This doesn't mean that the subordinate leaders or the team members operate on their own, this will result in chaos. Instead, they must fully understand what is within their decision-making authority i.e. the left and right limits of their responsibility. They must also communicate with senior leaders to recommend decisions outside their authority and pass critical information up the chain so the senior leadership can make informed strategic decisions. Subordinate leaders are expected to plan and execute rather than ask "What do you want me to do?" To get to that stage, each team member must clearly understand the strategic mission. 

Plan

A broad and ambiguous mission results in lack of focus, ineffective execution and mission creep. To prevent this the mission must be carefully refined and simplified so that it is explicitly clear. Mission must explain the overall purpose and desired "end state".

Leaders must delegate the planning process down the chain as much as possible to key subordinate leaders. Team participation even from most junior personnel is critical in developing bold, innovative solutions to problem sets. Giving the frontline teams ownership of even small piece of the plan gives them buy-in, helps them understand the reasons behind the plan and creates the belief in the mission. This translates into far more effective implementation and execution. 

Leading Up and Down the Chain of Command

A good leader is immersed in the planning and execution of tasks, projects and operations to move the team towards a strategic goal. Such leaders possess insight into the bigger picture and why some tasks need to be done. This information does not automatically translate to subordinates. It is paramount that senior leaders explain to the subordinate leaders and the team how their role contributes to the big picture success. This understanding helps the team members prioritise their efforts in rapidly changing, dynamic environment. This is called leading down the chain of command. 

If your boss ins't making a decision in a timely manner, don't blame the boss. First, take extreme ownership and introspect what you can do to better convey the critical information for decision to be made? Leading up the chain of command requires tactful engagement with immediate boss to obtain the decisions and support necessary to enable your team to accomplish the goal. To do this, leader must push situation awareness up the chain of command.

Decisiveness amid Uncertainty

The leaders cannot be paralysed by fear. That results in inaction. It is critical for a leader to act decisively amid uncertainty. To make the best decision they can based on only the immediate information available. Leaders must be comfortable in chaos and act decisively. Waiting for 100% information before making a decision is catastrophic. 

Discipline Equals Freedom - The Dichotomy of Leadership

Leadership requires finding the equilibrium in the dichotomy of many seemingly contradictory qualities. 
  • A leader must lead but also be ready to follow.
  • A leader must be aggressive but not overbearing. 
  • A leader must be brave but not foolhardy
  • A leader must have a competitive spirit but also be gracious loser
  • A leader must be attentive to details, but not obsessed by them
  • A leader must be strong but likewise have endurance, not only physically but mentally.
  • A leader must be humble but not passive; quiet but not silent. 
  • A leader must be close to subordinates but not too close. Leaders must never get so close that the team forgets who is in charge.
  • A leader must exercise Extreme Ownership and decentralised chain of command by giving control to subordinate leaders.
  • A leader has nothing to prove but everything to prove!
Conclusion 

I learned a great deal from this book, it has a world of experience to offer. I hope, you are inspired enough to pick this book up and give it a go!

Sunday, November 29, 2020

Book Overview: High Output Management

I finally got my act together and read the book High Output Management by Andrew Grove - The legendary ex-chairman and CEO of Intel. 

This is by far the most important book to read for improving the output of your company. The book applies production principles to management. It also provides comprehensive overview of a managers role and how they can improve the output of their own organisation. The main thing I learned from the book was:

Managers Output

A manager’s output = the output of his organisation + the output of the neighbouring organisations under his influence.

A manager's objective is to increase the output of those below and around him. A manager should therefore focus on high-leverage activities that have a multiplicative impact on the overall output of his subordinates and peers.

The book states that, “When a person is not doing his job, there can only be two reasons for it. The person either can’t do it or won’t do it; he is either not capable or not motivated.” Hence, to increase the performance of an individual, manager has only two options. 

  • Training 
  • Motivation
To increase motivation, manager needs to understand an individual’s highest level needs. The needs can be mapped to the Maslow's Hierarchy of Needs

Training is the highest leverage activity a manager can do to increase the output of an organisation. 

If a manager spends 12 hours preparing training for 10 team members that increases their output by 1% on average, the result is 200 hours of increased output from the 10 employees (each works about 2000 hours a year). Don’t leave training to outsiders, do it yourself.


Meetings

A lot of time I have seen people end up with endless meetings with participants having no say in whats going on. This is very wasteful for both employee as well as the company. People's time should be treated as one of the most important asset in any company. Meetings should be purposeful and well-executed. The book categorises the meetings into two main categories. 

  • Process-oriented meetings
  • Mission oriented meetings.
The process oriented meetings include the one-to-one meetings, staff meetings and performance review meetings. 

The book goes to great length to explain the importance of one-to-one meetings. They are not only a fundamental element in the manager/employee relationship, but also act as the best source for organisational knowledge that a manager can get. 

Performance reviews are easily mistaken as simply a way to assess performance and evaluate compensation. The fundamental goal of a performance review is to improve the subordinates performance. The performance review is intended to influence a subordinate's performance, this makes this activity one of the manager's highest-leverage activities. Great care needs to be taken in the preparation and delivery of a performance review.

The mission oriented meetings are created on an ad-hoc basis to take a decision. These type of meetings should be lesser than 25% of the total meetings. The meeting attendees should be well prepared and all people vital to taking the decision should be part of the meeting.


Decisions

Last point I want to mention from the book is about making a decision.

Managers technical knowledge will become dated over time, so decision-making in a technical, information-driven environment needs to be a process that takes into the account both people with knowledge-power and people with position-power. 

People with knowledge-power have the knowhow of how the technology works, they understand the technology better. People with position-power are the ones who are responsible for actually taking the decision.

To make any decision all of the below mentioned questions should be answered in advanced:

What decision needs to be made?
When does it have to be made?
Who will decide?
Who will need to be consulted prior to making the decision?
Who will ratify or veto the decision?
Who will need to be informed of the decision?

The book offers so much guidance, I recommend reading the book multiple times to actually digest and implement the advices fully.

Saturday, October 31, 2020

Book Overview: The Art Of Game Design

Well, where do I begin. The Art Of Game Design by Jesse Schell is the holy grail for game designers. It is simply a must read for anyone who is serious about build a game.

This book is extremely detailed and it will be foolish of me to summarise this book here. I will instead provide an overview about the book and encourage you to read this awesome book. The kindle version of the book can be bought from Amazon

Book Overview

The book starts by listing down the skills that a game designer needs to learn in order to design an awesome game. It lists around 20 essential skills, ranging from Anthropology, Architecture, Engineering, Economics, Mathematics, Sound and Music, Psychology to Visual Arts.

After reading this list for the first time, my respect for the game designers sky rocketed. I was wondering, can any single person have all these skills? 

As with everything else the most important skill for a game designers is "Listening"

Game designers must listen to many things. These can be grouped into five major categories: team, audience, game, client and self!

The book then starts dissecting the process of creating a good game. It's like peeling an onion, layer after layer the book talks about various important aspects to consider while designing a game.  Here's a comprehensive but elegant map of things involved in creating a good game design 


The book gives out a set of questions that must be asked by the game designer to iterate on the current game design to make it better. These questions are called lenses. 

There are about 100 lenses described in the book. It also gives a set of most important question that the game designer must ask to look at the current game design from a given lens. For e.g. "The Lens of Fun" the questions for this lens are 

  • What parts of my game are fun? Why?
  • What parts need to be more fun?

Using the knowledge from the book we improved many things in our game design process. I would like to mention one very simple change we did which resulted in giving us great results. 

The book talks about "Finding a Brainstorming Partner". 

Finding the right brainstorming partner can make a world of difference-sometimes the two of you can get to great solutions many times faster than either of you could alone, as you bounce ideas back and forth and complete one another's sentences.

 We implemented this simple change in our process and we saw immediate improvements in our progress. The book is filled with tips like these. These tips can have material impact on the final game.

The book talks about 100 different lenses, obviously it's difficult to remember all of them. To make the lenses more handy and easy to use, author has an iOS and Android app called The Art of Game Design: a Deck of Lenses

Overall, I feel it was a great read and I totally recommend reading this book. If you have built a game in the past or are considering building a game just pick up a copy today.

Wednesday, September 30, 2020

How To Invoke Swift code from Objective C code

I wasted a couple of hours trying to do exactly this. The lack of clear documentation didn't help either. I decided to write small post about this so that others do not have to waste their time digging through the documentation.

How do you invoke Swift code from Objective C code?


Swift class either need to be derived from NSObject or they need to be @objc attribute. Let's look at a simple swift class that we want to invoke from Objective C


When you add the Swift class to the Objective C project, XCode will ask whether you want to generate the "Bridging Header", just say yes. This header is useful when you want to invoke Objective C code from Swift code. But we are interested in doing the opposite, i.e. invoke Swift code from Objective C code.

Next we need to head to XCode -> Project Properties -> Target -> Build Settings, search for "Generated Interface". You should see a single entry called "Objective-C Generated Interface Header Name". You need to make a note of the generated header file name, it follows the format "<Product Module Name>-Swift.h"




This is the name of the header file that we need to include in our Objective C code to invoke the Swift code. This header file is auto-generated by XCode.

In the Build Settings search for "Bridging Header". You should see an entry called "Objective-C Bridging Header". This setting points to the path of the Bridging Header generated by XCode earlier. The value here should have been populated by XCode automatically. 


We also need to set the value of "Swift Language Version" Build Setting. Search for "Language Version" and set the value.



Now that the Build Settings are out of the way, here is the sample Objective C code which invokes the Swift class we defined above.


Please note that you can only include the "<Product Module Name>-Swift.h" in the .m or .mm files. To use the Swift class in .h file, just forward declare it using @MySwiftClass.

Thats about all there is to invoke Swift code from Objective C, we do not need to change any other Build Settings. If the documentation was clear enough, I would not have to write this post!

Sunday, August 30, 2020

Invoking AppStore Connect API via Command Line

Sometime back Apple had opened up the AppStore Connect API for its developers. The API is a bunch of RESTful service which can be used to customise and automate our workflows. It helps us automate tasks across developer tools, such as App Store Connect, Xcode, and Certificates, Identifiers & Profiles, to give us greater flexibility and increased efficiency in our workflows. We could use it for development, beta testing, managing app metadata, reporting etc.

It can be very helpful to invoke the AppStore Connect API via command line. I use it primarily to check the structure of the response object. Although the documentation of the AppStore Connect API is good, but there is nothing as good as seeing the response object with real values in it.

In this post we will see how can we invoke the AppStore Connect API from the command line.

How To Do It? 

To invoke the AppStore Connect API via command line we will follow these steps.

  • Create API Key from the App Store Connect Web Portal
  • Create JWT JSON Token for Accessing API using XCToken
  • Invoking the API from command line using curl.

Create API Key 

  • To generate an API Key you will need to login to iTunes Connect portal. 
  • Navigate to the "Users and Access" section


  • In there, navigate to the "Keys" tab
  • Choose the "Key Type" as "AppStore Connect API"
  • Make a note of the "Issuer Id" we will be using this later on to generate the JWT JSON Token.


  • Generate a New API Key, by clicking the "+" icon. This will open up a dialog which ask you to name the key and select the Access type. I am going to choose "Developer" for this post.


  • This will generate the API key, make a note of the generated Key Id we will be using it later to generated the JWT JSON Token.
  • iTunesConnect will give you an opportunity to download the generated key only once. So please make sure you download it and keep it safe.


  • This completes the steps necessary to generate an API Key.

Create JWT JSON Token

To Generate the JWT JSON Token we are going to use a command line utility called XCToken. It can generate on-demand JWT tokens forAppStore Connect API. To install the utility just run the following command.

gem install xctoken
To generate the JWT JSON Token this utility expects three environment variables.
  • ISSUER_ID = This is the issuer id which we have noted in the earlier step from the iTunes Connect page.
  • KEY_DIR = The full directory path where the API key was downloaded from iTunes Connect
  • KEY_ID = The key id of the newly generated API key.
Once these environment variables are set up the XCToken is ready to generate the JWT JSON Token. Here is the sample script that will generate the token.

export ISSUER_ID=ABCD
export KEY_DIR=~/Downloads/
export KEY_ID=ABCD1234
xctoken  generate
This will spit out the token on the console, make a note of this token, we will be using it to invoke the AppStore Connect API.

Invoking the API

Now that we have generated a new JWT JSON Token, we are ready to invoke the AppStore Connect API. Here you can find various endpoints and their documentation. For e.g. to get a list of all your apps, use the following command.

curl  https://api.appstoreconnect.apple.com/v1/apps --Header "Authorization: Bearer <GENERATED TOKEN>"
Thats about all we need to do to invoke the AppStore Connect API via command line!

Have some Fun!