Skin in the game is an old phrase that meant that you had something to lose if things went bad.
Nassim Nicholas Taleb tells us not to accept advice from a consultant/advisor who doesn’t stand to lose something if you lose something with the advice–they don’t have skin in the game. On the other hand, if you are trying to win through investing or even otherwise, you’d be better with skin in the game.
Following up on The Black Swan: The Impact of the Highly Improbable, Taleb’s latest book is Skin in the Game: Hidden Asymetries in Daily Life. In it, he offers many practical examples for success and takes pointed swipes at his adversaries also noting that being an intellectual doesn’t mean that you can detect satire.
Here are a few insights:
For social justice, focus on risk sharing and putting skin in the game. He pokes at the Wall Street bankers who walked off with personal millions by transferring risk from themselves to citizens of the US.
The world is not run by consensus majorities, but by stubborn minorities imposing their tastes and ethics on others.
You can be an Intellectual yet an Idiot. Educated Philistines have been wrong on everything from Stalinism to Iraq to low-carb diets.
Beware of complicated solutions (that someone was paid to find). Remember, a simple barbell is better for strength fitness than an expensive machine.
True religion is commitment, not just faith. How much you believe in something is manifested only by what you are willing to risk for it.
Intellectual monoculture prevails in the absence of skin in the game.
The symmetry of skin in the game is a simple rule that is necessary for fairness and justice, and the ultimate BS-buster.
I am a fan.
This is a post about education, personal development, and why you should be a generalist.
Tiger Woods was trained almost from the cradle for one thing–to be the greatest golfer.
Roger Federer tried many sports. He loved soccer. Even though his mother was a tennis teacher, he didn’t pick up tennis until his early teens. Other kids had been playing for years by then. He soon passed them by and into his thirties is a dominant tennis star.
You need to be good at something, but it is good to be interested and experienced in many things.
I have a book to recommend. Range: Why Generalists Triumph in a Specialized World, by David Epstein. This book will help you learn to live a fuller life–and help you bring up your kids and encourage your grandkids.
Life in the industrial age, as well as in some previous eras, was composed of patterns. You could be trained to recognize patterns and adapt and become skilled at them. These are called “kind” learning environments. Kids excel who see and repeat the patterns.
Life today is what a psychologist call a “wicked” learning environment. Here, the rules of the game are often unclear or incomplete, there may or may not be repetitive patterns, and they may not be obvious, and feedback is often delayed, inaccurate or both. In most devilishly wicked learning environments, experience will reinforce the exact wrong lessons.
So, let’s look at responding to today’s “wicked” learning environment. “The bigger the picture, the more unique the potential human contribution. Our greatest strength is the exact opposite of narrow specialization. It is the ability to integrate broadly.” This all sounds great. But what about what I read in the news as the “typical Trump voter” who is a worker trained in the old way watching his job being replaced. And who is the leader who is poised to take them to this next level? Well, no one. Just leaders who play to their fears.
There are some courageous leaders changing the system for educating young people so that they can thrive in this new environment. We just have to have more of that. More people guiding young people—and older people, as well—need to take into practice this advice from psychologist and creativity researcher Dean Keith Simoton, “Rather than obsessively focusing on a narrow topic, creative achievers tend to have broad interests.” Modern work demands knowledge transfer—the ability to apply knowledge to new situations and different demands. In my life I have worked with both highly educated engineers AND high-school-educated technicians who exhibit this. More must be encouraged.
For those who, like me, studied broadly as an undergraduate and didn’t care much about grades, take this observation from professor and researcher James Flynn who was “bemused to find that the correlation between the test of broad conceptual thinking and GPA was about zero. Flynn, “The traits that earn good grades at [the university] do not include critical ability of any broad significance.
Here is a tip for those who teach at any level. When asking a student a question, force them to answer, even if it is wrong. Then just force them to answer again. And again. Until they get it right. Giving them hints to guide a correct answer quickly provided fewer long-term results than the first method. “Repetition is less important than struggle.”
Oh, and in a test of forecasting, experts were far worse than “amateurs” getting it right!
How does one adapt? By reading widely. Pursue several interests. That will be the human triumph in an age of robots.
I am at the Las Vegas airport United Club on my way home after an the Hitachi Vantara customer conference. I learned a lot about the company, people I knew, and the technology.
But I’m not here to talk about technology. That will be the next post. I’m here today to talk planning, perseverance, achievement.
Perseverance keeps you working toward your goal; Planning leads to confidence; Achievement follows.
The final keynote speaker at the conference was Alex Honnold. You may think you don’t know him, but he was the rock climber featured in the documentary “Free Solo” about his climb up the face of El Capitan. Alone. No ropes. No safety.
I can’t look down 10 feet without feeling a little queasy. He went up 3,000 feet.
His story was about quest.
More than that, it was the painstaking planning and practice. He didn’t just decide to climb and then go up the cliff. He spent months exploring the face of the cliff on ropes. He needed to know the right path up. He needed to know every hold, every potential rock slide, every bush.
Then he mentally rehearsed every step of the way. He knew exactly what needed to be done at each transition point. He had rehearsed it in his mind a thousand times.
He made it.
We, also, can learn from that. What do we want to achieve? What will it take to make it? Plan every step of the way. Rehearse it in your mind. Make sure you are physically/mentally/intellectually prepared. Go for it!