Don Sull's blog

Business leaders must act decisively without knowing what the future holds. Action despite uncertainty is not unique to business. Generals wage war, politicians make policy, and coaches draft game plans without knowing how events will unfold. Action absent certainty is a universal challenge. “Life can only be understood backwards,” as Søren Kierkegaard noted, “but must be lived forwards.”

This summer I read several books describing how soldiers, coaches, philosophers, scientists, and politicians grapple with action under uncertainty. Three stood out as quite interesting. (Note to English readers: When Americans say “quite,” they mean “very,” while interesting implies they want to hear more. In England, “quite” means “not at all,” “interesting” equals “I can’t think of anything nice to say,” and calling something “quite interesting” indicates the speaker is desperately searching for the nearest fire exit).

• In The Metaphysical Club, Louis Menand composes a verbal fugue to trace the origins of pragmatism.  Menand introduces four distinct voices: the psychologist William James, the philosophers John Dewey and Charles Peirce, and Supreme Court jurist Oliver Wendell Holmes Jr. Menand summarizes pragmatism as “a single idea–an idea about ideas.  They [the thinkers he profiles] all believed that ideas are not ‘out there’ waiting to be discovered, but tools–like forks and knives and microchips–that people devise to cope with the world in which they find themselves” (xi). The pragmatists rightly argued that we need ideas (mental maps in my terminology) to make sense of a turbulent world and guide action. The value of an idea lies not in its correspondence to absolute “truth,” but its utility in coping with uncertainty. The pragmatists emphasized the importance of adapting mental maps as circumstances change. Menand interweaves the antecedents and variants of pragmatism into a coherent synthesis without sacrificing detail.  Although the pragmatists got many things right, they  ignored the benefits of committing to a mental map, a flaw I discuss in my next post.
• Vienna in the Age of Uncertainty by Deborah R. Coen traces Vienna’s Exners, a distinguished family of intellectuals, jurists, scientists, and educational reformers from the 1840s through the Second World War.  As Austrians faced the uncertainty of modern life, some clung to a dogmatic certainty, while others veered to the opposite extreme by denying the possibility that people could know anything at all. Coen traces how members of the Exner family used probabilistic thinking as a tool to navigate between the dangerous extremes of dogmatism and radical scepticism. Like the pragmatists in The Metaphysical Club, the Exners worked out the implications of their probabilistic world view in a range of fields including optics, the law, meteorology, and high school pedagogy. In education, for instance, the Exners shared a belief that “education was the acquisition not of eternal knowledge but of the ability to find one’s footing in an unpredictable world” (122), and advocated a philosophy course for high school students that would “immunize” them against dogmatism. In the law, one Exner used statistics to grapple with questions like what constitutes an “act of god” or force majeur in an unpredictable world.  Probabilistic thinking could not solve all the problems that the Exners tackled, but their efforts illuminate even when they fail.  Like most books written for academics, Vienna in the Age of Uncertainty requires a bit of effort to read, but Coen’s book repays the effort handsomely.
• In Moneyball,  Michael Lewis analyzes baseball and statistics, producing a book that is impossible to put down even for readers who think baseball is the one topic in the world less interesting than statistical analysis. Like every book by Lewis, Moneyball is well written and populated by engaging characters, but the book gains its universal appeal from the specific examination of a general story–how contextual shifts create opportunities that entrepreneurs seize, but only by defying conventional wisdom.  Three apparently unrelated changes in the late 1970s set the story in motion: Sabermetrics, the statistical analysis of baseball pioneered by Bill James in 1977 provided the tools to assess a player’s value with precision, while Moore’s law reduced the expense of crunching the numbers exponentially. The simultaneous spread of free agency in baseball raised the cost of a recruiting mistake from thousands to millions of dollars. The opportunity was obvious–use data and statistics to pick players–and yet more than two decades passed before Billy Beane began drafting players by the numbers. To seize the opportunity, Beane weathered howls of derision from baseball old-timers who clung to their traditional ways of evaluating players. This story is playing out across industries, including retail, health care, and publishing, where new information technology creates opportunities for radical improvement in performance, which go unseized due to tradition, inertia, and fear.