From Study Hacks: Making Sense of a Recent Attack on Practice

This is from Study Hacks, a blog that’s so popular, chances are you’ve already read the article. I’m a huge enthusiast in the whole talent vs effort debate, and so this was immediately interesting to me:

Is Talent Underrated? Making Sense of a Recent Attack on Practice

Here’s the gist:

Many popular authors have recently cited correlations between elite success in a field, and the amount of time, effort and skilled mentoring that contributed to that success. The most famous example is Malcolm Gladwell‘s observation that many preeminent successes have applied over 10,000 hours to their field. This has tilted the current talent vs effort debate in favor of effort, suggesting that disciplined practice and a supportive environment are better predictors of future success than inherent aptitude.

This belief has become very fashionable because it’s such an empowering thought, and appeals to our sense of just rewards. If you follow the logic to the end of the rainbow, then your first-grade teacher was being straight with you when she said you can do anything you want.

Not so fast, say David Hambrick and Elizabeth Meinz, the psychology professors who wrote a recent New York Times op-ed called, “Sorry Strivers, Talent Matters.” The article is based on their research, published in the Journal of Psychological Science, which found that among sight-reading pianists, those with higher memory capacity (their proxy for “talent”) performed better on average than those with low memory capacity.

The blog Study Hacks, which posted and commented on the article, is authored by a vocal proponent of the Deliberate Practice Hypothesis (a phrase he coined). Here’s author Cal Newport, in his own words:

Recently, I’ve been exploring what we can call the deliberate practice hypothesis. This hypothesis says if you apply deliberate practice (a technique well known to athletes, musicians, and chess players) to the world of knowledge work, you will experience a significant jump in ability.

Being an expert in the field of performance improvement, Mr. Newport took a close interest in this op-ed and supporting research.

I’ll let you read Mr. Newport’s comments for yourselves, since they are well written and I would not be doing them justice to paraphrase them here. Suffice it to say that despite the conclusions of this particular paper, there are many reasons not to give up hope on effort and practice just yet.

It turns out, for example, that this same study found that those musicians who practiced for more hours performed significantly better than those who practiced for fewer hours, and that performance gap was much more dramatic than the gap based on working memory capacity.

In other words, the research does not conclude that talent is the most important performance factor; it merely concludes that effort is not the sole predictive factor.

None of this is going to come to any surprise to the rest of us. We all instinctively know that, while it’d be nice to be able to achieve elite status based on strife alone, there is also such thing as natural aptitude and it does have an influence on our performance. As long as research in this area attempts to prove absolutes (e.g. “There is no such thing as talent.” or “Knowledge and practice are not the sole predictors of success.”), it will not be useful to us.

What we would like to know is what improvements can be achieved through application? Could almost anyone be an athlete if they ate, breathed and slept it? How about a performer? How about a research professor?

While it seems logical that there are limits to everything, I also like Cal Newport’s philosophy. One of the most interesting points he makes about the Deliberate Practice Hypothesis is that few people really try it (especially in knowledge work). Few people really eat, breathe and sleep anything, so it’s hard to tell if such a person could have theoretically overcome a deficit of natural aptitude.

When I was in theatre school, I knew people with a great amount of natural gifts, whether it be height, charisma, vocal power, attractiveness, excellent singing voices, or a gift for compelling, believable line readings. I also met a lot of people who didn’t have these gifts…I was one myself.

What I did not see was anyone who was so intent on overcoming these shortcomings that he/she consciously racked up stage time any way possible, poured over new plays, practiced line readings from shows they were not in, took full advantage of professors available for monologue work, etc. I saw many actors who were dedicated, but none who were really relentless, even though the profession demands it by definition. So I can’t point to an example of someone who became an actor from nothing but sheer will.

For my own part, I was too busy being worried that I wasn’t naturally gifted enough for the profession. What would have happened if I had taken all that worry and applied the hell out of myself? I haven’t the foggiest idea. But it would have been helpful to have had some insight one how much that might have mattered. I’m sure many other people feel the same way.

Is it possible to will an aspiration into reality, no matter the natural aptitude? I have no idea. But after reading Cal Newport’s work, I believe that when we fall short, one of the last things we should blame is a lack of talent.

How Debt Screws With Our Heads, Part 2: Distortion and Bias

This is Part 2 of a 2-part article on the human cognition of risk and debt. Part 1 can be found here.

In our last post, we talked about the loss-aversion mechanisms of the brain, and how they send us emotional signals that help us avoid unwise risk. We also noted that there were about ten or twelve cognitive biases that tend to interfere with that mechanism, keeping it from kicking-in when it should. Here are a few of the major cognitive distortions that disable our ability to objectively conceptualize the risks of debt:

Aversion to Sure Loss: “If I don’t take this risk, I can’t get back where I should be.”

Loss aversion can hurt us as well as help us, because if we feel that we are “down,” we tend to take increasingly risky behaviors to try and get “back even.” This was proven out in a serious of famous choice problems conducted by Tversky and Kahneman.

Aversion to Sure Loss is related to another bias called Social Anchoring. Social Anchoring is the idea that if you don’t take on this risk, everyone else will pass you by. Both biases make you feel like you might be “behind” by comparison. One World Bank policy working paper pointed out how the directors of the Big 5 investment banks were concerned not about the nature of the investments they took on, but about beating one another’s returns.

In his paper, How Psychological Pitfalls Generated the Global Financial Crisis, Professor Hersh Shefrin tells how UBS, trailing its competitors in 2006, got itself deep into the subprime mortgages that led to its downfall. Their decisions seemed to have less to do with the prudence of the investment than with their trailing position in the industry. They made the decision from what’s called “the domain of losses,” the same psychological sensation we feel when we’ve lost $200 at the blackjack table, and we “know we can get it back.”

Present Bias: “I’ll just sacrifice something later on to make room for this new debt.”

Present Bias says that we value the present more than we value the future. Sure, it’s okay to eat cake now; you’ll do more exercise next week to make up for it. Sure we can afford the flatscreen; we’ll give up something else for the next couple months.

How Debt Screws With Our Heads, Part 1: Pleasure and Pain

This is Part 1 of a 2-part article on the human cognition of risk and debt. The second part can be found here.

In her textbook Neuroeconomics and the Firm, Angela A. Stanton quotes psychiatrist and former trader Richard Peterson, who tells us the story of Lee:

Lee [was] a 53-year-old partner in an accounting firm, who lost part of his Orbitofrontal Cortex (OFC) as a result of surgery to remove a tumor…

After a successful operation, Lee was able to return to work and function normally except for his terrible investment decisions. He bought several expensive vacation time shares, bought penny stocks based on faxed and emailed promotional material and could not keep up his mortgage payments. The loss of his OFC took away an important part of Lee’s functional ‘loss avoidance’ system. Previously a conservative investor, he was now unable to feel ‘risk.’ Lee explained that he knew he should feel uncertain and afraid, but his highly speculative investments did not feel ‘risky’ to him.

America is a nation engorged on debt. Many of us need ten years or more to pay off hefty student loans. Many others of us never fully recover from getting too deep into credit card debt. Still others of us took mortgage debt on terms we couldn’t afford because we planned on refinancing before it became a problem.

Market theory tells us that supply and demand forces will place a rational value on debt risk. A debtor fitting such-and-such a profile, with so much collateral, borrowing for so long a time equals a precise interest cost. Of course the future is not completely foreseeable, and there’s always a risk that the borrower will not be able to pay the loan back. But the market has baked that possibility into the cost of the loan…that’s the whole point. Therefore – as far as the market is concerned – debt is a knowable, quantifiable entity.

And yet, every major financial crisis in the history of the United States has been either precipitated or exacerbated by over-leveraging. Investors and banks have borrowed to finance investments since Aristotle’s time. Yet we find ourselves living through more and more periods of financial turmoil, usually kicked off by over-leveraged or unwisely-leveraged professional investors.

Preceding the 1929 crash, investors were buying stocks on as much as 90% margin (nine dollars of loan to every one dollar of capital). Starting in 1975, the maximum debt-to-equity ratio for investment banks was 12-1 (it could borrow up to 12 times its own net worth to play the market). When the rule was relaxed in 2004, those ratios went up to 30-1 and even 40-1. At the time of its crash, the Swiss bank UBS was leveraged at 60-1. The Long Term Capital Management hedge fund, at its 1998 bailout, had an effective leverage ratio of 250-1. These outlandish leverage rates were a major contributing factor to the 2007 financial crisis.

So if the major aspects of debt risks are so quantifiable – if you can know the terms and rationally determine the risks to which you will be exposed – why does debt consistently get us into so much trouble?

Swarm Intelligence: Is the Group Really Smarter?

Swarm Intelligence, or Swarm Theory, is the collective behavior of decentralized, self-organizing systems: ants in a colony, movie raters at Rotten Tomatoes, participants in a market economy, etc. By observing these systems in nature, scientists have theorized that such systems harness a sort of leaderless, collective intelligence. By leveraging these kinds of consensus-based systems, groups of independently-acting agents can solve problems more efficiently than they could if they were centrally controlled.

Ants, for example, do not use any kind of centralized management in their colonies. Organization happens organically, through millions of interactions between individual ants who are following very simple behavior rules. Some are patrollers, some are foragers, some perform maintenance, some collect waste, and so on. A forager will not leave the colony to go find food until it’s bumped into at least four patrollers and the interactions are no more than ten second apart. The fact that these patrollers have returned alive from the same area are the cue that it’s safe to travel to that area to forage for food.

Bees choose their next hive location using a similar, self-organized system. Scout bees will fly out in all directions looking for new hive locations. When a scout finds an interesting piece of real estate, it flies back to the hive to let the other bees know about his find. It communicates to other scouts using physical motion both the location of the potential new home and his enthusiasm for it (the goodness of fit). Soon, scout bees start assembling at four or five potential new hive locations. Consensus is reached once fifteen bees arrive at any single location. Those fifteen bees will then fly back to the hive to signal that the new hive location has been chosen.

Scientists started looking at this kind of theory as early as the 40’s (John Van Neumann and John Conway did the first theoretical work on “self-replicating automatons”). The field exploded in the last twenty years with the rise of computer science and the Internet. Swarm Theory lends itself perfectly to Artificial Intelligence. Computer learning is based on cycles of testing, valuation, and reiteration using simple heuristics and leveraging computational brute force. This is analogous to leveraging the many thousands of simply-programmed individual agents within a swarm. Google uses a variation of Swarm Theory to discern authorities and rank pages.

Swarm Theory was popularized in 2007, in a National Geographic article: I also spoke briefly about Swarm Intelligence in a previous article called The Superstar Trap.

There are many examples of how society has leveraged this idea, even before we knew what it was. Adam Smith’s Invisible Hand works through the collective intelligence of Swarm Theory. Market valuation is a perfect problem for this particular structure, and the fall of the Soviet Union became a great validator of the collective wisdom of decentralized markets compared with command economies.

Where Genius Comes From

“Edwin Land once told me that those people who can stand at the intersection of the humanities and science…are the people who can change the world.”

–Walter Isaacson quoting Steve Jobs

“I am here to stop your heart…. I am here to make you think…. I am not here to make pretty pictures!”

–Mark Rothko, in Red

Our reaction to Steve Jobs’s passing is uncanny for two reasons:

First, we’ve never before expressed so immense a grief for someone in the field of technology. We’ve seen emotional reactions to the passing of icons like Princess Diana and Michael Jackson, but it’s hard to imagine similar reactions for technology innovators. Could you picture the same reaction to the passing of Sergey Brin, even though our lives would be significantly different without the search engine he invented?

Second, most of the reaction has been laudatory, despite what we know of the man’s darker side. For every striking, almost hypnotically satisfying new invention he gave us, there were five stories about how he would embarrass, crush, humiliate, deride, browbeat, or publicly fire those around him. These stories were never denied or even mitigated. Given this very strong aspect of his nature, our elegies seem like cognitive dissonance on an epic scale.

It turns out that this seeming disconnect does not come from some irrational or misguided place. It comes from the frame in which we think about this man, and what he actually represents to us.

Steve Jobs may have founded a computer company, but he was not, fundamentally, a technology innovator. He was an artist, whose medium of choice just happened to be technology. Seen through this lens, we begin to understand the man’s singularity.

The Silicon Valley types have similar DNA, which makes it relatively easy for us to paint people like Brin, Bill Gates, Larry Page, and Mark Zuckerberg with the same brush. They give us tools and toys that both groundbreaking and useful. Jobs did as well, but his DNA was fundamentally different from these other men. Not necessarily better, but certainly rarer. Jobs has more in common with Mark Rothko, the expressionist artist who’s the subject of the John Logan play Red.  Both were perfectionists, temperamental to the extreme, and obsessed with making the viewer an active participant in the art.

Jobs was not a technology innovator in the mold of Brin, Page, or Zuckerberg. Jobs was a polymath – one of a few modern Renaissance Men who show mastery in several fields and who often straddle the line between artistry and innovation.

A Message to Data Analysts, Our Future Overlords

[Editor's Note] This entry is written as part of the Analytics Blogarama hosted by SmartData Collective. The subject prompt was: “The Emerging Role of the Analyst.”

***

As the post-apocalyptic civilization of 2017 (yes, it’s not too far off) sifts through banks of computer data searching for remnants of our contemporary culture, I hope they happen upon this post. I want them to note my foresight and prescience at having accurately predicted the new ruling class of the Next World Order.

As of this writing, very few of my colleagues join me in my supposition that data analysts – those seemingly quiet, thoughtful employees who “mostly kept to themselves” – are a mere six years away from all-out world takeover. My wife and I, no doubt, will not have survived the Great Quantitative Wars, but in return for paying homage to you “before it was cool,” I ask consideration for any household pets that may have survived us. If they survived, they’re probably hungry by now. There’s food in the bottom corner cabinet in the kitchen.

I understand why you felt you had to finally assert dominance over the world, and I sympathize. The madness simply had to be stopped.

It’s hard to believe that people wouldn’t see the signs leading up to this eventuality. After amassing many years of university education and several hundred thousand dollars worth of student loans, we rewarded you by putting you to work for managers that didn’t have the faintest idea what the hell you were talking about.

• “What do you mean, there’s no significant relationship? Make one!!”
• “Random, schmandom…who gives a damn?”
• “What the hell is a mean? I just asked you for the average!”

And God help you if you worked for an MBA. The beneficiaries of one intro stats course fifteen years before, they would proceed to tell you exactly how you must have miscalculated your c-value…and it’s not like you could tell them that there is no such thing as a c-value. You were very patient as you explained that, no, we can’t just throw in more bar and pie charts to pretty it up. But alas, there was that one accidental moment when you corrected your boss’s interpretation that the data showed his decisions were 95% certain to be accurate, and they kicked you over to the IT department and called you a “Business Analyst,” and you were never heard from again.

By the time the financial sector melted down in 2008, you clearly all had enough. You watched in horror as the market minted AAA-rated junk CDOs, and insisted that it had quantitative models that proved absolutely no risk. How could there be no risk?! A first-year quant student from University of Phoenix could have told you that there was risk! Yet off we went, because our banks had to make more money than all the other banks. The risk analysts were moved into closet offices.

We figured out too late that those people who we assumed to be quantitatively-driven traders were actually hormone-addled narcissists. Oops.

So, now you’re ruling the world, and I can’t really say that’s unjust. We kind of had it coming. Our mistake was that we didn’t respect analysis enough to learn about it. We had a statistics class once, and then said, “That’s hard. I’m just going to hire someone to do this.”

That’s a pretty arrogant stance. We assumed that we could be leaders while still maintaining our own ignorance. You can’t be a leader while turning whole subject matter areas unquestioningly over to others because we simply can’t be bothered to make an effort at understanding. While campaigning for the presidency in 2000, George W. Bush was asked several times about his lack of military experience, and he replied that he would “listen to his generals and take their advice.” Having witnessed how that plan turned out, we collectively made the same mistakes in the area of data analysis.

What we should have done was embrace the emerging role of analysts in business by educating ourselves to a level of basic competence, and placing some trust in the relatively objective perspectives they afforded us. The last ten years have put more useful data at business’s disposal than the preceding hundred years, and its to our benefit that you, our new leaders, became more prominent in business as a result. Your work gives us a picture of our enterprise that circumvents our internal biases and predilections. Respect for analysis and objectivity would have spared us both The Great Depression and The Great Recession, and God knows how many unnecessary bankruptcies and bad decisions. But, it also would have denied us the opportunity to remain ignorant and make uninformed gut decisions. So we said, screw it.

So, as you’re reading this, oh Great Overlords, you have consolidated your power as the new ruling class of earth. Praise be to you. The good news is that social programs will now be fully funded, the military fully provisioned, the national debt fully paid down, and lawyers abolished. The bad news, of course, is that salons, barber shops, and upscale style boutiques will have fallen into dilapidation from lack of use, and college parties will now be very measured, thoughtful affairs. I’m truly sorry we didn’t respect your value until it was too late for us, and I wish you well. And seriously, please, look in on the pets. The short, stumpy little fuzzy one likes cheese.

***

If you’re new to this blog, it has lots of information on what motivates our behavior and interactions. It may therefore provide some insight into the downfall of our civilization and the rise of the Analyst Ruling Class. Here are some articles that might be of interest:

Social Validation and the Drive for Success

The Six Weapons of Influence: Reciprocity

The Six Weapons of Influence: Commitment and Consistency

The Six Weapons of Influence: Social Proof

The Six Weapons of Influence: Liking

The Six Weapons of Influence: Authority

The Six Weapons of Influence: Scarcity

The Halo Effect

Why We Want What We Can’t Have, and Can’t Have What We Want

Motivation in the Workplace: Surprising New Science

How Pressure and Stress Are Affecting Your Performance

Rational Markets and Irrational Traders

“Traders and rodents…seem to have something in common.” –The Economist

Image via Wikipedia

If you’re in the current cool-crowd of psychology, you are probably a cognitive psychologist. Interest in, and funding for, cognitive psychology has greatly increased over the last fifteen to twenty years. This is due in part to popular authors like Gladwell and Daniel Pink bringing public awareness to new discoveries about how the mind forms conclusions. This has popularized cognitive and neurological perspectives in other fields of study as well.

One very interesting field that has surfed on the wave of cognitive psychology is behavioral economics. Behavioral economics studies the cognitive and emotional – that is to say the irrational – decision factors of an area that has been traditionally understood as completely rational.

Market participants like consumers, investors and bankers typically think of themselves as analysts. They’re job is to study information and make an informed decisions as to whether a certain product of instrument is worth of investment. Understanding their function in this way, participants are quick to credit their own powers when transactions turn out favorably.

Two recent articles from The Economist paint a more interesting picture: one of influential market actors as hormone-drenched, delusional, cognitively disconnected impulse-actors who have a biased understanding of their own abilities and track record.

The first article is “Raging Hormones.” It details the work of a Cambridge neuroscientist named John Coates who studies the biochemistry of market traders. According to the article, Coates’ work “suggests that hormones drive investment decisions to a far greater extent than economists or bank executives realize.”

Cortisol, in 3D

One example of this is the fluctuation in serum cortisol levels in equity traders’ blood. In a recent post, I discussed the roles of adrenaline and cortisol in the bloodstream, and their roles in dealing with stress triggers. While conducting experiments on a London trading floor, Coates saw cortisol levels in traders saliva jump as much as 500% over the course of a day. In fact, it rose in direct correlation with the market’s current implied volatility. Cortisol is the hormone that’s part of a primal early warning system; among other things, it causes feelings of dread. When it enters the blood, it would cause an irrational tendency towards risk aversion. Chronic high levels can lead to paranoia.

Another article, “The Irrationality of Politics,” uses the principles of behavioral economics to explain voter preferences, as those preferences arise from the same kind of economic irrationality. The article highlights three principles within behavioral economics that apply just as much to politics as they do to market trading:

Loss Aversion - There’s a longstanding axiom called “prospect theory” which holds that people are more sensitive to losing what they already have than they are to the prospect of new gains. For example, in a recent election, many well-off voters withdrew their support for a conservative candidate who wanted to get rid of certain short term tax credits, even though a conservative government would be the most likely to cut the voters’ overall taxes in the long run. The votors simply did not want to feel the acute sting of immediate loss. Prospect theory is generally healthy for us because the principle keeps us from taking too much financial risk.

Cognitive Dissonance

Cognitive Dissonance - It is possible for people, and entire electorates, to hold two different and contradicting views on an issue depending on how that issue is framed. This article cites the issue of inheritance (“death”) tax. Pollsters noticed that the voters responded positively to the idea of raising the tax threshold, because they view the tax as an inherently unfair one. However, the electorate also responds positively to attacks on the idea of raising that same threshold, as a give-away to the rich during recessionary times. There are many market-related examples of cognitive dissonance, and they usually come about as issues get more complex. For example, during the height of the housing bubble, CDO tranches filled with toxic subprime mortgages continued to receive triple-A ratings, leading to a huge amount of dissonance in terms of the value of those securities. That dissonance was a major contributor to the market’s bubble and subsequent downfall.

Instant Judgement - As this article calls it, the “Gladwellian Blink Test.” Malcolm Gladwell wrote in his famous book Blink about the rapid mental processing and judgement that takes place at the instant of introduction to something new. Psychologists believe that much voter and market decision making is based on this kind of rapid, subconscious processing, and that the process that we call rational decision-making merely serves to reverse-justify the instant judgement to which we have anchored ourselves.

Many economic assumptions, including the assumption of Market Discipline, are based off of the concept of the free market as a series of fundamentally rational transactions. As we now look back at the reasons why market discipline failed to head off The Great Recession, we must ask ourselves whether this principle is capable of mitigating systemic risk given what we are learning about how the market actually makes its decisions.

Related articles

• Protect Your Mental Health and Capital: Don’t Trade Retail (managed-futures-blog.attaincapital.com)

Do Nice Guys Really Finish Last? Notre Dame Study Says…

In 2011, 480 business management undergrads at Notre Dame participated in a study in which they were to play the role of HR managers. They were assigned randomly to examine either eight male or eight female entry level candidate descriptions, and determine which of the eight should be placed on the fast track to management.

Here is an example of a candidate description excerpted from the study:

Carl Q: Was well organized. Nonverbal behaviors were appropriate. Demonstrated great intelligence via college transcripts. Has good insights on topics. Observation: He seems to be candid and trusting.

For all eight sample candidate profiles, the employee descriptions were kept relatively consistent. Each candidate was “described, in some way, as conscientious, smart and insightful.”

The only part of the candidate description that changed significantly was the sentence after the word “observation.” In four of the eight cases, the candidate was described using adjectives that would make the candidate seem agreeable (e.g. trusting, straightforward, modest, compliant, etc.). In the other four cases, the candidates were described as disagreeable, using adjectives that were antonymous.

So which candidates got put on the fast track to management?

The “Superstar” Trap

In the wake of President Obama’s election, it’s easy to forget that in 2007, no one questioned that Hillary Clinton would become the next president. It’s difficult nowadays to remember exactly how far removed she was from all other Democratic contenders. In addition to the qualities that made her the inevitable nominee – name recognition, clout, a campaign war chest – the mere appearance of inevitability brings it’s own advantages: early donations, commitments from precinct captains, general momentum, and most importantly an All Star team of strategists and campaign managers.

Hillary Clinton's 2007 Campaign Staff

It’s hard to overstate how much of an effect that last advantage carries. Very few human beings have the experience of running a high-quality national campaign. Those strategists on the A-list are truly superstars in their field. Campaign management is a grinding, heart wrenching trial-by-fire. Many have slogged through losing campaigns for their entire careers before one major win brought them their hard-earned recognition as kingmakers. In 2007, Hillary Clinton had her pick of the very best.

Patti Solis Doyle, a veteran of the Chicago mayoral campaigns and one of the most fervent Clinton loyalists, became the first female Hispanic manager of a presidential campaign. Her deputy, Mike Henry, was one of the key strategists behind the Democratic re-taking of the Senate the year earlier. Mark Penn, the superstar pollster from Bill Clinton’s presidential administration, became Hillary’s personal Karl Rove. Howard Wolfson, a veteran of bare-knuckle New York politics, became the campaign spokesman. Hillary’s campaign COO was a former deputy White House chief of staff. Another of her senior advisers was a former White House communications director. Other notable strategic advisers included famous names like Madeline Albright, Richard Holbrook, Sandy Berger, Wesley Clark, and Geraldine Ferraro.

Harlem Globetrotters versus the Washington Generals

Having this team together was the political equivalent of sending the Harlem Globetrotters to do battle with the Washington Generals; not only was the winner apparent before the game ever started, but they would probably be dancing around their opponents and doing trick moves to rack up style points. No other team could possibly compare. Mark Penn alone is in a league of just two other pollsters – Dick Morris and Frank Luntz – whose interpretations are taken as gospel in political circles. Finally, after assembling all this talent in one place, “Hillaryland” was now set to bring about the result that everyone knew was inevitable.

Does anyone remember how that turned out?

If one judges by the endless, ever-tight primary fight that year, we would tend to draw the conclusion that Hillary’s All Star team was simply the victim of bad luck. The nation wanted palpable change, after all, and Mrs. Clinton had been part of American Political Reality for quite some time. And Mr. Obama had run a very disciplined campaign. And he was a superior public speaker, with a charisma and a capability for human connection that Hillary would openly admit that she lacked. And some of Bill’s comments during South Carolina had hurt as well. So maybe her inevitable run for the White House was simply not in the cards.

That conclusion, however, would gloss over the reality that Hillary’s All Star team was broken and dysfunctional from the first day, and did as much to destroy the Clinton campaign than any actions by her primary rivals. According to the book Game Change, by John Hellemann and Mark Halperin, Solis Doyle turned out to be an ineffectual leader who had no clue how to run a national campaign. Before the Iowa caucuses had even concluded, she was contemplating a way for Hillary to gracefully bow out of the campaign. Mark Penn had a secret cabal going with Bill Clinton, and the two of them were running their own private campaign strategy and undermining the rest of the group. The most basic campaign functions went untended. Important ad money didn’t get approved in time. Important phone calls when unanswered. Hundreds of balls were dropped in every conceivable aspect of the campaign. And most importantly, all the campaign executives hated each other’s breathing guts.

What started as an exercise in raw talent – a group that Hillary saw as emulating Lincoln’s cabinet as portrayed in Doris Kearns Goodwin‘s book Team of Rivals – ended in early primary losses, a major campaign management shake-up, and then finally a total implosion. The All Star Team ended up being less than the sum of its parts.

Steve Jobs, of Apple

We live in an age obsessed with individual talent. We are easily mesmerized by it. America, from its inception, has valued individual endeavor and has sought to afford maximum individual freedom to facilitate expression and achievement. When we look at success, the easiest way to understand it is as a direct result of the individuals most closely associated with it.  Most of our major success stories – Apple, Google, Amazon – have a name and a narrative associated with them. Business leaders and consultants bow to the alter of some Great Innovator – so much so that we could easily call this decade “The Steve Jobs Era.” In sports we put All Star and fantasy teams together in order to pit the absolute best against the absolute best. Even in the entertainment business, the production models are evolving to emphasize superstars. For the last decade, the most excellent scripted shows have been tightly ruled by a new breed of totalitarian “show-runners” (e.g. David Chase for The Sopranos, David Simon for The Wire, Matthew Weiner for Mad Men, Aaron Sorkin for The West Wing, etc.).

All this begs the question – are we right to worship individual talent alone? Does the success of a group merely reflect the sum of the talent of its individual members?

The “Shaken Self”: Self-Confidence and Product Choice

I’m always excited when science finally catches up with marketing.

A man walks into a sociologist’s office, and is asked to write a short essay highlighting his healthy life habits. He does so. Afterwards, he’s offered a choice of two small rewards for his work: an apple, or a pack of M&M’s. He makes his choice and leaves.

After that, another man walks into the sociologist’s office, and is asked to write a short essay highlighting his healthy life habits. As he’s about to begin, the sociologist asks him to write it with his non-dominant hand. After he does so, he is offered a choice between an apple or a pack of M&M’s.

This second man, who wrote with his non-dominant hand, is significantly more likely than the first to choose the apple. Why would that be?

A lot of excellent research is starting to emerge dealing with the relationship between “state” self-confidence (short term mental states) and purchasing habits. The study I’ve just referenced came out of Stanford last year. It was published in Advances in Consumer Research by Leilei Gao, S. Christian Wheeler, and Baba Shiv, and talks about the concept of the “shaken self.”