Theories, Predictions, and Diagnoses

1. Puzzles vs. Mysteries: Knowing the Difference is Key

Osama bin Laden’s whereabouts are a puzzle. We can’t find him because we don’t have enough information.

Puzzles are solvable. Puzzles have a clear answer, and the challenge lies in finding the missing pieces. The solution often comes from acquiring more information. For example, finding Osama bin Laden was a puzzle that required more intelligence and sources.

Mysteries require judgment. Mysteries, on the other hand, are complex and uncertain. They don't have a single, factual answer. The challenge lies in interpreting the available information and making informed judgments. For example, the situation in Iraq after the fall of Saddam Hussein was a mystery, requiring an understanding of complex social and political dynamics.

• Puzzles: Clear answers, information-driven, solvable with more data
• Mysteries: Complex, uncertain, require judgment, often no clear solution

Applying the framework. Understanding whether a problem is a puzzle or a mystery is crucial for choosing the right approach. Puzzles require more data, while mysteries require better analysis and judgment. This distinction is critical in fields like intelligence, business, and medicine.

2. Too Much Information Can Obscure the Truth

Mysteries require judgments and the assessment of uncertainty, and the hard part is not that we have too little information but that we have too much.

Information overload. In the modern world, we are often overwhelmed with data. This abundance of information can make it difficult to discern what is truly important and can lead to analysis paralysis. The Enron scandal is a prime example, where the sheer volume of financial data obscured the company's true condition.

The Enron case:

• Enron's financial statements were complex and difficult to understand
• The company used special-purpose entities (SPEs) to hide debt
• The sheer volume of information made it difficult to see the underlying problems

The need for filters. To navigate information overload, we need to develop filters and frameworks for analyzing data. This involves focusing on key indicators, asking critical questions, and seeking diverse perspectives. Sometimes, less is more.

3. The Power of "Middle Guys" and On-the-Ground Knowledge

You don’t start at the top if you want to find the story. You start in the middle, because it’s the people in the middle who do the actual work in the world.

"Middle guys" have unique insights. People who are directly involved in the day-to-day work often have a deeper understanding of the issues than those at the top. They possess practical knowledge and insights that are often overlooked. For example, the author's friend Dave, who worked in the grocery business, had unique insights into the ketchup market.

Examples of "middle guys":

• A grocery store employee who understands consumer behavior
• A factory worker who knows the intricacies of the production process
• A police officer who understands the dynamics of a neighborhood

Value of on-the-ground experience. These individuals are often more attuned to the nuances of a situation and less likely to be influenced by political or corporate agendas. Their perspectives are invaluable for understanding complex problems.

4. Power Laws: A Few Hard Cases Drive Most Problems

It cost us one million dollars not to do something about Murray.

Uneven distribution. Many problems, from homelessness to crime, follow a power-law distribution, where a small number of individuals or events account for a disproportionate share of the problem. For example, a small percentage of the homeless population accounts for the majority of healthcare costs.

Examples of power laws:

• A small number of police officers account for most complaints
• A small number of cars produce most of the pollution
• A small number of chronically homeless individuals consume most of the resources

Targeted solutions. Understanding power laws allows us to develop more targeted and effective solutions. Instead of trying to address the entire problem, we can focus on the small group that is driving the majority of the issues. For example, providing housing and support for the chronically homeless can be more cost-effective than managing the problem through shelters and emergency services.

5. Solving Problems Requires Understanding, Not Just Seeing

Seeing a problem and understanding it, then, are two different things.

Beyond the surface. Simply observing a problem is not enough. True solutions require a deep understanding of the underlying causes and dynamics. The Schweinfurt bombing raids during World War II are a prime example, where the Allies successfully bombed the ball-bearing factories but failed to understand the German supply chain.

The Schweinfurt example:

• The Allies bombed the ball-bearing factories, but the Germans had stockpiles
• The Germans were able to import ball bearings from other countries
• The Germans were able to reduce their need for ball bearings

The need for context. Understanding a problem requires considering the broader context and the various factors that contribute to it. This involves asking critical questions, challenging assumptions, and seeking diverse perspectives.

6. The Limits of Pictures: Interpretation is Crucial

That photography not only does not, but cannot, lie is a matter of belief, an article of faith.

Pictures are not objective. While pictures can provide valuable information, they are not always objective or self-explanatory. They require interpretation, and the way we interpret them is influenced by our biases and experiences. The Scud hunt during the first Gulf War is a prime example, where pilots misidentified targets based on limited visual information.

The Scud hunt example:

• Pilots misidentified tanker trucks as Scud launchers
• The targeting pods had limited resolution
• The pilots had limited time to identify targets

The human element. The human task of interpretation is often a bigger obstacle than the technical task of picture taking. This is particularly true in fields like medicine, where mammograms require careful analysis and judgment.

7. Plagiarism: When Borrowing Becomes Theft

I am happy to be the source of inspiration for other writers, and had you asked for my permission to quote — even liberally — from my piece, I would have been delighted to oblige. But to lift material, without my approval, is theft.

Words have owners. The ethical principle that words belong to the person who wrote them is a fundamental concept in intellectual property. Plagiarism, the act of taking someone else's words without attribution, is a serious breach of this principle.

The case of Frozen:

• The playwright Bryony Lavery borrowed heavily from the author's article
• The author felt violated by the unauthorized use of his work
• The case raised questions about the nature of inspiration and originality

The line between borrowing and theft. While inspiration and influence are essential to the creative process, there is a clear line between borrowing and theft. The key is to acknowledge the source of your ideas and to use them in a transformative way.

8. Intelligence Failures: The Perils of Hindsight

The most fundamental problem … is our Intelligence Community’s inability to ‘connect the dots’ available to it before September 11, 2001, about terrorists’ interest in attacking symbolic American targets.

Hindsight bias. It is easy to see patterns and connections in the past that were not obvious at the time. This phenomenon, known as hindsight bias, can lead to unfair criticism of intelligence agencies and other organizations. The 9/11 attacks are a prime example, where many missed signals were only clear in retrospect.

The 9/11 example:

• The FBI and CIA had information about Al Qaeda operatives
• The information was not properly shared or analyzed
• The missed signals were only clear after the attacks

The problem of noise. Intelligence agencies are constantly bombarded with information, much of which is useless or misleading. The challenge is to separate the signal from the noise and to identify the truly important pieces of information.

9. Choking vs. Panicking: Two Distinct Forms of Failure

Under conditions of stress, however, the explicit system sometimes takes over. That’s what it means to choke.

Choking is overthinking. Choking occurs when we become too self-conscious and start overthinking our actions. This disrupts the automatic, intuitive processes that allow us to perform at our best. Jana Novotna's collapse at Wimbledon is a prime example, where she began to think too much about her shots.

Panicking is underthinking. Panicking, on the other hand, occurs when we lose our ability to think clearly and revert to our most basic instincts. This can lead to irrational behavior and a failure to use our training and experience. John F. Kennedy Jr.'s plane crash is a prime example, where he lost his ability to use his instruments and relied on his instincts.

• Choking: Overthinking, loss of instinct, reversion to explicit learning
• Panicking: Underthinking, reversion to instinct, loss of short-term memory

Understanding the difference. Recognizing the difference between choking and panicking is crucial for developing effective strategies for dealing with stress and pressure.

10. The Paradox of Expertise: When Thinking Too Much Hurts

The culpable failure of Aman’s leaders in September and October 1973 lay not in their belief that Egypt would not attack but in their supreme confidence, which dazzled decision-makers.

Expertise can be a liability. While expertise is valuable, it can also lead to overconfidence and a failure to consider alternative perspectives. This is particularly true in complex and uncertain situations. The Israeli intelligence failure during the Yom Kippur War is a prime example, where the head of Aman was too confident in his assessment.

The Yom Kippur War example:

• The head of Aman insisted that war was not imminent
• His confidence blinded decision-makers to the possibility of an attack
• The failure was not a lack of information but a failure of judgment

The need for humility. To avoid the pitfalls of expertise, we need to cultivate humility and a willingness to challenge our own assumptions. This involves seeking diverse perspectives, considering alternative scenarios, and being open to the possibility that we might be wrong.

Last updated: January 15, 2025