In his new book Superforecasting: The Art and Science of Predictions, which was longlisted for this year's Financial Times and McKinsey Business Book of the Year Award, the Canadian-born academic Philip Tetlock recounts how he spent years assembling teams of "superforecasters". Armed with skills in research and analysis, they showed an uncanny success rate in predicting outcomes of political conflicts. In this exclusive excerpt for The National, Tetlock and his co-author Dan Gardner describe how the methods of the superforecasters can help organisational leaders to make sound decisions.
Ask people to list the qualities an effective leader must have, or consult the cottage industry devoted to leadership coaching, or examine rigorous research on the subject, and you will find near-universal agreement on three basic points. Confidence will be on everyone’s list. Leaders must be reasonably confident, and instil confidence in those they lead, because nothing can be accomplished without the belief that it can be. Decisiveness is another essential attribute. Leaders can’t ruminate endlessly. They need to size up the situation, make a decision, and move on. And leaders must deliver a vision – the goal that everyone strives together to achieve.
But look at the style of thinking that produces superforecasting and consider how it squares with what leaders must deliver. How can leaders be confident, and inspire confidence, if they see nothing as certain? How can they be decisive and avoid “analysis paralysis” if their thinking is so slow, complex, and self-critical? How can they act with relentless determination if they readily adjust their thinking in light of new information or even conclude they were wrong? And underlying superforecasting is a spirit of humility – a sense that the complexity of reality is staggering, our ability to comprehend limited, and mistakes inevitable.
And consider how the superteams operated. They were given guidance on how to form an effective team, but nothing was imposed. No hierarchy, no direction, no formal leadership. These little anarchist cells may work as forums for the endless consideration and reconsideration superforecasters like to engage in but they’re hardly organisations that can pull together and get things done. That takes structure – and a leader in charge.
This looks like a serious dilemma. Leaders must be forecasters and leaders but it seems that what is required to succeed at one role may undermine the other.
Fortunately, the contradiction between being a superforecaster and a superleader is more apparent than real. In fact, the superforecaster model can help make good leaders superb and the organisations they lead smart, adaptable, and effective. The key is an approach to leadership and organisation first articulated by a 19th-century Prussian general, and deployed by many successful corporations today. You might even find it at your neighbourhood Walmart.
Uncertainty principle
“In war, everything is uncertain,” wrote Helmuth von Moltke. In the late 19th century, Moltke was famous the world over after he led Prussian forces to victory against Denmark in 1864, Austria in 1866, and France in 1871 – victories that culminated in the unification of Germany. His writings on war – which were themselves influenced by the great theorist Carl von Clausewitz – profoundly shaped the German military that fought the two world wars. But Moltke was no Napoleon. He never saw himself as a visionary leader directing his army like chess pieces. His approach to leadership and organisation was entirely different.
The Prussian military had long appreciated uncertainty – they had invented board games with dice to introduce the element of chance missing from games such as chess – but “everything is uncertain” was for Moltke an axiom whose implications needed to be teased out. The most urgent is to never entirely trust your plan. “No plan of operations extends with certainty beyond the first encounter with the enemy’s main strength,” he wrote. That statement was refined and repeated over the decades and today soldiers know it as “no plan survives contact with the enemy”. That is much snappier. But notice that Moltke’s original was more nuanced, which is typical of his thinking. “It is impossible to lay down binding rules” that apply in all circumstances, he wrote. In war, “two cases never will be exactly the same”. Improvisation is essential.
Moltke trusted that his officers were up to the task. In addition to their military training, they received what we today would consider a liberal arts education with an emphasis on critical thinking. Even when the curriculum focused on purely military matters, students were expected to think hard. In other nations of that era – including the United States – instructors laid out problems, told students the right answer, and expected them to nod and memorise. In Germany’s war academies, scenarios were laid out and students were invited to suggest solutions and discuss them collectively. Disagreement was not only permitted, it was expected, and even the instructor’s views could be challenged because he “understood himself to be a comrade among others”, noted the historian Jörg Muth. Even the views of generals were subject to scrutiny. “German junior officers were regularly asked for their opinions and they would criticise the outcome of a large manoeuvre with several divisions before the attending general had the floor.”
Decisive action
All this may sound like a recipe for a fractious organisation that can’t get anything done, but that danger was avoided by balancing those elements that promoted independent thinking against those that demanded action.
The time devoted to a decision was constrained by circumstances, so decision-making could be leisurely and complex or – when bullets were flying – abrupt and simple. If this meant a decision wasn’t as informed as it could be, that was fine. An imperfect decision made in time was better than a perfect one made too late. “Clarification of the enemy situation is an obvious necessity, but waiting for information in a tense situation is seldom the sign of strong leadership – more often of weakness,” declared the command manual of the Wehrmacht (the German military) published in 1935 and in force throughout World War II. “The first criterion in war remains decisive action.”
Mission command
Armies are unusual organisations, but bosses everywhere feel the tension between control and innovation, which is why Moltke’s spirit can be found in organisations that have nothing to do with bullets and bombs.
“We let our people know what we want them to accomplish. But – and it is a very big ‘but’ – we do not tell them how to achieve those goals.” That is a near-perfect summary of “mission command”. The speaker is William Coyne, who was senior vice president of research and development at 3M, the famously innovative manufacturing conglomerate.
“Have backbone; disagree and commit” is one of Jeff Bezos’s 14 leadership principles drilled into every new employee at Amazon. It continues: “Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.”
When Walmart found it was building stores faster than it could develop store managers, it created a “leadership academy” to get prospects ready for promotion sooner. The academy was designed by the British consulting firm McKinney Rogers, which is headed by Damian McKinney, a former British Royal Marine. It is modelled after military academies, with the “mission command” philosophy at its foundation.
And Mr McKinney is far from alone in bringing his military experience to the corporate world. Many former officers, including the American military commander David Petraeus, have followed the same path. They often encounter the perception that militaries are strictly hierarchical organisations in which subordinates snap salutes to superiors and mechanically obey. That image is laughably out of date. In fact, ex–military officers advising corporations often find themselves telling executives to worry less about status and more about empowering their people and teams to choose the best ways to achieve shared goals. “Ironically,” Mr McKinney told the Financial Times, “companies are much more focused on what I call ‘command and control’ than their military counterparts.”
But there’s still the vexing question of humility.
No one ever called Winston Churchill or Steve Jobs humble. Same with David Petraeus. From West Point cadet onward, Mr Petraeus believed he had the right stuff to become a top general.
The same self-assurance can be seen in many of the leaders and thinkers whose judgment I have singled out in this book. John Maynard Keynes always thought he was the smartest man in the room. And George Soros was a Wall Street hedge fund manager who worked under extreme pressure at a pace that would drive many to nervous exhaustion with stakes that would make many executives go weak in the knees. Mr Soros’s most famous bet, shorting the British pound in 1992, which earned him an estimated $1.1 billion, required him to sell sterling worth almost $10bn. “There is nothing like danger to focus the mind,” Mr Soros once said. That does not sound like someone who worries that he’s not up to the job.
Intellectual humility
The humility required for good judgment is not self-doubt – the sense that you are untalented, unintelligent, or unworthy. It is intellectual humility. It is a recognition that reality is profoundly complex, that seeing things clearly is a constant struggle, when it can be done at all, and that human judgment must therefore be riddled with mistakes. This is true for fools and geniuses alike. So it’s quite possible to think highly of yourself and be intellectually humble. In fact, this combination can be wonderfully fruitful. Intellectual humility compels the careful reflection necessary for good judgment; confidence in one’s abilities inspires determined action. “With firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in,” Abraham Lincoln declared in his second inaugural address. It’s a statement of fierce conviction and determination. But it is also a humble acknowledgement – “as God gives us to see the right”– that our vision is limited, our judgment flawed, and even firmest belief may be wrong.
Reprinted from Superforcasting: The Art and Science of Prediction by Philip Tetlock and Dan Gardner. Copyright © 2015 by Philip Tetlock Consulting, and Connaught Street. Published by Crown Publishers, a division of Penguin Random House.
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