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November 17, 2008
eNews from EvolvingSUCCESS

Lessons from Optimizing Luck XI:

Critical Thinking as Illustrated by Current Events (NOT!)

While critical thinking can be a difficult process, it usually doesn't have to be. In fact, planning and decision making that is guided by only a few simple rules can return huge rewards over plans and decisions that simply seem to feel good. That's all we're talking about here: critical thinking based on a few, simple, yet reliable rules to catch some of the obvious faults that untested plans and decisions often contain.

October 23, 2008, it was nice to have Mr. Greenspan confirm my analysis for last month's eNews when he said, to paraphrase, "I presumed the greed in the system would include an adequate sense of sustainability. How could I know they were stupid enough to kill the goose laying the golden eggs." He believed that self-interest was an adequate safe-guard against abuse, and therefore pulled back on regulation and interest rates. But history almost always shows us that the goose gets eaten, and the run of golden eggs ends...the results of short-sighted stupidity. Had Mr. Greenspan cast his typically objective eye on that history and applied his skills of critical thinking on it, he would have avoided some of his admitted mistakes. In all candor, I've made very similar kinds of mistakes when assessing people and their motivations.

Critical thinking isn't about what you like or dislike. It isn't about a nasty demeanor everytime you hear something. Critical thinking is the application of fairly simple principles to test whether or not your approach to things makes sense.

Let's take a type of principle called a conservation principle. E=mc2 is an example of such a principle. Among Michigan farmers in most of the 20th Century, "Pay as you go," was a conservation principle. If you didn't have the money, you didn't buy it.

But the banking industry, for instance, doesn't operate on conservation laws. If a typical bank has ten customers each depositing $1000 dollars, it will make up to $120,000 in loans against the $10,000 it actually holds. Most of the institutions involved in the current mortgage mess (using these same, simple numbers for examples) made a half a million dollars worth of loans against every $10,000 they had on deposit, or what would be called a 50 to 1 margin. Critical thinking using a conservation law like, "If you haven't got the money, don't lend it," would have saved some trouble.

For another example based on an EvolvingSuccess principle, consider the following. Alpha climbers understand status and prestige, but they don't understand performance. If a board is attempting to woo some famous CEO into their company, critical thinking is not used to compose an attraction package. They only want to obtain some sense of status or prestige for the company that the candidate might bring merely by his or her presence. Outrageous salaries, bonuses and parachutes are offered with (apparently) no conditions based on performance. Well, since the board is likely composed of alpha climbers, why would you expect to see performance conditions in the package? Critical thinking about performance doesn't really seem to kick in, does it?

Using well tested principles to guide your planning and decision making is time very well spent. Have your list of two to five reliable principles handy, run your new ideas against them, and execute the new direction if the principles show you that you have a good shot.


(View our special Tribute Page for the 30th Anniversary of the Launch of the IUE Project, the basis of Optimizing Luck.)


New Features in the
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Learning Opportunities

Get WorkingTOGETHER materials in print. We've taken the scripts from some of the sub-units in the WorkingTogether MP3 library and converted them into PDF booklets. Download and pass along as you will.

  • Team Building for CEOs. Does it seem like you have more enemies within your camp than among your competition? Let's suppose your assessment is correct. How can you turn your "insiders" into true collaborators?

  • Components of Instructionless Teams. What kind of team can still get things done even there is absolutely NO real language used? ALL of them can still get some things done. It's just not particularly productive. For everyone except the person at the top, it's not particularly fun, either.

  • Components of Instruction-Rich Teams. We couldn't simply describe poorly performing teams without providing a way of breaking out of that set of habits. For each negative point about alphas we presented in the work on instructionless teams, we provide one way of dealing with that point and changing the habits of the group so that they can create the instructions they need to succeed.



  • Most mail filters block out the direct Amazon.com link to purchase Optimizing Luck, so it's not included in our eNews letters. Please go to the bottom of our Optimizing Luck page to make your Amazon.com purchase there.

    "...Everyone and every project has to face the great unknown and a random onslaught of luck, but how people utilize split decisions can mean the difference between getting the job done right, or not getting there at all. Using luck optimizing and fault-tolerant strategies within the 'do it right' work ethic will skyrocket any goal." Executive Book Summaries.



    Script books from the WorkingTOGETHER Library...

  • Teaching Children Success. The sooner you start training your kids to be adults, the greater advantage they will have over children whose parents think they should be "giving them a great childhood." The elite families of America are preparing their kids to take over the country. Why aren't you?


  • The Leadership Breakfast of Maryland: Invitation Only

  • Friday, December 5th, 2008: What do Elephants, Entrepreneurs and Economics have in Common? presented by Renee Lewis, President of The Pensare Group. Light breakfast at 7:00am. Presentation starts promptly at 7:30am. Hosted in the Olney region of Maryland. Email an Inquiry for Admission.


    Business Destiny® Radio

    Catch local business leaders live with John Hrastar of InterSource on Saturdays, 8am to 9am, on radio WTNT 570AM, on the live stream, or link to archived programs and podcasts.



  • Leading ALL to Success


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