In Skin in the Game, Nassim Nicholas Taleb makes a strong argument that in the context of business success people generally place too much value on education. For him, smart people sometimes turn the attitude they’ve developed through education into obstacles for their own success. This is because an educated person is accustomed to understanding and explaining ideas before getting any form of validation for their work. If understanding must come before application, the educated person might miss an idea that others with less education will jump on right away simply because the educated person will wait until understanding the idea before taking initiative.
A version of the above that Taleb cites is how educated people tend to shy away from ideas they perceive as stupid. He notes that smart people fail in business if their tendency to dismiss or merely criticize what they do not understand prevents them from ever recognizing that if something they perceive as stupid still works (as in, makes money) it cannot actually be stupid (from a business perspective, at least, and within a reasonable time period). At the very least, it cannot have been stupid, given how the goal in business is to make money and the so-called 'stupid' idea made money.
Taleb goes on to further consider the implications of how education nudges students toward explanation rather than action. When such people get into business, are they more likely to try anything just to see what works or are they more likely to try the small handful of things they are able to explain? Although there is no perfect approach, it is difficult to think of successful businesses that followed the blueprint its very smart founders drew up one day one.
The business context Taleb uses to consider the importance of education helped me think more deeply about my own question. The kind of intelligence emphasized through education requires understanding before application. The academically successful graduate who goes into business would surely want to apply this skill in the real world. But in business, sometimes things work before anyone understands it. It brings to mind an ironic scene – someone demanding data to help him or her explain the success behind a young initiative while ignoring the fact that the success itself is perhaps the most relevant data point during the early days.
Instead of worrying so much about explaining, perhaps the best approach is to consider how to mitigate the effects of failure. The ‘stupid idea’ that succeeds wildly should be studied and understood, of course, but that doesn’t mean the best thing to do is to stop leveraging the idea until an acceptable narrative is written. Instead, the business should think of ways to put safety nets in place so that if the idea suddenly does start to fail it won’t put everyone out of a job. In fact, this is what businesses should be doing all the time – putting safety nets in place to reduce the impact of errors – because this encourages employees to try new things and learn quickly from mistakes. In such an environment, it is only a matter of time before someone will make a significant discovery.
Footnotes / endnote, really / must everything tie back to politics?
0. But didn’t one of their own get elected?
Though Taleb generally steers clear of politics in this book, he does chime in with the occasional thought. He defines the concept of the educated philistine along these lines, saying that this type of person criticizes decisions others wouldn’t have made if they were smarter. Such a person may, for example, label someone who votes counter to an educated person’s preference as a ‘populist’.
