Inequality in the US – Part 2

This is the second part of our lit review on inequality in the US. Let me start by highlighting a book that I started reading called, Capital in the 21st Century, by Thomas Piketty.

Synopsis via Amazon – What are the grand dynamics that drive the accumulation and distribution of capital? Questions about the long-term evolution of inequality, the concentration of wealth, and the prospects for economic growth lie at the heart of political economy. But satisfactory answers have been hard to find for lack of adequate data and clear guiding theories. In his lecture, Thomas Piketty analyzes a unique collection of data in twenty countries, ranging as far back as the eighteenth century, to uncover key economic and social patterns. His findings are raising issues for the next generation of thought about wealth and inequality. Piketty shows that modern economic growth and the diffusion of knowledge have allowed us to avoid inequalities on the apocalyptic scale predicted by Karl Marx. But we have not modified the deep structures of capital and inequality as much as we thought in the optimistic decades following World War II. The main driver of inequality – the tendency of returns on capital to exceed the rate of economic growth – today threatens to generate extreme inequalities that stir discontent and undermine democratic values. But economic trends are not acts of God. Political action has curbed dangerous inequalities in the past and may do so again.

You can learn about the book via these book reviews (from all sides of the inequality debate).

Also take a look at this video: Thomas Piketty Lecture On Inequality @ Max Plank Institute

Moving on to today’s curated readings I recommend starting with this post by Michael Pettis –  of Credit Writedowns -comparing and contrasting the pros and cons of income inequality.

Next take a look at this Video: Does Income Inequality Have A Good Side - via PBS

The Myth of Increasing Income Inequality - by Roth – Via Manhattan Institute - President Obama’s new fiscal year 2013 budget, with its proposed  tax-rate hikes, reflects the misguided assumption that income  inequality in the U.S. has increased in recent years. Populist  cries for redistribution as a means to remedy this purported  inequality have gained currency in both the press and in the public  imagination.1 This paper, based on an original analysis of U.S. Labor  Department data, concludes that inequality as measured by per capita  spending is no greater today than in it was in the 1980s

Redistribution, Inequality, & Growth - by Berg, Ostry, & Tsangarides –  via IMF - Economists are increasingly focusing on the links between rising inequality and the fragility of  growth. Narratives include the relationship between inequality, leverage and the financial  cycle, which sowed the seeds for crisis; and the role of political-economy factors (especially  the influence of the rich) in allowing financial excess to balloon ahead of the crisis. In earlier  work, we documented a multi-decade cross-country relationship between inequality and the  fragility of economic growth. Our work built on the tentative consensus in the literature that  inequality can undermine progress in health and education, cause investment-reducing political  and economic instability, and undercut the social consensus required to adjust in the face of  shocks, and thus that it tends to reduce the pace and durability of growth. So what does the historical evidence say? First, more unequal societies tend to redistribute more. It is thus important in understanding  the growth-inequality relationship to distinguish between market and net inequality. Second, lower net inequality is robustly correlated with faster and more durable growth, for a  given level of redistribution. These results are highly supportive of our earlier work And third, redistribution appears generally benign in terms of its impact on growth; only in  extreme cases is there some evidence that it may have direct negative effects on growth. Thus the combined direct and indirect effects of redistribution—including the growth effects of the resulting lower inequality—are on average pro-growth.

Is The United States Still A Land of Opportunity? Recent Trends in Intergenerational Mobility – by  Chetty, Hendren, Kline, Saez, & Turner - We present new evidence on trends in intergenerational mobility in the U.S. using administrative earnings records. We find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971-1993 birth cohorts. For children born between 1971 and 1986, we measure intergenerational mobility based on the correlation between parent and child income percentile ranks. For more recent cohorts, we measure mobility as the correlation between a child’s probability of attending college and her parents’ income rank. We also calculate transition probabilities, such as a child’s chances of reaching the top quintile of the income distribution starting from the bottom quintile. Based on all of these measures, we find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s. However, because inequality has risen, the consequences of the “birth lottery” – the parents to whom a child is born – are larger today than in the past.

Has Consumption Inequality Mirrored Income Inequality? - by Aguiar & Bils – Abstract via NBER - We revisit to what extent the increase in income inequality over the last 30 years has been mirrored by consumption inequality. We do so by constructing two alternative measures of consumption expenditure, using data from the Consumer Expenditure Survey (CE). We first use reports of active savings and after tax income to construct the measure of consumption implied by the budget constraint. We find that the consumption inequality implied by savings behavior largely tracks income inequality between 1980 and 2007. Second, we use a demand system to correct for systematic measurement error in the CE’s expenditure data. Specifically, we consider trends in the relative expenditure of high income and low income households for different goods with different income (total expenditure) elasticities. Our estimation exploits the difference in the growth rate of luxury consumption inequality versus necessity consumption inequality. This “double-differencing,” which we implement in a a regression framework, corrects for mis-measurement that can systematically vary over time by good and income group. This second exercise indicates that consumption inequality has closely tracked income inequality over the period 1980-2007. Both of our measures show a significantly greater increase in consumption inequality than what is obtained from the CE’s total household expenditure data directly.

Misperceptions About the Magnitude and Timing of Changes in American Income Inequality – via Gordon- The rise in American inequality has been exaggerated both in magnitude and timing. Commentators lament the large gap between the growth rates of real median household income and of private sector productivity. This paper shows that a conceptually consistent measure of this growth gap over 1979 to 2007 is only one-tenth of the conventional measure. Further, the timing of the rise of inequality is often misunderstood. By some measures inequality stopped growing after 2000 and by others inequality has not grown since 1993. This cessation of inequality’s secular rise in 2000 is evident from the growth of Census mean vs. median income, and in the income share of the top one percent of the income distribution. The income share of the 91st to 95th percentile has not increased since 1983, and the income ratio of the 90th to 10th percentile has barely increased since 1986. Further, despite a transient decline in labor’s income share in 2000-06, by mid-2009 labor’s share had returned virtually to the same value as in 1983, 1991, and 2001. Recent contributions in the inequality literature have raised questions about previous research on skill-biased technical change and the managerial power of CEOs. Directly supporting our theme of prior exaggeration of the rise of inequality is new research showing that price indexes for the poor rise more slowly than for the rich, causing most empirical measures of inequality to overstate the growth of real income of the rich vs. the poor. Further, as much as two-thirds of the post-1980 increase in the college wage premium disappears when allowance is made for the faster rise in the cost of living in cities where the college educated congregate and for the lower quality of housing in those cities. A continuing tendency for life expectancy to increase faster among the rich than among the poor reflects the joint impact of education on both economic and health outcomes, some of which are driven by the behavioral choices of the less educated.

In Defense of Citizens United - by McConnell – Abstract via SSRN –  Citizens United v. FEC is one of the most reviled decisions of the Supreme Court in recent years. The President of the United States denounced it to the Justices’ faces at his 2011 State of the Union address. His 2008 opponent, John McCain, called it “the worst decision ever.” The Democratic Party is pledged to reverse it by constitutional amendment if necessary. Prominent newspapers attribute to it virtually every excess of the campaign finance system, whether or not the practices were authorized by the decision or would have been lawful even without it. It has become shorthand for corporate domination of politics. It has few defenders among legal scholars. I believe it is time for a more balanced evaluation.

How Do Corporations Play Politics? The Fedex Story

Here is a case study by Jill Fisch on how Fedex has played corporate politics (over a span of 40 years). I find a lot of the material in the study to be relevant to securities analysts, journalists, and regulators.

Abstract – via Jill Fisch

United States law extensively regulates corporate participation in the political process. The rationale for this regulation is a concern that corporate political activity, particularly campaign contributions, will corrupt the political process and enable corporations to obtain rents at societal expense. Regulators, the media and the public generally view corporate political activity as illegitimate and distinguish it from operational business decisions. Critics of corporate political activity advocate ever-increasing regulatory restrictions and support their analysis with empirical studies that purport to demonstrate the ability of corporate donors to buy favorable legislation by making political contributions to members of Congress.

This Article challenges the prevailing characterization of corporate political activity as a distortion of the political process. Using a case study methodology, the Article examines the political involvement of one company, FedEx, in a series of regulatory reforms over a forty year period. Drawing upon the business context, the legislative record, campaign finance materials and interest group analysis, the Article demonstrates that political activity has been an integral component of FedEx’s business growth and operations. FedEx has successfully used its political influence to shape legislation, and FedEx’s political success has, in turn, shaped its overall business strategy. Moreover, in identifying the specific components of FedEx’s political activity, the Article highlights the range of mechanisms that corporations use to engage in politics, revealing that the exercise of political influence is far more complex than the purchase of political favors in a spot market.

Regulation is becoming an increasingly important factor for United States businesses. As a result, corporations must integrate political activity into their overall business strategy and must develop and manage their political capital in the same way that they manage other business assets. The FedEx story demonstrates the importance of politics to business and explains the growing investment by corporations in political capital. It further explains how the business world has responded, and will continue to respond, to regulatory restrictions by developing alternative mechanisms for exerting political influence. By understanding how and why corporations participate in politics, policy-makers can better address concerns about the effect of corporate political influence.

Download: How Do Corporations Play Politics? The Fedex Story

Inequality in the US – Part 1

I have been spending a lot of time reading about inequality in the U.S. Today I am posting part 1 of my findings related to inequality, campaign finance, & political influence.*Note today’s curations might seem a bit left leaning. I hope to balance this effect with tomorrows post.

2 Books to read:

Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems - by Thomas Ferguson  -Synopsis via UChicago -

“To discover who rules, follow the gold.” This is the argument of Golden Rule, a provocative, pungent history of modern American politics. Although the role big money plays in defining political outcomes has long been obvious to ordinary Americans, most pundits and scholars have virtually dismissed this assumption. Even in light of skyrocketing campaign costs, the belief that major financial interests primarily determine who parties nominate and where they stand on the issues—that, in effect, Democrats and Republicans are merely the left and right wings of the “Property Party”—has been ignored by most political scientists. Offering evidence ranging from the nineteenth century to the 1994 mid-term elections, Golden Rule shows that voters are “right on the money.” Thomas Ferguson breaks completely with traditional voter centered accounts of party politics. In its place he outlines an “investment approach,” in which powerful investors, not unorganized voters, dominate campaigns and elections. Because businesses “invest” in political parties and their candidates, changes in industrial structures—between large firms and sectors—can alter the agenda of party politics and the shape of public policy.”

Affluence and Influence: Economic Inequality and Political Power in America - by Martin Gilens –  Teaser via Amazon

“Can a country be a democracy if its government only responds to the preferences of the rich? In an ideal democracy, all citizens should have equal influence on government policy–but as this book demonstrates, America’s policymakers respond almost exclusively to the preferences of the economically advantaged. Affluence and Influence definitively explores how political inequality in the United States has evolved over the last several decades and how this growing disparity has been shaped by interest groups, parties, and elections. With sharp analysis and an impressive range of data, Martin Gilens looks at thousands of proposed policy changes, and the degree of support for each among poor, middle-class, and affluent Americans. His findings are staggering: when preferences of low- or middle-income Americans diverge from those of the affluent, there is virtually no relationship between policy outcomes and the desires of less advantaged groups. In contrast, affluent Americans’ preferences exhibit a substantial relationship with policy outcomes whether their preferences are shared by lower-income groups or not. Gilens shows that representational inequality is spread widely across different policy domains and time periods. Yet Gilens also shows that under specific circumstances the preferences of the middle class and, to a lesser extent, the poor, do seem to matter. In particular, impending elections–especially presidential elections–and an even partisan division in Congress mitigate representational inequality and boost responsiveness to the preferences of the broader public.”

Papers worth reading: 

Inequality –  by Glaser

“This paper reviews five striking facts about inequality across countries. As Kuznets (1955) famously first documented, inequality first rises and then falls with income. More unequal societies are much less likely to have democracies or governments that respect property rights. Unequal societies have less redistribution, and we have little idea whether this relationship is caused by redistribution reducing inequality or inequality reducing redistribution. Inequality and ethnic heterogeneity are highly correlated, either because of differences in educational heritages across ethnicities or because ethnic heterogeneity reduces redistribution. Finally, there is much more inequality and less redistribution in the U.S. than in most other developed nations.”

Party Competition and Industrial Structure in the 2012 Elections: Who’s Really Driving the Taxi to the Dark Side? -By Ferguson, Jorgensen, & Chen

“This paper analyzes patterns of industrial structure and party competition in the 2012 presidential election. The analysis rests  on a new and more comprehensive campaign finance database that catches far more of the myriad ways businesses and  major investors make political contributions than previous studies. By drawing on this unified database, the paper is able to  show that both major parties depend on very large donors to a greater extent than past studies have estimated. The paper  outlines the firm and sectoral bases of support for the major party nominees, as well as for Republican candidates who  competed for the GOP presidential nomination. The paper shows that President Obama’s support within big business was  broader than hitherto recognized. A central conclusion is that many major companies in the sectors most involved in the  recent controversies over surveillance were among the president’s strongest supporters. The paper also analyzes patterns of  business support for the Tea Party in Congress, showing that certain parts of business are more supportive of Tea Party  candidates than others. The role of climate change, financial regulation, and other issues in the election is discussed at length.”

Super Pacs - by Briffault

“The most striking campaign finance development since the Supreme Court’s Citizens United decision has not been an upsurge in corporate or union spending as many commentators predicted. Instead, federal election campaigns have witnessed the emergence of a new campaign finance vehicle – the Super PAC – which relies primarily on extremely large individual contributions, not corporate or union money, but which threatens to upend the federal campaign finance regime in place since 1974.  Super PACs can accept contributions in unlimited amounts and use them to engage in unlimited independent expenditures expressly supporting or opposing candidates. Non-existent before the spring of 2010, Super PACs were significant players in a number of 2010 Congressional elections and became major factors in the 2012 Republican presidential nominating contest. In many of the Republican primaries, Super PACs outspent the candidates. Nearly all the leading Super PACs in 2011-12 were closely identified with specific presidential contenders, and they became vehicles for wealthy donors who had given the legal maximum in contributions to a candidate’s campaign to give much more to the Super PAC backing that candidate. As a result, Super PACs threaten to effectively eliminate limits on contributions to candidates.This article examines the Super PAC phenomenon. It compares and contrasts Super PACs with other campaign finance actors. It considers the judicial and Federal Election Commission decisions that authorized their existence and operations, and the impact of Citizens United — which is not directly responsible for Super PACs — in creating an atmosphere in which lower courts concluded that donations to independent spending committees cannot be limited. The article explores the preliminary data on Super PAC fundraising and spending and the evidence that they function as virtual, but legally far less constrained, alter egos for the candidates they support. As a result, the emergence of Super PACs may very well spell the beginning of the end of our nearly four-decade-old post-Watergate campaign finance regime.”

Inequality & Democratic Responsiveness - By Gilens

“By Allowing voters to choose among candidates with competing policy orientations and by providing incentives for incumbents to shape policy in the direction the public desires, elections are thought to provide the foundation that links government policy to the preferences of the governed. In this article I examine the extent to which the preference policy link is biased toward the preferences of high-income Americans. Using an original data set of almost two thousand survey questions on proposed o policy changes between 1981 and 2002, I find a moderately strong relationship between what the public wants and what the government does, albeit with a strong bias toward the status quo. But I also find that when Americans with different income levels differ in their policy preferences, actual policy outcomes strongly reflect the preferences of the most affluent but bear virtually no relationship to the preferences of the poor or middle-income Americans. The vast discrepancy I find in government responsiveness to citizens with different incomes stands in stark contrast to the ideal of political equality that Americans hold dear. Although perfect political equality is an unrealistic goal, representational biases of this magnitude call into question the very democratic character of our society.”

Money Talks but it Isn’t Speech – by Hellman

“This Article challenges the central premise of our campaign finance law, namely that restrictions on giving and spending money constitute restrictions on speech and thus can only be justified by compelling governmental interests. This claim has become so embedded in constitutional doctrine that in the most recent Supreme Court case in this area, Citizens United v. FEC, the majority asserts it without discussion or argument. This claim is often defended on the grounds that money is important or necessary for speech. While money surely facilitates speech, money also facilitates the exercise of many other constitutional rights. By looking at these other rights, this Article notes that sometimes constitutional rights generate a penumbral right to spend money and sometimes they do not. Thus the fact that money facilitates the exercise of a right is insufficient to show that the right includes a penumbral right to give or spend money. The first contribution this Article makes is to identify this question: when do constitutional rights generate a penumbral right to spend money? The second contribution this Article makes is to provide an answer. When a right depends on a market good for its exercise, the right generates a penumbral right to give or spend money. When a right does not depend on a market good for its exercise, the right does not include a penumbral right to spend money. Using this account, this Article argues that the right to give and spend money in connection with elections need not be protected as speech under the First Amendment.”

The Democracy to Which We are Entitled: Human Rights and the Problem of Money in Politics - by Kuhner

“This Article is the first to argue that campaign finance, corporate political activity, lobbyists, and other ‘money in politics issues’ fall within the purview of human rights treaties. The universal assumption that domestic political finance is a purely domestic issue is mistaken. Domestic political finance is actually a matter of concern for international law. This is so because the provisions of the democratic entitlement under international law cannot be reconciled with the high levels of money in politics observed in many democracies. If this argument is sound, then human rights law requires States to enact political finance reforms.”

Inequality and Institutions in 20th Century America – by Levy & Temin

“We provide a comprehensive view of widening income inequality in the United States contrasting conditions since 1980 with those in earlier postwar years. We argue that the income distribution in each period was strongly shaped by a set of economic institutions. The early postwar years were dominated by unions, a negotiating framework set in the Treaty of Detroit, progressive taxes, and a high minimum wage – all parts of a general government effort to broadly distribute the gains from growth. More recent years have been characterized by reversals in all these dimensions in an institutional pattern known as the Washington Consensus. Other explanations for income disparities including skill-biased technical change and international trade are seen as factors operating within this broader institutional story.”

Does Corruption Affect Income Inequality & Poverty –  by Gupta, Davoodi, Terme

“This paper demonstrates that high and rising corruption increases income inequality and poverty by reducing economic growth, the progressivity of the tax system, the level and effectiveness of social spending, and the formation of human capital, and by perpetuating an unequal distribution of asset ownership and unequal access to education. These findings hold for countries with different growth experiences, at different stages of development, and using various indices of corruption. An important implication of these results is that policies that reduce corruption will also lower income inequality and poverty. “


Video: Affluence & Influence: Economic Inequality and Political Power in America

Video: How Economic Inequality Harms Societies 


Learning Soft Skills From Improv Theater

I recently posted my notes on Venkatesh Rao’s book, Tempo. The footnotes from “Tempo” led me to a really interesting book called, Impro: Improvisation and the Theatre by Keith Johnstone, it was written as a guide for improv performers but is primarily a manifesto on creativity, human psychology, and interpersonal relationships. Below are some of my favorite quotes:

Education & Creativity:

“In the gentlest possible way, this teacher had been very violent. She was insisting on categorising, and on selecting. Grown-ups are expected to distort the perceptions of the child in this way. This makes it difficult to understand that education can be a destructive process, and that bad teachers are wrecking talent, and that good and bad teachers are engaged in opposite activities.”

“If I’d have wept over a poem in class the teacher would have been appalled. I realised that my school had been teaching me not to respond. The damage was greatest in areas where my interests and the school’s seemed to coincide : in writing, for example (I wrote and rewrote, and lost all my fluency). I forgot that inspiration isn’t intellectual, that you don’t have to be perfect. In the end I was reluctant to attempt anything for fear of failure, and my first thoughts never seemed good enough.”

“From then on I noticed how warped many people of great intelligence are, and I began to value people for their actions, rather than their thoughts.”

“Stirling believed that the art was ‘in’ the child, and that it wasn’t something to be imposed by an adult. The teacher was not superior to the child, and should never demonstrate, and should not impose values: ‘This is good, this is bad.”

“The implication of Stirling’s attitude was that the student should never experience failure.”

“The sage keeps to the deed that consists in taking no action and practises the teaching that uses no words …. When his task is accomplished and his work done the people all say, “It happened to us naturally.”

“If a child is creative he’s likely to be more difficult to control, but that isn’t a reason for disliking him.”

“Almost all teachers, got along reasonably well as schoolchildren, so presumably it’s difficult for them to identify with the children who fail.”

“One astounding thing was the way cowed and dead-looking children would suddenly brighten up and look intelligent when they weren’t being asked to learn.”

“My problem was to resist the pressures that would turn me into a conventional teacher. I had to establish a quite different relationship before I could hope to release the creativity that was so apparent in the children when they weren’t thinking of themselves as ‘being educated.”

“Ten minutes is the attention span of bored children”

“I’d argue that a director should never demonstrate anything to an actor, that a director should allow the actor to make his own discoveries, that the actor should think he’d done all the work himself.”

“I began to think of children not as immature adults, but of adults as atrophied children. But when I said this to educationalists, they became angry.”

“The feeling is that a good teacher can get results using any method, and that a bad teacher can wreck any method.”

“There seems no doubt that a group can make or break its members, and that it’s more powerful than the individuals in it. A great group can propel its members forward so that they achieve amazing things. Many teachers don’t seem to think that manipulating a group is their responsibility at all.”

“I meet a group of new students is (probably) to sit on the floor. I play low status, and I’ll explain that if the students fail they’re to blame me. Then they laugh, and relax, and I explain that really it’s obvious that they should blame me, since I’m supposed to be the expert; and if I give them the wrong material, they’ll fail; and if I give them the right material, then they’ll succeed. I play low status physically but my actual status is going up, since only a very confident and experienced person would put the blame for failure on himself. At this point they almost certainly start sliding off their chairs, because they don’t want to be higher than me.”

“Many teachers seem to me to be trying to get their students to conceal fear, which always leaves some traces.”

“Most schools encourage children to be unimaginative. The research so far shows that imaginative children are disliked by their teachers.”

“Torrance has a theory that ‘many children with impoverished imaginations have been subjected to rather vigorous and stern efforts to eliminate fantasy too early. They are afraid to think.’ Torrance seems to understand the forces at work, but he still refers to attempts to eliminate fantasy too early. Why should we eliminate fantasy at all? Once we eliminate fantasy, then we have no artists.”

“He said that uncreative people ‘are ashamed of the momentary passing madness which is found in all real creators … regarded in isolation, an idea may be quite insignificant, and venturesome in the extreme, but it may acquire importance from an idea that follows it; perhaps in collation with other ideas which seem equally absurd, it may be capable of furnishing a very serviceable link.’”

“Imagination is as effortless as perception, unless we think it might be ‘wrong’, which is what our education encourages us to believe.”

“People may seem uncreative, but they’ll be extremely ingenious at rationalizing the things they do. You can see this in people who obey post-hypnotic suggestions, while managing to explain the behavior ordered by the hypnotist as being of their own volition.”

“At school any spontaneous act was likely to get me into trouble. I learned never to act on impulse, and that whatever came into my mind first should be rejected in favour of better ideas. I learned that my imagination Wasn’t ‘good’ enough. I learned that the first idea was unsatisfactory because it was (1) psychotic; (2) obscene; (3) unoriginal. The truth is that the best ideas are often psychotic, obscene and unoriginal.”

“The most repressed, and damaged, and ‘unteachable’ students that I have to deal with are those who were the star performers at bad high schools. Instead of learning how to be warm and spontaneous and giving, they’ve become armoured and superficial, calculating and self-obsessed.”

“Rousseau began an essay on education by saying that if we did the opposite of what our own teachers did we’d be on the right track, and this still holds good.”

“The stages I try to take students through involve the realization (t) that we struggle against our imaginations, especially when we try to be imaginative; (2) that we are not responsible for the content of our imaginations; and (3) that we are not, as we are taught to think, our ‘personalities’, but that the imagination is our true self.”


“My feeling is that sanity is actually a pretense, a way we learn to behave. We keep this pretense up because we don’t want to be rejected by other people—and being classified insane is to be shut out of the group in a very complete way.”

“Most people I meet are secretly convinced that they’re a little crazier than the average person. People understand the energy necessary to maintain their own shields, but not the energy expended by other people. They understand that their own sanity is a performance, but when confronted by other people they confuse the person with the role.”

“A Canadian study on attitudes to mental illness concluded that it was when someone’s behaviour was perceived as ‘unpredictable’ that the community rejected them.”

“When I explain that sanity is a matter of interaction, rather than of one’s mental processes, students are often hysterical with laughter. They agree that for years they have been suppressing all sorts of thinking because they classified it as insane.”

“Students need a ‘guru’ who ‘gives permission’ to allow forbidden thoughts into their consciousness. A ‘guru’ doesn’t necessarily teach at all. Some remain speechless for years, others communicate very cryptically. All reassure by example.”

“It’s no good telling the student that he isn’t to be held responsible for the content of his imagination, he needs a teacher who is living proof that the monsters are not real, and that the imagination will not destroy you. Otherwise the student will have to go on pretending to be dull. ”

“Laughter is a whip that keeps us in line. It’s horrible to be laughed at against your will. Either you suppress unwelcome laughter or you start controlling it. We suppress our spontaneous impulses, we censor our imaginations, we learn to present ourselves as ‘ordinary’, and we destroy our talent—then no one laughs at us.”

“We all know instinctively what ‘mad’ thought is : mad thoughts are those which other people find unacceptable, and train us not to talk about, but which we go to the theatre to see expressed.”

“A therapeutic situation is one ‘in which the patient can freely voice his innermost thoughts towards himself, towards any other person, and towards the analyst. He can be confident that he is not being judged, and that he is fully accepted, whatever he may be, or whatever he may disclose.’ Later they add: ‘We encourage the relaxation of censorship.”

“She adds that women with prolonged labours tended to be ‘inhibited, embarrassed by the processes taking place in their bodies, ladylike in the extreme, and endured what they were undergoing stoically as long as they were able, without expressing their anxieties. It was not these women’s bodies that were causing them difficulties; they were being held up by the sort of people they were. They were not able to give birth.”


“You have to be a very stubborn person to remain an artist in this culture. It’s easy to play the role of ‘artist’, but actually to create something means going against one’s education.”

“Maybe our artists are the people who have been constitutionally unable to conform to the demands of the teachers.”

“Creating a story, or painting a picture, or making up poem lay an adolescent wide open to criticism.”

“We have an idea that art is self-expression—which historically is weird. An artist used to be seen as a medium through which something else operated.”

“Once we believe that art is self-expression, then the individual can be criticized not only for his skill or lack of skill, but simply for being what he is.”

“Many students block their imaginations because they’re afraid of being unoriginal. We have a concept of originality based on things that already exist.”

“But the real avant-garde aren’t imitating what other people are doing, or what they did forty years ago; they’re solving the problems that need solving, like how to get a popular theatre with some worth-while content, and they may not look avant-garde at all! The improviser has to realise that the more obvious he is, the more original he appears. I constantly point out how much the audience like someone who is direct, and how they always laugh with pleasure at a really ‘obvious’ idea.”

“Ordinary people asked to improvise will search for some ‘original’ idea because they want to be thought clever.”

“People trying to be original always arrive at the same boring old answers.”

“An artist who is inspired is being obvious. He’s not making any decisions, he’s not weighing one idea against another. He’s accepting his first thoughts.”

“Content lies in the structure, in what happens, not in what the characters say.”

“My decision was that content should be ignored. This wasn’t a conclusion I wished to reach, because it contradicted my political thinking. I hadn’t realised that every play makes a political statement, and that the artist only needs to worry about content if he’s trying to fake up a personality he doesn’t actually have, or to express views he really isn’t in accord with.”

“If you improvise spontaneously in front of an audience you have to accept that your innermost self will be revealed. The same is true of any artist. If you want to write a ‘working-class play’ then you’d better be working class. If you want your play to be religious, then be religious. An artist has to accept what his imagination gives him, or screw up his talent and that spontaneity means abandoning some of your defenses.”

“Once you decide to ignore content it becomes possible to understand exactly what a narrative is, because you can concentrate on structure.”

“To be a good questioner you have to enter something like the same trance state as the person answering.
A student who becomes an expert questioner, that is, who becomes very ingenious at changing the ‘set’ of the questions, becomes a better improviser.”

“Speed is important, so that the questions and answers are a little too fast for ‘normal’ thought. Some questioners start.”

“The question baffles them because they can’t see how to use it to display their ‘originality’ … A word like ‘the’ or ‘once’ isn’t good enough for them.”

“I began this essay by saying that an improviser shouldn’t be concerned with content, because the content arrives automatically. This is true, and also not true. The best improvisers do, at some level, know what their work is about. They may have trouble expressing it to you, but they do understand the implications of what they are doing; and so do the audience.”

“It’s the same kind of trick you use when you tell them that they are not their imaginations, that their imaginations have nothing to do with them, and that they’re in no way responsible for what their ‘mind’ gives them. In the end they learn how to abandon control while at the same time they exercise control.”


“My feeling is that the best argument may be a testimony to the skill of the presenter, rather than to the excellence of the solution advocated.”

“Also the bulk of discussion time is visibly taken up with transactions of status which have nothing to do with the problem to be solved.”

“My attitude is like Edison’s, who found a solvent for rubber by putting bits of rubber in every solution he could think of, and beat all those scientists who were approaching the problem theoretically.”

“The improviser has to understand that his first skill lies in releasing his partner’s imagination.”


“My view is that we have a universal phobia of being looked at on a stage. Instead of seeing people as untalented, we can see them as phobic, and this completely changes the teacher’s relationship with them. Students will arrive with many techniques for avoiding the pain of failure.”

“Many students will begin an improvisation, or a scene, in a rather feeble way. It’s as if they’re ill, and lacking in vitality. They’ve learned to play for sympathy. However easy the problem, they’ll use the same old trick of looking inadequate. This ploy is supposed to make the onlookers have sympathy with them if they ‘fail’ and it’s expected to bring greater rewards if they ‘win’. Actually this down-in-the-mouth attitude almost guarantees failure.”

“Another common ploy is to anticipate the problem, and to try and prepare solutions in advance.

“This has two great disadvantages stops you learning from the attempts of your classmates; and very likely you’ll have calculated wrongly, and will be asked to read one of the adjacent paragraphs throwing you into total panic.
I’m teaching spontaneity, and therefore I tell them that they mustn’t try to control the future, or to ‘win’; and that they’re to have an empty head and just watch.”

“It’s this decision not to try and control the future which allows the students to be spontaneous.”

“”There are people who prefer to say ‘Yes’, and there are people who prefer to say ‘No’. Those who say ‘Yes’ are rewarded by the adventures they have, and those who say ‘No’ are rewarded by the safety they attain. There are far more ‘No’ sayers around than ‘Yes’ sayers, but you can train one type to behave like the other”

“If I say ‘start something’ to two inexperienced improvisers, they’ll probably talk, because speech feels safer than action. And they’ll block any possibility of action developing. Each actor tends to resist the invention of the other actor, playing for time, until he can think up a ‘good’ idea, and then he’ll try to make his partner follow it. The motto of scared improvisers is ‘when in doubt, say “NO”.’ We use this in life as a way of blocking action.”

“Then we go to the theatre, and at all points where we would say ‘No’ in life, we want to see the actors yield, and say,Yes”

“When I meet a new group of students they will usually be ‘naysayers’. This term and its opposite, ‘yeasayers’, come from a paper by Arthur Couch and Kenneth Kenison, who were investigating the tendency of people answering questionnaires to be generally affirmative, or generally negative in attitude.”

“Yeasayers seem to be “id-dominated” personalities, with little concern about or positive evaluation of an integrated control of their impulses. They say they express themselves freely and quickly. Their “psychological inertia” is very low, that is, very few secondary processes intervene as a screen between underlying wish and overt behavioural response. The yeasayers desire and actively search for emotional excitement in their environment. They see the world as a stage where the main theme is ‘acting out’ libidinal desires.”

“In the same way, they seek and respond quickly to internal stimuli: their inner impulses are allowed ready expression … the yeasayer’s general attitude is one of stimulus acceptance, by which we mean a pervasive readiness to respond affirmatively or yield willingly to both outer and inner forces demanding expression.

“The disagreeing”naysayers have the opposite orientation. For them, impulses are seen as forces requiring control, and perhaps in some sense as threats to general personality stability. The naysayer wants to maintain inner equilibrium; his secondary processes are extremely impulsive and value maintaining forces. We might describe this as a state of high psychological inertia—impulses undergo a series of delays, censorships, and transformations before they are permitted expression. Both internal and external stimuli that demand response are carefully scrutinized and evaluated: these forces appear as unwelcome intruders into a subjective world of “classical” balance.”

“What a person is afraid to do, he does when possessed.”


“Suddenly we understood that every inflection and movement implies a status, and that no action is due to chance…”

“Normally we are ‘forbidden’ to see status transactions except when there’s a conflict. In reality status transactions continue all the time.”

“Status is a confusing term unless it understood as something one does.”

“If someone points a camera at you you’re in danger of having your status exposed, so you either clown about, or become deliberately unexpressive”

“In my own case I was astounded to find that when I thought I was being friendly, I was actually being hostile! If someone had said ‘I like your play’, I would have said ‘Oh, it’s not up to much’, perceiving myself as ‘charmingly modest’. In reality I would have been implying that my admirer had bad taste.”

“Many people will maintain that we don’t play status transactions with our friends, and yet every movement, every inflection of the voice implies a status. My answer is that acquaintances become friends when they agree to play status games together.”

“When we tell people nice things about ourselves this is usually a little like kicking them.”

“People really want to be told things to our discredit in such a way that they don’t have to feel sympathy.”

“If I’m trying to lower my end of the see-saw, and my mind blocks, I can always switch to raising the other end. That is, I can achieve a similar effect by saying ‘I smell beautiful’ as ‘You stink’. Most comedy works on the see-saw principle. A comedian is someone paid to lower his own or other people’s status”

“We want people to be very low-status, but we don’t want to feel sympathy for them—slaves are always supposed to sing at their work”

“…the man who falls on the banana skin is funny only if he loses status, and if we don’t have sympathy with him.”

“Tragedy is obviously related to sacrifice. Two things strike me about reports of sacrifices : one is that the crowd get more and more tense, and then are relaxed and happy at the moment of death; the other is that the victim is raised in status before being sacrificed.”

“This is because normal people are inhibited from seeing that no action, sound, or movement is innocent of purpose.”

“However, S. E. Poppleton, a research student at Exeter, has since shown that the relationship between eye-glance submission hierarchies and an independent measure of dominance is an inverse one.”

“Thus he who looks away first is the more dominant.”

“In my view, breaking eye contact can be high status so long as you don’t immediately glance back for a fraction of a second.”

“Finally I explain that I’m keeping my head still whenever I speak, and that this produces great changes in the way I perceive myself and am perceived by others.”

“Actors needing authority—tragic heroes and so on—have to learn this still head trick. You can talk and waggle your head about if you play the gravedigger, but not if you play Hamlet. Officers are trained not to move the head while issuing commands.”

“My belief (at this moment) is that people have a preferred status; that they like to be low, or high, and that they try to manoeuvre themselves into the preferred positions.”

“A person who plays high status is saying ‘Don’t come near me, I bite.’ Someone who plays low status is saying ‘Don’t bite me, I’m not worth the trouble.’ In either case the status played is a defense, and it’ll usually work.”

“When actors are reversing status during a scene it’s good to make them grade the transitionsas smoothly as possible. I tell them that if I took a photograph every five seconds, I’d like to be able to arrange the prints in order just by the status shown.”

“Once the status becomes automatic, as it is in life, it’s possible to improvise complex scenes with no preparation at all.”

“In order to enter a room all you need to know is what status you are playing.”

“Once you can accept being insulted (the insult is the verbal equivalent of the custard pie), then you experience a great elation. The most rigid, self-conscious, and defensive people suddenly unbend. It is important for an actor to accept being insulted. The stage becomes an even more ‘dangerous’ area if you can’t admit your disabilities.
The actor or improviser must accept his disabilities, and allow himself to be insulted, or he’ll never really feel safe.”

“f you observe them closely you’ll see that the ones who always play low status in life won’t ever hold eye contact long enough to feel dominant.”

“You may have to precisely control the length of time that they look before they experience the change of sensation. Then they’ll say, Tut it feels wrong.’ This feeling of wrongness is the one they have to learn as being correct.”

“I can’t avoid talking about ‘space’ any longer, since status is basically territorial. In my view it’s only when the actor’s movements are related to the space he’s in, and to the other actors, that the audience feel ‘at one’ with the play. The very best actors pump space out and suck it in, or at least that’s what it feels like.”

“High-status players (like high-status seagulls) will allow their space to flow into other people. Low-status players will avoid letting their space flow into other people. Kneeling, bowing and prostrating oneself are all ritualised low-status ways of shutting off your space.”

“High-status people often adopt versions of the cherub posture. If they feel under attack they’ll abandon it and straighten, but they won’t adopt the fear crouch.”

“When the highest-status person feels most secure he will be the most relaxed person”

“When you watch a bustling crowd from above it’s amazing that they don’t all bump into each other. I think it’s because we’re all giving status signals, and exchanging subliminal status challenges all the time. The more submissive person steps aside.”

“I ask students (for homework!) to watch groups of people in coffee bars, and to notice how everyone’s attitude changes when someone leaves or joins a group. If you watch two people talking, and then wait for one to leave, you can see how the person remaining has to alter his posture. He had arranged his movements to relate to his partner’s, and now that he’s alone he has to change his position in order to express a relationship to the people around him.”

“Once you understand that every sounu and posture implies a status, then you perceive the world quite differently, and the change is probably permanent.”

“In my view, really accomplished actors, directors, and playwrights are people with an intuitive understanding of the status transactions that govern human relationships.”

“High-status players will block any action unless they feel they can control it. The high-status player is obviously afraid of being humiliated in front of an audience, but to block your partner’s ideas is to be like the drowning man who drags down his rescuer.”

Pecking Orders & Rules for High Status Leaders:

“Actors should become expert at each stage of a pecking order. There will be actors who can at first only play one role really well.”

“Number One in a pecking order has to make sure that everything is functioning properly. Anything that irritates him must be suppressed. At all times everything must be organised for his personal contentment. ”

Desmond Morris, in The Human ZQO gives ‘ten golden rules’ for people who are Number Ones [in pecking orders].

1. You must clearly display the trappings, postures and gestures of dominance.
2. In moments of active rivalry you must threaten your subordinates aggressively.
3. In moments of physical challenge you (or your delegates) must be able forcibly to overpower your subordinates.
4. If a challenge involves brain rather than brawn you must be able to outwit your subordinates.
5. You must suppress squabbles that break out between your subordinates.
6. You must reward your immediate subordinates by permitting them to enjoy the benefits of their high ranks.
7. You must protect the weaker members of the group from undue persecution.
8. You must make decisions concerning the social activities of your group.
9. You must reassure your extreme subordinates from time to time.
10. You must take the initiative in repelling threats or attacks arising from outside your group.

The End

Be sure to read, Impro: Improvisation and the Theatre by Keith Johnstone

Learning From Military Strategist John Boyd

Today I am linking to my notes from the book, “Certain to Win” by Chet Richards. The book is about the teachings of the famous (military) strategist John Boyd. Boyd is well known for pioneering the concept of the OODA loop. The more time I have spent studying Boyd (and the OODA loop) the more I realize how relevant it is to knowledge work as well as all competitive endeavors. 

First, let’s define the OODA Loop:

The OODA loop has become an important concept in litigation, business and military strategy. According to Boyd, decision-making occurs in a recurring cycle of observe-orient-decide-act. An entity (whether an individual or an organization) that can process this cycle quickly, observing and reacting to unfolding events more rapidly than an opponent, can thereby “get inside” the opponent’s decision cycle and gain the advantage. 

Boyd developed the concept to explain how to direct one’s energies to defeat an adversary and survive. Boyd emphasized that “the loop” is actually a set of interacting loops that are to be kept in continuous operation during combat. He also indicated that the phase of the battle has an important bearing on the ideal allocation of one’s energies.

Boyd’s diagram shows that all decisions are based on observations of the evolving situation tempered with implicit filtering of the problem being addressed. These observations are the raw information on which decisions and actions are based. The observed information must be processed to orient it for further making a decision.

- Via Wikipedia

Take a look at a visual representation of the OODA Loop:

– Via Wikipedia Originally posted on Wiki Commons

Want more background information? Read this presentation (click here)

Introduction to the book:

“Boyd simply asked: “What does it take to win?”

“What does it take to win? This question occupies the rest of the book, which will base its answer on a concept known as agility, another word that has lost its original meaning through careless application. Boyd, however, used the term in a specific sense, to mean the ability to rapidly change one’s orientation—roughly, worldview—in response to what is happening in the external world.”

General Strategy:

“There is a school of strategy—it forms the ultimate foundation for this book—which teaches that the best strategy wins without ever engaging in battle at all.”

“Once one side considers abandoning the field, particularly if it loses the initiative, small setbacks can lead to big disasters, and collapse can occur quickly.”

“In particular, the winners were able to make things happen that their opponents may have anticipated, but not when their opponents might have expected. Our view of the world, our “orientation,” as Boyd called it, depends heavily on things happening close in time to when we expect them to happen.”

“Under stress, disoriented people become demoralized, frustrated, and panicked.”

“The essence of agility and of applying Boyd’s ideas to any form of competition is to keep one’s orientation well matched to the real world during times of ambiguity, confusion, and rapid change, when the natural tendency is to become disoriented.”

“Strategy itself begins where hard, provable techniques leave off.”

“People, ideas, and hardware—in that order!”

“If you can be modeled (“sand-tabled,” as Boyd referred to it) you aren’t using strategy at all, and you can be defeated.”

“The distinguishing characteristic of an effective focus is that all other activities of the organization must support it and that the people conducting these activities understand what the main effort is and know that they must support it.”

“The ability to rapidly shift the focus of one’s efforts is a key element in how a smaller force defeats a larger, since it enables the smaller force to create and exploit opportunities before the larger force can marshal reinforcements.”

“In any case, an arrogant disrespect for the opponent has proven fatal.”

“Boyd inferred that if you can do things before the other side reacts, you can greatly increase your chances of winning, and it doesn’t make much difference how big or how strong the other guy is.”

“In fact, speed increases momentum, which can make one more predictable”

“Ambiguity is a terrible thing, much more effective as a strategy than deception, with which it is often confused.There is no conflict, however, between ambiguity and deception, since the first provides an environment for generating the second.”

“However, the essential lesson of the decision and execution cycle is the absolute importance of generating tempo. Maintaining rapid decision and execution cycles-and thus rapid tempo of operations-requires that seniors and subordinates alike have an accurate image of the battlespace and a shared vision of what needs to be done. With this common perspective, commanders are able to experience superior situational awareness and make more effective decisions, enabling them to exercise initiative during combat.”

“Victory is achieved in the way of conflict by ascertaining the rhythm of each opponent, by attacking with a rhythm not anticipated by the opponent, and by the use of knowledge of the rhythm of the abstract.”

“Boyd’s metaphor of strategy as a mental tapestry, rather than a chart or map, suggests that at the level of individuals and small units, the action may seem confused and complex, but that when viewed in its whole, a pattern must emerge to accomplish a higher purpose”

“The basic idea is to start a number of things going and reinforce the ones that succeed. This seems reasonable, but a closer look at its strategic roots suggests that it is not enough.”

Strategy vs Planning:

“Strategy is a deliberate search for a plan of action that will develop a business’s competitive advantage and compound it.”

“Given where you are now and where you think you want to go, now, what can you do, now, to help you get there? I am going to draw a distinction between the two concepts, and consider a plan as something more specific than a strategy. A plan is an intention about how to get from where we are now to where we want to be.”

“To build a specific a plan, we have to make assumptions about what the future will bring.”

“As a general rule, it is not a good idea to bet the company on a single vision of the future.First, you will spend a lot of time trying to map out the future: “If this happens, I’ll do that.”

“It is also possible to have multiple plans operating at the same time, within an overall strategy. You can then reinforce the ones that succeed and cut off the ones that don’t. This is analogous to an important concept in maneuver warfare known as “multiple thrusts” that we will examine near the end of chapter Strategy, then, includes selecting the view of thefuture we want, creating devices to harmonize all the plans and actions designed to achieve that future, and on relatively rare occasions, shifting to an alternate future.”

A plan says, “Here’s what I intend to accomplish, here’s what I’ve got to work with, so here’s what I’m going to do.” Strategy can also ask, “Who said this is what I’ve got to work with? I can develop or buy new capabilities or partner with those who have them.”


“A goal is an intention at a point in time.”

“The point is that although goals are one way to focus people’s efforts, they should be used sparingly.”

“If you are going to use goals anyway, never impose them on someone else or on yourself without explaining where they came from and why they’re important.”

OODA Loop – Observe:

“Observe” means much more than “see.” “Absorb” might be more descriptive if it did not have a passive undertone. Go out and get all the information you can by whatever means possible is even closer.”

“How well your orientation matches the real world is largely a function of how well you observe, since in Boyd’s conception, “observe” is the only input from the outside. Anything that restricts the inflow of information or ideas can lead to mismatches (disorientations) between what you think is happening and what actually is and may also delay you from spotting (and so acting upon) these mismatches.”

“Since what you’re looking for is mismatches, a general rule is that bad news is the only kind that will do you any good. To thrive in any form of maneuver conflict, you must seek out and find data that don’t fit with your current worldview and you must do this while there is still time.”

Those who know the situation in the marketplace serve the role of spies for the leaders of modern companies. They will sometimes be bearers of bad news, and, if you follow the Sun Tzu tradition, they will bear this news to you while there is time to act.

It bears repeating that if you cannot or do not spot mismatches, and generally this means finding bad news, your orientation becomes detached from reality.

OODA Loop – Orient: 

“Orient is the key to the process.”

“Then, since decision and action flow from orientation, the ability to rapidly change one’s orientation, since it is orientation locking up under the stress of competition and conflict that causes OODA loops to slow and makes one predictable, rather than abrupt and unpredictable.”

“For an individual, though, if observe and orient were done well you just know what to do the vast majority of the time. Decision making can and should be implicit, and that quite often, orientation controls action directly without the need for explicit decisions at all.”

“Agility is the ability to move and adjust quickly and easily. It springs from trained and disciplined forces.”

“Agility is mental and physical.”

“As the battle progresses, the slower side’s orientation, its mental picture of what is happening, becomes less and less accurate. There is a well-known name for this detachment from reality that strikes the less “entropy.” The energy is still there, but it isn’t available for doing work. The insidious thing about entropy is that within a closed system, it always increases. In other words, closed systems run down.”

“The more often you’re sampling, that is, dropping balls and observing the results, the quicker you will be able to detect real movement by the mark.”

“Reorienting, which is the essence of agility, occurs when you interpret the data to conclude that you have a systemic bias or that the mark has moved..”

The main idea of appreciation is to learn what’s really going on in your organization without causing the organization to react to your observing.


“Leadership—implies the art of inspiring people to enthusiastically take action towards uncommon goals.”

“Your ultimate purpose is to survive in a threatening and confusing world. But survival per se will hardly arouse the passion and commitment you need to win. So winning requires more than the promise of survival. It must offer an idea of such power and appeal that people will, at times, neglect their other responsibilities and work nights and weekends and extend trips to make it happen.”

“What is needed is a vision rooted in human nature so noble, so attractive that it not only attracts the uncommitted and magnifies the spirit and strength of its adherents, but also undermines the dedication and determination of any competitors or adversaries. Moreover, such a unifying notion should be so compelling that it acts as a catalyst or beacon around which to evolve those qualities that permit a collective entity or organic whole to improve its stature in the scheme of things.”

“The idea is that not only does a compelling mission motivate and uplift employees, but it attracts and keeps customers and sometimes makes them fanatic adherents of the company.”

“This is the connotation of “survival on your own terms”—people don’t put in this amount effort and passion for somebody else’s terms. For this reason, the first task of strategy is to define and win agreement on what “your own terms” really means.”

Boyd observed that “appreciation includes the recognition of worth or value and the idea of clear perception . . . it is difficult to believe that leadership can even exist without appreciation.”


“…Substitute “the person who has the vision for what needs to be done” for “superior” and “a person whom he or she is going to ask to help accomplish it” for “subordinate.” It should be noted, though, that there are few examples of effective combat units that were participatory democracies.”

“Soldiers at all levels must be free to—must be required to—use their creativity, intelligence, and initiatives to work around the enemy’s weapons and generate and exploit opportunities.”

“You cannot, he admonishes, give in to the urge to check and control everybody. In the heat of battle, there isn’t time. You have to trust your soldiers and subordinate leaders to do the right thing under the stress of combat. But, and this is the key point, this trust cannot be wished for or assumed. It must be earned through training and working together.”

“While they were moving up, from squad leader to platoon leader and company commander, they generally stayed in their original units. All of the officers and sergeants shared a common background, knew each other’s strengths and weaknesses, and could communicate rapidly and accurately using very few words. Boyd concluded that to be most effective, training and shared experiences must expose the organization to more and more complex and dangerous situations so that people finally learn to trust each other in the confusion of conflict.”

“Once your team has achieved a high level of competence in performing individual and unit tasks, and where most communication is implicit and the need for written instructions is relatively rare, then you can start leading through missions—as opposed to by assigning tasks, for example.”

“Once your team has achieved a high level of competence in performing individual and unit tasks, and where most communication is implicit and the need for written instructions is relatively rare, then you can start leading through missions—as opposed to by assigning tasks, for example.”

A maneuver warfare military believes it is better to have high levels of initiative among subordinate officers, with a resultant rapid Boyd Cycle, even if the price is some mistakes.

“If we have built sufficient trust based on mutual experience, I know what you are capable of, and I trust you to do it if you agree to it. You trust me not to order you to do something that you cannot do or that will endanger you for no important strategic reason.”

“Although “mutual trust” gives us all a soft, warm feeling, how does it actually help win? Simply, it speeds execution of OODA loops. The reason? For starters, it permits implicit communication among team members, where very little needs to be written down.”

“Mutual trust / cohesion is unique among harmonizing agents in that it encourages individual initiative. This point is worth stressing because as we all know, there are ways to achieve, perhaps better would be “enforce,” a sort of harmony by eliminating initiative.”

“Another less egregious but more common way to destroy trust is to succumb to the temptation to control everything.”

“Boyd called this an “obsession for control,” and assigns it much of the blame for the bloodbaths that occurred from the mid-1800s to the end of WW I. Most people realize that over-control is the opposite of trust. It is impossible to overestimate the damage you can do to yourself through over-control. One of the tasks of senior managers is to spot this tendency and retrain or in the worst case remove the micromanager.”

“In fact, the whole notion that we can “control” other human beings is a fallacy. Psychologist Michael Popkin, founder of the highly successful “Active Parenting” program, calls it the “Paradox of Control: The more you try to control a teen, the less you can influence that teen.The reason? Control eventually leads to resistance, and resistance to rebellion.The more you try to control people, the less control you get.”

“The duty of senior managers is to design the garden, decide what they want to grow, and prepare the proper conditions. Obviously to do this well, they must be highly experienced gardeners, with a sure feel for the soil conditions, the nature of their plants, the climate, and the local rabbit population. Once conditions are right and seeds are in the ground, the plants grow themselves—bottom up, as Boyd used to emphasize. With seeds planted, and favorable climate and soil conditions, the “system” implements itself.”

Business & The OODA Loop:

“First, there is the Basic Rule of All Competition (BRAC): You are not smarter than either the customer or the competition. ”

“Managed structural changes that enabled their operations to execute their processes much faster.” Not only were their processes quicker, but Honda knew or learned how to exploit this advantage to achieve a decisive result in the marketplace. cycle time, to create opportunities in the marketplace and then provide products that customers wanted to buy more than they wanted those of the competition.”

“W. Edwards Deming, a quote from whom opened this chapter, recommended looking at the world in terms of “special” and “common” causes. If in your organization you have a small number of people making mistakes and performing poorly, it’s probably their fault. You should spend your time working with them, or transfer them to other jobs, or if neither of those options is feasible, remove them. If it’s much more than 10%, though, then it’s the system’s fault and you should put your effort into fixing the system and quit blaming or exhorting the people in it.”

“What all of this suggests is that individual brilliance alone cannot account for strategies where smaller, less technologically advanced forces win, since, following Deming, such effects should only account for something less than 10% of battles. The study cited above suggested that the true number is over 25%, more than can be ascribed to numbers or technology.”

“Lind notes, and this is especially relevant to business, that the focus is often a concept rather than a unit, and so shifting it requires a mental as well as a physical change.”

“Quick OODA loops will allow you to better track your environment. In particular, you will be able to tuck-in tighter under your customers’ wings, and more rapidly discover their needs and wants and respond to them. An agile company can also track changes in customer preferences better than its slower competitors, since it will bring in data from the world.”

“Under this paradigm, there is always a lag: the customer has needs and some time later, you discover them. To turn this into an active tool of strategy, you should ask yourself where these needs and wants come from. Too often they represent successful attempts by competitors to shape the marketplace—customers “want” something because a competitor has offered it.”

“There is a principle of strategy that says that when your strategies start becoming aggradations, where each new feature is intended to correct problems found with earlier versions, then it’s time to throw the whole thing out and start over.”

Intuition, Self Discipline, & Practice:

“Literally a fingertip feeling or sensation, it is usually translated as “intuitive skill or knowledge.” It provides its owner an uncanny insight into confusing and chaotic situations and is often described as the “ability to feel the battle.” Zen and other oriental philosophies talk at great length about intuitive knowledge, but they also stress that it comes through years of experience and self-discipline.”

“The end result is to become so good at your profession that it really does seem magical, which, of course, is what real magic”

“The trick is to expand our envelope of intuitive capabilities so that the vast majority of the time, we don’t need to utilize a slower explicit decision process.”

“This level of skill can be deceiving when seen by others (again, think of a stage magician), because people who have it often don’t look like they’re working harder or doing things faster. They just, as Musashi insisted, get to a useful result sooner.”

“Now you are ready to begin acquiring a true intuitive competence. How? By using these skills in ever more complex circumstances so that you build an intuitive feel for situations where there is a lot of stress and the answers are not clear. We do this through incessant practice, incorporating exposure to an ever-widening variety of new and challenging types of situations, and with feedback from knowledgeable individuals (otherwise we’re practicing our mistakes.)”

“Musashi insisted that practice imitate the real world as closely as possible. The Zen masters of Musashi’s age emphasized the ultimate role of objective reality, and much of their practice was designed to minimize the possibility that one’s existing orientation would cloud one’s perception—the risk in that “implicit guidance and control” link from orientation back to observation”

The End.

Read The book Certain To Win on Amazon