Foxes and Hedgehogs
I’ve been throwing stones at prediction in the last few posts. Here’s another angle. I’ve talked about the distinction between hedgehogs and foxes before. These differences in mindset go very deep and surface in all kinds of ways. Another way to put it is between a kind of academic analytic approach to decisions, and a practitioner’s or leader’s approach.
As Richard Rumelt puts it in his book Good Strategy Bad Strategy: The Difference and Why It Matters; –
Whereas a social scientist seeks a diagnosis that best predicts outcomes, good strategy tends to be based on the diagnosis providing leverage over outcomes.
Strategy is about doing something, he says, not passively predicting or forecasting things. That means if you can’t take action, or shape the situation, you are very vulnerable. And the first thing to do is usually have a plan B.
True enough, a failed prediction may show up a wrong assumption or mistake. But by that point its usually too late. Practitioners have to survive another day, not develop parsimonious explanation and general theory that is true for all time.
That means you have to think about and test your assumptions before a big failure. But most people find it extremely hard to see their assumptions, let alone test them and adjust their view.
In theory people should learn from their mistakes and failed predictions. In practice they most often don’t. It’s an anomaly. Or an exception. Or they knew all along anyway (i.e. hindsight bias). The reality is people resist changing their minds, predictions or no predictions. They get too entrenched in a view. That’s the fundamental problem that needs solving.