Dan Heath: Three obstacles to thinking upstairs

“Each system is designed to get its results perfectly.” – Responsible for Paul Batalden

Dan Heath credits the inspiration for his latest book, Upstream, A solo example of sociologist Irving Zola.

“It goes like this,” explained Heath, a bestselling author and senior fellow at Duke University’s KSE Center, at the CFA Institute Alpha Summit:

“You and a friend are picnicking by a river and you are just spreading your picnic blankets, you are preparing a feast, when suddenly, you hear a scream from the river side. You look back and there is a child almost drowning.

Instinctively, you and a friend both jump up and swim to rescue the baby. But when you bring the baby safely back to shore and just as your pulse begins to return to normal, you will hear another baby cry for help.

“So, you go back,” Heath said. “You fish that kid. As soon as you don’t do it, you hear two screams. Now two kids in the river. And so begins this kind of rescue door. ”

Just as fatigue comes, Heath said, you notice that your friend is swimming on the shore, rising from the water and rising to the top.

“You say, ‘Hey, where are you going? I can’t do all this work myself.’ And your friend says, ‘I’m going upstairs to deal with the boy who’s throwing all these kids into the river.

The story resonates with Heath because it reflects a problem that we find in every aspect of our lives, financially and beyond, which he calls the “reaction trap”.

“We are always running after emergencies, we are always putting out fires,” he said. “It simply came to our notice then. And we seldom spend time and dedicate the resources needed to rise up and solve these problems at their root. ”

But in order to take an upward approach, we must first understand what puts us in that reactive, downward crouch. Which example allows one picnicer to jump back and the other tackles the problem at its source? Heath has identified three main obstacles and described how we can recognize and overcome them.

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1. Blindness

“If you don’t see it, you can’t fix the problem.”

Some problems are so ubiquitous and inherent, they fade into the landscape or are perceived as inevitable, the value of doing business.

Heath used the example of a hamstring injury in the National Football League (NFL). When 11 players on each side of a football collide with each other at full speed, some are forced to get hit in the hamstring.

For the New England Patriots, it added 22 such injuries in a single season. It was too much for them to be competitive. They needed a new approach and a new approach, so they hired MD Marcus Elliott to evaluate the problem.

Elliott saw things differently. These diseases were not “inevitable”, but were the result of poor training and muscle imbalances. Insightfully, it was clear. The linemen, weighing 500 pounds, went through the same offseason training procedure as the Wide Wide receiver. This needs to change.

But Elliott went even further. Not only were different protocols required for different positions, but a unique personalized approach was required for each player. “Some people’s quads are so powerful that they actually disrupt the work of the system,” Heath said. “The hamstrings of the other wide receivers are going to be a bit stronger than the other and this creates an imbalance.”

As Elliott tried to implement his new arrangement, he was greeted with considerable skepticism. His vision went against football orthodoxy. But in the season following the adoption of Elliott’s inventions, the number of hamstring injuries by the Patriots increased from 22 to three.

“The evidence was in the pudding,” Heath said. “And it has made a lot of believers.”

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2. Tunneling

“In a tunnel, you only have to go one way, assuming you don’t want to go back: you just have to go your own way.”

When we’re leaning towards rhetorically injured football players or fishing a stream of drowning kids from a river all day, it’s hard to step back one step and take a systematic approach. Heath calls this tunneling, a term he borrowed from a psychology book, Lack.

“There’s no wide macrovision in the tunnel, you just have to keep charging ahead,” he said. “There is no question of strategy. There are no thorns on the road. ”

And once we get into that tunnel, it’s hard to get out. One problem leads to another and we spend all our time desperately trying to put out the fire. Heath said, “You’re at the end of the day, and you’re thinking, ‘Did I really do anything to get my work done or did I run after problems all day?'”

We focus so much on moving forward that our first reaction to the obstacle is not to deal with it, not to solve it, but to surround it.

“We need a lot of energy, we need a lot of bandwidth, just to fight the problems, to solve them,” he said.

This almost guarantees that the problem will recur.

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3. Lack of ownership

“Who will pay for what doesn’t happen?”

We all know what to do if our house catches fire: Call the fire department.

“It’s amazing how many times the ownership line is crystal clear for emergencies, isn’t it?” Heath observed.

But the answer is a little less clear when we ask, who is responsible for protecting our home from fire?

As home residents, we are in the front row. But we are not alone. Who came up with the building code? Or have you chosen building materials? And our neighbors and neighbors also play a role.

The more complex and diffuse the problem, the less likely it is to have a clear line of ownership, Heath said.

“When no one owns the problem,” he said, “it probably won’t be solved.”

And it traps our response:

“There’s an emergency, and then we respond to it, and then we become inactive,” Heath said. “We don’t work anymore until there’s another emergency and we repeat that cycle.”

And this cycle is often driven by economics. Where there is an emergency, there are economic activities and financial rewards.

“Someone breaks a butt, and they go and have surgery. Surgeons get paid, hospitals get paid, ”Heath said. “But who pays to prevent a hip fracture?”

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Breaking the cycle: “Keep it up, keep it up, keep it up”

“Upstream thinking demands of us a new lens, a new perspective, the way organizations work.”

To return to the opening quote, systems are designed for efficiency, and whenever systems provide consistent output, good or bad, according to Heath, we use those systems as if their main purpose was to provide these outputs.

“How do we get a big job done?” He asked. “We divide it into parts. And then we measure each part on their success. Often we neglect the whole in terms of optimizing the part.

If our job is to pull children out of the river or treat hamstring injuries, we will find ways to improve our performance. But we will not solve the origin of the problem.

The reaction trap exacerbates this kind of downward thinking.

“Often when designing for response efficiency,” he noted, “we slow ourselves down in the process of overcoming the problems we’re actually responding to.”

In the story of the river, Heath explains, there are only two locations: downstream, where we repeatedly prevent children from drowning, and upstream, where our friend is at once disabling the cause of the problem.

“We should move beyond that,” he said. “It’s actually a lot easier and more practical to think about downstream and upstream as an almost endless spectrum as a spectrum.”

To illustrate, he referred to the YMCA as the real-life parallel to Zola’s parable. Millions of children swim in YMCAs every year. Emergency is inevitable. But the YMCA has not taken an upward or downward approach, it has adopted an all-stream approach. They removed the lifeguard chair to avoid eye stains. They have created a colorful wrist arrangement to indicate a child’s ability to swim. And they have attacked the source of the problem.

“YMCA is the country’s leading supplier of swimming learning,” Heath said, “if you think about it, it’s a great way to completely prevent river accidents.”

And that approach goes to the core of upstream thinking.

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“Almost all levels of defense are needed to try to prevent any problem that is immediately enough and important,” he said. “The basic trap has nothing to do with how far you go. The trap is that in the real world we spend 95% of our time here, in response to problems. “

According to Heath, we need to retire from that downstream mentality.

“We need a generation of upstream heroes,” he said, “who are not in a hurry to save the day, but who refrain from the need to save the day.

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All posts are the author’s opinion. As such, they should not be construed as investment advice, or the opinions expressed must not reflect the views of the CFA Institute or the author’s employer.

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Paul McCaffrey

Its editor is Paul McCaffrey Entrepreneurial investors At the CFA Institute. Previously, he served as editor at the HW Wilson Company. His writings have been published Financial planning And Daily Finance, Among other publications. He holds a BA in English from Vassar College and an MA in Journalism from the City University of New York (CUNY) Graduate School of Journalism.

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