Think backwards to move forward

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Personal Finance

Think backwards to move forward


IDEa

Summary

  • To think strategically, go backwards, and consider failing to succeed. Insightful managers are able to think forward and backwards.
  • Thinking backwards works for Warren Buffett and Charlie Munger of Berkshire Hathaway, one of the world’s most successful investment groups.
  • Inversion thinking, reflecting and planning for the opposite of what you want to happen, is a source of gaining a competitive advantage.

To think strategically, go backwards, and consider failing to succeed. Insightful managers are able to think forward and backwards.

Thinking backwards works for Warren Buffett and Charlie Munger of Berkshire Hathaway, one of the world’s most successful investment groups. Inversion thinking, reflecting and planning for the opposite of what you want to happen, is a source of gaining a competitive advantage.

Not taught in school, this way of approaching problems dates back thousands of years to the Stoics, Marcus Aurelius and the mathematician Carl Jacobi who said “invert, always invert”. Pythagoras thought in reverse, to prove that the square root of 2 was an irrational number.

Coming up with a simple elegant strategy requires an ability to look at things differently, to stand out from the crowd. Inversion is a thinking skill that helps solve difficult tricky problems, and make better strategic decisions in a unique, [hopefully] less risky way.

Running a successful business and being an effective manager in this time of coronavirus requires strong problem solving skills. Things rarely happen as predicted, and if they do come relatively close to the plan, there is always a little twist that was not thought about.

The Stoics, a school of Greek philosophers, dating back to the 3rd century BC believed it was useful to imagine the worst case scenario. While most people think about managing ‘blue sky sunny days’ success, the Stoics thought about how to deal with failure. What if everything went wrong tomorrow ? How is it possible to prepare for it today ?

In inversion thinking, you consider the opposite of what you want will happen. For instance, for a bank this might be: What happens when we lose almost half of our most profitable customers to a ‘youth savvy’ innovative competitor, offering free graphically stunning digital product ? For an NGO, it might be: What happens if our main donor, cuts their funding next week, because they don’t see the targeted programme impact ? What happens when the small duka has their sales cut by half ? Or, the boda boda rider, who only gets 2 of 3 rides per day, and is now unable to repay their Sacco loan ? Or, the university, whose graduates have difficulty getting jobs, because they lack drive, imagination and critical thinking skills ?

German mathematician, Carl Jacobi, was known for his ability to solve difficult problems, by following an ‘upside down’ approach. He believed that to clarify ones thinking, it was best to restate the problem in the inverse form. Inversion works because it puts a spotlight on errors and bumps in the road, that are not immediately obvious. What if the opposite was true ? What if we focussed on a different side of the situation ? Don’t think about how to achieve a task, think about how not to make it happen.

There is always the status quo in any business, or non-profit sector. It’s the small, often hidden, not noticed, innovators who are the ones who disrupt, who upset the ‘same old – same old’ way of doing things, in a compelling ‘breakthrough thinking’ way.

To apply inversion thinking, an insurance company, that is a small fish, in a big pond, that prides itself on being a touch imaginative, ‘aspiring to innovate’ might ask: How can we make the organisation less innovative ? How can we create barriers that make sure creative ‘out of the box’ ideas and thinking are stifled, not encouraged, and never implemented ?

Learning from what doesn’t work, can be just as useful, as knowing what does work. First step in inversion thinking is not about finding wise advice, but more about ‘anti-advice’.

Imagine the goal for the project that you are working on right now. Think forward 6 months and assume it has failed completely. Tell the story of what happened, what went horribly wrong ? This ‘kill the company’ approach will spell out, exactly how you could fail.

Inversion thinking is counter intuitive. Thinking about what you don’t want, is not the normal [standard operating procedure] way we want our grey cells to work. Thousand of years ago the Stoic’s visualized negative outcomes, and more recently, artists like Picasso inverted the status quo, in creating synthetic and analytic cubism, breaking apart images, confronting convention. What if you could transform your business, the way Miles Davis led stylistic developments in jazz ?

Challenging our own cherished beliefs is not easy, but it is useful skill to have in your management tool box. Inversion thinking is there to stop of the magnetic attraction of a confirmation bias, being attracted to, what we already think is the case.

In management, as in art and science, perspective is everything. Time to step out of the normal patterns of thinking. After all, how useful is a car without a reverse gear ?



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