Welcome to the linear world. Our previous conversation led us to conclude that you should not behave the same way in the linear world and in the chaotic world. And in particular, we argued that the existence of risk in the linear world demands flexibility on your end to adjust and reallocate resources on the ground as the future unravels, and to be conscious enough of the multiple trajectories that can materialize in the future. So what does this mean in practice for you in the linear world? It seems that the main challenge lies in interpreting the landscape as well as the actual meaning of each event on the ground. Too often, we feel that this interpretation should be simple and straightforward. The temptation to explain these events with an explanation that confirms your intial thinking and logic at any cost, is significant. Perhaps because the greatest cost of all is admitting an initial mistake. In fact, on closer examination, these events could mean something quite different. The Monty Hall game, that you’ve just played before viewing this video, is a telling example of this issue. Remember the rules of the game as well as the sequence. A contestant needs to pick one of three doors Behind two of the doors stands a goat. Picking one of those two doors means the contestant loses the game. Behind the third door stands a brand new fancy car. If the contestant picks that door, he wins the car. Note that the game show host knows where the car is. So the contestant picks one door, say door #1 for example. Among the two doors that the contestant did not pick, the game show host opens up one behind which a goat stands. Say door #3 for example. The game show host then asks the contestant whether he wants to change doors or to stick to his initial choice. Here’s a question. Would you change doors? Do you think it matters, or should the contestant be indifferent between changing his mind and sticking to his initial choice? Pause this video for a moment and think about this. The faulty yet tempting logic would state that the contestant initially had a one-out-of-three chance of picking the right door, which is true. And now that the contestant knows where one of the goats is, the likelihood that the car is behind the door he initially picked is one half. As a result, he should be indifferent between picking the same door or changing his mind. This logic is false however. We won’t get into the mathematical proof here, you’ll get the chance to check one after the video. Let’s just stick to intuition, for now. By opening up one of the two doors that the contestant did not initially pick, door #3 in our example, The game show host, who again, knows where the car is, is revealing some information about the state of the world, about the state of what lies behind the doors that the contestant did not pick, namely door #2 and door #3. But he’s not revealing anything about the door the contestant did pick. He cannot do that by design. The likelihood that the car is behind door #1 remains 1/3 as a result. In addition, in fact, when the game show host opens up door #3, he reveals two things: 1 – that the likelihood that the car is behind door #3 is 0 since there's a goat, 2 – And, as a result, that the likelihood that the car is behind door #2, the door the host did not open and the door that the contestant did not choose, is actually higher than we initially thought. So since the car has to be somewhere and since the likelihood that the car is behind door #1 is still 1/3 The likelihood that the car is behind door #2 is in fact 2/3. Changing doors would make sense if the contestant wants to maximize his chances of winning the car. This Monty Hall game, it seems, offers a powerful lesson on how complicated likelihoods can be and how bad we, humans, are at updating our beliefs about the state of the world as we gather additional information and as the future unravels a bit more each step of the way. Being flexible in the linear world means being conscious of this and in particular, it means avoiding the temptation to explain every new event in a way that confirms your initial understanding of a situation. If you do that, you’re likely to be blindsided in the linear world. So living in the linear world demands some intellectual honesty, some acceptance that your initial thinking could be wrong and that adjustments, as painful as they might be, are required. In particular, the cleverest analyst should follow these easy steps to ensure the intellectual honesty of her approach. The first step lies in coming up with a narrative of the current landscape, an explanation of what the current configuration means and what to expect from it in the future. The second step lies in determining what, in the future, would be proof that this explanation is correct and what, in the future, would be proof that the explanation is incorrect. In particular, this requires identifying the indicators, the pieces of data and/or the signposts that you need to monitor and that would prove or disprove your initial logic. For instance, this would mean saying that if your explanation is correct, then you expect indicator X to follow this evolution and the answer to question Y to be this. On the contrary, if your explanation is incorrect, you would expect indicator X to follow this other evolution and answer to question Y to be somewhat different. In a nutshell, the question you should ask yourself is what do I expect to happen if I’m right and if I’m wrong? This is probably one of the safest approaches to avoid groupthink and to fully leverage the skills and the talents of your team. It is perhaps the true source of agility in a team or for an individual as it empowers people to adjust in a way that is congruent with reality. Before we conclude, try to answer the following question: What do you think living in the linear world requires from you? A – Being flexible B – Being intellectually honest and admit initial misunderstandings C – Move straight ahead, without considering new events D – Being mindful of indicators and questions that are important to you. If you’re still with me, I think that you’ll agree that the answers are A, B and D. Indeed, here’s the bottom-line. Since the linear world requires you to maintain flexibility, both intellectually and physically, you need to be aware of how new realities and trends should shape your understanding of the landscape. We’ve tried to develop an approach that does just that.