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June 4, 2017 - Jordan B. Peterson Podcast
01:28:23
2017 Personality 21: Biology & Traits: Performance Prediction
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This is the most practical of all the things that we've discussed so far.
It's really, you could consider it a component of industrial organizational psychology, but it's a component that has a strong emphasis on individual differences.
And so, you could consider it, first, an exploration of the practical utility of psychological concepts in predicting real-world phenomena, but you could also consider it a part of the validation of the psychometric but you could also consider it a part of the validation of the psychometric models of
because one of the things that you want to do To determine whether or not a construct, so it's a hypothetical psychological phenomena or entity, whether or not that's real depends to some degree on what it's good for.
Right?
Part of the aim of science is prediction and control.
And so, It's useful to take a look at important life outcomes among human beings, and to determine whether or not you can predict them, because that's one way of testing whether or not the phenomena that you've derived,
say, from your statistical analysis, both in the case of fluid intelligence, or intelligence more broadly, and in the case of the Big Five, actually has the capacity to manifest itself in a meaningful way In the world inside the lab, that's one domain of potential validation, but then outside the lab as well.
And so what we're going to do today is to look at the factors that determine performance In the real world.
And so you might think, well, what are some important real-world outcomes on which performance might vary?
And we're going to stick to those that are rather obvious today.
We talked about creative achievement already, for example.
But you could think of creative achievement, entrepreneurial achievement.
Those actually clump together.
They're part of the same phenomena.
You think about academic achievement, and you could think about...
Success in the workplace.
And then those can be subdivided because success in the workplace, for example, needs to be analyzed in terms of success, say, at simple jobs and success at complex jobs.
Like, there's different ways of fractionating a phenomena to increase your capacity to understand it and to measure it and then to predict it.
But those are rough domains where there's self-evident individual differences and where the capacity to predict performance would at least be of some Utility.
Performance in the workplace.
This is an interesting one.
Performance in the workplace is a tricky measure, a tricky issue.
I've been working on performance prediction tests for a long time because I was interested in, because I'm a clinical psychologist and because I have a practical side, I'm often interested in what the utility of psychological measurements might be outside the lab.
It's interesting to consider that from an ethical perspective, too.
So if you're hiring people, you have two conundrums that lay themselves in front of you.
And one is the...
Ethical necessity to give each person a fair chance and the other is the ethical necessity to place the proper person in the proper position and you might say well you could do that randomly and Like there are countries in Europe for example that have a quasi random approach to the selection of university students.
So Holland is like that.
They have a pretty Open admission policy.
Now, what that means is that everyone has a chance to go to college, but the downside of it is that the failure rate in the first year, for example, is extraordinarily high.
Now, you might say that's a perfectly reasonable price to pay for the open admission and for the opportunity to give everyone a chance, but you could also say, well, that's a hell of a waste of time.
For the people who go into the first year of college or university and fail.
It's not a pleasant experience for them.
It's very expensive in terms of time and resources.
And perhaps it would have been better for them and for broader society had they been able to determine beforehand whether they had the sets of qualities that were necessary to Increase the probability of success.
Because if I could tell you, well, you know, you have an 80% chance of success in this domain and only a 20% chance in this domain, you still might want to take the risk in the 20% success domain, but you might also think, well, I might as well go off and function where my particular...
Combination of proclivities has the best opportunity to manifest itself and because why not position yourself for success rather than failure?
Now, I'm not saying that the ethical conundrum between those two alternatives is something that's easy to...
What would you say?
An easy thing to map your way through.
It's by no means an easy way to map your way through because there's strong arguments to be had on both sides of the equation.
So, but...
There's still the scientific question that remains which is to what degree can you accurately predict people's performance and to what degree does that reflect positively or negatively on your psychological concepts and then there's the actual practical utility of potentially offering to schools to universities and to workplaces in general the probability of selecting People with an above average chance of succeeding.
It's even more complicated, say, if you're selecting not so much entry level employees in a company.
Because maybe you tilt yourself there more towards the possibility of bringing more people in and letting them fail or succeed in the job.
But let's say you're replacing a management team at a medium to large size corporation.
You know, if you bring in managers that are incompetent, not only are they going to fail, which is obviously not very good for them, and the failure rate among managers is very high.
It exceeds 65, they figure, I think it's 65% of managers, I believe that's correct, add zero or negative net value to the companies.
It's something like that.
The failure rate in managerial positions is overwhelming.
And the problem with bringing someone into a managerial or an executive position, even worse, who isn't competent to play that role, is that they can wipe out the careers of everyone that they're supervising.
And in the case of, say, large companies, they can bring the whole damn company down.
And so, it's not like the ethic of...
People deserve an equal chance, let's say, to fail and succeed.
Isn't a very practical ethic when you're putting someone in a high demand position where the consequences of failure can be overwhelming, not only for that person, but for all the people that they happen to be, whose destiny they happen to be involved in determining.
And so then you might say, If you could come up with a selection process that would increase the probability of hiring an above average manager from 50-50 to 60-40 or 70-30, maybe you're actually ethically compelled to use that.
In fact, by law, this is particularly the case in the United States, You're required by law to use the most effective, valid, reliable, and non-discriminatory selection process that currently exists in order to select your employees.
And one of the things that's going to happen to employers in the next 10 years is they're going to get a very nasty shock for using interviews because the data on unstructured interviews indicates quite clearly that, A, that they're discriminatory, partly because they, for example, if you're tall and...
Assertive and good-looking and charming, then you're much more likely to do well in an interview, but that doesn't necessarily have any bearing whatsoever on the probability that you'll succeed in the position.
And so, and not only that, the predictive validity of unstructured interviews is very low.
It's about.12.
It's something like that, which means that if you just pick people randomly for success or failure, let's say you'd have a 50-50 chance of Predicting whether someone was going to be a success or a failure.
It's just a coin toss.
And then if you used an unstructured interview, you'd get that up to 56.44, which is slightly better, but it's by no means.
It's not even close to the accuracy that you could get, for example, if you just used a standard test of conscientiousness, which would give you a correlation of about 0.25 with, say, managerial productivity.
And there's this interesting...
This is an interesting thing to know.
It's called the binomial effect size display.
Effect size is the magnitude of an effect, right?
And it's not an easy thing to get a handle on, although you really need to if you're going to be a psychologist, because in any study, there's an effect size indicator, a correlation often, or an R squared, which is the correlation squared, or a Cohen's D, which is the effect size expressed in standard deviations, or something like that.
But you kind of have to understand that at a basic level to understand what statistics actually do.
And there's this phenomenon called the binomial effect size display that can help you understand what, like, in an embodied sense, what the magnitude of a correlation means.
So here's how it works.
Imagine that you have a predictor of 0.20.
So the correlation is R equals 0.20 between phenomena one, we'll say conscientiousness, and phenomena two, workplace performance.
0.20 correlation.
The question might be, well, How much would you improve your predictive capacity over chance levels if you applied that predictor?
And the answer is that the R is the difference between the odds ratio.
So let me explain that.
So.50,.50.
If you subtract one from another, you get zero.
So the predictive validity of Selection by chance is zero.
0.50 minus 0.50 equals zero.
That's the predictive validity of chance.
If you have a predictor of 0.20, which is approximately, that's sort of the low-end estimate for conscientiousness, then that would change your odds ratio from 0.50, 0.50, right, random, to 0.60, 0.40, because 0.60 minus 0.40 is 0.20.
And so the correlation coefficient turns out to be the The difference between the odds.
And so it gives you a quick rule of thumb.
So, for example, if you have a.20 predictor, that gives you 60-40.
If you have a.30 predictor, that gives you 65-35.
Because.65 minus.35 is.30.
And if you have a.6 predictor, which is really up on the high end, right?
You're really starting to push the limits of statistical prediction validity at that point.
That gives you.80 minus.20.
And so what you've done, if you use a predictor that has a correlation coefficient of.60, which you could get, for example, if you took conscientiousness and combined that with a good test of IQ for predicting complex jobs, you might be able to get up to.6.
That moves your odds ratio of selecting an above-average Person for the position from.50 to.80 to.20.
So it cuts your failure rate by more than half.
Brings it down from.50 to.20.
Because.80 minus.20 is.60.
So that's a really good thing to know.
That's called the binomial effect size display.
It's a really good thing to have in your mind.
It's very simple.
It's just subtraction.
And it gives you some sense of the power of statistical prediction.
Now...
The question might be, well, let's say you had a predictor of.20, conscientiousness.
You might say, well, if you square the R, that gives you 4% of the variance.
Who the hell cares?
4% of the variance.
You've left 95% of the variability between people in terms of their performance unexplained.
You might say, well, why even bother?
Well, the answer to that question is...
How much difference in productive output is there between people?
Because if there's a tremendous degree of difference in productive output between people, then increasing your ability to predict someone's performance, even by some relatively small increment, might have massive economic utility.
If, let's say, the top 10% of your people are 50 times as productive as the bottom 10% of your people, then shifting your ability to predict up so that you have more of those extremely high-performing people, or less of the extremely low-performing people, might more than pay off It might more than pay for itself from an economic perspective, even though your prediction, your predictor isn't, doesn't have that massive amount of power.
Well, and that actually happens to be the case.
So back in 1968, there was a guy named Walter Michel, and he had reviewed, he's a social psychologist, he reviewed the personality literature up to that point, and concluded that the typical personality measure only predicted the typical performance measure at about point two.
And that's actually remained relatively stable.
I would say it's a little higher than that.
It's probably 0.25, especially if you do things like correct for measurement error and so forth.
And what Michelle said was, because it's only 0.25, let's say, you square that, that's 5% of the variance.
You leave 95% of the phenomena unexplained.
You might as well not even bother measuring personality.
And so that actually killed the field of personality from a psychometric perspective for about 25 years, really until about the early 1990s when people woke up and thought, wait a minute, what are the typical effect sizes in other domains of prediction?
And then they found out that, well, the.20 correlation that was typical of personality prediction was actually pretty damn good by social sciences or health sciences standards.
Like, it doesn't sound good when you just think about it as an absolute measure, Because it leaves 95% of the phenomena unexplained.
But when you compare it to other things that people consider of reasonable magnitude, then it turns out that personality psychologists are doing just fine.
And then also in the 1990s, and I'll show you some of this, there were economic calculations done.
And so one of the calculations would be, well...
Imagine that you have, maybe you took 20 companies, and you did a distribution of the productivity of their employees.
It's a hard thing to do, because you have to measure their productivity.
It's like, how the hell do you do that, right?
With salespeople, you can measure sales.
That's pretty straightforward.
With lawyers, you can measure hours built.
Like, there are some occupations where the performance measure is sort of built into the job.
But if you're a manager in the mid-level of a large corporation, how the hell can you tell how productive you are?
So there's a measurement problem on the productivity measurement end as well as the performance prediction end.
And it's a very intractable problem.
And the way that people often do that is by saying, well, let's say you're a manager in the mid-level of a corporation.
How do we determine how productive you are?
Well, we might ask you to compare your...
Your work productivity with your peers.
Maybe construct up a questionnaire asking about your efficient use of time and so forth.
And then we might get your peers to do the same thing to you.
We might get your supervisors to do the same thing to you.
And we might get your subordinates to do the same thing to you.
And then aggregate across all those measures.
And infer that that aggregate...
Opinion actually constitutes a valid measure of productivity.
You actually don't know, right?
Because that assumes that what you're doing, that your peers and your supervisors and so forth are rating, is actually related in some positive manner to the bottom line of the company.
And you actually don't, you actually can't figure that out.
This is actually, I think, why large companies start to become unstable, is because if there's enough layers between the operations of the people in the tiers of the corporation and the real outcome measure, which is basically profit, because that's what we've got, then the relationship between your activity as a manager and the productivity of the company starts to become increasingly blurred.
And that might mean that you're working as hard as you can on something that's actually going to cost the company money.
So you'd actually be much more productive from a profit perspective if you just didn't go to work at all.
And that happens a lot in large corporations because you'd never know, especially if there's a lot of steps that have to be undertaken in a process before you can test the product in the market, you have no idea if you're wasting time.
And resources.
You just can't tell.
So the performance measurement issue is a very, very complicated one.
We haven't talked about it that much, but I give you kind of a brief overview of it now.
What you really want to do is have multiple sources of information about performance and aggregate across them.
And if you can use real-world measures that are tied to To income generation, so much the better, because you have to use something as your gold standard, right?
You have to say at some point, well, we're going to define this as reality when it comes to performance.
And in a free market economy, roughly, what you do there is you say that, well, profit is the proxy for productivity.
And that isn't the same thing as saying that profit is productivity.
That's not the same thing.
It's saying that at some point you have to decide what you're going to accept as a measure of productivity because otherwise there's no point in even talking about it.
And you can't just not talk about productivity if you're running an organization because the organization doesn't exist unless it produces something that will keep it going.
And generally that happens to be money.
So anyways, it's very complicated all of this.
I was also curious Because I'm curious, I guess, is to find out what would happen if I took a measure that was derived in the lab and then tried to launch it out in the actual real-world environment, tried to market and sell it.
And that was very informative because I presume that we developed tests, which I'll talk to you about, that were actually pretty good at predicting performance, managerial performance, for example, administrative performance.
We got ours of upwards of 0.6, which is, you know, really bloody impressive.
So we could tell employers, look, if you use our tests, we can increase the probability that you'll hire an above-average employee from 50-50 to 80-20, and the economic benefit of that will be staggering.
Staggering.
And I'll show you the calculations that enable that sort of prediction to be made.
And you might think, well, and this is what you do think if you're naive about producing something of value.
You might think, well, if you can produce something that's of self-evident economic value, selling it will be a snap.
And that is so wrong.
You just cannot believe it.
So one of the things we found, which was really mind-boggling to me, was that You could make a case that the probability that a company will use a test that predicts performance, the probability that they will use the test is inversely related to the accuracy of the test.
Which basically means that the less accurate tests are easier to sell.
And you think, well, why the hell would that be?
How in the world would it possibly be that corporations would rather buy tests that don't work than tests that do work?
And that is what they do, because really what they do buy is the Myers-Briggs, right?
That sells about a million units a year.
And the Myers-Briggs has zero predictive utility with regards to performance prediction.
So why do people use it?
Well, here's one reason.
It doesn't hurt anybody's feelings.
Everybody wins, right?
And so then you think, well, do corporations really care whether or not everybody wins when they're being tested?
And the answer to that is yes, much more often than you would think.
So...
So we hit all sorts of barriers.
That was one.
The problem with tests that work is that most of the people who take them don't do very well on them.
And then the other problem is that people aren't good at statistical reasoning at all.
They're really, really bad at it.
And so, for example, they don't know the difference between a percentage and a percentile.
So a percentage is, you know, if you get 40% on a test, it means you got 40% of the questions right.
If you are at the 40th percentile in the distribution of test scores, it means that you perform better than 40% of the people.
That's actually not too bad, right?
But you'll think, no, that's not 40 percentile, that's 40%, and then you'll think that you failed.
And so one of the things we found, for example, was that when we were marketing the tests to mid-level managers who had some say at least on whether or not they would be used, the first thing they would say is, well, I want to do the test.
And the thing you say about that is, no, you don't, because this is derived statistically.
You can't validate the test on the basis of your opinion about its applicability in your case.
But you can't have that conversation.
That isn't going to go anywhere.
Because they say, well, I'd never give a test to my employees that I hadn't taken myself.
It's like, okay, so then you think, well...
You're a typical manager.
You're going to score at the 50th percentile.
You are not going to be happy about that, because you want to score at the 90th percentile, because you confuse percentiles and percentages, and also because you don't notice that if you're doing better than 50% of the managers, that's actually a pretty damn good question.
- You talked about the 50th percentile.
- Yeah.
- 50th percentile in relation to what, is it just conscientiousness?
And if so, like, maybe too conscientious?
Is there an optimal personality profile?
- That's a good, I'll answer that as I go through this, okay?
Okay.
So that was often a dead starter right there.
And then the other thing we'd find...
This was cool, too.
Horrible, but cool.
So imagine a large corporation, and you go in and you try to make a sales pitch to someone, and maybe they're in HR, and you say to them, look, you could use these tests.
If you use it for 100 people, we'll increase your bottom line by $2 million a year.
You'd think people would be jumping up and down about that, and they say, well, how much does it cost?
And we say, well, it doesn't matter, because the cost-to-benefit ratio is what you should care about, not the cost, because they would want it, say, for $9 a test.
It was like, no.
If you do this for each, and I'll show you the mathematics in a bit, each person that you select with this test will bring $20,000 of extra value to your company.
You're not getting that for $9.
And then they say, well, wait a minute, we have a budget for testing that's limited to $9 a test.
They say, well, it's going to produce $30,000 a year in revenue.
They say, well, that revenue goes to another branch of the company and we won't get any credit for it.
We'll just get punished because we've exceeded our budget for selection.
I thought, oh yeah, never, never...
Never expected that to come up as an obstacle.
So, you know, so we had very well-designed products.
They also took about 90 minutes, because we started with a full-scale neuropsychological assessment.
So we took tests of dorsolateral prefrontal cortical ability, which had, before that, been administered by neuropsychologists, and we computerized them.
We did that back in 1993, so it was among the first attempts to do this sort of thing.
And then we had a 90-minute test battery that also assessed the big five, And then you could give that to employees and, you know, you could produce this 80-20 differential that I described.
And, well, then we found out, well, the test was too long.
It's like, well, what do you mean?
You're going to gain $30,000 a year per employee if you use this test.
It's like, no, people don't want to be tested that long.
It's like...
Okay, so you want an accurate test that doesn't discriminate against anybody, that makes everyone feel good, that's dirt cheap, and that doesn't take any time at all.
It's like, well, it took us about 15 years to build one of those, after we had built the original thing that actually worked.
And so even then, the process of trying to introduce it into the workplace was almost impossible.
The other thing you find...
If you're trying to sell to large companies, this is worth knowing, is that it's great if you can sell to a large company, because it's a large company, man.
And so the potential for the sale is astronomical.
But large companies are so slow, you cannot believe it.
And so it might take you three years.
First of all, you have to find who you should talk to.
That's impossible.
Because all the people that you can talk to have no decision-making power whatsoever.
So all you do is waste your time talking to them.
They'll talk to you.
They'll have meetings with you, but it won't matter because they don't have any decision-making power.
And then you can't get access to people who have the decision-making power because they don't let you have access to them.
And so that's a huge problem.
And even figuring them out is a huge problem.
And even figuring out that those are the people that you need to talk to is a huge problem.
So that might take you five years just to get it through your head.
That you're wasting your time 95% of the time talking to the wrong people.
And so then the next thing that happens, this is really comical, so let's say you do make some headway, it takes you three bloody years, you've made a relationship with the person, they're ready to launch it, then they have to market it internally, and that takes them a year, because they have to convince everybody to get on board, And then the corporation reshuffles and the person that you're dealing with disappears.
It's like, that happened to us.
We were marketing to a very large company.
We had got all the way up to the CEO and ready to...
This was with the future authoring program.
And we were ready to launch the damn product.
It took us a huge amount of time to get through all the layers.
And just the week that we were going to launch it, the CEO resigned and the company's stock crashed.
And that was the end of that.
Bang!
And...
And large companies are like that.
Like, they're extremely slow.
And the typical duration that a person lasts in a given position, and this is something to consider with regards to your careers, is about four years.
So you'll occupy the position you're in for about four years.
And then, well, you'll either fail out, you'll move laterally, or you'll move up.
And so, it's a three-year sales cycle, minimum.
And that's interweaved with the possibility that whoever you're talking to is just going to disappear.
And then if you sell to small companies, well, they're faster, but they don't have any money.
So, that's not very helpful.
So, it's extraordinarily difficult, even if you produce something of high value, and that you have proof that the thing exists.
It's extraordinarily difficult to sell it.
And so, here's another thing to think about.
You know, I think I mentioned this to you before.
If you write a book, which is virtually impossible, and then get a publisher, which is virtually impossible, you probably have a rejection rate of 99%.
So, then if you do...
If you do manage to publish the book with a reasonable publisher, which you won't because it's impossible, then you get 8% royalties.
That's it.
So 92% of your labor goes to the sales, marketing, and distribution end of things.
And so it's just...
So it's very, very difficult to generate capital as an entrepreneur.
And there's innumerable impediments.
One of the things that people do, and this is something for those of you who might be entrepreneurial and reminded, here's another thing that you have to understand, is that You can't really create a product and then launch it.
Because first of all, you don't know how to do that.
You might know how to create the product, but you do not know how to market or sell it.
You don't know how to advertise it.
You don't know how to communicate about it.
You don't know how to ship it.
Like, there's all sorts of things you just don't know.
But worse is, you don't know if people will use it.
And so what companies do that roll out new products on a relatively continual basis do, is they don't develop the product and then go sell it.
They continually communicate with their customers about what product the customer is willing to buy next, and then they develop that.
And so you have to have your market identified, and then you have to be in continual communication with the market while you develop the product.
It's not, I build a better mousetrap and the world comes, you know, marching to my door.
That isn't how it works.
Is that you gotta find out if someone wants to buy your stupid thing.
And then the next thing is, is that even if you have a great thing, You're going to go talk to people and they have 50 great things that they might buy.
And they're all great, but they're not going to buy all 50.
They might buy one, maybe.
And maybe they'll buy it this week, but probably they'll buy it in six months.
And they're not going to buy any of them, no matter how great, unless they're on fire and you're selling water.
Because they're so busy already.
They're so overwhelmed and preoccupied by their jobs that if you come in and you say, well, here, this is going to increase your efficiency by 20%, and here's the three weeks you'd have to spend doing that, and then the payoff would come in the next years, they'll say, yeah, well, I'll do that as soon as I have time.
And as soon as I have time is never.
So, if they're on fire and you have water, you can sell it to them.
But that's all, because otherwise, it's a no-go.
So, those are all things that are worthwhile knowing, because they're very hard to learn.
And so, and very comically, I mean, if you would have told me when I first started developing these tests, that one of the reasons corporations wouldn't buy them was because they worked.
That, I would have just thought, really?
I mean, come on, really?
That's really the reason?
It's like, yeah, yeah, that's the reason.
God.
So...
Very, very, very problematic.
And then they already have their processes in place, and they're entrenched, and then the next problem is, you know, you haven't got any customers, I think I told you that before.
You don't have any customers, and you show them the statistics, but they can't understand the statistics, and they also have 200 other people selling them things, and 50 of them are crooks, so they're just lying about what they're doing, and they can't tell the difference between the liars and the people who are telling the truth, and so they can't understand the statistics for themselves, and they can't verify them anyways, so what they ask you is, who else is using it?
And if the answer is, well, everybody, then you don't even have to do the sale because you're already rich.
And if the answer is nobody, then they're gonna say, well, why is nobody using this?
You say, well, it's the hottest thing that's come along, and they think, well, I'm not gonna be this sucker who gets painted, you know, red and fired because this failed.
They do not think this might make me succeed.
People do not care about whether or not they succeed.
They care about whether or not they fail.
And so that's another thing is that if you're marketing something and you can say this will stop you from being identified as a failure, then people might be happy about that.
But if you say this will really help you succeed, it's like, yeah, yeah, no, I don't want to succeed.
I just don't want to fail.
I don't want to succeed.
I just want to be invisible and be left alone.
And if you're looking for people's fundamental motivation, that's it.
It's they want to be invisible and they want to be left alone.
I tell you the zebra story.
Hmm?
Any of you know that story?
Okay, I'll tell you this zebra story.
Stop me if I've told it to you before.
This tells you everything you need to know about human beings.
So it's worth knowing.
Okay, so zebras have stripes, and people say, well, that's for camouflage.
And then you think about that for two seconds, and you think, that's a really stupid theory, because lions are camouflaged, and they're like golden like the grass.
And zebras are black and white, so you can see a zebra...
Five miles away.
It's like, there's a zebra.
It's black and white.
So the whole camouflage thing, that's just not working out so well as a hypothesis.
Okay, so biologists go and they decide to take a look at some zebras.
And so they're looking at a zebra on the herd, because there's no zebra, right?
Just like there's no fish.
There are schools of fish, and there are herds of zebras.
There isn't a fish.
This is why I think the cod aren't coming back.
There are no cod.
There are massive, hundred mile long schools of cod.
Ten stories deep.
Twenty million years old.
You wipe out the school, you don't just get to throw a cod in the water and say, well, you know, off you go.
It's like, well, where's my city?
It's like launching you in the middle of a field.
It's like, well...
Go out there and reproduce.
It's like, no, that's not gonna happen, you know?
So, without the school, there's no cod.
And you can't just introduce a whole school of cod because you don't have a whole school of cod.
So, you know, maybe the cod are never coming back.
And zebras are the same thing.
There's not a zebra.
There's zebras.
And so...
You're looking at the zebras, trying to study a zebra, and you look at the zebra, and you make some notes, and you look up and you think, oh, Christ, which zebra was I looking at?
And the answer to that is, you don't know, because the camouflage is against the herd, and the black and white stripes.
There's a variety of reasons for the stripes.
Flies also seem not to like the stripes, but, you know, usually things evolve for multiple reasons, but...
Anyways, it's very difficult to parse out a zebra against the herd.
You look down, you look up, it's like, uh-oh.
All those damn zebras look the same.
Yes, the camouflage is effective, but it's against the herd.
Alright, so then you think, well, we better identify a zebra so we can see what he's up to.
So then you take your jeep, And a can of red paint and a stick with a rag on the end of it.
You drive up to the zebras and you paint their haunch red a little bit.
Put a nice red dot on their haunch or maybe clip their ear with a cattle clip.
And then you, you know, you stand back and you think, hey, I'm pretty smart.
Now I'm going to watch that zebra.
So what do you think happens to the zebra?
The lions kill it.
Right, right, right.
Because lions, they're smart, right?
Hunting animals are smart.
But they have to identify a zebra before they can organize their hunt.
They can't just hunt the whole herd.
They have to pick out a zebra.
And so maybe it's like a zebra that's got a sore hip or something.
And so you think, well, nature's kind.
It just takes the weak.
No, lions like really healthy, delicious zebras.
But they look like all the other healthy, delicious zebras so they can't get a bead on them.
But if they're small and just born, or if they're limping, or there's something that identifies them, then the lions can pick them out.
And then they do pick them out.
And so the rule for human beings is...
Keep your damn stripes on so the lions don't get you.
And I'm telling you, man, if you want to remember one thing from my class about human motivation, that's a good thing to learn.
People camouflage themselves against the herd.
And they like to be in the middle of the herd, which is what fish do, by the way.
If you have a big school of fish, the smart, healthy, large fish are in the middle of the school.
Because you know what you call fish on the outside of the school?
Bait.
Right.
So, that's what people are doing.
They're trying to move into the middle of the herd all the time.
And the herd moves around, or the school moves around, and people are going, well, I'm in the middle.
I'm staying in the middle here.
So, I've got this protective ring of people around me, so the predators don't pick me out and do me in.
So...
Okay, so that's part of the reason why I said, well, you can't sell something to someone for success.
Because, you know, you're thinking, well, people are aiming at success.
Don't be thinking that.
It's not by any means necessarily true.
Trait neuroticism is a powerful motivator.
And trait neuroticism is, let's not be too threatened or hurt.
Right?
That's the negative emotion system.
And the negative emotion system is a killer source of motivation.
You know, you also see that...
There are scales of well-being that have been designed, mostly by social psychologists, which means they're very bad scales most of the time, because their psychometric capacity is absurdly low, generally speaking.
So what you find with scales of well-being, sometimes they're talked about as scales of happiness even, is that people aren't after happiness, they're after not hurting.
So they don't want to be extroverted and enthusiastic, right?
And bubbly and full of smiles and laughter.
That isn't what they mean by, I want to be happy.
What they mean is, I don't want to be anxious or in pain.
And so well-being scales tend to be something like, Neuroticism.
Sorry.
Emotional stability plus extroversion.
But the big loading is on emotional stability.
The reverse of neuroticism.
You want to avoid suffering.
You don't want to be happy.
You want to avoid suffering.
And one way to avoid suffering is not to let the lions gnaw on you.
And one way of doing that is to stay in the middle of the damn herd.
I'm not being a smart aleck about this.
I understand why people do that.
There's real danger to being visible.
There's real danger in being visible.
Now, you might be successful if you're visible, but you also might be dead.
So, okay.
So, now, there's a number of things to consider if you're thinking about performance prediction, and one of them is, to what degree do people vary in terms of their performance capacity?
And you might say, well, there's very little performance variability, or you might say there's a tremendous amount of performance variability, or you might say there's an absurd amount of performance variability.
And it turns out that the claim that there's an absurd amount of performance variability is the proper claim.
IQ is normally distributed.
So is conscientiousness.
But productivity is distributed along the Pareto distribution, and I'll show you why.
And that follows a law called Price's Law from someone named Derek DeSola Price, who was studying scientific productivity in the early 1960s.
And what he showed was that a vanishingly small proportion of the scientists operating in a given scientific domain produced half the output.
And so what you see, and what's happening is that to do really well at a given productive task, which would also include generating money as a proxy for creative productivity, is that you have to be, a bunch of things have to go your way simultaneously.
So maybe you have to be really, really smart, you have to be really, really lucky, you have to be really healthy, you have to be really energetic, you have to be really conscientious, you have to be in the right time at the right place.
And maybe you also have to have the right social network, right?
So it's a lot of things.
And each of those are small probability.
Each of those are small probabilities.
And then if you multiply the small probabilities together, you get an extraordinarily tiny probability.
And you have to have all those things functioning before you're going to end out on the...
On the extreme end of the productivity distribution.
But if you do end up there, then you produce almost all of everything.
So it's a tiny number of people that produce almost all of everything.
That's Price's law.
And technically it is, and I mentioned this to you before, it's the square root law.
The square root of the number of people in a productive domain produce half the output.
Right?
So if you have 10 employees, 3 of them produce half the output.
If you have 100, 10 of them produce half the output.
If you have 10,000, 100 of them produce half the productive output.
And so what that also means is that because there's massive variability in performance, you don't have to shift your ability to predict performance very...
Very much up towards being better at it to gain substantially on the positive side because there's so much difference in productivity.
And that actually happens to be also a function of the complexity of the job.
If the job is simple, which means you can...
This job has ten rules.
That's a janitorial job, let's say.
It takes a little while to learn it.
But once you've learned it, you basically do the same thing all the time.
There's not a lot of performance variability in those jobs.
And most of that would be eaten up by conscientiousness.
And also, to some degree, by neuroticism.
Because the people who hire neuroticism would be more likely to miss work.
But general cognitive ability, for example, is not a good predictor at all.
It'll predict how fast you learn the tasks initially, but not how well you perform the tasks.
But if the tasks you're doing are shifting constantly, so your responsibilities change, or you're in a creative job where you're constantly solving new problems, those are kind of the same thing, Then, as the complexity of the job increases, the predictive utility of IQ increases.
Which is only to say that smarter people can handle complex situations faster.
That doesn't seem like a particularly radical claim.
Price's law dictates that there's massive individual productivity differences between people, so increasing your predictive...
your capacity for predicting performance, even by small increments, has a huge economic consequence.
That was established in the 1990s.
The equations were first developed in the 1990s, and that's part of the reason that I started working on performance prediction tests, because I read the economics and I thought, oh my god, you can produce a test that costs...
$30 times, say, maybe you have 50 applicants for the position, $1,500 to administer, and it'll produce increments of something like 30% of salary permanently for the person that you put in the position.
So let's say you hire a $75,000 employee.
And it increases their productivity by 30%, so we'll say roughly $25,000.
You get a $25,000 return on a $1,500 investment every single year that person occupies the position.
On average, that's four years.
That's a $100,000 payoff for your $1,500 investment.
I read that and I thought, oh!
That'll be easy to sell.
It's like, wrong, wrong.
Even though the economic payoff was so massive.
I told you the other impediments that emerged.
But the arithmetic, or the capacity to produce these calculations was established in the 1990s.
And I'll show you the equations in a bit here.
Okay, so...
We already talked about what a normal distribution looks like.
That's the red line.
And a normal distribution emerges as a consequence of chance processes.
So we'll take a look at those here.
Hopefully this will work.
Look at that.
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ORGAN PLAYS
ORGAN PLAYS ORGAN PLAYS So there's your corporate advertisement for the day.
It's not often you see a heroic normal distribution, but there you go.
So what you see is that you get a pattern output as a consequence of chance processes.
And so where you happen to be on the distribution for all of the traits that we've described is a consequence of innumerable chance genetic and cultural processes.
But a lot more than people like to admit are genetic.
You can make people stupider with the environment, but it's not that easy to make them smarter.
Think about it, right?
It's way easier to make something worse than it is to make something better.
And so even if you take everyone and you give them optimal access to information and, say, optimal nutrition, which pretty much everybody's in that position now, at least insofar as we can manage it, You're going to get massive genetic differences in such things as conscientiousness or extroversion or intelligence.
In fact, as you flatten out the sociocultural environment, so you take everybody and you provide them with optimal nutrition and optimal access to information, which you've pretty much done, by the way, with a computer, right?
Because how are you going to give someone more access to information than to give them a web-enabled computer?
That's it!
Right?
There's just no better.
It's an infinite library.
You can learn anything with it.
So we're done.
We've equalized the educational landscape, roughly speaking.
And then nutritionally, well, you know, yeah, some people eat badly and some people eat better.
But the option to eat well is basically open to at least everybody in North America, roughly speaking.
You've wiped out the sociocultural variation.
You might think, well, that equalizes people.
It's Wrong.
All it does is reduce the variability to the remaining biological differences.
You maximize the genetic variability by minimizing the sociocultural variability.
Right?
Very important thing to understand.
This is why the gender differences between personality, between men and women, are largest in the Scandinavian countries.
Right?
Tens of thousands of people have been assessed along these dimensions.
We know the data that have come in are clear.
The biggest differences between men and women in the world, in terms of personality and in terms of interest, are in the Scandinavian countries.
Why?
Wiped out sociocultural variation, all you've got left is biological differences.
So, well, you can draw your own conclusions from that.
It's unfortunate and fortunate at the same time.
Alright, so here's a Pareto distribution.
This is the distribution.
Remember I showed you with the creative achievement questionnaire that almost everybody stacked up at zero?
People have zero creative output.
The median person has zero lifetime creative output.
And then there's a tiny proportion that are way the hell out on the, you know, right-hand end of the distribution, right?
Those are the people who have...
Everything is cycling forward for them.
And as they get more well-known, of course, they get more opportunities as well.
That person's very conscientious.
So I'll just run this simulation for you, okay?
And this shows you why the Pareto distribution emerges.
Now you have to watch this quickly, because it's a fairly fast animation.
So here's what happens.
Everybody starts out with ten dollars.
There's a thousand people playing the game.
Everybody starts out with ten dollars.
I have a dollar, you have a dollar.
I flip a coin.
If I get heads, you give me a dollar.
If I get tails, I give you a dollar.
We go around and we trade with everyone.
Okay, so the first thing that happens when people start to trade is this.
Normal distribution develops, right?
Because some people lose and some people win.
It's just like the golden board that I showed you.
Okay, so you keep playing.
People start to stack up at zero.
Watch.
Because they lose ten times in a row.
Bang, they're done.
The bottom graph is a graph of the entropy of the distribution which increases as the game continues.
Because at the beginning it's maximally ordered, right?
Everybody has exactly the same amount.
Now it's being distributed.
Same equations apply to the distribution of gas into a vacuum.
Well, what happens?
Now someone, you know, there are people out there at the $50 range, or at the $60 range, or at the $70 range.
You keep playing it.
Well, eventually what happens, if you play it right to its conclusion, is that one person ends up with all the money.
So that's, to those who have everything, more will be given.
From those who have nothing, everything will be taken.
That's the law of economic productivity.
It's called Matthew, it's the Matthew Principle.
And it's actually an economic principle that was derived from a saying in the New Testament.
I'll tell you some more about this on Tuesday, because I didn't get through all of it.
I want to finish up the performance prediction lecture and show you a couple of things I didn't get to show you the last time that we talked.
And then I want to do the closing lecture since we're done today.
So, we'll start with the performance prediction.
So, I've been thinking more about this Pareto distribution issue, because it's a really big deal, and it's still difficult for me to understand.
See, I didn't really learn about this until about 10 years ago, which is quite a shock to me, because it's such a fundamental phenomenon that it seems to me that it would have been addressed in my training somewhere along the way.
And so, And so I'm still thinking it through, what it means exactly.
Now, here's an interesting thing.
You know that IQ is normally distributed and it's a good predictor of long-term performance.
And conscientiousness is normally distributed and it's a good predictor of long-term performance.
And openness is also...
Normally distributed, and it's a good predictor of creative behavior, but creative output is not normally distributed.
It's distributed in this weird Pareto distribution that's indexed here, and I showed you that with the creative achievement questionnaire most specifically because that provides a really concrete example of it.
So it looks like the capacity to think creatively might be normally distributed.
That would be openness, say, and intelligence.
But the consequence of that turns into this strange Pareto distribution.
And the Pareto distribution with regards to creative achievement was best...
The catastrophe of it, in some sense, is best indexed by the fact that, if I remember correctly, 70% of people who complete the creative achievement questionnaire, which indexes lifetime creativity, score zero.
And zero is a strange number.
You know, zero isn't like other numbers.
And part of the reason for that is that it's difficult to do anything with nothing.
So, you know, if you buy a stock and the price sinks to, like, two cents a stock, You're still alive.
But if the price sinks to zero, you're done, right?
That's it.
The game's over.
And that's the thing about zero.
When you hit zero, or maybe when you're at zero, the game is over.
And when we were attempting to...
Market, for example, the tests that we had designed to predict performance in companies, one of the big obstacles to begin with was having zero customers.
And zero customers is really the wrong number of customers to have.
And there's a big difference between zero customers and one customer, right?
Because then you're in the game.
There's these weird barriers to moving forward in life, and you see this, there's a poverty trap that's sort of like this, too.
Like, if you're so broke that you can't keep up with paying your bills, it's really, really difficult to get out of that, because you can't get a bank account, for example, and you can't pay your rent, and there's economies of scale that you can't take advantage of, because you don't have any money at all.
And so you can't get going in the game.
And then, so there's the problem of starting out with zero, which is a big problem, and very difficult to get out of.
And then there's the problem of falling to zero if you are in the game.
Because when you fall to zero, then it's very difficult to get going again.
And so...
Alright, so...
Now, I want to show you something about how trading games work.
So, I think we closed with this last time, but so, this is a graph that shows you how a monopoly game starts, roughly speaking, but you could say, this is how you would set up the world if you wanted perfect equity, if you wanted everybody to have the same outcome, everybody would have the same amount of money.
In this case, it's $10.
And so it's dollars along the bottom axis and it's number of players along the left-hand axis.
And you can think about this as a monopoly game.
Everybody starts with the same amount of money and then you start trading randomly.
And, you know, if you have ten dollars and you're trading a dollar each trade, If you have enough people, some unlucky person is going to end up with zero dollars after ten trades.
And if they end up with one dollar after nine trades, they still have a chance of recovery.
It's a low chance, but it's not zero.
But once they hit zero, they're out of the game.
And so what happens is, if you run this simulation, you have people...
Flip a coin to determine how they're going to trade, then this is what happens.
So the first thing that happens is you generate a normal distribution because some people win and some people lose and most people sort of half win and half lose, but some lose continually and some win continually and so it turns into a normal distribution.
That's fine, but then when the game continues to play, then what happens is that people start to stack up on the zero end of things and a tiny proportion at the Upper end, and if you play the game right to cessation, which is what you do if you play Monopoly, for example, somebody ends up with all the money.
And the funny thing about playing Monopoly, as you know, if you've played Monopoly multiple times, is that the probability that you'll win continually across games is pretty low.
You know, there's a lot of randomness in Monopoly, and if you play with the same five people, ten games, the probability is pretty good.
You're not going to win more than two games.
So...
So there's chance elements that come into play that determine the outcome.
And so anyways, I was thinking about this a little bit more last night, and somebody asked me, I was talking about it with somebody, and he asked me if the Pareto distribution was a necessary consequence of the fact that production is, number one, measured, And number two, social.
And I thought that was a really interesting question.
It's like, do you get a Pareto distribution every time creative output ends up being measured in some way?
And even if you can conceptualize it, so, because it might be, the idea might be that anything that you can assign monetary value to is, first of all, is something you can measure, because assigning monetary value to something is, in fact, measuring it, right?
You're measuring it with money.
And then, as soon as you assign a monetary value to it, you can trade it.
You can trade it.
And it also takes on some aspects of a zero-sum game.
And most of the things that we talked about with regards to the production of Pareto distributions were measured entities and were We're trading games as well.
So even, because I mentioned to you, for example, that number of basketball hoops successfully managed by NBA players is pre-distributed.
But that's also, those are measurable with money, because of course you get paid to do it, and it is a social game.
And so maybe it is an inevitable consequence of trading in a social game that you produce pre-to-outcomes.
And then I was trying to figure out why, and...
I've always had the suspicion that what happens to people is that as they move towards zero, positive feedback loops get set up so they're more likely to hit zero.
And as they move away from zero, positive feedback loops get set up so that they're increasingly more likely to move away from zero.
So here's an example.
Let's say you're not doing too bad, so maybe you're in the middle of the normal distribution, then you lose your job.
Okay, and so...
And let's say you're a conscientious person.
And we can say, just for the sake of argument, that you lose your job because of mass layoffs in your company.
So it has nothing to do with you.
Fundamentally, it's just like luck of the draw, basically.
But then what happens to you?
Well...
If you're conscientious, you're gonna go after yourself pretty hard.
So you're gonna, and especially if you're also high in neuroticism, it's gonna depress you to lose your job.
And maybe you're in a situation where you just, for one reason or another, you don't have that many other opportunities.
Now, maybe you should have looked for them, but maybe you're in a depressed strata of the economy, or you're geographically located somewhere that makes moving difficult, or so on and so forth, you know?
So, but you lose your job, and then you start to get depressed because of that.
Well then, as you start to get depressed, you know, it decreases the probability that you're going to look for a job, but it also maybe starts to put stress on your family, and it also starts to decrease the probability that you're going to engage in positive social interaction.
So now, not only are you unemployed and suffering from economic stress, but your marriage is starting to suffer, And you're starting to isolate yourself from your friends.
And then, of course, as your marriage suffers and the stress builds up, then that's going to make you more depressed.
And that's going to keep you even farther away from your friends.
And that's going to decrease the likelihood that you're going to have enough positive emotion and enthusiasm to look for another job.
And then, you know, maybe you want to add a bit of a drinking problem to that just for fun.
And you can see that you can get a spiral going that's just taking you down.
Right?
And it's all sorts of things.
Because lots of times people conceptualize...
Let's say, you know, you're an unemployed guy and you go to counseling and you get a diagnosis of depression.
And the thing about a diagnosis of depression, it's sort of like the assumption is there's something gone wrong with your psychological structure.
It's like, if you're unemployed and you're depressed, it isn't obvious at all that the problem is in your head.
You know what I mean?
It isn't even obvious that it's a psychological problem.
It's just a problem.
And problems can take you out.
And so, you know, if you're unemployed, and you're under economic stress, and your marriage is starting to shake, and you're isolating yourself from your friends, and you're less likely to be motivated to go look for a job, you can sort of think about that as a depressive spiral, but you can also think of it as a conspiracy, in some sense, of external forces that are auguring you into the ground.
We don't tend to conceptualize psychological disorders that way, but we should.
Because lots of times when people are suffering from something that you could describe in psychological terminology, and depression is a very good example of that, it isn't obvious that there's something wrong with them psychologically.
Often they just are in trouble.
and there isn't a category in psychological diagnosis for client in serious trouble but my experience has been almost without exception that the people that come to see me come to see me because something's gone wrong with their life not because they have a psychological problem now you could say well Their psychological inadequacies,
such as they might be, are interfering with their ability to recover, or maybe even served as precursors to, you know, increase the probability of the catastrophe, but it's still not exactly the appropriate way to conceptualize it.
And, you know, because you're...
there's you inside you, and...
As a personality psychologist and as a clinical theorist, most of what I've talked to you guys about is your psyche and its structure as if it was like a soul that inhabited you.
And there's some real utility in that.
You know, you're an individual demarcated from the community.
You can be set up in a healthy manner or a non-healthy manner.
The problem with that is that you're not just an individual.
You're connected to all these external networks.
Dynamic networks that are really, really important.
And it isn't even easy to separate them from you.
You know, like, you might say, well, this is especially true once you become a parent.
It's like, is your child more you than your arm?
You know, well, you think it's pretty obvious that parts of you that are physically linked are more key to you as an entity.
But it's by no means obvious.
I think many people would...
Much more happily sacrifice an arm than a child.
Where your boundaries are located are not precisely isomorphic with the outline of your body.
It's not that simple at all.
And so you're embedded in all sorts of networks that can pull you down rapidly or elevate you.
Because the other thing that happens is that, well let's say I've never traded with anyone.
And I go up to someone and I say, well do you want to trade?
And they say, well how can I trust you?
And the answer to that is, well, you have to take my word for it.
That's not a very good argument.
You might say instead, well, here's what I have to offer, and you can evaluate it.
But the person is likely to say, well, I don't know how to evaluate it, and so I'm still stuck with taking your word.
That's a bad problem.
And you'll see that if you ever try to sell a product in the marketplace.
If you don't...
If the product is new and it's complex, then you're forcing the person that wants to buy it to evaluate it, and then you're forcing them to take the risk of being wrong, as well as the time it would take to evaluate it, and they don't like that.
What they want is what's often called social proof, which is, okay, well you want to trade with me, who else have you traded with?
And if the answer is zero, then they are going to say, well, you're an interesting person and all that, but I've got these other people over here who've already traded with a bunch of people, and therefore the risk is lower, in part because, let's say, I have a supervisor.
And I'm going to make a decision.
And my primary concern is that my supervisor will not hate me for making the decision.
It's not that my primary concern is to make the best decision.
It's not the same thing.
It's that I want to make a decision that I'm not going to get in trouble for.
Okay, so how do I do that?
Because I need a post-hoc justification.
So I buy something from you and it turns out to be terrible.
And I get called for it, called on the table for it.
And what do I say?
I say, well, you know, that person was buying from it, and that person was buying from him, and that person was buying from him.
Like, all these other people were doing the same thing, so it's not like the error is localized in me.
And that's often a very credible story.
But if the answer is, well, you know, I evaluated it and decided to take a risk, it's like, well, I'll out the door with you, Sonny, because, you know, that's an indication that you're not capable of doing that sort of thing.
So, I think part of the reason that people spiral downhill into zero is because a positive feedback loop is a loop that increases the probability that the loop will continue.
Right?
A positive feedback loop is, you've experienced this when you hear microphone feedback in an amplified system.
So, you know, the microphone sends a message to the speakers, and then the speakers send out the message amplified, and then the microphone picks up the message, and it gets amplified again, and you get this howling occur, which can be deafening, but can also destroy the system, because it'll keep amplifying upward until the speakers blow, for example.
That's a positive feedback loop.
And a positive feedback loop can spiral you upward, or it can spiral you downward.
And so, a virtuous circle, a virtuous positive feedback loop is when, well, I've traded with him, and I've traded with him, and I've traded with him, and now I can say to you, I've traded with these three people, and you go talk to them, and they say good things, and so then you say, well, I'll trade with you, and then, because of that, then you're even more likely to trade with me, and it's like, the thing starts to spiral uphill, and it does that, I think, in a non-linear form.
And so, because one of the things you guys are going to be asking yourself as you mature, because what's happening is that income inequality is increasing, right?
And you might ask, well, why is that?
The first thing you need to know is that that's what income does.
So it's not like you need an explanation for it.
This is the explanation.
It's like a natural rule.
If you run a trading game to its logical conclusion, one person ends up with all the money and everyone else ends up with zero.
So you don't need an explanation for that.
It's in the natural order of things that that occurs, so to speak.
It's a logical consequence of a random trading game, with zero as one of the polls.
You still might ask yourself, well, what can you do about income inequality?
And that's a perfectly reasonable question.
And as I said already, the answer to that is, well, it's an extraordinarily complicated problem to address.
We don't really know how to address it.
The only time it's really been successfully addressed, as far as I can tell, roughly speaking, It's during the Industrial Revolution, especially in the part of the Industrial Revolution that occurred, say, after World War II in the developing world, where for one reason or another, it turned out that there were a tremendous number of high-paying industrial jobs that people who That people could get access to without having had the fortune, the good fortune of one of these positive feedback loops working for them.
But those jobs are disappearing very, very, very rapidly.
And one of the problems is, as far as I can tell, is that computational devices are an intelligence and conscientiousness multiplier.
And that's a big problem, because the more intelligent people are already, and more conscientious people, are already more likely to be tapped up on the winner's Side of the Pareto distribution, then you add, you know, if you have an IQ of 150, let's say, you have an IQ of 150, you know how to use a computer, and you live in Silicon Valley.
So, man, you're a deadly person, right?
Because you're super fast, let's say you're super hard-working, we could also say maybe you're super energetic and healthy, because that also seems to be a criterion that is a real important determinant of that kind of lifetime hyper-success.
So you need, you need, you're way the hell above average in IQ, you're very, very industrious.
You know how to use computers.
They're a massive, insanely massive effort multiplier.
And then you're surrounded by people who are super smart.
It's like there's a lot of things going for you, right?
You're going to be moving ahead at an awful, awful rate.
That's, again, why places like Silicon Valley are so damn effective, is that they're bringing people from all over the world who are like that into one place.
So, like, Silicon Valley, I don't know if you guys know about the Indian Institute of Technology, but it's India's answer to MIT, and it's one hell of an engineering school.
But a huge number of the graduates from India go to Silicon Valley and work there, mostly as entrepreneurs.
And they're very good at being entrepreneurs, as it turns out.
And they ship money like mad back to India, and that's part of what's driving the Indian economy.
But it's just another example is that because Silicon Valley is already full of brilliant entrepreneurial people, then more brilliant and entrepreneurial people from all over the world flock there like mad.
And it's just...
It's one of these cycles that spirals upward.
Very, very difficult to...
to set that up somewhere else and once it gets going it's an unbelievably powerful economic engine crazily, crazily powerful so Okay, so what's the panoply, let's say, of predictors that we know of?
Well, so these are determinants of lifetime success, as far as I can tell.
And I would think about this because I'll tell you what it is that you need to do to be successful.
Some of these things aren't so malleable, but others are things that you can work on.
Well, IQ, well that's a rough one.
Because there's no evidence, as far as I can tell, that you can do a damn thing about your IQ. I was just reading a paper by Dan Simon today.
It's a relatively recent review.
Dan Simon did the invisible gorilla stuff, and he was looking, because there's all these companies that claim that these online brain training exercises can produce cognitive improvements, and he reviewed the literature again.
I've reviewed that literature like six times in the last 15 years, because I keep hoping that someone will crack the problem, but it's always the same answer.
It's like, you do brain training games, you get better at the game.
A lot better at that game.
You get slightly better at similar games, but distal games that are still heavily cognitively loaded.
Doesn't affect your performance at all.
Zero.
None.
So the issue of how to raise IQ, man, that's a killer.
No one knows how to do it.
I can tell you how to stop your IQ from decreasing as you get older.
That's not so bad, because it does that.
Fluid IQ decreases from the time you're 20 and pretty rapidly.
It's physical health is the best preventative.
So exercise.
Physical exercise.
Weirdly enough, you know, you think, well, why?
Well, your brain uses oxygen like mad, right?
And it needs to be kept clean and well oxygenated.
And physical exercise, both like weightlifting, so anaerobic, anaerobic, Anaerobic and aerobic exercise both seem to be very very effective at staving off cognitive declines across the lifespan.
So that's a really useful thing to know because that's the only thing we know that does that.
So then The next best predictor of lifetime success is conscientiousness.
And of the two aspects of conscientiousness, say, orderliness and industriousness, the better predictor is industriousness.
So the question is, well, what can you do about your industriousness?
And the answer to that is, well, that's kind of rough too, because there's a strong genetic component.
But...
You can work on micro-habits with regards to your conscientiousness.
And I think the best micro-habits, and this is partly to do with this future authoring program processes, I think the best thing you can do with regards to your conscientiousness is to set up some aims for yourself.
Goals that you actually value.
And the Future Authoring Program helps people do that.
And basically, it helps you do a situational analysis of your life more than a psychological analysis, I would say.
And so the questions are something like, well, alright, you're going to have to put some effort into your life.
And you need to be motivated to do that.
And so, what are the potential sources of motivation?
Well, you could think about them in the Big Five manner.
You know, if you're extroverted, you want friends.
If you're agreeable, you want an intimate relationship.
If you're disagreeable, you want to win competitions.
If you're open, you want to engage in creative activity.
If you're high in neuroticism, you want security.
Okay, so those are all sources of potential motivation that you could draw on, that you could tailor to your own, you know, your own personality.
But then there are dimensions that you want to consider your life across.
And so we ask people about, well, you know, if you could have your life the way you wanted it in three to five years, if you were taking care of yourself properly, you know, what would you want from your friendships?
What would you want from your intimate relationship?
How would you like to structure your family?
What do you want for your career?
Well, how are you going to use your time outside of your job?
And how are you going to regulate your mental and physical health, and maybe also your drug and alcohol use?
Because that's a good place to auger down, you know, because alcoholism, for example, wipes out, you know, five to ten percent of people, so you want to keep that under control.
And then, so maybe, you know, you develop a vision of what you would like your life to be, and that associates Once the goal is established and then you break down the goal into microprocesses that you can implement, the microprocesses become rewarding in proportion in relation to their causal association with the goal.
And that tangles in your incentive reward system.
You know, we talked about the dopaminergic incentive reward system and that's the thing that keeps you moving forward.
And the way it works is that it works better If it produces positive emotion when it can see you moving towards a valued goal.
Okay, well, what's the implication of that?
Better have a valued goal, because otherwise you can't get any positive motivation working out.
And so the more valuable the goal, in principle, the more the microprocess is associated with that goal, start to take on a positive charge.
And so what that means is, well, you get up in the morning and you're excited about the day.
You're ready to go.
And so as far as I can tell, what you do is you specify your long-term ideal.
Maybe you also specify a place you want to stay the hell away from so that you're terrified to fail as well as excited about succeeding because that's also useful.
You specify your goal.
You do that...
You do that, in some sense, as a unique individual.
You want to specify goals that make you say, oh, if that could happen as a consequence of my efforts, it would clearly be worthwhile.
Because the question always is, why do something?
Because doing nothing is easy.
You just sit there and you don't do anything.
That's real easy.
The question is, why would you ever do anything?
And the answer to that has to be because you've determined, by some means, that it's worthwhile.
And then the next question might be, well, where should you look for worthwhile things?
And one would be, well, you could consult your own temperament.
And the other would be, well, you kind of look at how...
Look at what it is that people accrue that's valuable across the lifespan.
Look what...
So you do a structural analysis of the subcomponents of human existence.
And I already did that.
You need a family.
You need friends.
Like, you don't need to have all these things, but you better have most of them.
Family, friends, career, educational goals, plans for, you know, time outside of work, attention to your mental and physical health, etc.
You know, that's what life is about.
And if you don't have any of those things, well, then all you've got left is misery and suffering.
So that's a bad deal for you.
So...
But once you set up that goal structure, let's say, and that's really, in many ways, that's what you should be doing at university.
That's exactly what you should be doing, is trying to figure out who it is that you're trying to be.
Right?
And you aim at that.
And then you use everything you learned as a means of building that person that you want to be.
And I really mean want to be.
I don't mean should be.
Even those things are going to overlap.
And it's important to distinguish between those because that's partly, and this is back down to the micro routine analysis, so if I was saying, well, you're going to try to make yourself more industrious.
Okay, number one, specify your damn goals.
Because how are you going to hit something if you don't know what it is?
That isn't going to happen.
And often people won't specify their goals too, because they don't like to specify conditions for failure.
So if you keep yourself all vague and foggy, which is real easy, because that's just a matter of not doing as well, then you don't know when you fail.
And people might say, well, I really don't want to know when I fail, because that's painful.
So I'll keep myself blind about when I fail.
That's fine, except you'll fail all the time then.
You just won't know it until you've failed so badly that you're done.
And that can easily happen by the time you're 40.
So, I would recommend that you don't let that happen.
So that's willful blindness, right?
You could have known, but you chose not to.
Okay, so once you get your goal structure set up, you think, okay, if I could have this life, it looks like that might be worth living, despite the fact that it's going to be, you know, anxiety-provoking and threatening, and there's going to be some suffering and loss involved, and all of that, obviously.
The goal is to have a vision for your life such that, all things considered, that justifies your effort.
Okay, so then what do you do?
Well, then you turn down to the micro-routines.
It's like, okay, well, this is what I'm aiming for.
How does that instantiate itself day-to-day, week-to-week, month-to-month?
And that's where something like a schedule can be unbelievably useful.
Google Calendar.
It's like, make a damn schedule and stick to it.
Okay, so what's the rule with the schedule?
It's not a bloody prison.
That's the first thing that people do wrong.
They say, well, I don't like to follow a schedule.
It's like, well, what kind of schedule are you setting up?
Well, I have to do this, then I have to do this, then I have to do this, you know, and then I just go play video games because who wants to do all these things that I have to do?
It's like, wrong!
Set the damn schedule up so that you have the day you want!
That's the trick!
It's like, okay, I've got tomorrow.
If I was going to set it up so it was the best possible day I could have, Practically speaking, what would it look like?
Well then you schedule that, and obviously there's a bit of responsibility that's gonna go along with that, because if you have any sense, one of the things that you're gonna insist upon is that at the end of the day, you're not in worse shape than you were at the beginning of the day, right?
Because that's a stupid day!
If you have a bunch of those in a row, you just dig, you know, you dig yourself a hole, and then you bury yourself in it.
It's like, sorry, that's just not a good strategy.
It's a bad strategy.
So, maybe 20% of your day has to be responsibility and obligation, or maybe it's more than that, depending on how far behind you are.
But even that, you can ask yourself, okay, well, I've got these responsibilities.
I have to schedule the damn things in.
What's the right ratio of responsibility to reward?
And you can ask yourself that, just like you'd negotiate with someone who is working for you.
It's like, okay, you gotta work tomorrow.
Okay, so I want you to work tomorrow.
And you might say, okay, well, what are you gonna do for me?
That makes it likely that I'll work for you.
Well, you could ask yourself that, you know?
So maybe you do an hour of responsibility and then you play a video game for 15 minutes.
I don't know, whatever turns your crank, man.
But, you know, you have to negotiate with yourself and not tyrannize yourself.
Like you're negotiating with someone that you care for, that you would like to be productive and have a good life.
And that's how you make the schedule.
It's like, and then you look at the day and you think, well, if I had that day, that'd be good.
Great!
You know, and you're useless and horrible, so you'll probably only hit it with about 70% accuracy, but that beats the hell out of zero, right?
And if you hit it even with 50% accuracy, another rule is, well, aim for 51% the next week, or 50.5% for God's sake, because you're going to hit that position where things start to loop back positively and spiral you upward.
So that's one way that you can work on your conscientiousness.
Plan a life you'd like to have.
And you do that partly by referring to social norms.
That's more or less rescuing your father from the belly of the whale.
But the other way you do that is by having a little conversation with yourself about As if you don't really know who you are.
Because you know what you're like.
You won't do what you're told.
You won't do what you tell yourself to do.
You must have noticed that.
It's like you're a bad employee and a worse boss.
And both of those work...
You know, for you.
You don't know what you want to do, and then when you tell yourself what to do, you don't do it anyways.
You should fire yourself and find someone else to beat.
But, you know, my point is that you have to understand that you're not your own servant, so to speak.
You're someone that you have to negotiate with.
And you're someone that you want to present the opportunity of having a good life to.
And that's hard for people, because they don't like themselves very much.
So, you know, they're always, like, cracking the whip, and then procrastinating, and cracking the whip, and then procrastinating, and it's like, God, it's so boring, and such a pathetic way of spending your time.
And you know what that's like, because you probably waste, like, six hours a day.
And I think we did an economic calculation about that a while back, right?
Your time's probably worth 50 bucks an hour.
Something like that.
I mean, you're not getting paid that now, but you're young, and so this is investment time, and what you do now is going to multiply its effects in the future.
So, So let's say it's 50 bucks an hour, which is perfectly reasonable.
So if you waste six hours a day, and you are, then you're wasting about $2,000 a week or about $100,000 a year.
So like, go ahead, but that's what it's costing you every hour.
And you need to know what your damn time is worth.
So let's say it's not 50 bucks, it's 30.
Whatever.
Maybe it's 100.
It's somewhere in that range.
One of the things you should be asking yourself is, when you spend an hour, was that, well, what if I paid someone 50 bucks to have had that hour?
And if the answer is no, it's like, well, maybe you should do something else with your time.
And it depends on whether or not you think that your time's worthwhile.
But the funny thing about not assuming that is if you assume your time isn't worthwhile, what happens is you don't just sit around sort of randomly in a state of responsibility-less bliss.
What you do is you suffer existentially.
And so that seems like a stupid solution.
So, okay, so anyways...
As far as I can tell, that's how you can improve your conscientiousness.
Outline a goal that you actually would like to hit.
And even better, here's something else you can think about when you're negotiating in your life.
You could say, if you're kind of pessimistic, you'd say, well, we have to negotiate an agreement.
I'd like to walk away not miserable and resentful.
Okay, let's call that a baseline.
And that's how you're going to negotiate with your wife or your husband.
That's a good thing to know.
You want to negotiate so that you don't walk away miserable and resentful.
Because that makes you hostile and then you'll work to hurt them.
And I would say that's unless you want to hurt them and then of course they'll happily return the favor.
Unless you, if you want to exist in a place where you're basically hitting each other in the head repeatedly for 30 years, you go right ahead.
But I wouldn't say that that's a particularly good way of living.
So you might say, well the minimal precondition for a successful negotiation is that you don't walk away resentful and angry.
And so that's also how you know when you have something to say to someone.
Because the rule has to be, if you're going to walk away resentful and angry, you've got something to say.
Doesn't mean you're right, by the way.
But it does mean that you have something to say.
But it's kind of a low bar, you know?
Like, if I wanted to live with you for 30 years, maybe we should say, how about we walk away from our mutual negotiations thrilled?
Well, why not?
You know, you gotta aim for something.
You could aim for that.
You wanna negotiate with your boss for a new salary, you might think, okay, I've got this damn job.
How much would I have to be paid so I'd be so bloody excited to go to work, I could hardly stand it.
Well, you could at least know what that number is.
And then you could go there and say, well, look, you know, you like to have me around.
I've been doing some thinking.
I think if you paid me this amount of money, I'd be so thrilled to go to work that you could hardly even keep me away from here.
And your boss might think, wow, I'd actually really like to have someone around who'd be so thrilled to work that I can't get rid of them.
It's like, maybe I'll, well, I can't give you all of that.
I'll give you 75%.
Maybe we can renegotiate it in a year.
It's like, hey, good deal.
Or you can, you know, be some...
Weasley coward and go in there and snivel about how awful your life is and walk away barely able to tolerate the outcome of the negotiation.
It's like, I wouldn't recommend that.
And it's funny because I've watched people do this repeatedly in my clinical practice because I do...
We plan all the time.
Because the rule is, you're going to come and see me.
I'm going to try to help you figure out how to have the life that you want to have.
And we're going to think about that strategically.
So you're making $50,000 a year right now.
Maybe you should be making $150,000 in three years.
And they think, well, that couldn't happen.
It's like...
Not with that attitude.
That's the first thing.
It's like, no, that's not going to happen.
If you don't ask people for the damn money, if you don't look for a better job, they're going to come along and just shovel a boat full of money at you.
It's like, no, that's not going to happen.
But why is that impossible?
Look at you people in here.
It's like, what the hell is wrong with you?
Nothing.
So you can probably have what you want.
If you could figure out what the hell it was.
And then, you know, you diligently pursued it.
So, and then maybe you wouldn't whine about being alive.
That'd be good because people who whine about being alive are dangerous to themselves and other people.
So you might think, I can have what I want.
But you better, well, figure out what it is.
And you can't just wait for the, like, have what you want fairy to show up at your doorstep and grant it.
Because obviously that's not going to happen.
So, okay, conscientiousness.
Well, we talked about how you could improve that.
Social networking.
That's another big deal.
It's one of the advantages that older people have over younger people.
And so, for example, now that I'm in my 50s, roughly speaking, I know a bunch of other people who are, you know, relatively well positioned in the dominance hierarchy.
And they know all sorts of people.
And so when I go to one of them and say, you know, can you do X or do you know X? They say, no, but I know someone who can.
And that's a huge advantage.
So another thing that you want to think about as you move through life, and this is that...
Use your ability to network properly.
And that doesn't mean schmooze.
And it doesn't mean go out and impress people.
That's all just complete bloody rubbish.
It means you try to surround yourself with people who are competent in multiple different dimensions.
And you maintain your relationships with them.
And that's a trading relationship too, right?
It involves reciprocity.
But it's a huge advantage.
A social network is a huge advantage.
And that's something extroverted people can be really good at.
Because, you know, they have that sort of social ability.
And that goes along with the ability to sell.
So another place that you can pick up power, and power for the right things, is to consciously develop and maintain your social networks.
And that also means, well, let's talk about friendships for a minute.
Here's how you know if someone's your friend.
A. You can tell them bad news.
And they'll listen.
They won't tell you why, you know, you're stupid and why that bad thing happened to you and how something worse happened to them once and, you know, derailed the whole conversation.
You can actually tell them bad news and they'll listen.
So that's a good thing.
And then, this is a weirder thing, you can tell them good news and they'll help you celebrate.
And that's a really good way of deciding who you should have around you, because if you have someone around you, you know, something good happens to you, and you're kind of afraid to even admit it, because, you know, God, something good happened to you, it's like, you let that be known, and it'll certainly be taken away.
So, you know, you come out, and you sort of tell someone half-heartedly that something good happened to you, and they give you a whack, and then talk about, you know, the great thing that happened to them three years ago, or worse, the great thing that happened to someone that they knew three years ago.
You know, it's like, go away from that person.
They're not helpful to you.
And they're not helpful to themselves either.
And so you want to surround yourself.
You've got to think about this.
You've got to surround yourself with people who want the best for the best part of you.
You can hang around with weasels and losers that are trying to pull you down to justify the fact that they're spiraling downhill as well.
And you know, the upside of that is you don't have to have any responsibility and you can all whine about how wretched life is, you know, so that's pretty attractive.
But I would say it's also a bad medium to long-term plan.
And so it's acceptable and desirable.
To try to surround yourself with people who are facilitating your development.
You know, and you might say, well, I've got people around, I know them well, you know.
They're not doing that well, and they don't fit into that category.
It's like...
What's your point?
What are you going to do with them, exactly?
If they'll listen and cooperate with you and move towards a better future, great!
If they don't pay any attention and they keep doing the same damn things over and over and they're not going anywhere and it's painful, then maybe the proper thing to do is say, you just have your misery.
I'll go off and have my life.
And maybe you'll wake up at some point in the future and think that's a better way of being.
Because just putting up with it is, well, they call that enabling, right?
You put up with that sort of behavior, you're providing tacit consent for it, and even tacit approval.
It's like, it's a bad idea.
You have, I would say, both the right and the responsibility to surround yourself with people who are good for the best part of you.
And that's not the same as, you know...
I don't have to elaborate on that.
You can figure out what that means.
Skills!
That's another thing you can do if you want to increase your probability of success.
Every time you have an opportunity to take an opportunity, that would provide you with a new skill.
Do it!
Right?
Learn to program.
Learn to write.
Learn to read.
Read new things.
Learn to public speak.
Learn how to introduce yourself to people.
Learn how to social network.
Learn how to go talk to your boss in a manner...
This is the right way to go talk to someone who's supervising you.
I see this problem, and here's the solution, and so I'm coming to talk to you about the problem and the solution.
It's like, that person is going to want to talk to you a lot!
It's like, because the other people they're talking to you are going to come and say, I've got a problem!
Can you do something about it?
It's like, they don't want to do something about it, they've only got 50 things to do, you know?
So if you're the person who constantly brings forth a problem, even if they're accurate problems, why are they going to want to have you around?
You're just another problem.
Don't be a problem for the people who want to give you money.
That's a good rule of thumb, man.
You know?
If someone wants to give you money, then help them do that.
And if they want to give you status and success, then help them do that, right?
And you do that in part by bringing them solutions.
And partly you do that by developing your skills.
And so, if things aren't going very well for you, this is also a good way of evaluating an opportunity.
Should you take an opportunity?
Well, here's the rule.
Take the opportunity if it will teach you something that you can use for other opportunities, because then even if it fails, which it probably will, it doesn't matter, because you've accrued something of value that you can bring forward to the next situation.
So, you know, there's this old Jungian idea that I told you about.
In the Chartres Cathedral, for example, the cathedral's made in the form of a cross, and the cross signifies the center of the world, and the dome signifies the sky, and so right below The dome at the center of the world, and it's a cross because the cross is the place of suffering.
So that's the center of the world.
Because that's what you are.
You're the place of suffering, right?
You're the place of conscious suffering.
That's the center of the world.
And so, inscribed on the floor is a maze.
It's a big maze, and it's a mandela, and there's a kind of a flower-shaped resting place right in the center.
And what you're doing is walking in the maze, and you walk all four quadrants, and you get to the middle, which is where you want to be.
You want to be in the middle.
Well, how do you get there?
You walk everywhere.
And what does that mean?
It means every bloody time you're offered an opportunity, take it and develop your skills.
And that's better than wealth, by the way.
In fact, it actually constitutes wealth because wealth constitutes what you have when someone takes all your money away.
Right?
That's real wealth.
And so the way that you build up that sort of wealth is you turn yourself into someone who's competent in multiple directions.
And you can be doing that all the time.
Right?
Especially with the kind of technology that you people have access to.
I mean, you can learn anything you want whenever you want.
So what a good deal that is, man.
And so there's easy fruit hanging that you could pick.
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