Podcast 33: Diverse Thought, Endless Possibilities
When a society embraces cognitive diversity, powerful outcomes can result. In this episode of The Active Share, Hugo sits down with Matthew Syed, a best-selling author, highly acclaimed speaker, and award-winning journalist, to discuss what it means to think in complex ways; the implications of moving away from group think; and how investors can benefit from diverse cultures and voices.
|00:30||Host Hugo Scott-Gall introduces today’s guest, Matthew Syed.|
|02:33||The five core categories of Matthew’s work.|
|03:27||Groupthink vs. cognitive diversity.|
|09:40||How can cognitive diversity be tested in a hiring process?|
|19:03||How younger generations are thinking now.|
|23:03||The significance of failure.|
|25:28||How social media has changed our way of thinking.|
|28:00||What stops people from reaching their full potential?|
|33:44||What comes after Moneyball in the world of sports?|
|42:12||Applying these principles to the act of investing.|
|47:14||Closing thoughts on the importance of cognitive diversity.|
Hugo Scott-Gall: Today I am delighted to have with me Matthew Syed. Matthew is an author and highly acclaimed speaker in the field of high performance. He has written six best-selling books on the subject of mindset and high performance and has worked with many leading organizations. His book titles include, Rebel Ideas, Black Box Thinking, Bounce, The Greatest, and his celebrated children’s books You Are Awesome and Dare to Be You.
He is also a multi-awarding winning journalist for The Times and Sunday Times in the UK and presents for the popular BBC Radio 4 program Sideways to which I subscribe.
He is a regular contributor to television and radio and his previous career was the England table tennis number one for almost a decade and competed in two Olympic games. That’s pretty cool. He is co-founder of Matthew Syed Consulting, and I am delighted he is here. There’s a lot to talk about. Matthew, welcome to the show.
Matthew Syed: Well, Hugo, thanks ever so much for having me on. I’m already in your debt. Firstly, you describing the sport that I used to play as table tennis. I occasionally get introduced as a former ping pong player, which really starts it off from a long tone because ping pong, I think to a lot of people, it sounds like a jumped up parlor game, roughly equivalent to tiddlywinks whereas, of course, Hugo, I’m conscious that you are fully aware that table tennis is a globally competitive sport and it takes tremendous resilience and dedication to reach the top. I’m probably protesting too much.
The other thing I should say to listeners is Hugo very kindly in our chats in preparation for this podcast, mentioned that his two or two of his children, or maybe his two children, had read one of my children’s books.
So, I already feel that the chemistry here, Hugo, is good and I’m much looking forward to the conversation. Thanks for having me.
Hugo Scott-Gall: I feel it too. It’s not every day you get to meet a legend of the pinnacle of sports of table tennis. That is mentally and physically probably the most demanding game yet invented by man. So, it is, it really is an honor to have you blessing our airways. So, I’m going start with how I think I see you and that gets me to the areas I want to discuss with you. So, I think you’re a fox not a hedgehog. I think you’re multi-disciplinary. I think you connect dots. I think you are looking for patents. That’s your mental model.
And so, I think it makes sense to touch on what I perceive to be maybe five areas that I think your work can be grouped into: how to think, cultural observations, what it takes to be a high performer, sports and failure, and then investing; lessons in decision-making investing that you think can be garnered and drawn from a huge body of work you’ve produced.
So, does that sound okay as a sort of set up to you in the sort of way of telling everyone here what’s coming?
Matthew Syed: I love that. On the one proviso that if you hear an answer that you think you want to push back on or take us into new avenues, unforeseen avenues, then I’m willing to go there too.
Hugo Scott-Gall: Well, that’s great. So, number one, how to think. I think that you spend a lot of time thinking around how do we as a society think and how that might be wrong. Perhaps you could frame that as group think versus cognitive diversity. Perhaps you could go back further and say are we even taught how to think properly?
Matthew Syed: It’s an interesting way that you’ve chosen to characterize that distinction between group thinking and cognitive diversity. I do feel that diversity as an attribute of groups and networks and societies, if I can put it this way is quite misunderstood and also mission critical to how we come up with great innovation, wise strategies, accurate empirical predictions.
In fact, diversity, I think, shapes wisdom in almost any area of complexity and if I may say so, Hugo, I think this is fundamentally under-optimized in the world today. You mentioned my most recent book for adults, Rebel Ideas. It’s really trying to give an insight into how getting diversity right has tremendous and often counter-intuitive power and it certainly contrasts very vividly with the problem I think we have in many parts of the world today, corporate, institutional, political, which is different varieties of group think.
Hugo Scott-Gall: So, most people would say, okay, I hear you on group think and I know group think’s bad, but why is it so persistent? It’s easy to say, of course, I want cognitive diversity and then walk into the next meeting and be guilty of group think. How do we break that? Is it a design thing, does it go back earlier? Do you actually have to really break things up?
Matthew Syed: For me, Hugo, I think the key thing is to properly define and then specify the circumstances in which cognitive diversity works. So, first perhaps it might be worth trying to explain what I mean by this. We often think, is it fair to say, Hugo, of diversity in demographic terms, differences in race and gender and social class? Cognitive diversity is a different way of thinking of diversity. Differences in insight, perspective, information, but also very importantly the mental models or heuristics that we deploy, consciously or otherwise, to filter information to reason through problems.
That’s practice worth saying. There’s often an intimate link between these two conceptions of diversity: demographic and cognitive because our demographic backgrounds shape to a large extent the experiences we have in our lives and therefore the way we think about certain things. So, if I could use a slightly simplistic example, Hugo.
If you imagine hypothetically putting together an advertising team to come up with a creative campaign to connect with a broad group of consumers, if everybody on the creative team comes from exactly the same demographic background, they’re going to find it difficult to connect that campaign with those consumers whose lives are very different from their own.
They’re going to lack the tacit knowledge. If, you know, for example, they’re all white, middle-aged male, middleclass, private school educated Ivy League graduates. Nothing wrong with that background, but if 100% are from that background you’re going to be too narrow. I mean, one thing I find sometimes highlights this intuition is a story from British politics in the 1990’s where Tony Blair, then the Prime Minister, gave a speech where he was coming out with a proposal to crack down on antisocial behavior and he said what we need to do is give the police the power to target people involved in antisocial behavior, march them to a cash point, get them to withdraw a hundred pounds, and issue an on-the-spot 100 pound fine.
And Hugo, all the upper middleclass journalists who heard this policy, thought it as a master stroke. It took somebody from a different social class to see the weakness in this policy which is, of course, that many of the people so targeted wouldn’t have bank accounts and a very small proportion would have a hundred pound bank balance. In other words, consensual flair detached from granular cultural understanding can take organizations, political institutions, to a certain extent societies, in the wrong direction. Those are the circumstances in which demographic diversity, I think, is really important to coming up with good judgments.
But there are circumstances, I think, where it’s worth saying that the link between demographic differences and cognitive differences are less significant. Is this too long an answer, Hugo?
Hugo Scott-Gall: That’s a good answer, that’s a good answer. I’ve got like five questions coming from it. Keep going.
Matthew Syed: I was afraid you might be glazing over. So the master response in which the link is—if you imagine designing an aircraft engine.
This is a complex multi-dimensional problem. You definitely need cognitive diversity. You know, people with backgrounds perhaps in material science, and aerodynamics, but they don’t match so, obviously onto demographic differences. You know, the fact that I happen to be mixed race—I’m half Pakistani and half Welsh, which by the way, Hugo, is an unusual combination. If anyone shares that amongst your listenership, do let me know on Twitter. I’ve never had an audience who come from that. So, I had a very distinctive set of experiences growing up in suburban Redding with that background which has been very helpful for journalism, but I don’t think it’s given me any germane insights into how tweaking the design of the engine might change its aerodynamic properties.
There isn’t a read-across between those demographic experiences and the problem we’re trying to solve. It will have longer term consequences. Somebody from my background thriving as an engineer sends a signal to the next generation that they can do the same.
It’s a contributor to social mobility and meritocracy but I think it’s rigorous also to say it’s not helping with the short-term engineering problem. And the reason, Hugo, maybe I’m over emphasizing this, or laboring the point, but I think it is a profound strategic mistake to reduce diversity to a box ticking exercise based only on demography. I think where you really break out of group think is when you optimize for true cognitive diversity and that requires a real analysis and an insight about how to do it and to do it well.
Hugo Scott-Gall: I have two immediate questions coming up off of that. One is a way of resolving too much of the same thing. It can be via hiring. If you think about a company, can you hire different? But how would you test for true cognitive diversity in a hiring process? That is question number one. Question two is which organizations around the world have you come across where you thought maybe they’ve cracked this. Maybe they are very good at achieving the right kind of diversity in that it is genuinely productive in a sustainable way?
Matthew Syed: It’s a great question, Hugo and it gives me a chance to tell a brief story which hopefully will unite your listeners. I know many are from the United States, many from the UK and, of course, around the world. But given that football, or should I say soccer—
Hugo Scott-Gall: No, let’s say football, let’s say football.
Matthew Syed: I happen to sit on a committee that advises the England men’s football coach. Now, Hugo, I hope you know who this is as a Brit.
Hugo Scott-Gall: Of course, I do. Gareth Southgate.
Matthew Syed: Gareth Southgate. He famously wears a waistcoat, although he hasn’t really been wearing one that often in Qatar, but I sit on a committee—
Hugo Scott-Gall: Too hot, too hot.
Matthew Syed: It’s too hot, exactly,—advising him on performance. But it’s quite an eclectic team because in addition to me with my interest in culture and psychology, there’s also somebody called Lucy Giles, who runs the Sandhurst Military Training Academy. Very good on logistics and performance psychology under pressure.
Somebody called David Brailsford. He’s not a football coach, he’s a cycling coach, one of the best cycling coaches in the world. Very good on recovery, cardiovascular endurance, selection, performance camps and so on and an expert in AI, very good at tactical patent recognition and other things of that kind. Sue Campbell who’s an Olympic sport expert. Michael Barber, an educationalist, David Sheepshanks and a few others.
Now, Hugo, I want to invite you first of all to ponder how football, English football insiders, thought about this advisory group when the composition of it leaked. You can kind of imagine, right? They’re horrified. How dare these outsiders come and tell us how to play football. You know, why is Southgate not advised like all previous England men’s football managers, by good old fashioned English football men. You know, where’s Harry Redknapp in this set up for crying out loud? By the way, Harry Redknapp, for those unaware, is an English-based football coach. He knows more about football than Matthew Syed which is true.
If you surrounded Southgate by Redknapp and Pulis and other English-based football managers, you’d have a lot of domain knowledge. But the problem it’d be the same knowledge replicated five-six-seven times. That’s not an innovative team; it’s an echo chamber. They’re agreeing all the time. You know, it’s comfortable, it’s clubbable, but they’re not going to come up with innovations on the pitch. What’s fascinated me, Hugo, about this group is when somebody shares an idea not known by the others in the group.
So, Brailsford has been brilliant, the cycling coach, on talking about for example, how big data sets help you to tailor the diet for the specific metabolism and gut microbiome of an athlete improving recovery, improving endurance. You know, that is divergent thinking. That’s a cross-pollination of ideas and this is where you get a big uplift in the collective intelligence of groups.
So, to answer your question directly, can you see that some kind of an analysis has gone into the array of voices, the array of lenses, the array of perspectives that might impinge usefully on the question of football performance. But if me and a cycling coach and an army person, and somebody with an Olympic sport background were advising not on football but on how to design a hadron collider, you’d have lots of diverse perspectives that were completely irrelevant.
So, in order to get the different dimensions of diversity right, requires an analysis and to put it slightly technically, you want it to map on to the dimensionality of the problem you’re trying to solve. Some organizations explicitly have a cognitive diversity strategy. I believe they’re going to win in the marketplace that we’re in today—one of complexity and rapid change. Those that don’t have a cognitive diversity strategy and do this kind of through gut intuition and not in a rigorous fashion, I just think they’re going to lose because they’re going to be missing out on what it really takes to solve difficult complex problems and come up with new ideas.
Hugo Scott-Gall: Organizations that have a cognitive diversity design and intelligent design, I mean you might not know the answer to this, but do you know how that happened? Is it the result of a very strong and secure leader who said actually I’m strong enough for my position to change things or was it a result of adversity, so a big failure. So, I’m thinking you could maybe say here is some real-world examples such as the invasion of Ukraine by Russia, we are told that quite a few intelligence agencies have said this will never happen, this isn’t going to happen.
And so, there are quite a few things that I think, you know, you can read their well-written books around the histories of whether it’s MI6 in the UK, whether it’s CIA with what’s the entry collective failure as the group think, where the stakes are pretty high. So, for an organization to embrace intelligence design around cognitive diversity, is it offered in reaction to mistakes, screw-ups, existential threats?
Is it strong leadership or is a coming together of something in between?
Matthew Syed: It does certainly, empirically happen after big failures. So, you mentioned intelligence agencies. Certainly in the case of the CIA, I argue and actually in Rebel Ideas that you can trace the profound strategic misjudgments of the post-war period to an analytical intake that were dominated by West Coast male, middleclass, Anglo Saxon, Protestant, liberal arts graduates. There was a slight bias in recruitment where the recruiters hired people that effectively looked and sounded like them.
And, of course, people from that background have a huge amount to contribute to a diverse team, but when you have 90% plus from that background and you’re trying to anticipate emerging threats in different kinds of society with different patents of religious radicalization and alienation, you’re just not going to be able to distinguish signal from noise effectively.
You’re not going to have the right array of perspectives and I think the CIA have acknowledged this. I think British post-war foreign policy has suffered from some of the same biases. But what you really want, I think, is buy-in from a critical mass of people in an organization that this is actually critically important for us. And when people start thinking in that way, they start to kind of organically exploit—so, maybe, perhaps another example. If you look at science, which I’m sure, Hugo, you and I would agree, and listeners will agree, is a successful institution.
One hundred years ago, successful science as measured by the number of citations that attached to the hit papers, which is not a completely inadequate proxy, used to be written by individual scientists digging deeper into a given subject specialism like economics or biochemistry or ethnography, or whatever. That’s not what great science looks like today.
Great science today is not individual scientists working within their given subject silo, but multidisciplinary teams because the problems they’re solving are complex and interconnected. So, great scientists today, you know, because the-the world doesn’t always obey the categories we impose upon it. So, the great scientists, yes they have deep subject specialists knowledge, but they have the curiosity to look into the why the constellation of ideas. Within can I usefully collaborate to solve these interconnected problems.
Funny enough, I was at Oxford University a couple of weeks ago; sat next to the professor of molecular biology and he was talking —this may be too much information—I said, “What are you working on at the moment?” And he said, “Well, I’m working on species of fungi. These mushroom-type species.” And it turns out, Hugo, believe it or not, I didn’t know this, that the certain species of fungi have small tails and when they’re in fluid they can detect light and swim towards the light source.
And so, insights into these fungi provide some useful information about biological evolution. But I knew the answer before I asked the following question. You know, who are you working with? And he said, “Well, it’s funny you should say that. In order to get a really great team together I’ve had to reach out beyond molecular biology. I had to go outside my comfort zone. I had to connect with people in computational mathematics, people in fluid dynamics.” In other words, those academics who stay rigorously within their own silo, they effectively get stuck in an echo chamber and they’re not producing great science.
I think the same is true of, you know, for example, professional services firms. For the really big value-added problems they’re solving, they need the different lines of service to come together to provide a strategic overview that unlocks the value creation. And this, I think, is an example that you see across the piece in technology and beyond.
Hugo Scott-Gall: I didn’t know that about fungi either. I must confess.
Matthew Syed: I bet you wished you’d never heard that.
Hugo Scott-Gall: I will repeat that story probably 70 times then I will actually believe it was me that was having the conversation, not you. I want to take a bit of a turn up and go from sort of culture, which I think cognitive diversity group think are clearly parts of culture and maybe take culture a bit broader, make it more relative to sort of younger generations. I’m interested because you’ve written quite a lot about this, how you think younger generations think now and then move that on to free speech and inevitably social media.
Because I think a lot of what you’ve just talked about was really applying to maybe middle-age people in institutions, in positions of authority, the ability to do something around group think, encourage cognitive diversity and design it, but let’s talk about younger folks, how they think, how they’re different. Why is that?
Matthew Syed: One thing that I became very interested in about five or six years ago, I was invited to a school to give a talk at the opening. It was a state school, you know, not a particularly well-to-do school in the north of England, and they were opening a new wing of the school.
And they had the local member of Parliament there and the Mayor and they had this other person, Matthew Syed, former ping pong player, and all the parents were there to watch this opening ceremony and one of the students, one of the young girls at the school, did a performance and, you know, like when you have a baton and you waive it around and throw it up and catch it, it was a kind of gymnastics performance. And I’ll never forget Hugo, the room became tense with anxiety. What if this young person drops the baton? What if they throw it into the air and it clatters to the ground? And actually about two-thirds of the way through the baton did fall and a sense of complete mortification dropped around the room.
And I ripped up the speech I was intending to give and I gave a talk on the absolute imperative importance of failing, that when we take a risk and we fail we often learn and that life isn’t about always being perfect but about having the resilience to face up to the setbacks and challenges that are an absolute necessity if we’re going to reach our full potential. I started reading the research around this and there is a phenomenon called the curse of perfectionism. I think the social media, to a certain extent, has exacerbated it where people curate their lives to look wonderful on the internet. They airbrush photos and their lives look rather marvelous, and I think young people can engage with this and think that life is about acting and looking perfect.
But if you want to look perfect, you never take risks. You never try anything new. You never have the courage to get up on stage and be somebody who’s willing to wield the baton or be a character in a school play. And yet, as we know, from technology, from science, failure is central to the learning process.
And I’m not saying that all young people lack resilience. All I’m really saying is that I think it’s a good idea as parents and as teachers to equip young people with that wonderful crusading sense that taking risks and being willing to occasionally fail, is a wonderfully empowering thing.
Hugo Scott-Gall: And do you view society as having gone the other way? That actually risk is seen as something bad and to be avoided and actually you should look to governments to take away risks, to protect and somehow that has created a risk adverse mindset and as you say resilience builds from failure from taking risks from understanding what worked, what didn’t work. And so, are we creating a generation that is fragile through no fault of their own?
Matthew Syed: Yeah, and I think it’s a valid question and it’s a healthy debate amongst psychologists.
I mean what I’ll perhaps say is if you think about the greatest institutions. I mentioned science already. But one of the things that science does well is perform experiments. But think about an experiment because if you know the result of an experiment before you conduct it, it isn’t an experiment. The performance of an experiment is an active a certain type of humility. You’re trying to discover new knowledge. You’re willing to put your theory on the line. The great philosopher of science, Sir Karl Popper, said that falsification is central to science and the reason is because again, a quote from Popper: “Human knowledge is finite.”
The implication is that human ignorance is infinite. It’s a willingness to step into the infinity of the unknown, to push back the frontiers of knowledge and those organizations that have low tolerance for risk, never innovate and in certain types of market they will be filtered out of the marketplace because they’re not managing to do new things and take advantage of new technologies.
Having said that Hugo, I perhaps make one conceptual point. I do think it’s sometimes a bit worrying to people when they hear people like me say failure is a good thing. You know, if I’m flying tomorrow from London to where are you, Boston or Chicago, Hugo?
Hugo Scott-Gall: Chicago right now, yeah.
Matthew Syed: So, if I fly over for dinner which would be a wonderful thing to do although probably too many emissions to justify it, I wouldn’t want the pilot to say, “Right, I’m going to try pulling a different lever today. And okay we failed so, it’s okay. We’ve crashed the plane.” I don’t want the pilot to try something new and potentially failing, crash the plane. What you really want the pilot to do is try new things in a simulator, a high-fidelity simulator. So, they learn while minimizing the costs of failure. And I think what the really savvy institutions do today, you know, they don’t bet the whole company on changing the retail configuration. They’ll test it in the pilot scheme.
But rather than doing the pilot scheme in the most conducive circumstances with the best customers in order to prove the hypothesis, they’ll do it in a challenging environment, so they properly learn from it before scaling.
And I think getting the balance strategically between minimizing the cost of learning while maximizing the benefits, I think that is where society should be at, and it varies from place-to-place. There’s certain companies that need to be at a different point in that calibration, in the innovation and tech space they’ll be in a different place from professional services and I think that perhaps younger people need to be in a different place to older people. I think the takeaway is that failure is nevertheless a necessary component of really virtuous growth.
Hugo Scott-Gall: I mentioned social media earlier, and I’ll ask you to sort of opine on whether it’s good or bad. I’m very interested whether you think it’s changed our way of thinking and that obviously whose are. That could be anyone, any age. But I imagine it’s probably going to have the exposure and formative years it’s going to have a greater, a potentially greater impact.
So, do you think social media and whether that’s just shorthand for fast flowing perhaps more superficial information is leading to a change in the way minds work and how we think? We started off with saying how do we think, are we taught how to think properly, and you said actually there are repeats or arrows on how to think whether that’s an institution. So, I’m just wondering putting social media into that, is that changing how we think, whether that is a good or bad thing, do you think that is a fair observation?
Matthew Syed: Well, perhaps one thing. Going back to the diversity and group think. There is a tendency, sometimes overstated, for people to surround themselves with the ideologically likeminded, so they’re effectively hearing opinions with which they already agree which can be wonderfully comforting and it’s not necessarily a bad thing if your particular group has a monopoly of good ideas. It’s slightly problematic if you’re shielding yourselves effectively from other ideas from which you might learn which is why this curious mindset, what I sometimes call the growth mindset, is such an important asset where we’re willing to reach out to different kinds of ideas.
But on the wider point, I do sometimes worry that young people are kind of living through a gigantic social experiment, the kind of which we simply don’t know the results yet and I do worry a little bit about what we will think about the social media. And children who have grown up with no reality other than the one with which they’re confronted today which is most of their friends on What’s App and Insta and Twitter and Tik Tok, and with the metaverse potentially coming. I think this is what I hope I suppose like you, Hugo, is that we’ll learn to use these tools to our own advantage. At the moment I think we’re being slightly manipulated by them.
We’re induced to stay on these platforms perhaps longer than what is good for us because that enables them to sell us to advertisers and harvest our data. But I do hope we reach a better and more benign accommodation, if I can put it that way with the social media.
Hugo Scott-Gall: We talked quite a lot here about how to think. Now I want to talk about how to perform. The sports, high performance, failure. What stops people from reaching their full potential? Is it external, is it internal?
Matthew Syed: Well, perhaps a story here, Hugo. I –
Hugo Scott-Gall: I love stories. Everyone loves stories.
Matthew Syed: That’s me. I’m trying to think back 20 years and I’m trying to transition out of being a ping pong player, you know. That’s been my life. I’ve been trying to move up the world rankings, I start to slow down, I have to reinvent, and I wrote a book called Bounce. I didn’t expect anyone to read it frankly, but a few people did. An unintended side effect was being invited to give a talk at Goldman Sachs. It wasn’t far from where I lived and still live in Southwest London, just up the district line to Fleet Street. I went to a state school and we did, Hugo, no public speaking. You know, there was no debating society.
And believe it or not, the press conferences for table tennis were not that well-attended, so –
Hugo Scott-Gall: Hard to believe, hard to believe.
Matthew Syed: I know. You’re dumbfounded by this revelation.
Hugo Scott-Gall: Yes.
Matthew Syed: So, I had done very little public speaking. So, I hadn’t had the practice to do it. So, I turned up suffering desperately from imposter syndrome and wondering why I was in front of this room. I was nervous and I didn’t do terribly well. I got heckled a couple of times, and on the tube on the way home I thought, you know what, if I’m invited to give another talk by a company or anyone else for that matter, I’ll politely decline. Think about that, Hugo for one second. One negative experience that I drew the conclusion I didn’t have the innate talent, the innate facility to read a room and natural charisma and social confidence and effectively severed all possibility of future learning.
This is called sometimes a fixed mindset and it’s tremendously damaging because it imposes very powerful self-limiting beliefs. But a couple of days later, I thought no, hang on.
You can potentially improve at public speaking. So, I Googled public speaking practice and the first tip was an organization called Toastmasters which is just a global network of public speaking clubs. And the nearest one to where I lived was just over the bridge in East Wokingham and they met every second Wednesday. You go along, you give a talk, you get feedback from other people in the room and when they’re giving you feedback, they’re in front of the room so they’re speaking too and you have to do some spontaneous speaking as well. And I went every second week for about five years, partly because they’re a wonderful group by the way.
And I’m not saying, Hugo, that I’m now the best speaker in the world. If you ever hear me, I’m certainly not, but what amazed me was how much we can improve when we have that can-do attitude and we’re liberated from these self-limiting beliefs. So, my sense of performance is it’s an iterative process based on performance and just to reiterate the point.
It doesn’t mean you’re going to win a Fields Medal or a Nobel Prize. It means you reached the summit of your potential. If you’re willing to have a go, fail, learn, get some decent feedback and I think we often, if I can put it this way, underestimate our own potential for growth when we’re put in the right circumstances.
Hugo Scott-Gall: And is that after you head up elite sports and as discussed you’re a participant in an extremely elite sport, is that still true when you’re thinking about professional sports people? They still don’t maybe fully appreciate how much they can grow? That imposter syndrome is just as rife there as elsewhere or was it a different set of problems?
Matthew Syed: I think at an elite level of sport, most performers have a really profound sense of their own scope for improvement because they got there through incredibly hard work. It’s not to say talent doesn’t matter. It’s that to really be the best of the best you need to have the synthesis of both talent and a great and empowering work ethic and a willingness to fail and fail well.
I think most top performers do have something of this kind, but they don’t necessarily apply it to all aspects of their life. I remember going to a football academy and I was really trying to encourage the young footballers at Arsenal that after they finished their football their football career, it’s worth having some other asset to fall back on. You know, why not continue your education, do an apprenticeship. There’s plenty of hours in the day to train at football and to do something else. In fact, it’d be a great release and escape and a few of them said, “Oh, I can’t do that because I don’t have an academic brain.” In other words, yes I can improve at football, I can improve my left foot, my right foot, heading the ball, volleying.
And they’re out there training like anything but they weren’t willing to use the same approach to something else and I think that can sometimes be something that holds people back.
Hugo Scott-Gall: Do you think—one of the things that I’ve spent quite a lot of time thinking about when it comes to sports is beyond money ball.
So, there’s pre-money ball. So, you referenced some sort of characters in the football world, in the soccer world, who you would describe as, as old school. This is pre-data, it’s a network of knowing people. And there’s a little bit, I think, of sort of entry barriers created by you’ve got to be in this network and you’ve got to be, you’ve got to be inside the sport. You have to be a participant but not necessarily an analyst of sport. That’s now changed. The money ball revolution, incomes data, so there’s all of a sudden a lot of things that were recorded in someone’s brain and now systematically recorded and turned into data and data enabled analysis, data analysis.
And so, you get a step change but it is sort of zero sum because everyone does it. So, what comes after money ball? Have we squeezed the data analytics lemon dry and then it’s going to fall back to human attributes for the very best sportsman, or is it actually you can still have situations which I think happen across many sports which is a team does better than perhaps it should.
A smaller team does very well because they have employed analytics more intelligently or maybe they have an edge in data. As you think about what drives great sporting performance, how much is enabled by better analytics, better data, better training as a result, or how much is just you can’t—it doesn’t matter what era Federer exists in, he’s going to be the best?
Matthew Syed: Oh, Federer, what a player.
Hugo Scott-Gall: You like writing about Federer in lavishly loving terms.
Matthew Syed: I do love Federer. But you know what, I’ve got to say who I love also Nadal who I know and Djokovic who I’ve got to know well as well as a sportswriter. I mean it’s interesting that Hugo, what that rivalry evokes for me is the power of competition. The extraordinary—we’ve talked about self-improvement, but one of the things that drives improvement is competition.
We must never forget that. Its why free markets are wonderful things. It’s not just about incentives. It’s about you get exposed by better performance in the market, and you have to raise your game or you get filtered out. I remember talking to Federer. He was getting hammered by Nadal because Nadal, for tennis enthusiasts, has a very looping forehand that kicks very heavily up off the surface, particularly on clay, and it kept hitting the top leading edge of Federer’s racket on his backhand side. So, Federer had to reshape his backhand, which he did to win the Australian Open. But Federer was exposed by Nadal, but then Djokovic exposed Nadal with his back and to Nadal’s forehand.
So, we have this wonderful competitive dynamic where they’re pushing each other to ever greater heights, so it’s been quite marvelous to behold. So, I think yes, a player like Federer is going to a beautiful performer in any era. And I do think that there’s still probably more scope to use data effectively particularly in games like football where data’s relatively new and I don’t think has reached the zenith of what it can bring to the game.
But often these methods are deployed at the end of the pipeline. In other words, we use data to hire the best players. Where I think science is going to take us ever further in sport is improving the pipeline itself. So, football is quite meritocratic, low entry costs. Almost anyone can play the game and so, it tends to recruit from all around the world. Whereas, a sport like Formula One is still very limited in the extent to which it brings people from different parts of the world who may have the talent for the game. Only a few people have ever driven a Formula One car or any of its precursors. The same in rowing and sailing and possibly also in table tennis and badminton.
Tennis is reasonably global. But also coaching methods. Let me talk a little bit about cricket, Hugo because I know you’re a big fan of cricket, you’ve said.
Hugo Scott-Gall: I am.
Matthew Syed: Most English people are. But when I was playing cricket at school there was a particular philosophy of a straight bat, the eye above off stump when you take guard and for those who are not interested in cricket, effectively a very rigorous and didactic set of requirements about how you should play the game. Not completely silly ideas but nevertheless, very integrated, particularly into the culture of cricket in England. And you look at someone like Steve Smith. This is a fantastic batsman, by the way, who learned like Donald Bradman, another great historic batsman to play organically. Not too much coaching, learning through trial and error, shaping the game around his own idiosyncrasies.
I think we need a bit more latitude for people, young people, as they develop their techniques. I think it’s been, if I can generalize it a little, a bit too didactic and I think we’re going to find new methods to accelerate the learning process through the pipeline, particularly on things like perceptual awareness. I think that’s where the big gains are to be had in the coming couple of decades.
Hugo Scott-Gall: I think you’re on record of saying that when you went to the Olympics you choked and you’re smiling, but you should—it’s brave of you to say that, but I don’t think it’s something to sort of smile about because my question is pressure is something that happens to everyone and some people say they thrive on pressure. I wonder whether initially everyone finds pressure pretty daunting and intimidating. How one responds to pressure, should that be a lesson you learn for yourself and gain confidence or is it back to resilience, or is it actually coachable? Can we help people handle pressure?
And obviously it happens in sports. That’s where it’s most observable but it kind of happens to everyone all the time. This is going to get me onto the final area I want to talk to you about which is investing. That is definitely pressure every day.
Matthew Syed: Well, the Olympic games in Sydney in 2000 where I choked rather graphically, Hugo. Thanks for bringing that up. No, I’m kidding.
I don’t mind talking about it because I did learn quite a lot from the experience. Obviously, the Olympics four yearly cycle and I was in with an outside chance of a medal, and I remember my coach came to me, Hugo, just before I went out into the megawatt light of the arena in Sydney to play Peter Frans of Germany in my first match. He said, “Matthew, the next 40 minutes will determine whether the last four years were a waste of time or not.” He was trying to inspire me. He was trying to really ratchet up the motivation, but it had completely the opposite effect because I became certainly terrified.
In table tennis, there are very fine margins, and I felt a slight tremor in my playing hand and that I can tell you is completely catastrophic because if your playing hand is shaking ever so slightly, it means you’re not going to be precise and I lost the first game 21-2. This is almost unheard of in international competition.
I was effectively knocked out within about 15 minutes, but I could see the kind of, the sympathy on Peter’s face as he shook my hand at the end of the match. I mean it was a 50-50 match and I was on the plane home. And I think this is a phenomenon, Hugo, that we have to take seriously. Under pressure, we sometimes trigger the fight-flight-freeze response and that can be catastrophic for rational decision-making when the stakes are very high. And so, what we need are a series of strategies to help us deal with it.
Can it be coached? Yes, for sure but the most—for me anyway, and I think the evidence shows this too—the most valuable thing of all is if there’s something you really care about, you know, a particular skill you really want to be able to demonstrate in a public space and you feel the pressure, that means you want to do well, so, that’s too bad. That’s not a bad thing. But put yourself in that environment and through time you’ll begin developing strategies to deal with the emotions, to deal with the rising heartrate.
I mean, Hugo, we were probably both a little anxious when we started this podcast but when you go on you learn different ways of doing it. It varies from person-to-person. The thing that I do, Hugo, if I’m very nervous before a big speech or a big broadcast, is instead of thinking if this goes wrong it’s all going to be awful. I might lose my job and if I can’t work then I’m going to lose my house and then my wife’s going to leave me. You’re often thinking of the absolute worst-case scenario as you’re about to perform. Instead of that I think, well hang on a second. Win or lose, perform well or perform badly, my mom will still love me.
Now, my mom thinks this is a slightly dubious claim, but you can see, Hugo, that when you have that ground level truth, that come what may, frankly, my wife will still love me too and my children. It’s something that you can build from psychologically, so that when you get into the crucible of the performance itself, you’ve actually got positive rather than negative thoughts coursing through your mind.
That works for me, but I do know having interviewed many top performers, that they have different techniques and different tools to get themselves in the right frame of mind and these are built, Hugo, by actually going out there and giving it a go and occasionally messing up as I did in Sydney.
Hugo Scott-Gall: Let’s talk about investing. So, I’ve been interested in your insights from your body of work, the things you’ve studied, the things you’ve learned, and you’ve met investors as well. If you tomorrow had to become an investor, what would you take from what you’ve learned so far? What do you kind of think are things you can bring from your investigations into culture and how to think and how to make decisions and how to perform, how to deal with failure? What do you think? I mean I don’t know how much you know about the actual art and science of investing, but those lessons, what would you bring?
Matthew Syed: If I had to say two things, and there’s some good evidence behind this. The first is learning from mistakes.
So, if you make a particular prediction that turns out not to be a good one, to update one’s assumptions or model in the light of that new information. If a particular stock has gone down in value, be willing to cut the losses. If a stock has gone up in value, be willing to run the winner. What tends to happen is that people hold their losing stocks twice as long as their winning stocks because if there’s a losing stock, they don’t want to crystalize a loss, so they hold it hoping that it will rebound. And when there’s a winning stock like crystalize early, so that they can show that it was unequivocal evidence that it was a good idea to buy this stock.
So, I think that’s a bias sometimes called the disposition effect that is worth confronting. The other thing is getting different points of view when it comes to an investment decision. I mean there is some very robust evidence from somebody called Philip Tetlock, who’s a psychologist in the United States who wrote a book called Superforecasting that diverse teams of investors tend to do better.
And this is because of something called the wisdom of the crowd effect. And, effectively, what that says is that if you have a diverse group of people who have information in their model and that these models are diverse when you aggregate the information, the errors tend to cancel in the aggregate because some are higher than the eventual overall price, some are lower or the eventual outcome of GDP or the eventual outcome of the stock performance. So, you’re pooling the information and filtering the error. So, this is quite a rigorous finding and that would be the other thing, Hugo, I’ll throw into the mix when it comes to investing.
Hugo Scott-Gall: Do you think it’s better to be an outsider versus an insider to be a good investor?
Matthew Syed: That’s a very difficult question to answer. I suppose it would depend on whether the insider had access to knowledge that the outsider lacked that was relevant to the determination of price.
Hugo Scott-Gall: I don’t mean insider in the sense of someone who works in a company or outside.
What I mean is someone who may be—you talked a bit about your background and how perhaps you felt something of an outsider because in some ways you were a bit different. I think that’s sort of a fair summary. So, people who’ve been on the outside at some point in their life in some way, are they used to thinking differently and/or draw confidence from feeling uncomfortable? I don’t think there’s such a thing as an outsider mindset versus insider, but someone who’s been more on the fringes of a group versus right in the core of a group.
Matthew Syed: Well, there’s very good evidence that groups tend to perform better when there is a contrarian who’s willing to speak up and disrupt the consensus. I would certainly throw that into the mix but what you really want is lots of people with deep subject knowledge that is different from one another but all of which is relevant to the problem you’re trying to solve. So, you want a mix, if you like, of insiders and outsiders to get that wonderful synthesis so that you disrupt the group think, you can cross pollinate ideas and hopefully kind of triangulate across the best decision of all.
Hugo Scott-Gall: One of my favorite quotes which I have used several times in this protocol comes from Charlie Munger who is one of my investing heroes and he said, “Show me the incentives, I’ll show you the behavior.” Are the incentives for a lot of people in investment management companies and other professional services firms, are there incentives oftentimes too skewed towards conformity?
Matthew Syed: That’s a great question. I love the quote by the way, I’ve got to say, but it doesn’t quite capture. Do you remember what I said a bit earlier that professional stock pickers were holding their losing stocks twice as long as their winning stocks. So, this effect isn’t explained by incentives because the incentives have to be as it were filtered through the behavior. And sometimes I think there are systematic biases that undermine our capacity to actually reach the incentives that we are set.
So, definitely the incentives can sometimes be not particularly conducive to the right kind of behavior. But even with perfect incentives, I think there can still be systematic biases which is why, to go back to your earlier point, sometimes the outsider/insider group dynamic is so helpful.
Hugo Scott-Gall: Which almost gets us back to where we started, I think around the role of cognitive diversity. The thing I’m taking away which I already believe but it’s nice to hear someone else say it is that I think in investing in any organization that is making decisions which is what investing is. But again, most organizations are making decisions. Now oftentimes they’re concerned with other things. You raised a very good point about safety in aviation, but cognitive diversity that’s well designed, intelligently designed is a must have. It’s not a nice to have.
Matthew Syed: It’s an absolute mission-critical variable and I really think that the organizations that are going to thrive and shape this post-pandemic age, they’re going to be camped out in that terrain. And I know we’re reaching the end here. I just wanted to say if I could give you some feedback because you said to me, we need feedback. I think you’ve done an absolutely terrific job. It’s been a joy to talk and hope we’ll stay in touch.
Hugo Scott-Gall: This has been great. So, thanks for coming on the show. It’s been a pleasure to host you and we covered a lot of ground but that’s the whole point of you, I think which is to cover a lot of ground.
Matthew Syed: Thank you very much.
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