Nurturing a System Mindset

I recently listened to a Tim Ferriss podcast interview with Safi Bahcall, a physicist turned biotech entrepreneur, where Bahcall was talking about system mindsets and it really resonated with me.

I’ve often focused on analyzing why something fails — why I didn’t get the result I expected — and trying to learn from the failure so that I can improve and avoid repeating the same mistakes. This mindset has proven valuable to me so far, and I’ve definitely learned a lot from my many failures. I also know that this is a mindset that is often pushed for at companies (“move fast and break things”, anyone?). This is called analyzing the outcome.

However, Bahcall was talking about elevating our point of view and looking at this from a higher perspective. Instead of analyzing the failures (or the outcome), companies and individuals should analyze the decision process. Why did we decide to do this specific move, what context did we have at that time, and what did the outcome look like?

This system mindset has a couple strong benefits in my opinion that I’d love to dig into further.

Avoid Repeating the Same Failures

The first benefit is that, when analyzing failures, we are looking past the outcome and spending more time analyzing the process that got us to make that decision. For instance, if the new hire on your team turned out to be a bad fit after a couple months and you decided to let them go, it would be easy to chalk this off on the candidate missing some key skills or because they were a bad culture fit. However, this would not prevent you from repeating the same mistake in the future. Instead, you need to analyze the process that got you to hire this candidate. What can you improve in your hiring process to better vet candidates? If this new hire did not have the required skills, how can you improve your process to specifically vet for these skills?

By shifting your focus to the process rather than the outcome, you are addressing the concerns at their root and setting yourself up for success by avoiding the same mistakes over and over again.

Analyzing the Successes

All too often we are focused on analyzing our failures but not successes, and understandably so. Why would we invest our time and effort analyzing successes when we got the result we desired? By shifting our focus and prioritizing a system mindset, we start to realize that analyzing successes is important, too.

“There’s one more crucial aspect of system mindset that great companies do and average companies almost never do: analyze successes as critically — if not more so — than failures.” — Safi Bahcall

In fact, a successful result does not mean that your decision making process was not flawed or wrong. Maybe you were lucky and got the desired result despite making some wrong decisions along the way. For instance, if your team was able to successfully meet a deadline, does that mean that you accurately estimated the level of effort required to complete the project and gave an accurate ETA? Maybe, but maybe not, and the only way to know is to analyze the process and the success. Some questions you could ask yourself here are:

• Did your team members work overtime to meet your optimistic deadline?
• Did you have to change the scope to stay within your ETA?
• Were you simply lucky enough that you did not run into any major unknowns despite the fact that you had not done enough research to identify the risks at the start of the project?

There is obviously a lot more that goes into breaking down a project and trying to identify an ETA, which makes even more of a case that you should analyze both successes and failures so that you can keep improving your decision process.

There is a saying in sports that “a win is a win” and that teams will take the ugly win and move on (e.g, a 7-6 hockey game). However, that’s a cliche and not entirely true. Coaches will dig into these ugly wins just as much as the losses. They will review the game, take notes, and give their feedback to the players so that they can improve before the next game, despite the fact that they won.

To quote Bahcall, “the [system] mindset means carefully examining the quality of decisions, not just the quality of outcomes.”

The Decision Process Is Key

I've mentioned this already but I cannot stress it enough: the decision process is key. A successful project does not always correlate with a good decision process, and vice-versa, a failed project does not mean that the decision process was necessarily wrong.

The outcome does not correlate 1-1 with the decision process.

For instance, if you use your cellphone while driving but do not get caught by the police or get into an accident, does this mean that the successful outcome was related to a good decision process? The answer is obviously no, and if you do this enough times, you will end up getting in trouble, or worse.

On the flip side, if you invest time getting better, and making the best possible decisions with the available information you have, the result will be a success more often than not. You might get unlucky sometimes and fail, or you might not have had access at the time to all the information you needed to realize that this was going to fail, but you will be successful in the long run if you stick to a good decision process. Failures will happen, but you are increasing your odds of achieving success.

Imagine that there are 99 other parallel universes that exist our there. If you stick to a system mindset and keep making good decisions, I’d like to believe that the outcome will be successful on a very large percentage of these universes.

The odd failure will occur every now and then, but you would be setting yourself up for success.