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1-Page Summary of Adapt

Overview

Our governments are not effective and efficient. Our leaders have big egos that lead to problems. The market is a volatile place where ideas can sink or swim without any rhyme or reason.

As a result, we’re constantly being bombarded with strategies on how to save the world and ourselves. But in reality, no one can solve complex problems or issues by using simple “how-to” guides. The best way is by experimenting, as Tim Harford’s book Adapt shows us.

The author presents several insights about how to deal with failure. For example, the author explains why we should not follow rules that are meant to reduce fossil fuel usage but actually end up increasing it. Another key point is that Churchill was wrong about the Spitfire and also one company allows its existing employees to choose new hires.

Big Idea #1: The only thing that’s certain about predictions is that many of them will be wrong.

What’s the difference between how long companies and biological organisms survive? It isn’t much. In fact, both are as likely to die out. Economist Paul Ormerod found that a 500 million year timescale of species extinction coincides with company deaths.

To understand why certain companies survived, Ormerod built a mathematical model of corporate evolution. He gave some initial strategies to the companies and made others more efficient than their competitors in order to gain an advantage over them.

A team of researchers analyzed the extinction rate among a group of companies. They discovered that there was no overlap between the results from this model and a model that represented actual company extinction rates. In other words, the survival of companies is not due to success or failure in strategic planning.

In another study, economic historian Leslie Hannah tracked the world’s largest companies from 1912 to 1992. In 1912, US Steel was the market leader with over 200,000 employees. However, it wasn’t even in the top 500 by 1992.

Although some companies did well over the years, most of them failed. These forgotten companies were actually Googles and Walmarts of their time.

Since companies come and go, they’re hard to predict. So, even if an expert is making the prediction, you should be skeptical.

Psychologist Philip Tetlock asked 300 experts about the future of Russia. These included diplomats, political scientists and economists with PhDs. Most of their predictions never came true – especially those concerning Russia’s political development from the Cold War to the collapse of the Soviet Union.

Because we can’t predict whether a company will succeed or fail, it’s important to be resilient when inevitable failures occur. Here are some ways you can do that:

Big Idea #2: Top-down, centralized organizations are under the illusion that they have total control.

You might think that the most trusted organizational structures – such as top-down models – would be better than others, but they make a lot of mistakes.

Where?

When it comes to making decisions, the top-down approach is often ineffective. This approach has three things: a high-level view of all available information; an absolute chain of command; and a unified team sharing a unanimous vision that effectively silences dissenting opinions.

Military mistakes are often made by top-down organizations. During the second Gulf War, for example, military knowledge acquired on the ground had no influence on government policy.

For example, one US army general wanted more troops to fight in the war while another advised the United States against fighting and killing low-level employees of Saddam Hussein’s regime.