Sunday, 21 September 2014

Book Review - Adapt: Why Success Always Starts With Failure by Tim Hartford

Book Review
Adapt: Why Success Always Starts With Failure
by Tim Harford
“From insurgency in Iraq to global poverty, big problems can only be solved through a willingness to fail, argues Tim Harford in his persuasive new book.” Reviewed by Rafael Behr, The Observer, Friday 3 June 2011

The pace of discovery has not slowed down since the Apollo missions. By some measures – the number of new patents registered in the US, for example – it has accelerated. People's capacity for invention remains as limitless as ever but it seems to be directed down ever narrower and less consequential avenues. It didn't take long for humanity to nail the problem of how to make video games for a phone that can also function as a camera. But we're still waiting for an Aids vaccine and a cheap, environmentally friendly alternative to fossil fuels.

In Adapt, Tim Harford argues that the process of innovation is bogged down in the sheer complexity of the modern world. Good ideas are suffocated by bureaucracy while bad practices and dangerous errors flourish in dysfunctional markets. To find solutions to some of the big problems – climate change, financial instability, global poverty – we must go back to basics, examining the circumstances in which ingenuity has broken through in the past, and then considering how to replicate them.

The starting point is evolution. Harford cites compelling statistical evidence that the way companies have risen and fallen throughout history neatly resembles Darwinian selection. Clusters of bankruptcies occur amid periods of relative stability in a pattern that can be accurately mapped 

Disruptive innovations bubble up in the marketplace by a process of trial and error. The more players there are, the higher the likelihood of something brilliant appearing. But, by extension, a reliable measure of how efficient a system is at generating success is the volume of failures it can safely expose.

Author Tim Harford is an economist by training and fastidious in his pursuit of evidence to buttress the theory. He is also an award-winning broadcaster, presenting More or Less, Radio 4's consistently excellent programme examining statistical gibberish in the media and rebutting unsubstantiated claims by politicians and journalists. He knows how to deal with complicated subjects in lay terms, gracefully holding a line of accessible elucidation without veering into patronising oversimplification.

Most of Adapt consists of jaunty storytelling – accounts of things that have gone badly wrong or spectacularly right in recent history, with practical lessons smuggled in along the way.

Sticking with the military theme, Harford then tells the story of the Spitfire, one of the most effective engineering feats of all time. It won the Battle of Britain, checked Nazi ambitions to colonise the UK and so, arguably, saved the free world. But no one had anticipated before the war that a small, short-range, quick and nimble fighter would be of any use. Long-range bombers were the order of the day. The Spitfire was not born of careful planning and military foresight, but of maverick bloody-mindedness in a handful of engineers and private capital put up by Dame Fanny Houston, an eccentric millionaire and serial philanthropist. The key to winning the war, Harford concludes, was not a brilliant plan A but a culture that permitted dedicated individuals to work on plans B, C and D.

Through the enumeration of many such parables, Harford builds up a check-list of conditions that must be in place for good ideas to chase out bad ones. Big institutions, whether corporations or governments, should create safe havens where experts can try new techniques and fail without bringing the whole system crashing down.

Prizes for achieving specific goals work better than grants for open-ended research, since the latter are prone to be captured by lazy establishments fiddling around the margins of orthodox thinking. Regulations dictated from on high by controlling managers are less effective at preventing disasters than corporate cultures that invite dissent from the lower ranks and heed whistle-blowers.

Hazards can never be eliminated; the key is to avoid designing systems so densely interlinked that one failure triggers a meltdown, like dominoes stacked in a row. Not surprisingly, Harford writes approvingly of proposals to break up the banks.

There is only a handful of specific policy recommendations in Adapt. Harford backs a flat carbon tax to put the price of pollution in every product. He likes companies that give maximum autonomy to shop-floor staff. But one of the book's major disappointments is a reluctance to consider the potential applications of Harford's ideas to the pressing current question of major public sector reform. It is easy to praise creative failure in the laboratories of Google; trickier when the feted culture of experimentation is applied to schools and hospitals.

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