Improv skills lead to success

Archive for November 2013

Perceived safety increases risk-taking

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In many senses, life is a series of risk/reward calculations. Choosing which school to attend, buying a house, and choosing a spouse are all risky endeavors. According to the Peltzman effect, also known as risk compensation, people have a tendency to take greater risks when perceived safety increases.

I’m sure this conclusion comes as no surprise to you. Toddlers learning to walk soon start to run, or go down stairs, with the expected results. Teen drivers (particularly teen boys) get comfortable behind the wheel and dart off in a burst of testosterone, occasionally ending up in dire circumstances. This phenomenon was very common the Formula 2 racing series. Formula 2 is a development series for the global F1 competition, which is viewed as the pinnacle of motor racing. The problem is that the Formula 2 series was plagued with multiple accidents resulting from brash moves made by the young drivers. The reason? Analysts, including current F1 drivers, argued that Formula 2 racers were overly aggressive because their cars are so safe. Romain Grosjean, a Formula 2 driver who now competes for the Renault F1 team, was fined several times and sat out for an F1 race after being at fault in repeated incidents following his promotion.

Investors make similar risk/reward calculations. Wall Street investment bankers often take significant risks because their compensation schemes reward short-term success far more than they punish failure. Why would they take such risks? Because it’s part of their overall strategy. In the Wharton School’s corporate finance MOOC I’m taking on Coursera, Professor Franklin Allen argues that one’s sense of risk is inverted when you think of investing in a portfolio of stocks rather than in a single stock. For example, imagine that you buy stock in an oil company that finds oil in 1 out of 20 wells, and each producing well returns $100. You have a hit rate of 5% which, multiplied by the return of a good well, yields an expected value of $5. Now imagine that you have a separate investment in a research company that has a 1 in 50 chance of returning $250, otherwise gaining you nothing. This investment has a similar expected value to the previous example, because 2% (1 in 50) of $250 is $5.

Which of the two investments is less risky? If you look at the expected values, they’re equally risky. However, Professor Allen argues that, when considered as part of a portfolio, the latter investment is less risky because of its higher potential return. The crux of the argument is that a diversified portfolio with numerous independent risks will tend to have a higher return than a collection of pedestrian investments with relatively low risk. The end result is safety in numbers. Just as a fair coin flipped 1,000 times will tend to show heads in about 50% of the trials, investments with independent risks will tend to earn out at their expected rate, assuming you adjudged the risks correctly in the first place. Statistics on investment return since the year 1900 bear out his argument.

Improvisers can and should take risks to make great scenes. We can do it without fear because we know our fellow players will be there to make what we say and do the right thing. Similarly, businesses can take risks as part of a diversified portfolio of ideas. Just as you wouldn’t invest in a single stock such as, I don’t know…Enron, you shouldn’t discourage experimentation and risk. That said, you must understand that risks taken within a scene or business are dependent, not independent. There’s only so much we can do to fix things if you go too far overboard. If you can’t spread out your risk, you must moderate it to be successful.

Clustering and Streaks — Real or Imagined?

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The folk wisdom that “bad things come in threes” is still popular in the U.S. Whenever two celebrities die on the same day, for example, even the most hardened critical thinker feels the urge to look for the third.

Is clustering real? Do events happen in streaks, or are they just a product of our pattern-seeking brains?  George Carlin made fun of the “bad things happen in threes” adage by stating that bad things actually happen in 27’s, noting that “it just takes longer to see the pattern.” You can always find instances of “bad things” in the world to fill out your sets of three, but what does the research say? There have been a lot of studies on the subject, including Koehler and Conley’s “The “Hot Hand” Myth In Professional Basketball”, published in 2003 in the Journal of Sport and Exercise Psychology. The authors examined the National Basketball Association’s long distance shooting contest and looked for statistical aberrations in the sequences of made and missed shots. As in all but a few other studies, they found no significant deviation from chance. When they took each player’s base shooting accuracy into account, the effect disappeared.

Sports are physical contests and even little variations in physical conditions can affect performance, but what about chess? Chess is a mental game played with perfect information. That is, you know everything there is to know about a position and there’s no hidden information, such as a player’s hole cards in poker. As of this writing, I have played 19,738 games of blitz chess (each player has 3 or 5 minutes to make all moves in a game) at the Internet Chess Club since June 27, 2001. As I watch my online chess rating fluctuate from embarrassing to “not bad for me”, I wonder how much the streaks of wins, losses, and draws reflect my abilities and how much is the “luck” of an opponent making some horrible mistake.

The three-year graph of my rating shows huge swings, but the average is right about where I perceive myself as a player. Perhaps my streaks are due to luck. After all, I don’t seriously study the game and play to take a break from other work. The big changes make a strong visual impression, but there are a lot of small shifts in there, too.

Improvisers can make a fun game out of looking for apparent patterns and justifying reasons for believing streaks exist. The lesson for analysts? Carefully examine whether a sequence of events is due to some underlying cause or is just a sequence of events that might be due to chance. That said, given the strength of our innate need to discover patterns, is there any way to dispel what appears to be the myth of the hot hand? In a 2006 review of the literature, Michael Bar-Elia, Simcha Avugosa, and Markus Raab summarized the situation in this way:

As Amos Tversky, who initiated the hot hand research, used to say (cited by Gilovich in an online chat, September, 2002), ‘‘I’ve been in a thousand arguments over this topic, won them all, but convinced no one’’.

Diversity Doesn’t Always Look Different

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In my last post, I talked about the bullying that went on between Richie Incognito and Jonathan Martin. The two men play football for the Miami Dolphins…or rather, they did. Martin left the team as a result of what he termed “harassment” and the Dolphins have suspended Incognito indefinitely for conduct detrimental to the team. They reportedly plan to cut ties with him.

It’s come out in the last couple of days that Incognito might have been given instructions from the Miami coaching staff to “toughen up” Martin. Martin grew up in a well-off household and went to Stanford, which doesn’t cut athletes too many breaks on GPA and academic performance. He’s quiet and thoughtful. Incognito, on the other hand, is a brasher, tougher person who didn’t grow up in the nice part of town.

Martin is black and Incognito is white, but there’s an interesting racial dynamic to the situation. On the November 6 episode of ESPN’s Pardon the Interruption, Michael Wilbon, who is black, pointed out that there’s an ongoing conversation in the community about what it means to be black. That conversation takes on a special meaning in the context of the super-macho NFL. According to media reports on ESPN’s web site and Wilbon’s commentary on PTI, Incognito is considered an “honorary” black person who could use the n-word casually in the locker room without offense. In fact, again according to Wilbon, Incognito was seen as “blacker” than Martin because Incognito’s behavior fit into the team’s cognitive model of what an NFL, and more specifically a black NFL player, should be like.

And that’s where the problem lies: the stereotype of how an NFL player should act. A thoughtful, sensitive, introverted person like Martin plays the game differently than his teammates. Maybe he’s not as forceful as his fellow linemen, but he wasn’t voted the second dirtiest player in the league like Incognito was, either. The stereotypical means of “toughening up” a player drove Martin from the team and to document his teammate’s behavior. Veteran Dolphin players have backed Incognito’s actions, calling him Martin’s “big brother” and characterized him as a person who always had Martin’s back. By contrast, when asked if Martin would be welcome in the Dolphins locker room, most players declined to answer.

I have to admit I have a lot more sympathy for Incognito than I did after I first heard about his conduct. Rather than acting as a rogue agent, he appears to have behaved in a manner consistent with the team’s culture. Whether that behavior is “right” or “legal” is up for discussion.

It’ll be interesting to see how this situation shakes out. I characterized the issue as one of diversity in the post’s title, pointing to the difference in cognitive style, personality, and approach Martin takes to life and the game. He’s a minority within the NFL, so there’s a question of whether he and (presumably) his attorney choose to make a hostile work environment claim based in whole or part on his status. Certainly the allegations in the case point to consistent behavior that might be contrary to the law, but I’m not a lawyer. I have a feeling we’ll all learn more about it in the coming months.

Finally, let me conclude with something that, thankfully, doesn’t apply to anyone with whom I currently work: If you think I need toughening up, you’re welcome to try it. I will become more aggressive, but it’ll be in your direction. I do what I do and I’m good at it. My approach works for me. If you think I’m doing it wrong, that’s your problem, not mine. Maybe you screwed up when you hired me.

Don’t Tolerate Abuse

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I’m not sure how many of you follow American sports, in this case the National Football League, but something important happened yesterday. The Miami Dolphins suspended Pro Bowl offensive lineman Richie Incognito for conduct detrimental to the team. The suspension resulted from an investigation after a Dolphin player left the team as a result of constant abuse, allegedly at the hands of Incognito.

NFL teams, like many sports teams and other organizations, has a tradition of hazing rookie players. Some examples include making rookies carry veteran players’ shoes, sing songs, duct-taping them to goal posts, and so on. If published reports are true, Incognito’s threatening text messages and at least one voice mail went far beyond what’s considered acceptable within the league. In a possibly related note, an article noted that an anonymous player survey tagged Incognito as the second dirtiest player in the league.

Bullying cannot and must not be tolerated. Yes, we all need to be mentally tough enough to make it through stressful times, but constant attacks on sensitive individuals will probably erode their base, not strengthen it. Also, just because someone can take abuse doesn’t mean they should have to.

If you find anyone in your organization who makes a habit of trying to “build others up” through bullying or other abuse, take decisive action immediately to put a stop to it. If you don’t, you could be responsible for team dysfunction and get your own dose of suffering when the inevitable lawsuit comes. I think you’ll enjoy defending a firing for misconduct a lot more than defending a lawsuit for failing to stop abusive behavior.