Be Foxy

Aesop was a Greek story teller who is famous for his fables. A fable is a short story, typically with animals as characters and it conveys a moral. In his stories foxes are portrayed as cunning creatures. I have read a lot of his fables and for a long time I had an aversion for fox.

Later in my life I came across the book Good to Great by Jim Collins. In this book he writes that great companies are built by hedgehogs. On the other hand mediocre companies are run by foxes. He writes

Those who built the good-to-great companies were, to one degree or another, hedgehogs. They used their hedgehog nature to drive toward what we came to call a Hedgehog Concept for their companies. Those who lead the comparison companies tended to be foxes, never gaining the clarifying advantage of a Hedgehog Concept, being instead scattered, diffused, and inconsistent.

This further increased my aversion for fox. Recently in the book More than you know I came across the following passage.

Hedgehogs know one big thing and extend the explanatory reach of that thing to everything they encounter. Foxes, in contrast, tend to know a little about a lot and are not wedded to a single explanation for complex problems.

This created a spark in me and I started to read more about foxes and hedgehogs. In the book The Signal and the Noise – Nate Silver writes

Hedgehogs are type A personalities who believe in Big Ideas – in governing principles about the world that behave as though they were physical laws and undergird virtually every interaction in society. Think Karl Marx and class struggle, or Sigmund Freud and the unconscious.  Or Malcom Gladwell and the “tipping point.”

Foxes, on the other hand, are scrappy creatures who believe in a plethora of little ideas and in taking a multitude of approaches toward a problem. They tend to be more tolerant of nuance, uncertainty, complexity, and dissenting opinion. If hedgehogs are hunters, always looking out for the big kill, then foxes are gatherers.

Nate Silver gives an excellent comparison between how foxes and hedgehogs think.

How Foxes Think	How Hedgehogs Think
Multidisciplinary: Incorporate ideas from different disciplines regardless of their origin on the political spectrum	Specialized: Often have spent the bulk of their careers on one or two great problems. May view the opinions of ”outsiders” skeptically.
Adaptable: Find a new approach – or pursue multiple approaches at the same time – if they aren’t sure the original one is working.	Stalwart: Stick to the same “all-in” approach – new data is used to refine the original model.
Self-critical: Sometimes willing (if rarely happy) to acknowledge mistakes in their predictions and accept the blame for them.	Stubborn: Mistakes are blamed on bad luck or on idiosyncratic circumstances – a good model had a bad day.
Tolerant of complexity: See the universe as complicated, perhaps to the point of many fundamental problems being insolvable or inherently unpredictable.	Order-seeking: Expect that the world will be found to abide by relatively simple governing relationships once the signal is identified through the noise.
Cautious: Express their predictions in probabilistic terms and qualify their opinions.	Confident: Rarely hedge their predictions and are reluctant to change them.
Empirical: Rely more on observation than theory.	Ideological: Expect that solutions to many day-to-day problems are manifestations of some grander theory or struggle.

The world is mostly filled with hedgehogs. The people you see on the news channels predicting about the stock markets and the economy are the best examples of hedgehogs. They make money by making predictions and not following them. The world we live in is really complex. Hence having a very strong ideology like hedgehogs in one big idea is very dangerous. It is better to develop a fox kind of thinking.

Examples of Foxes

There are very few people in the world who think like foxes.

Richard Feynman

Richard Feynman, scientist, teacher, and musician. He is a multi disciplinary thinker who assisted in the development of the atomic bomb, expanded the understanding of quantum electrodynamics, translated Mayan hieroglyphics, and cut to the heart of the Challenger disaster.

Warren Buffett

Warren Buffet made a lot of money by investing in public companies. In spite of his extraordinary success  he never predicts the direction of the economy nor the stock market.  He understands it is not possible and hence he keeps quiet. Charlie Munger tells that Buffett naturally thinks in terms of probabilities. From the Elementary Worldly Wisdom

If you don’t get this elementary, but mildly unnatural, mathematics of elementary probability into your repertoire, then you go through a long life like a one legged man in an ass kicking contest. You’re giving a huge advantage to everybody else. One of the advantages of a fellow like Buffett, whom I’ve worked with all these years, is that he automatically thinks in terms of decision trees and the elementary math of permutations and combinations.

Charlie Munger

Charlie Munger is the vice chairman of Berkshire Hathaway. He is a multidisciplinary thinker and believes that worldly wisdom cannot be obtained from a single discipline. He calls those people who use one big idea for every problem as man with a hammer. He does not believe in economists who tries to achieve physics like precision in their predictions.  From the Elementary Worldly Wisdom

It’s like the old saying, “To the man with only a hammer, every problem looks like a nail.” And of course, that’s the way the chiropractor goes about practicing medicine. But that’s a perfectly disastrous way to think and a perfectly disastrous way to operate in the world. So you’ve got to have multiple models.

Is it possible to think like a fox?

The world we live in is extremely specialized. I develop web applications software at work. There are several people involved in developing a web application. We have engineers categorized as front end, mid tier and backend. Testers categorized as white box and black box. Administrators to manage and release the application. This makes sense as the division of labor increases the productivity. This is very good for the organization. But the individual will not know anything beyond his area of work. With this limited knowledge it is not possible to understand how the world works. We are all hedgehogs.

If we want to be better thinkers and decision makers like a fox then we need to learn from multiple disciplines. We need to see the world as it is instead of altering it the way we want it to be.  For that we need to read books written by people with multi-disciplinary minds. The ones that I follow are

1. Charlie Munger
2. Warren Buffett
3. Richard Feynman
4. Sanjay Bakshi
5. Michael Mauboussin

Two terrific books that will help you get started are The signal and the noise by Nate Silver and The Halo Effect by Phil Rosenzweig