"Invest in mutual funds and the stock market. It's much better than letting the value of your money depreciate due to inflation."
"FDs are a bad investment. Don't buy a house, either."
"Don't go for that big bash wedding, you're literally setting your money on fire. Use that money to travel as a couple instead and strengthen your relationship."
"The best way to build a personal brand is to put yourself out there and be consistent with your content creation."
"To succeed in business, you need to have a sense of mission and tonnes of conviction."
"Hire A+ players and let them tell you what to do!"
The internet is full of advice. Initially, young folks lapped it up. They got their hands on every self-help book they could find. They followed all their internet fathers and social media gurus and influencers.
But after a few years, they realized one of these two things:
- The advice failed to work for them (happened with most people who took investment advice from financial influencers)
- They never got around to implementing any advice or self-help tactic, no matter how insightful and great it sounded
And now, the general sentiment I'm noticing among youngsters today is that of disdain and contempt against rich people giving advice on the internet.
I'm not rich rich, but while writing this piece, I'm aware of how ironic this entire essay might sound.
"Another piece of advice against advice, eh?!"
But this isn't advice. I'm only attempting to explain why most hacks and advice fail to work.
"When you are dealing with a complex social system, such as an urban center or a hamster, with things about it that you are dissatisfied with and eager to fix, you cannot just step in and set about fixing with much hope of helping. This realization is one of the sore discouragements of our century."
— Lewis Thomas
People get energized by motivational speeches and smitten by fancy advice — only to later get straitjacketed by structural behavior and incentives imposed by the larger systems they're working within.
Consider the example of an average VC-funded startup.
In the early stages, everything is working smoothly, the founding team is ambitious and able to keep up with the demands of the work. And if you have VC money in the bank, you don't think too much about hiring more people to keep things manageable.
But there comes a stage when hiring more people introduces more problems than it solves.
If you are growing at a rapid clip, it is simply unfeasible for the early team to transmit cultural values and organizational context to new hires. If an individual contributor, say a brand marketer, is promoted to manager and suddenly has five new reports, hired just yesterday, there will definitely be a lack of culture transfer and mentoring.
Additionally, hiring A+ players is, by definition, strictly rate-limited. So if you're going from , in all likelihood, you're hiring B+ players in the usual scenario. This opens up a whole new Pandora's box of problems.
- Firstly, new reports don't understand the brand that well. Just getting them up to speed on the brand ethos, tone, and voice takes a few months of consistent work.
- Even after that is done, as they're mostly B+ players, the feedback rounds go up significantly. Huge communication overhead costs enter the picture.
- Suddenly, what took 5 days to deliver now takes 5 weeks.
- Optics management and politics enter the picture since new hires aren't invested in the company like the early team is.
- Creative work is suddenly democratic, everyone has a say in what should be done, and the lowest common denominator wins.
- The number and length of meetings go up drastically.
- Roles are now more siloed and delineated, which means new hires only care about doing what was mentioned in their job description and nothing more. Most likely, they are here because the brand name will look good on their resume and the company pays a healthy package with a sizeable chunk of stock options.
- Overall accountability of each individual goes down as they can now blame stuff on the "system", and rightly so. The culture is now a mishmash of different people with different values and notions about the company, all tugging in different directions.
- The intra-team communication now is much more generic, designed to be safe and palatable for everyone and the CEO delivers platitudes like "Let's be life-long learners" and "Let's practice radical candour" while the on-ground reality is that getting that next promotion means not rubbing your boss the wrong way, not making them look bad, laughing at their sad jokes and keeping your mouth shut if what you're about to say isn't steeped in sycophancy.
This now has all sorts of adverse effects on the product and customer service. The effects ripple throughout the entire chain of dominoes, along with plenty of self-reinforcing feedback loops — or as we commonly call them — downward spirals.
So, what happened here?
Essentially, the early team fell into the trap of snapshot thinking or static thinking vs. process thinking or dynamic thinking. And they chose to go with the "better before worse" option instead of the "worse before better" option.
The understanding they were missing was simply a well-known characteristic of complex systems:
In a complex system, cause and effect are not obviously connected or related in time and space.
The symptoms can often show up way later than the decisions that led to them, and they can show up all at once.
In a marketing context, this excerpt shared by Adithya Venkatesan today is a great example.
Here's another related trap many marketing teams can fall into.
When one of their products suddenly starts to lose its attractiveness in the market, they push for more aggressive marketing. Because that's what always worked in the past, isn't it? They spend more on advertising, drop the price, offer larger discounts, introduce more gimmicks to increase acquisition and retention...
While these methods may bring customers back temporarily, but they also draw money and attention away from things that will matter more in the long run: product quality and customer experience (CX).
What ends up happening is that the more fervently the company markets, the more customers it loses. Because the loyal customers churn due to bad CX and newly acquired customers are here only due to the heavy discount.
If you think about it, this isn't too different qualitatively from the overhiring case.
But the gist is that everyone wants better results in the short-term at the expense of the long-term. Because they can't see the system as a whole and they don't understand the multipolar traps it springs up.
"For years, for example, American manufacturers thought they had to choose between low cost and high quality. "Higher quality products cost more to manufacture," they thought. "They take longer to assemble, require more expensive materials and components, and entail more extensive quality controls."
What they didn't consider was all the ways the increasing quality and lowering costs could go hand in hand, over time. What they didn't consider was how basic improvements in work processes could eliminate rework, eliminate quality inspectors, reduce customer complaints, lower warranty costs, increase customer loyality, and reduce advertising and sales promotion costs. They didn't realize that they could have both goals, if they were willing to wait for one while they focused on the other.
Investing time and money to develop new skills and methods of assembly, including new methods for involving everyone responsible for improving quality, is an up front "cost."
Quality and costs may both go up in the ensuing months; although some cost savings (like reduced rework) may be achieved fairly quickly, the full range of cost savings may take several years to harvest."
— Peter Senge, The Fifth Discipline
To effect real change, you need structural explanations for observed problems.
Simply thinking on the level of "big bash weddings are a waste of money" or "buying a house is a bad investment" or "let's promote a culture of <insert the latest Silicon Valley management buzzword here>" is not going to work.
Your father will not stop saving money in his bank account because he needs liquidity and hates volatility. And years of listening to people losing money in the stock market has made him cynical. The recent scams haven't helped change this notion either.
Nor will he stop investing in real estate. He likes security and safety and assigns a lot of emotional value to owning a house — returns and all that compounding nonsense be damned.
Your family will not let you have a court marriage because they have a reputation to preserve and a big bash wedding creates better relationships, and hence, more business.
You won't start writing consistently because your priorities in life are different and you're not willing to invest in reading more and taking more notes so that you have more ideas to write about. Nor do you truly see the benefit of building a personal brand.
Problems are systemic in nature. And by structural explanations, I mean focusing on answering the question
"What are the bunch of factors that lead to this pattern of behaviour? And how are these factors interrelated amongst themselves, where solving one will be impossible unless I solve all the others, too?"
Most advice and hacks make you feel that you can do just this one thing and change your life.
It never happens because life and organizations are multivariate and all simplistic and rhetoric-filled motivational babble sounds impactful but rarely works.