For Sam Walton, ‘creating a huge personal fortune was never particularly a goal of mine’.   Bill Gates’s autobiography leaves no doubt that his principal interests are in computers and business rather than finance.  The wealth of Warren Buffett is not so much an objective as a means of keeping score:  he lives in the bungalow in Omaha he has occupied for fifty years, and still works hard at the age of 78.  Not, presumably, because he needs the money.

       Obliquity describes the process of achieving objectives indirectly, and obliquity is ubiquitous.  The American continent separates the Atlantic Ocean in the east from the Pacific in the west.  The route of the Panama Canal follows the shortest crossing of America.  When you arrive at the Pacific coast you are some 30 miles of where you left the Atlantic. The shortest straight line running from east to west goes through Nicaragua, and this direct route is much longer.  The people who first found this route weren’t looking west, and they weren’t looking for oceans.  They were conquistadors who were looking for silver and gold.  Not only was the route oblique, so was the means of its discovery.

       The happiest people are not those who pursue happiness.  John Stuart Mill was the strongest exponent of utilitarianism, the notion that the goal of mankind was the greatest happiness of the greatest number.  Yet towards the end of his (far from happy) life he would write

‘…..this end was only to be attained by not making it the direct end.  Those only are happy (I thought) who have their minds fixed on some object other than their own happiness;  ….  on some art or pursuit, followed not as a means, but as itself an ideal end. Aiming thus at something else, they find happiness by the way.’

John Stuart Mill,

Autobiography

       Listen to Donald Trump.  ‘I don’t do it for the money.  I’ve got enough, much more money than I’ll ever need.  I do it to do it.  Deal are my art form’.   Echoing Mill, Trump claims to engage in business not as a means, but as itself an end.  Building a successful company, the main route to a spectacular fortune today, requires devotion to business, exceptional talent and immense hard work.  These are not the typical qualities of the greedy and materialistic.

       Oblique approaches recognise that both personal and business goals are complex and the components of their goals are not necessarily compatible.  Like  other great achievers, the conquistadors tackled problems whose nature emerged only as they solved them.  We learn about the nature of our objectives and the means of achieving them through a process of experiment and discovery.

       Perhaps the most striking instance of obliquity is the profit-seeking paradox.  The most profitable businesses are not the most profit-oriented.  The modern Boeing Corporation was created by its long term CEO Bill Allen.  During Allen’s tenure, Boeing built the 737, the biggest selling aircraft in history, and he then bet the company on the 747 jumbo jet.  Allen described the purpose of his company as ‘to eat, breathe and sleep the world of aeronautics’.   When a non-executive director asked for details of the expected ROI on the 747, he was brushed off:  some studies had been made, he was told, but the manager concerned could not remember the result.  

       Phil Condit became CEO of Boeing in 1997. Condit explained that the company’s preoccupation with meeting ‘technological challenges of supreme magnitude’ would have to change.  Under Condit’s regime ‘unit cost, ROI, shareholder return are  the measures by which you’ll be judged’.  That’s a big shift.  But it was Allen’s company which created bucket loads of shareholder value:  Condit’s did not. 

       When John Reed and Sandy Weill were briefly joint CEOs of Citigroup, Reed gave a visiting journalist a lengthy description of his objectives: ‘the model I have is of a global consumer company that really helps the middle class’.  He was abruptly interrupted by Weill: ‘my goal is increasing shareholder value’.  Weill forced Reed out, but as reputational scandals assailed Citigroup the shaken dealmaker was forced to acknowledge that ‘we must be conscious of a broader purpose than simply delivering profits’.  Weill was replaced by the lawyer Chuck Prince, but to little avail:  within a decade of the Citicorp/Travelers merger, almost all shareholder value in the business had been destroyed.

       But surely you must do better if you set out to maximise something – happiness, wealth, profit – than if you don’t?   The surprising answer to that question is no.  For many years, people thought the implication of evolution – the survival of the fittest –was that self-interested behaviour not only pays, but drives out all other behaviour.  Richard Dawkins’s famous metaphor of ‘the selfish gene’ is sometimes interpreted in this way.  But this is a misunderstanding.  Genes are not selfish – genes have no motivation at all.  The gene achieves what an all-knowing selfish designer would achieve, obliquely,  by a process of experimental and incremental response. 

Few responses seem more direct than the reflex that pulls our hand away from a hot stove.  But the process that nature and nurture equipped us with is oblique.    We pull our hand away because it hurts, probably even before it hurts, because we know that it will hurt.  If we know the stove is hot we will avoid the painful experiences in the first place.  

If we think about it, we recognise that we will suffer serious injury unless we pull our hand away.  But we don’t actually have that thought, and that isn’t why we remove our hand:  yet the reason we pull our hand away is, in a sense, the prospect of injury. This is the complex paradox involved in obliquity. Pain is an evolved capacity which enables us to avoid or reduce damage to their bodies by forcing them to withdraw from threatening situations.  Pain is an uncalculated reaction which works more effectively than a considered response and inability to experience pain a life-threatening condition.

Gary Klein has studied the expertise of people like paramedics and fire-fighters with exceptional practical skills.  The expertise of these people is evidenced by their effectiveness and the respect of their colleagues.  One of Klein’s experiments involved showing videos of paramedics in action – some novice, some expert – to various groups of observers.  He discovered that lay people were more successful at distinguishing the novices from the professionals than were teachers of paramedic skills, who monitored adherence to the rules they taught.  The teachers saw that adherence more often in the novices. 

The professionals looked knowledgeably for directness and could not easily recognise the success of obliquity.  That doesn’t mean the rules were useless – they were essential to learning.  Only when you know the rules so well that they are second nature can you do without them.  When you have learnt the direct solution, you can – and should – adopt oblique approaches.  The general public, by contrast, didn’t know or care whether the practitioners they observed were following the rules or not.  Lay people valued decisiveness and effectiveness and these were the qualities they saw in the most successful paramedics.

In the same way, novice chess players are taught simple heuristic rules – which exchanges of material should be accepted and which rejected.  Novice chess players often lose because they make mistakes and don’t apply these basic rules.  But novices often lose because they do apply these basic rules.  A more skilful chess player generally follows the rules, but occasionally breaks them.  An entry level chess computer never makes mistakes in applying the rules but, like a novice chess player, is easy to beat.  Practised obliquity routinely wins against disciplined directness.  When computers came into use in the 1950s, it was assumed that chess was an easy problem for them.  It wasn’t.   It was forty years before Deep Blue defeated Gary Kasparov, the world champion, and today the most sophisticated chess computers, programmed with the knowledge and experience of Grand Masters, are about as good as the best human players

            We often describe reactions the judgements of an expert chess player or paramedic or our response to pain as intuitive or instinctive.  Malcolm Gladwell famously describes the allegedly fake Getty kouros – a Greek statue, expensively purchased and authenticated by careful science, which some art experts immediately perceived as a fake.  Gladwell emphasises the speed of their judgment – Blink. 

            But the speed of expert judgment isn’t the main point.  The main point is that there is such a thing as expert judgment.  If I asserted that the kouros was a fake, no one would be interested.  The people who suspected it was a fake were established authorities, whose skill and expertise had been developed over many years and who had earned respect for their previous opinions and judgments.  Paramedics are good at what they do not only because they have exceptional talents but because they have trained for many years.    The capabilities of the art expert, like the skills of the paramedic,  are real and verified and if we call these things instincts and intuitions we fail to acknowledge that, they are finely honed, well developed skills. The intuition that Nazi Germany was endangered by a Jewish-Bolshevik conspiracy was worthless because it had no basis in evidence or experience and there was nothing to suggest that the holders of these views had been right about similar issues in the past.  There is a large difference between the voice of expertise and voices in the air.

Evolution has given us the pain response because evolution has a better sense of what is good for us than we do ourselves.  The calculations are too complex, and we do not know enough about how our bodies work.  We simply lack the information that a computational solution would require.   

The skill of problem solving frequently lies in the interpretation and reinterpretation of objectives.  Many great achievements are of this kind.  Alexander Graham Bell’s invention of the telephone, like Akio Morita’s creation of the Sony Walkman and Steve Jobs’ reinterpretation of Morita’s idea in the iPod, were solutions to problems people did not know they had.  Henry Ford reportedly said that if he had asked his customers what they wanted, they would have said a better horse.

       The success of the physical sciences has encouraged us to believe there might be a science of decision making:  a scientific procedure which would, if undertaken sufficiently carefully, lead every conscientious person to the same answer.  Political and personal disputes could then be resolved by the collection of evidence and the pursuit of rational discourse.  The distinction of the great business leader, the measure of financial acumen, would rest only in the ability to arrive at the objectively right answer faster than other people.  I call this concept of scientific decision-making Franklin’s rule, after the great American polymath who set it out in a famous letter to the English scientist, Joseph Priestley.   Franklin explained that one should make decisions by listing pros and cons, and attaching weights to each item on the list:  he called the process moral algebra.

       But Franklin knew perfectly well that people – including Franklin himself – did not really make decisions this way.  He went on to observe how ‘convenient a thing is it to be a reasonable person, since it enables one to find or make a reason for everything one has a mind to do’.   This is Franklin’s Gambit – the process, so common in business and politics, of constructing elaborate rationalisations of decisions which have already been made on quite different grounds.  The fortunes of consultants have been made on the basis of Franklin’s Gambit.

       The mistake arises because we believe, wrongly, that we should really be applying Franklin’s Rule even if in reality we do not.  But there is not, and will not be, a decision science.  We do not solve problems in the way the concept of decision science implies because we can’t.  Our objectives are typically imprecise, multi-faceted, and change as we progress towards them.  Our decisions depend on the responses of others, and on what we anticipate these responses will be.  The world is complex, imperfectly known, our knowledge of it is incomplete, and these things will remain true however much we learn and however much we analyse the environment.

So the achievement of the great statesman is not to reach the best decision fastest but to mediate effectively among competing views and values.  The achievement of the successful business leader is not to articulate and realise a comprehensive vision of the economy and industry but to continuously match the capabilities of the firm to the changing market environment.  The test of financial acumen is not to predict the future – you can’t but to navigate successfully through irresolvable uncertainties. The writings of Buffett and Soros are signally distinguished from those of other investment gurus by their ready acknowledgement of the limitations of their knowledge.

       When we solve complex problems successfully we solve them obliquely.  Our approaches are iterative and adaptive.  We make our choices from a limited range of options.  Our knowledge of the relevant information  and of what information is relevant, is imperfect.  Different people will make different judgments in the same situation, not just because they have different objectives, but because they observe different options, select different information, and assess that information differently:  and even with hindsight it will often not be possible to say who was right and who was wrong.  In a necessarily uncertain world, a good decision doesn’t necessarily lead to a good outcome, and a good outcome doesn’t necessarily imply a good decision, or a capable decision maker. The notion of a best solution may itself be misconceived. 

       The political scientist, Philip Tetlock, studied the political predictions of experts over two decades.  He made use of Tolstoy’s distinction, made famous by Isaiah Berlin, between the hedgehog – which knows one big thing – and the fox, who knows many little things.  The hedgehog approaches problems, however, complex, directly;  the eclectic fox’s approach is oblique.  Tetlock found that the foxes were more often right, but the hedgehogs received more popular acclaim.  We make better decisions if we are endlessly adaptive, recognise the limits of our knowledge, and range widely in our sources of information and opinion:  but we want to describe the world in terms of simple narratives and clear visions.

It is hard to overstate the damage recently done by people who thought they knew more about the world than they did.  The managers and financiers who destroyed great businesses in the unsuccessful pursuit of shareholder value.  The architects and planners who believed that buildings could be designed from first principles, that vibrant cities could be drawn on a blank sheet of paper, and that expressways should be driven through the hearts of communities.  The politicians who believed they could improve public services by the imposition of multiple targets.  The gravest cases of bad public decision making of the last decade – the Iraq War and the credit expansion of 2003-7 were the direct result of assumed knowledge of the world by decision makers which they did not in reality possess – and who played Franklin’s Gambit in support of their mistaken judgments.

       Obliquity is the best approach whenever complex systems evolve in an uncertain environment, and whenever the effect of our actions depends on the ways in which others respond to them.  Directness is appropriate when the environment is stable, objectives are one dimensional and transparent, and it is possible to determine when and whether goals have been achieved.  And only then.