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figuring out who should buy your business

Specializing is Overrated

For many years, I have goofed on my brother-in-law for his sports-betting hobby (habit? addiction? Hmmm). My argument is that beat reporters, columnists, and ex-players, i.e. those with direct access to locker rooms and insider info, are often at best breakeven predictors of game outcomes when picking against the spread. If they’re at .500 +/-, surely some schmo who lives in coastal Maine is set up to get clobbered by Vegas. Yet after reading Range, David Epstein’s study on the downside of specialization, I realize now the error in my logic. Turns out the deeper we burrow into a niche area, the less likely we are to factor ambiguities and contradictions. Epstein says so-called experts “cherry-pick details that fit their all-encompassing theories” and that “their deep knowledge works against them.” Important conclusions for sure. [So, with apologies, Scott: have at it. Drop a c-note on the Dolphins, go ahead and take the points, brother. I’m sure you’ll win… and buy us lunch.]

A sure sign of a good business book is a fellow best-selling author (in this case, Malcolm Gladwell) endorsing it (on the front cover, no less) even though he’s ripped within for a concept (hello, 10,000-hour rule) that helped make him famous. Whereas Outliers convinced the masses to pursue mastery through intensive, deliberate practice, Epstein’s book cautions against that approach, saying its effectiveness is almost entirely determined by the environment in which it’s performed. Mastering a specific, technical skill in a “kind” domain – one in which there are clear & complete rules, repetitive patterns, and immediate feedback – is one thing yet should often be deemed a thing of the past because, well, it’s become a wicked world out there in the Information Age. He writes, “The human tendency to rely on experience of familiar patterns can backfire horribly.” For example, when addressing real-world business problems, consultants hatched in single-loop learning environments can net ineffective action plans due to bad cases of something called cognitive entrenchment. Sounds pretty contagious, no?

Moreover, if you hire, manage, and/or coach others, consider the impact of future automation on the workforce. While a robot can perform a constrained, repetitive task, it (gulp, we hope) cannot “take conceptual knowledge from one problem or domain and apply it in an entirely new one.” The key is broad training which leads not only to a better performing employee but a more loyal one as well. In the so-called war for talent during an era where a large swath of those 55+ are opting for early retirement (due to Covid, burnout, or because apparently equities & home values will forever grow to the sky), investing in your workers’ general education is motivating, even exciting. People claim to hate change and yet when they work for a company with leaders who endeavor to see the future and ready everyone for it, adaptation creates a win for all involved. Discuss it, debate it, embrace it. Or you can always just hold the door open as your folks leave one by one, single file to go work for someone who will.

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