Tim Harford doesn’t disappoint readers with his latest book ‘Messy’

By: |
Updated: December 25, 2016 7:39:36 AM

Tim Harford joins the popular mood that’s gaining momentum, of being more chaotic, less fast, of being more discordant with the times we live in

group-lThe author takes us through the process of drawing up ‘incentives’ for human beings, as there is always a tendency to game the system.

Messy’ is the propagation of the dictum that when things are in disorder, they make you work the best. While all of us like to walk the known path, messiness brings out the best in you, as it forces you to innovate. This is the basic thrust of Tim Harford in this book, quite appropriately titled Messy, which we in India would call jugaad.

When you pick up any book by Harford, starting from Undercover Economist to Adapt, you expect to read unique approaches to common issues, with a lot of psychology and reality thrown in. He does not disappoint the reader in his latest book too. The section on ‘life’ is appealing and very typical of Harford where he gets into the finer points of online dating and makes some very pertinent points. For instance, he argues that when an algorithm concludes that two people are matched and they team up successfully, the mechanism often acts as a placebo rather than correctly identifying a true match. But it works, as both sides believe that their match is the
best just because the computer said so.

There is another section on ‘automation’ where Harford takes us through the dangers of having things automated in life, as we cease to think and leave everything to technology. But what when technology fails? Here, he gives an example of a plane flying across the Atlantic that is on auto pilot mode for most of the time, thus making the crew redundant. This ‘Air France’ Airbus flight develops a snag, which makes it lose height, and the pilots are unable to figure out what to do. None of their responses are right and the plane crashes into the ocean. It is the humdrum of being dependent on technology that comes in the way in which we think and respond.

In the same context, Harford shows how ‘creativity’ is engendered by chaos and gives examples of musicians who come up with great performances under adversity, which is what we see in our own lives. Therefore, we need some sort of disruption to ensure that we become more creative. He believes that some of the best ideas germinate from a crisis—howsoever small it may be, even something like the keys of a piano malfunctioning.

The author takes us through the process of drawing up ‘incentives’ for human beings, as there is always a tendency to game the system. Bus drivers who have to meet targets measured in terms of ‘being on time’ could skip some stops or change their routes to ensure that they do so. Ambulances may change their way if they realise that they are not able to reach the patient in the pre-defined time limit. Hence, there is a thin line between providing incentives and the same becoming a perverse incentive. A glaring example is the famous assignation of risk weights under Basel II, which gave lower risk weights to less risky assets. Banks took advantage here and invested heavily in Greek bonds, which offered high rates, as they were really of junk status, but were still considered to be government bonds and had lower risk weight attached.

The takeaway here is that once we have targets, it makes the participants concerned look for distortion. By making such investments, banks were able to do well with the Federal Reserve stress tests. Volkswagen was able to cheat through all the emission tests—a goal for all automobile manufacturers—but ultimately got caught. Therefore, every time there is a scheme of incentives, it is essential to ensure that they do not degenerate into perverse incentives.

At another level, Harford also looks into the relationship between output from employees and the quality of the ‘workspace’. Steve Jobs, for instance, liked the idea of serendipitous interactions, where workers almost get forced to meet each other without any planning while probably walking to the coffee machine. Further, Harford’s research shows that workers like places where they have a say in its layout. Hence, if they are allowed to choose the décor, which could be as simple as arrangement of plants and paintings, they would feel empowered. But if these basic choices are decided by the superiors, which happens in most organisations, it’s a sign of disempowerment and workers feel less attached to the company they work with.

Another attribute picked up and deliberated upon is ‘winning’, where the author gives the story of then German general Erwin Rommel, who always managed to outwit the allies because of his uncanny way of surprising them every time. At the business level, he speaks of Jeff Bezos of Amazon and Donald Trump in politics, though the narrative is more on the latter. The approach of Amazon to retailing is an amazing story that involved several calculated risks being taken to ensure that the company stayed ahead even though there were several reverses, especially when its ‘third party tie-ups’ flopped. But the brand Amazon stands for power and strength.

In this book, Harford emphasises how there are close connections between creativity and mess, and unexpected changes in plans or unfamiliar people and events generate both new ideas and opportunities.

Using real-life examples, he is able to illustrate how messiness helps in bringing about better solutions and backs his arguments with psychoanalysis. At the end of the day, it is the human mind that matters. His belief is that people think harder when they face uncomfortable situations and are able to come up with better ideas and solutions. If the reader looks back at almost all products or services that have made a difference, he/she will realise that it is a case of making the most from an opportunity that resides in the chaos that envelopes us today. This is the message to be taken from this book.

Madan Sabnavis is chief economist, CARE Ratings

For latest coverage on Maharashtra Assembly Election 2019 and Haryana Assembly Election 2019, log on to financialexpress.com. We bring you full coverage of Assembly Election 2019 on Financial Express, stay tuned for latest election updates.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.