Dan Heath: Three Barriers to Upstream Thinking

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“Every system is perfectly designed to get results.” – Attributed to Paul Battleden

Dan Heath Gives credit for the inspiration for his latest book, over the river, for a parable told to the sociologist Irving Zola.

“It goes like this,” said Heath, a bestselling author and Senior Fellow at Duke University’s Case Centerbut explained Alpha Summit by CFA Institute:

“You and a friend are having a picnic by a river and you have just laid out your picnic blanket, you are preparing for a feast, when suddenly, you hear a scream from the direction of the river. You look back So a kid is taunting here and there, apparently he’s drowning.”

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Naturally, both you and his friend jump in and swim to save the baby. But when you bring the baby back to shore safely and as soon as your pulse returns to normal, you hear the baby calling for help.

“So, back you go,” Heath said. “You fish that kid. As soon as you’ve done that, you hear two screams. Now there are two kids in the river. And so begins the revolving door of the rescue.”

As the exhaustion wears off, Heath said, you see your friend swimming back to shore, emerging from the water, and walking uphill.

“You say, ‘Hey, where are you going, I can’t do all this work alone.’ And your friend says, ‘I’m going upstairs to deal with the guy who’s throwing all these kids in the river.'”

The story resonated with Heath because it depicts a problem we all deal with in every aspect of our lives, in finance and beyond, which he calls a “reaction trap.”

“We’re always chasing emergencies, we’re always putting out fires,” he said. “We respond after a bad thing happens. And we seldom take the time and dedicate the resources we need to go above and beyond and solve these problems at the root. “

But to take an upstream approach, we must first understand what puts us in that reactive, downstream crouch. What is the reason that in the illustration one picnicker keeps jumping back and another tackles the problem at its source? Heath identifies three major obstacles and explains how we can recognize and overcome them.

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1. Blindness

“You can’t fix a problem if you can’t see it.”

Few problems are so ubiquitous and inherent, they fade into the landscape or are considered unavoidable, the cost of doing business.

Heath used the example of hamstring injuries in the National Football League (NFL). When 11 players on each side of football hit each other at full speed, some suffer hamstring injuries.

For the New England Patriots, that added 22 such injuries in one season. It was too much for him to stay competitive. He needed a fresh approach and a fresh approach, so he hired Marcus Elliott, MD, to assess the issue.

Elliot saw things differently. These diseases were not “inevitable” but were the result of poor training and muscle imbalances. In the end, it was clear. The lineman weighing 300 pounds went through the same off-season training regimens as the Wiry wide receiver. which needed to be changed.

But Elliot went even further. Not only do different positions require different protocols, but each individual player requires a unique individual approach. “Some humans have quads that are so strong that they actually disrupt the functioning of the system,” Heath said. “In other wide receivers one hamstring is going to be a little stronger than the other and that creates an imbalance.”

As Elliot sought to implement his new system, he was greeted with considerable skepticism. His approach went against football conservatism. But the season after adopting Elliott’s innovations, the number of hamstring injuries suffered by the Patriots dropped from 22 to three.

“The evidence was in the pudding,” Heath said. “And it produced a lot of believers.”

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2. Tunneling

“In a tunnel, there’s only one direction to go, assuming you don’t want to go back: you just have to move your way forward.”

When we’re turning to figuratively injured football players or fishing a stream of kids drowning by the river all day, it’s hard to take a step back and adopt a systematic approach. Heath calls this tunneling a term borrowed from the book of psychology, Shortage.

“There’s no broad macrovision in the tunnel, you just have to keep charging,” he said. “There is no question of strategy. There are no thorns in the way.”

And once we’re in that tunnel, it’s hard to get out. One problem leads to another and another and we spend all our time trying to put out the fire. “You reach the end of the day,” Heath said, “and you wonder, ‘Have I really done anything to advance my work or have I been chasing down problems all day?'”

We become so focused on moving forward that our first reaction to an obstacle is not to address it, to solve it, but to circle around it.

“It’s taking so much of our energy, so much of our bandwidth, just to grapple with problems, just to work around them,” he said, “that we starve ourselves of the resources it takes to prevent those problems.” were necessary. Future. ”

This almost guarantees that the problem will come up again and again.

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3. Lack of ownership

“Who will pay for what doesn’t happen?”

We all know what to do if our house is on fire: Call the fire department.

“It’s amazing how often the lines of ownership are clear for emergencies, isn’t it?” Heath saw it.

But when we ask who is responsible for saving our home from fire, the answer is a little less clear?

As residents of the house, we are the first in line. But we are not alone. What about who came up with the building code? Or selected building materials? And our neighbors and neighborhoods play a part too.

Heath said the more complex and spread out the problem is, the less likely it is to have a clear line of ownership.

“When nobody has a problem,” he said, “it probably won’t be solved.”

And this brings us back to the reaction trap:

“There’s an emergency, and then we respond to it, and then we’re inactive,” Heath said. “We don’t act anymore until the point where another emergency occurs and repeat that cycle.”

And this cycle is often encouraged by economics. Where there is an emergency, there is economic activity and financial reward.

“Someone breaks a hip, and they leave and they have surgery. The surgeon gets paid, the hospital gets paid,” Heath said. “But who gets paid to stop the hip from breaking? ?”

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“What upstream thinking demands of us is a new lens, a new perspective, the way organizations operate.”

To return to the opening quote, systems are designed for efficiency, and whenever systems provide consistent outputs, whether good or bad, according to Heath, we tend to consider systems as those that deliver those outputs. His main aim was to do it.

“How can we do a great job?” He asked. “We break it down into parts. And then we measure each of those parts on their success. Often in optimizing the part, we neglect the whole.”

If our job is to drag kids down a river or treat hamstring injuries, we’ll find ways to improve our performance. But we will not solve that problem at its core.

Feedback nets outweigh this kind of downstream thinking.

“Often in designing for efficiency in response,” he said, “we actually slow ourselves down in the process of addressing the problems that are being reacted.”

In the river story, Heath explained, there are only two places: downstream, where we’re saving children from drowning, and upstream, where our friend is disabling the cause of the problem once and for all.

“We must move on from this,” he said. “It’s actually much easier and more practical to think of downstream and upstream as a spectrum, a nearly endless spectrum.”

To explain, he points to the YMCA as a real-life parallel to Zola’s parable. Millions of kids swim at the YMCA every year. Emergencies are inevitable. But the YMCA did not take an upstream or downstream approach, it took an all-stream approach. He moved lifeguard chairs to avoid blindspots. He developed a colored wristband system to indicate a child’s swimming ability. And he attacked the source of the problem.

“The YMCA is the nation’s leading provider of learning swimming, which is a great way to prevent downstream accidents altogether,” Heath said.

And that approach goes to the core of upstream thinking.

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“Any problem that is urgent enough and important requires layers of defense to try to stop it,” he said. “The basic trap really has nothing to do with how far you go. The trap is that in the real world we spend 95% of our time here, reacting to problems.”

According to Heath, we need to retire that downstream mindset.

“We need a generation of upstream heroes,” he said, “not those who rush to save the day, but those who survive what they need to save the day.”

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All posts are the views of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of the CFA Institute or the author’s employer.


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Paul McCaffrey

Paul McCaffrey is the editor enterprising investor at the CFA Institute. Prior to this, he served as an editor at HW Wilson Company. his writings have come to the fore Financial Planning And daily finance, among other publications. He holds a BA in English from Vassar College and an MA in Journalism from the City University of New York (CUNY) Graduate School of Journalism.



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