A Technique for Producing Ideas

In the foreword to James Webb Young’s book, A Technique for Producing Ideas, Keith Reinhard asks “How can a book first published in the 1940s be important to today’s creative people on the cutting edge?"

The answer lies in the question that inspired Webb’s book, “How do you get ideas?"

Webb argues that the production of ideas is a process, just like production of cars.

… the production of ideas, too, runs on an assembly line; that in this production the mind follows an operative technique which can be learned and controlled; and that its effective use is just as much a matter of practice in the technique as is the effective use of any tool.

The formula is simple but not easy.

First, the formula is so simple to state that few who hear it really believe in it.

Second, while simple to state, it actually requires the hardest kind of intellectual work to follow, so that not all who accept it use it.

That’s the same reason Warren Buffett has no problem sharing the secrets of investing in his shareholder letters (I recommend the real thing but if you’re pressed for time you could do worse than the Cliff Notes version.)

Training the mind requires that you learn principles and method.

In learning any art the important things to learn are, first, Principles, and second, Method. This is true of the art of producing ideas.

Particular bits of knowledge are nothing, because they are made up of what Dr. Robert Hutchins once called rapidly aging facts. Principles and method are everything.

[…]

So with the art of producing ideas. What is most valuable to know is not where to look for a particular idea, but how to train the mind in the method by which all ideas are produced and how to grasp the principles which are at the source of all ideas.

Echoing Einstein, Webb believed that the key to creativity could be found in new combinations of old things.

With regard to the general principles which underlie the production of ideas, it seems to me that there are two which are important.

The first of these has already been touched upon in the quotation from Pareto: namely, that an idea is nothing more or less than a new combination of old elements.

This is, perhaps the most important fact in connection with the production of ideas.

[…]

The second important principle involved is that the capacity to bring old elements into new combinations depends largely on the ability to see relationships.

Here, I suspect, is where minds differ to the greatest degree when it comes to the production of ideas. To some minds each fact is a separate bit of knowledge. To others it is a link in a chain of knowledge. It has relationships and similarities. It is not so much a fact as it is an illustration of a general law applying to a whole series of facts.

[…]

Consequently the habit of mind which leads to a search for relationships between facts becomes of the highest importance in the production of ideas.

Young expands on the notion that combinations, and thus relationships and connections between ideas, are the key.

An idea is nothing more nor less than a new combination of old elements [and] the capacity to bring old elements into new combinations depends largely on the ability to see relationships. The habit of mind which leads to a search for relationships between facts becomes of the highest importance in the production of ideas.

The process he advises involves 5 steps.

While we will all be familiar with each individual step, it is more important to recognize their relationship and “grasp the fact that the mind follows these five steps in definite order."

1. Gather Raw Material

Gathering raw material in a real way is not as simple as it sounds. It is such a terrible chore that we are constantly trying to dodge it. The time that ought to be spent in material gathering is spent in wool gathering. Instead of working systematically at the job of gathering raw material we sit around hoping for inspiration to strike us. When we do that we are trying to get the mind to take the fourth step in the idea-producing process while we dodge the preceding steps.

The materials which must be gathered are of two kinds: they are specific and they are general.

Part of this is what you set out to do when you create an idea and part of it is a life-long curiosity.

“Before passing on to the next step there are two practical suggestions I might make about this material-gathering process."

The first is that if you have any sizable job of specific material gathering to do it is useful to learn the card-index method of doing it.This is simply to get yourself a supply of those little 3 X 5 ruled white cards and use them to write down the items of specific information as you gather them. If you do this, one item to a card, after a while you can begin to classify them by sections of your subject. Eventually you will have a whole file box of them, neatly classified.

…

The second suggestion is that for storing up certain kinds of general material some method of doing it like a scrapbook or file is useful.

You will remember the famous scrapbooks which appear throughout the Sherlock Holmes stories, and how the master detective spent his time indexing and cross-indexing the old bits of material he gathered there.

2. The Mental Digestive Process

What you do is to take the different bits of material which you have gathered and feel them all over, as it were, with the tentacles of the mind. You take one fact, turn it this way and that, look at it in different lights, and feel for the meaning of it. You bring two facts together and see how they fit. What you are seeking now is the relationship, a synthesis where everything will come together in a neat combination, like a jig-saw puzzle.

3. Unconsciously Process

Drop the whole subject and put it out of your mind and let your subconscious do its thing.

It is important to realize that this is just as definite and just as necessary a stage in the process as the two preceding ones. What you have to do at this time, apparently, is to turn the problem over to your unconscious mind and let it work while you sleep.

4. A-Ha

Now, if you have really done your part in these three stages of the process you will almost surely experience the fourth.

Out of nowhere the Idea will appear.

It will come to you when you are least expecting it — while shaving, or bathing, or most often when you are half awake in the morning. It may waken you in the middle of the night.

5. The Final Stage

It requires a deal of patient working over to make most ideas fit the exact conditions, or the practical exigencies, under which they must work. And here is where many good ideas are lost. The idea man, like the inventor, is often not patient enough or practical enough to go through with this adapting part of the process. But it has to be done if you are to put ideas to work in a work-a-day world.

Do not make the mistake of holding your idea close to your chest at this stage. Submit it to the criticism of the judicious.

When you do, a surprising thing will happen. You will find that a good idea has, as it were, self-expanding qualities. It stimulates those who see it to add to it. Thus possibilities in it which you have overlooked will come to light.

Still curious? Read A Technique for Producing Ideas.

Seneca on Gathering Ideas And Combinatorial Creativity

“Combinatory play," said Einstein, “seems to be the essential feature in productive thought."

Ruminating on the necessity of both reading and writing, so as not to confine ourselves to either, Seneca in one of his Epistles, advised that we engage in Combinatorial Creativity — that is, gather ideas, sift them, and combine them into a new creation.

We should follow, men say, the example of the bees, who flit about and cull the flowers that are suitable for producing honey, and then arrange and assort in their cells all that they have brought in; these bees, as our Vergil says,

Pack close the flowing honey,

And swell their cells with nectar sweet.

It is not certain whether the juice which they obtain from the flowers forms at once into honey, or whether they change that which they have gathered into this delicious object by blending something therewith and by a certain property of their breath. For some authorities believe that bees do not possess the art of making honey, but only of gathering it … Certain others maintain that the materials which the bees have culled from the most delicate of blooming and flowering plants is transformed into this peculiar substance by a process of preserving and careful storing away, aided by what might be called fermentation,— whereby separate elements are united into one substance.

But I must not be led astray into another subject than that which we are discussing. We also, I say, ought to copy these bees, and sift whatever we have gathered from a varied course of reading, for such things are better preserved if they are kept separate; then, by applying the supervising care with which our nature has endowed us,— in other words, our natural gifts,— we should so blend those several flavors into one delicious compound that, even though it betrays its origin, yet it nevertheless is clearly a different thing from that whence it came.

Montaigne, perhaps echoing Seneca, reasoned that we must take knowledge and make it our own, Seneca comments:

We must digest it; otherwise it will merely enter the memory and not the reasoning power. Let us loyally welcome such foods and make them our own, so that something that is one may be formed out of many elements, just as one number is formed of several elements whenever, by our reckoning, lesser sums, each different from the others, are brought together. This is what our mind should do: it should hide away all the materials by which it has been aided, and bring to light only what it has made of them. Even if there shall appear in you a likeness to him who, by reason of your admiration, has left a deep impress upon you, I would have you resemble him as a child resembles his father, and not as a picture resembles its original; for a picture is a lifeless thing.

The Loeb Classic Library collection of Seneca’s Epistles in three volumes (1-65, 66-92, and 92-124), should be read by all in its entirety. Of course, if you don’t have time to read them all, you can read a heavily curated version of them.

(Image source)

Building Blocks and Innovation

Most innovation comes from combining well-known, well-established, building blocks in new ways.

John Holland, a professor of two vastly different fields—psychology and engineering—at the University of Michigan, lectures frequently on innovative thinking.

According to Holland there are two steps to innovation. The first step is to try and find the right building blocks—the basic knowledge. Second, is the use of metaphors to relate understanding.

Holland is focused on innovation, but many readers of Farnam Street will recognize the first step—acquiring the building blocks—as the process for acquiring worldly wisdom.

Like us, Holland wants to connect well-known and well-established ideas from multiple disciplines in new ways to solve problems.

In our case, the basic building blocks are the big ideas in each major discipline. While this seems daunting, luckily, according to Charlie Munger “80 or 90 important models will carry about 90% of the freight in making you a worldly wise person."

Domain Dependence and Linking

It’s important that you can link these models together and recognize them outside of the domain they are presented. Many people, for instance, don’t link the supply and demand from economics and equilibrium from physics. Yet in many ways they are the same thing. If you can’t recognize the forces at play outside of the system in which you learned about them, you are domain dependent.

In Antifragile, Nassim Taleb writes:

We are all, in a way, similarly handicapped, unable to recognize the same idea when it is presented in a different context. It is as if we are doomed to be deceived by the most superficial part of things, the packaging, the gift wrapping.

If you don’t have a basic understanding of each of the major models you won’t be able to link them together. And if you can’t link them together, you’re going to go through life like a one-legged man in an ass-kicking contest.

Construction of a Model

According to Holland, “the construction of a mental model … closely resembles the construction of a metaphor:"

1. There is a source system with an established aura of facts, interpretation and practice.
2. There is a target system with a collection of observed phenomena that are difficult to interpret or explain.
3. There is a translation from source to target that suggests a means of transferring inferences for the source into inferences for the target.

Seeing new connections requires models and metaphors. Holland continues:

For most who are heavily engaged in creative activities, be it in literature or the sciences, metaphor and model lie at the center of their activities. In the sciences, both the source and the target are best characterized as systems rather than isolated objects. … In the sciences, decisions about which properties of the source system are central for understanding the target, and which are incidental, are resolved by careful testing against the world. As a result of testing and deduction, a well-established model in the sciences accumulates a complicated aura of technique, interpretation, and consequences, much of it unwritten. One physicist will say to another “this is a conservation of mass problem" and immediately both will have in mind a whole array of knowledge associated with problems modeled in this way.

“The essence of metaphor," write Mark Johnson and George Lakoff in their book Metaphors We Live By, “is understanding and experiencing one kind of thing in terms of another."

Holland posits that metaphors help us translate ideas into models, which form the building blocks of innovative thinking.

“In the same way that a metaphor helps communicate one concept by comparing it to another concept that is widely understood," Robert Hagstrom writes in Investing: The Last Liberal Art, “using a simple model to describe one idea can help us grasp the complexities of a similar idea. In both cases we are using one concept (the source) to better understand another (the target). Used this way, metaphors not only express existing ideas, they stimulate new ones."

Metaphor and Innovation

From the Credit Suisse Thought Leader Forum:

To understand the problems in any discipline, it is necessary to have deep knowledge in that discipline. To resolve those problems, it is often necessary to look at the problem through the filters of a different and often distant discipline. The simplest analogy to the phenomenon is simply perspective. It is very difficult to understand, say, the traffic patterns of a city if you are stuck in your car at rush hour. With the distance provided by a traffic helicopter, however, it is much easier to see the major thoroughfares, the bottlenecks and the overall dynamics of the traffic system. The shift in vantage point offers better understanding and new insights for your strategy. For more abstract challenges, the use of metaphor serves the same purpose as distance in the traffic example. If we are stuck on the challenge of distribution in a global manufacturing company, for example, it may be useful to apply models from other disciplines as metaphors. The model that we have developed and used for our distribution system has been quite effective over the years, but we just cannot seem to resolve some particular challenge. Perhaps we can learn something from other kinds of distribution systems. How does an ant colony collect and distribute its resources? How does the human body manage its circulation and processing of nutrients and wastes?

Three Keys to effectively applying metaphors

There are three keys to effectively applying metaphors to achieve insight and innovation. First, you must develop a deep understanding of the metaphorical system. You will gain no new insights if you look at the human circulatory system and say, “Aha! The brain tells the rest of the body where to send things!" If you draw conclusions too quickly, then more than likely you have only recreated your existing model of distribution systems – you are seeing the human body’s circulation system as if it were the distribution system of a global manufacturing firm. If you invest the time and effort to understand this complex new system on its own merits, then you might discover something interesting about your own discipline. For instance, the human circulatory system is one of several overlapping hierarchical systems that allow the human body to grow, heal, change and yet maintain homeostatic balance. How do those systems overlap? How are the priorities of those different systems balanced? What overlapping systems exist in our global manufacturing firm, and how do they interact? An in-depth study of a new complex system should force you to ask new questions about your own, seemingly familiar system.

The second key to applying metaphors is to recognize the value of the cognitive leap. As you map the models from one system onto another, the fit will never be perfect. Our global manufacturing firm is not a human body. Therefore the solution to our challenge will not lie in our suddenly believing this to be true. Instead, the solution will lie one or two steps away. As we look at the human circulatory system, we will encounter questions and tangential thoughts. “What performs the function of ‘hormones’ in our organization?" We will not, of course, implement a system of complex chemical exchanges in our organization, but this might lead us to think about our communication systems or decision-making metrics in a new way.

The final key is often the most frustrating for managers — only a very few of the ideas that this process produces will be highly valuable. Some of the ideas will be useless. Many of the ideas will be interesting but impractical or irrelevant. Other ideas will serve as useful, incremental improvements to your system. But only a rare few of these ideas will be truly revolutionary. The secret is the same in any game of statistics – you have to try large numbers of these metaphors for the big ideas to hit. These ideas are the outliers, not the norm, and while metaphor can push your thinking towards the innovative, no process can guarantee that your new ideas will be both different and effective. Many managers are willing to try this approach once or twice, and give up when it does not immediately return impressive results. … In order to discover great innovations, you must engage regularly in the search and recognize that most of your discoveries will have either marginal or moderate value. Creative combination is a process that increases your odds of discovering breakthrough innovations, but it cannot guarantee success. This is a tool, not a silver bullet.

While the audio quality leaves much to be desired, Holland gives an interesting TEDx talk introducing a lot of these ideas:

Steve Jobs on Creativity

“Originality depends on new and striking combinations of ideas."

— Rosamund Harding

In a beautiful article for The Atlantic, Nancy Andreasen, a neuroscientist who has spent decades studying creativity, writes:

[C]reative people are better at recognizing relationships, making associations and connections, and seeing things in an original way—seeing things that others cannot see. … Having too many ideas can be dangerous. Part of what comes with seeing connections no one else sees is that not all of these connections actually exist.

The same point of view is offered by James Webb Young, who many years earlier, wrote:

An idea is nothing more nor less than a new combination of old elements [and] the capacity to bring old elements into new combinations depends largely on the ability to see relationships.

A lot of creative luminaries think about creativity in the same way. Steve Jobs had a lot to say about creativity.

In I, Steve: Steve Jobs in His Own Words, editor George Beahm draws on more than 30 years of media coverage of Steve Jobs in order to find Jobs’ most thought-provoking insights on many aspects of life and creativity.

In one particularly notable excerpt Jobs says:

Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences or they have thought more about their experiences than other people. Unfortunately, that’s too rare a commodity. A lot of people in our industry haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have.

The more you learn about, the more you can connect things. This becomes an argument for a broad-based education. In his 2005 commencement address to the class of Stanford, Jobs makes the case for learning things that, at the time, may not offer the most practical benefit. Over time, however, these things add up to give you a broader base of knowledge from which to connect ideas:

Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me.

While education is important for building up a repository for which you can connect things, it’s not enough. You need broad life experiences as well.

I, Steve: Steve Jobs in His Own Words is full of things that will make you think.

Steve Jobs on Creativity

“Originality depends on new and striking combinations of ideas."

— Rosamund Harding

In a beautiful article for The Atlantic, Nancy Andreasen, a neuroscientist who has spent decades studying creativity, writes:

[C]reative people are better at recognizing relationships, making associations and connections, and seeing things in an original way—seeing things that others cannot see. … Having too many ideas can be dangerous. Part of what comes with seeing connections no one else sees is that not all of these connections actually exist.

The same point of view is offered by James Webb Young, who many years earlier, wrote:

An idea is nothing more nor less than a new combination of old elements [and] the capacity to bring old elements into new combinations depends largely on the ability to see relationships.

A lot of creative luminaries think about creativity in the same way. Steve Jobs had a lot to say about creativity.

In I, Steve: Steve Jobs in His Own Words, editor George Beahm draws on more than 30 years of media coverage of Steve Jobs in order to find Jobs’ most thought-provoking insights on many aspects of life and creativity.

In one particularly notable excerpt Jobs says:

Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences or they have thought more about their experiences than other people. Unfortunately, that’s too rare a commodity. A lot of people in our industry haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have.

The more you learn about, the more you can connect things. This becomes an argument for a broad-based education. In his 2005 commencement address to the class of Stanford, Jobs makes the case for learning things that, at the time, may not offer the most practical benefit. Over time, however, these things add up to give you a broader base of knowledge from which to connect ideas:

Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me.

While education is important for building up a repository for which you can connect things, it’s not enough. You need broad life experiences as well.

I, Steve: Steve Jobs in His Own Words is full of things that will make you think.

What You Can Learn About Making Better Decisions From One of Baseball’s Greatest Hitters

Ted Williams was arguably the greatest pure hitter who ever played the game of baseball. He’s the last person to cross the magic .400 barrier. That’s exceptional. It also means he failed to get a hit 60% of the time.

How did he do it? And more importantly what can we learn from him that will help us make better decisions?

I’m not a huge baseball fan. I only read Williams book, The Science of Hitting, because Warren Buffett mentioned it in a comment on making better decisions.

I enjoyed the book much more than I thought I would.

Williams understood that an important aspect to improving the odds of making good choices is the ability to distinguish between decisions within our circle of competence and those on the outside.

The way we make decisions — our decision process — matters.

And Williams used a great process to tilt the odds in his favor.

You Need a Good Pitch

A good hitter can hit a pitch that is over the plate three times better than a great hitter with a questionable ball in a tough spot.

The first rule of hitting actually comes from a fellow baseball legend, Rogers Hornsby.

He told Williams that the single most important thing for a hitter was to get a good ball to hit.

Ever a student of the game, Williams carved the strike zone into 77 cells, each the size of a baseball.

Williams knew that swinging at balls in the best cells, the red ones, would allow him to bat pretty close to .400; deviating outside of that, and reaching for his worst spot, would reduce him to .230.

Patience would make the difference between a trip to the hall of fame and a ticket to the minors.

Our Strikezone

We all have a strike zone, this is our circle of competence. This is an area in which we are capable of understanding with a high degree of probability the relevant variables and likely outcome.

Making decisions within our circle improves the odds we’ll do well. This is our sweet spot and it’s different for all of us.

The problem is everyone wants to have a large circle. We think bigger is better. But the size of the circle is not really what’s most important.

Knowing the boundaries of our circle of competence is more important than its size. Familiarity with something is different than competence.

Charlie Munger says “It’s not a competency if you don’t know the edge of it."

And Warren Buffett, elaborating on the same topic, wrote:

“If we have a strength, it is in recognizing when we are well within our cycle of competence and when we are approaching the perimeter. Predicting the long term economics of companies that operate in fast-changing industries is simply far beyond our perimeter. If others claim predictive skills in those industries—and seem to have claims validated by the behaviour of the stock market we neither envy not emulate them. Instead,w e just stick with what we understand. If we stray, we will have done so inadvertently, not because we got restless and substituted hope for rationality."

Unlike Williams, Buffett can’t be called out on strikes if he resists pitches that are barely in the strike zone. He can, quite literally, wait for the perfect pitch. That explains why he bats pretty close to 1.0 while Williams had to settle for less.

In some decisions, such as investing, we can choose to do the same thing. We can sit around, read, and wait for the right opportunity. Most decisions, however, are not of that nature.

We simply don’t have the option to wait for the perfect pitch. We have to make decisions in an uncertain world with imperfect information.

Knowing the boundary of our aptitude, where we bat above average and where we don’t, can help guide those decisions and how we make them.

Making decisions outside of our circle of competence (i.e., we don’t know what we’re doing) is riskier than making decisions inside our circle (i.e., where we do know what we’re doing.)

Williams batting average dropped off when he swung outside his core, and so to will ours.

If we have to decide something and we know we’re not in our sweet spot, we can take steps to improve the odds of making the a better decision. Or, at the very least, acknowledge that the decision we’re making is risky; We know we’re the patsy.

Whatever decision you’re making, know where it falls in your strike zone. To the extent possible you should attempt to deal with things that you are capable of understanding.

(Editor’s Note: This is an updated article that I wrote and originally posted on The Reformed Broker.)

Decisions Under Uncertainty

“We confuse risk and uncertainty."

If you’re a knowledge worker you make decisions everyday. In fact, whether you realize it or not, decisions are your job.

Decisions are how you make a living. Of course not every decision is easy. Decisions tend to fall into different categories.  The way we approach the actual decision should vary based on category.

Here are a few basic categories that decisions fall into.

There are decisions where:

1. Outcomes are known. In this case the range of outcomes is known and the individual outcome is also known. This is the easiest way to make decisions. If I hold out my hand and drop a ball, it will fall to the ground. I know this with near certainly.
2. Outcomes are unknown, but probabilities are known.In this case the range of outcomes are known but the individual outcome is unknown. This is risk. Think of this as going to Vegas and gambling. Before you set foot at the table, all of the outcomes are known as are the probabilities of each. No outcome surprises an objective third party.
3. Outcomes are unknown and probabilities are unknown. In this case the distribution of outcomes are unknown and the individual outcomes are necessarily unknown. This is uncertainty.

We often think we’re making decisions in #2 but we’re really operating in #3. The difference may seem trivial but it makes a world of difference.

Decisions Under Uncertainty

Ignorance is a state of the world where some possible outcomes are unknown: when we’ve moved from #2 to #3.

One way to realize how ignorant we are is to look back, read some old newspapers, and see how often the world did something that wasn’t even imagined.

Some examples include the Arab Spring, the collapse of the Soviet Union, the financial meltdown.

We’re prepared for a world much like #2 — the world of risk, with known outcomes and probability that can be estimated, yet we live in a world with a closer resemblance to #3.

Read part two of this series: Two types of ignorance.

References: Ignorance: Lessons from the Laboratory of Literature (Joy and Zeckhauser).