Backward Thinking

Backward Thinking

A lot of success in life and success in business comes from knowing what you really want to avoid - like early death and a bad marriage.

• Charles Munger

Avoid what causes the opposite of what you want to achieve.

"You must always invert," said the 19th Century German mathematician Karl Jacobi when asked the secret of his mathematical discoveries. Whenever we try to achieve a goal, solve problems, predict what is likely to happen or likely to be true or false, we should think things through backwards.

At the weekly meeting with his managers, John asked: "What actions could our company take to destroy as much value as possible in as short time as possible?" "Treat the employees badly. Reward bad work. Don't appeal to the employee's self interests but to a goal no one understands. Don't inform people what the company stands for, what rules apply, and the consequences for breaking them. Make sure people don't know their areas of responsibility. Put the right person in the wrong place. Don't let people know if they achieve a goal. Everything should be impossible to measure. Never tell people why something should be done.

Surround the CEO with confused, unmotivated subordinates. Give key customers reasons to be angry. Late and wrong deliveries, delays, and arrogance will help. Let the customers associate the business with misery and make sure that this feeling gets reinforced at every contact with the company."

Thinking backwards, we can determine what actions must be avoided. As Charles Munger says, "If you were hired by the World Bank to help India, it would be very helpful to determine the three best ways to increase man-years of misery in India - and, then, turn around and avoid those ways."

Instead of asking how we can achieve a goal, we ask the opposite question: What don't I want to achieve (non-goal)? What causes the non-goal? How can I avoid that? What do I now want to achieve? How can I do that? For example, instead of searching for how John and Mary can improve their marriage, they ask: "What qualities will destroy our marriage?" One quality is dishonesty. They then turn the question around again: "How can we improve our marriage?" Be honest.

Charles Munger illustrates how incentives can encourage destructive behavior:

Let's say you have a desire to do public service. As a natural part of your planning, you think in reverse and ask, "What can I do to ruin our civilization?" That's easy. If what you want to do is to ruin your civilization, just go to the legislature and pass laws that create systems wherein people can easily cheat. It will work perfectly. Take the workers' compensation system in California. Stress is real. And its misery can be real. So you want to compensate people for their stress in the workplace. It seems like a noble thing to do. But the trouble with such a compensation practice is that it's practically impossible to delete huge cheating. And once you reward cheating, you get crooked lawyers, crooked doctors, crooked unions, etc. participating in referral schemes. You get a total miasma of disastrous behavior. And the behavior makes all the people doing it worse as they do it. So you were trying to help your civilization. But what you did was create enormous damage, net. So it's much better to let some things go uncompensated - to let life be hard - than to create systems that are easy to cheat.

"Don't think about the color red!"

If someone told you not to think of the color red, you might automatically think of that color. Why? Because in order to know what not to think about, your brain must first think about it. When John is on a golf course trying to hit over a water hazard in front of the green, he doesn't say to himself, "I don't want to hit the ball in the water," but instead "I want to hit the ball on the green." So when we tell people what to avoid, we should end with what we want them to achieve.

Study errors.

Marcus Porcius Cato wrote: "Wise men profit more from fools than fools from wise men; for the wise men shun the mistakes of the fools, but fools do not imitate the successes of the wise."

To reduce mistakes, we should study failures with severe consequences. Both in business and in life. We should look at their causes over time and see if they are unchanged.

Often we learn more from understanding why something doesn't work than from why it does. The account also describes dramatic error-story training as an effective method of learning. Errors are salient and memorable. Studying errors encourages effortful thinking and improves our capacity to deal with change and new or unusual situations. Ask: Why did that happen? Why do certain businesses lose money or fail? Why do smart people engage in foolish behavior? Why do certain accidents happen? What was the mistake that caused bad performance? What circumstances were present? What's the lesson?

When we know this, we should ask: What people or businesses are doing things that history has proven causes failure? How can we best avoid what we don't want to happen? How can we create the best conditions to avoid mistakes? How can we prevent causes that can't be eliminated? How can we limit the consequences of what we want to avoid? How can we limit the probability of what we want to avoid?

Organize the study of errors with a table:

What to avoid	Cause	Antidote
What were the mistakes?	Why did they happen? What were the major risk factors?	What can be eliminated or prevented?
How did specific errors develop?	What contributing factors or broader ideas help explain them?	How can we create better conditions for decisions?

Turn the negative into an advantage.

In 1796, British physician Edward Jenner tested cowpox inoculation as protection against smallpox. He had noticed that milkmaids who had contracted cowpox seemed protected against smallpox, and inoculated a boy using material from a milkmaid’s lesions. The example starts with an observation about protection to investigate how it might be reproduced.

Begin with the end in mind

In the 4th Century the Greek mathematician Pappus of Alexandria wrote: "Let us start with what is being seeked and assume that we already found it." Assume we've achieved our goal, then ask: What was the purpose? Was this what I wanted? If so, from which earlier position do I get there? What is needed to achieve this? Then work backward to the beginning. Working backward can make it easier to see whether and how something may work. An example of this is retrospective disease studies. Researchers study the disease then work backward to see what prior conditions are associated with it.

"We need discipline in schools. "

What would happen under the alternative? Considering a school without discipline may help clarify what discipline is meant to achieve. Undesirable consequences of an alternative do not, by themselves, prove the original claim true.

When we believe we have arrived at the right judgment, we should consider what could cause the opposite of our prediction -what we don't want to happen. Suppose we make a personality judgment and conclude that the individual is of good character and we want to enter a relationship. Ask: What can ruin this relationship? What causes me to misjudge character?

Other uses of backward thinking are: Study evidence that implies the opposite of what is normal and ask "why." Use "negative" rules - tell people what they can't do. Practice zero base thinking - start with a clean sheet of paper and ask: If we weren't already doing what we do, how can we best achieve our goal?

Thinking backward helps identify a route to avoid; follow it by specifying the action you want to take.