"Accelerating Wisdom" Episode 1: How to Accelerate Expertise
Welcome to the Accelerating Wisdom Series.
- Article #1 of 8 in the Accelerating Wisdom Series.
- Guest expert: Cedric Chin. Cedric is a writer, researcher and operator whose Commoncog newsletter is dedicated to finding practical ways to accelerate business expertise. He recorded a special presentation specifically for this episode (below).
- Woo Rating: 1/10 (all Leading Edge content will have a “woo rating” reflecting how far from the current consensus worldview it is. But we will never cover topics without direct practical applications).
Welcome to the Accelerating Wisdom Series. While others obsess over Artificial Intelligence making us all obsolete, at The Leading Edge we're focused on amplifying our unique human advantages. “Accelerating” wisdom doesn’t mean finding short-cuts or “hacking” anything, it means paying deliberate attention to ideas and practices that can meaningfully improve every aspect of our lives. That’s what this series will explore.
Each episode will have a free summary article (like this one) with the key insights and an interview or lecture with the expert in each area. Expert Q&A calls, additional resources and the footnotes are available for paid members (see below). Each episode will have a recommended short-term experiment and a long-term commitment related to the content. This is to make sure we bring the benefits of these ideas and practices into our daily lives.
What do we get wrong about expertise?
Our first episode explores the practical acquisition of expertise. I haven’t encountered anyone better than Cedric Chin on this topic. Both wisdom and expertise mean knowing what’s most important at any single moment in time, even in hyper complex and dynamic environments. In the real world, this looks like "expert intuition." Cedric’s work, especially around Cognitive Flexibility Theory (CFT), has been instrumental in showing how you acquire expert intuition, therefore it also provides deep insights into how to become wise. I would define Cedric’s entire genre as asking: “sounds clever on paper, does it work in practice?” CFT specifically has worked repeatedly in his own life, and he’s successfully tested it on more than a hundred of his readers.
Cedric spent fourteen hours generously producing a new presentation specifically on this topic for the launch of The Leading Edge (also available on Spotify here)
In order to understand what experts get right, you need to first understand what novices get wrong. We are drowning in blogs, threads, listicles and books that are focused on revealing the “10 universal principles of success.” And yet, the most significant mistake Cedric sees people make is applying a small number of abstract principles to highly complex domains. When these mental models remain too rigid, you can’t update them quickly enough to reflect new information. You get left behind.
Surprisingly, wisdom doesn’t correlate that strongly with either age or intelligence[1]. While our intelligence tends to peak in our early twenties, the pursuit of wisdom has no upper limits. If we choose to focus on it, wisdom and expertise can even be accelerated.
What wisdom does correlate with is openness, and Cedric’s work illustrates how expert business operators demonstrate it.
What does "Expert Intuition" look like?
“In business, only intuition can protect you against the most dangerous individual of all - the articulate incompetent.”
- Robert Bernstein
The only articulate incompetents we used to have to worry about were our overconfident and inexperienced colleagues. But now we risk being fooled by the shallow fluency of A.I. output. At the same time, we are also at increasing risk of A.I. automating certain aspects of our professional experience.
This makes the acquisition of expert intuition increasingly essential. What are some examples of what this looks like in practice?
One of the first takeaways in determining where it's most valuable to acquire your expertise is the importance of "game selection." One of Wall Street’s most beloved books is The Art of Learning by Josh Waitzkin. A chess prodigy, Waitzkin later becomes a world champion at tuishou, an incredibly subtle tai-chi-style combat sport. Chess has an inherently limited number of moves, tuishou doesn’t. The more “structured” the domain, the easier it is for A.I. to outpace humans. Deep Blue beat Kasparov in 1997, but it’s hard to imagine when, if ever, A.I. could beat humans at tuishou. Expertise is most valuable in similarly “ill-structured” domains, such as medicine, business and investing. These are also the fields where CFT can have the most positive impact.
Cedric tells a great story about the sustainable advantage of expert intuition in complex real-world environments:
“It is easy to acquire and instill “middle of the bell curve” knowledge (in an electric utilities company), but at an electric plant, there will be, say, five out of 1500 people who are irreplaceable. A senior relay system protection engineer retired and was replaced by four engineers, each having had 10 years of experience. That did not suffice. When a car hit a pole and two lines tripped, both lines were lost. Across the two lines there were dozens of different kinds of relays and dozens of different kinds of relay protection schemes, some 50 years old. The retired engineer had to be brought back in to fix this emergency situation.”
Cedric has also pointed me to another amusing anecdote. Because of the immense payoffs in finding productive drilling sites, energy companies have long been some of the biggest spenders on A.I. and computer modeling. And yet, these same companies sometimes also employ a handful of mysterious veterans who could simply walk in, point at a location on the map, and have an unusually high hit rate in locating profitable sites[2].
Within investing, investors that meet with management face-to-face tend to outperform[3]. The cynical response is to assume this is because they are receiving material nonpublic information (MNPI). Having sat as a third party in literally hundreds of those meetings, I never once heard MNPI discussed. What I have seen, occasionally, is highly intuitive investors reading facial expressions and body language, especially once they know the correct question to ask. Even with all the recent advances in animation, the complexity of the human face is such that the tiniest discrepancy unconsciously triggers our intuitive sense of the “uncanny valley.” This is why even Pixar keeps faces extremely cartoony. Embodied intuition still retains the advantage in human interactions.
Expert investors ask the most relevant question, at the most relevant time and can read the most relevant physical response. Experts notice subtle details novices don't. As Stan Druckenmiller said: "You need a certain amount of intelligence, but it’s wasted over a certain level. After that it’s more about intuition."
For those of you familiar with Dr. Iain McGilchrist's work on the brain's hemispheres, expert intuition is a right-hemispheric trait, relative to the reductive simplicity of the left. What’s also interesting is that attempts to ask intuitive experts to explain or codify their process is not only impossible, it can actually damage their effectiveness. McGilchrist tells the story of veteran racehorse trainer Franck Mourier. He persistently beat the betting odds by picking winners after briefly watching the horses warm up. But his expertise was so subtle, not only could he not explain how he was doing it, any attempt to put a framework around his process made it worse.
Now we know what expert intuition looks like, how do we acquire it? Put simply: how do we get good at something fast?
How do we accelerate expertise?
Over the last twenty years of working in business and finance, a central conclusion, repeatedly confirmed throughout this entire series, is that the more intelligence you ascribe to the outside world the more you’ll flourish. This openness has 3 specific applications to accelerating expert intuition:
- Read Case Studies:
One of the most important practical recommendations that emerges from Cedric’s work is the importance of reading case studies. He says that the best operators he encounters are always seeking out fresh stories in their domain of interest to rapidly update their intuitive database.
But!
Here is the hardest nuance to understand in this entire field: good operators do not read to extract general principles, they do it to build a relevant database of examples. Then they reason by analogy in comparing one highly complex situation to another. It took me about a month of sustained work to work out how to apply this idea to investing, specifically what made Warren Buffett and Charlie Munger different[4]. Cases should contain surprising similarities and surprising dissimilarities. The goal in life is to collect as many cases as quickly as possible, so nothing surprises you anymore.
Cedric has compiled a precious trove of case studies clustered around certain topics that investors can read to accelerate their pattern recognition skills.
- Seek Safe Failure: Play Games
In more complex, real-world domains, you can grow the sample of cases in your head through "safe failure" using simulations.
Another key theme from this entire series is that personal evolution requires constant deaths and rebirths at different scales. The takeaway from CFT isn’t “don’t have models of the way the world works”, it’s that experts are ready to destroy and update those models at a moment’s notice in the presence of superior information. They don't tend to fit the world to their model, they fit their model to the world. This is what’s called an “adaptive worldview.”
The practical recommendation is to get as many rapid repetitions as possible in your desired domain of expertise. Cognitive scientist Lia DiBello has done fascinating work on “strategic rehearsals.” It turns out sitting in a stale meeting room and passively learning by PowerPoint just isn’t that effective. She found that it was only after first experiencing the “visceral failure” of their old operating procedures that executives could learn new models. That creates a necessary breakdown stage (the death/rebirth). She believes that our adaptive unconscious learns 200,000 times faster than the conscious part of the brain. As the unconscious learns so rapidly, she even claims it can take as few as sixty decision cycles to reprogram mental models in a bounded domain (such as a game). Sixty cycles may not sound like a lot, but how many different things have you failed at sixty times? She believes there are fields where the ten-thousand-hours-to-mastery rule made famous by Anders Ericsson can be compressed into something more like six hours. DiBello’s innovation was to create safe simulations for businesses. Rather than outdated executives all getting fired, she allowed them to fail rapidly in a low-consequence environment.
What stands out from most successful training programmes is that they also tend to focus on relevant games. SIG (Susquehanna Investment Group) is one of the world’s most competitive trading firms. Their training system is legendary, to the extent that new hires have to sign a 3 year non-compete before they enter boot camp. Former SIG alum Kris Abdelmessih has written about their focus on games: “They believe poker is very relevant and there was a lot of focus on it. You needed to log 100 hours during training and there was an annual firm-wide tournament.”
Another key signpost to look for across disciplines is whether an approach used by the military. They have a lot of money and the ultimate motivation to get things right in the real world. This is a big part of what drew Cedric to CFT. The U.S military found that the intuitive feeling a veteran operator gets when he senses an Improvised Explosive Device (IED) might be nearby was often the difference between life and death. But they faced the problem that classroom learning couldn’t keep up with the rapid evolution of warfare tactics. So the military developed a video game simulation where soldiers played as the insurgents when placing IEDs. This rapidly gave them an intuitive sense of where within a complex environment they should look for danger.
If a central tenet of wisdom is that “the outside world is often more intelligent than you”, a game that allows you to inhabit that intelligence (in this case, the mindset of your adversary) is going to rapidly accelerate your expertise.
The clear takeaway is to build domain-specific games for your business, or to find pre-existing ones that build the skillsets in your desired domain.
Some or all of this may sound obvious, but there's a world of difference between knowing something works, and systematically implementing it in your life.
- Cultivate Emotional Granularity
The final thing to note is probably one of the most important, yet most rarely explored. Case studies build a deep reservoir of expertise, but that information is stored in our unconscious. Hence when our intuition is triggered it’s typically accompanied by an emotion or embodied sense.
A 1 minute explanation on Value After Hours.
There’s a legendary anecdote about George Soros getting a back spasm whenever his portfolio was positioned poorly. But the correct takeaway from the Soros anecdote isn’t that he was blindly guided by mystical bodily signals, but that he had enough ingrained experience to interpret what it meant when his back hurt. This means acquiring a deep sense of embodied perception. This is going to be the topic for Episode 3.
In the context of this piece, it’s worth specifically focusing on the practice of “emotional granularity.” As I discussed elsewhere recently, emotional granularity simply means identifying the range of emotions you experience and putting a wide variety of accurate labels on them. Psychologist Lisa Feldman Barrett has argued that “people who exhibit higher emotional granularity go to the doctor less frequently, use medication less frequently, and spend fewer days hospitalized for illness.” If unconscious emotions and intuition come prior to thoughts, having a wide range of words for your emotions helps determine how effectively you navigate the world. A more precise link to your embodied unconscious also means a much clearer connection to your database of embodied experience, in business specifically and life generally.
Suggested Experiments and Commitments
If you’re interested in taking the benefits of these concepts beyond the screen and into your own life, here are two recommended short-term experiments and longer-term commitment.
Experiment:
- Buy or print an emotion chart (see below) and put it somewhere prominent in your house. Then challenge yourself and your family to be more specific in your self-expression.
- Think of something you really want to get better at, professionally or personally, and commit to failing at it over sixty times (I am trying shuffle dancing)
Commitment:
- Read case studies in your business domain but, practice maintaining an adaptive worldview while doing so.
- Find a way to build more "games" into your life.
Join us in a couple of weeks for Episode 2 on attractors, the most interesting and important topic I’ve ever explored.
Thanks again to Cedric Chin for all his help and wisdom! Hit "Subscribe on the homepage to follow the rest of the series.
Footnotes + Additional Resources:
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