So he threw all of his accountants out and he took his engineers and said, âNow, weâll devise
our own system of accounting to handle this process.â And in due time, accounting adopted a lot of Carl Braunâs notions.
So he was a formidably willful and talented man who demonstrated both the importance of accounting and the importance of knowing its limitations.
He had another rule, from psychology, which, if youâre interested in wisdom, ought to be part of your epertoireâlike the elementary mathematics of permutations and combinations.
His rule for all the Braun Companyâs communications was called the five Wâsâyou had to tell who was going to do what, where, when and why. And if you wrote a letter or directive in the Braun Company telling somebody to do something, and you didnât tell him why, you could get fired. In fact, you would get fired if you did it twice.
You might ask why that is so important? Well, again thatâs a rule of psychology. Just as you think better if you array knowledge on a bunch of models that are basically answers to the question, why, why, why, if you always tell people why, theyâll understand it better, theyâll consider it more important, and theyâll be more likely to comply. Even if they donât understand your reason, theyâll be more likely to comply.
So thereâs an iron rule that just as you want to start getting worldly wisdom by asking why, why, why, in communicating with other people about everything, you want to include why, why, why. Even if itâs obvious, itâs wise to stick in the why.
Which models are the most reliable? Well, obviously, the models that come from hard science and engineering are the most reliable models on this Earth. And engineering quality controlâat least the guts of it that matters to you and me and people who are not professional engineersâis very much based on the elementary mathematics of Fermat and Pascal:
It costs so much and you get so much less likelihood of it breaking if you spend this much. Itâs all elementary high school mathematics. And an elaboration of that is what Deming brought to Japan for all of that quality control stuff.
I donât think itâs necessary for most people to be terribly facile in statistics. For example, Iâm not sure that I can even pronounce the Poisson distribution. But I know what a Gaussian or normal distribution looks like and I know that events and huge aspects of reality end up distributed that way. So I can do a rough calculation.
But if you ask me to work out something involving a Gaussian distribution to ten decimal points, I canât sit down and do the math. Iâm like a poker player whoâs learned to play pretty well without mastering Pascal.
And by the way, that works well enough. But you have to understand that bellshaped curve at least roughly as well as I do.
And, of course, the engineering idea of a backup system is a very powerful idea. The engineering idea of breakpointsâthatâs a very powerful model, too. The notion of a critical massâthat comes out of physicsâis a very powerful model.
All of these things have great utility in looking at ordinary reality. And all of this cost-benefit
analysisâhell, thatâs all elementary high school algebra, too. Itâs just been dolled up a little bit with fancy lingo.
I suppose the next most reliable models are from biology/ physiology because, after all, all of us are programmed by our genetic makeup to be much the same.
And then when you get into psychology, of course, it gets very much more complicated. But itâs an ungodly important subject if youâre going to have any worldly wisdom.
And you can demonstrate that point quite simply: Thereâs not a person in this room viewing the work of a very ordinary professional magician who doesnât see a lot of things happening that arenât happening and not see a lot of things happening that are happening.
And the reason why is that the perceptual apparatus of man has shortcuts in it. The brain cannot have unlimited circuitry. So someone who knows how to take advantage of those shortcuts and cause the brain to miscalculate in certain ways can cause you to see things that arenât there.
Now you get into the cognitive function as distinguished from the perceptual function. And there, you are equallyâmore than equally in factâlikely to be misled. Again, your brain has a shortage of circuitry and so forthâand itâs taking all kinds of little automatic shortcuts.
So when circumstances combine in certain waysâor more commonly, your fellow man starts acting like the magician and manipulates you on purpose by causing your cognitive dysfunctionâyouâre a patsy.
And so just as a man working with a tool has to know its limitations, a man working with his cognitive apparatus has to know its limitations. And this knowledge, by the way, can be used to control and motivate other peopleâŚ.
So the most useful and practical part of psychologyâwhich I personally think can be taught to any intelligent person in a weekâis ungodly important. And nobody taught it to me by the way. I had to learn it later in life, one piece at a time. And it was fairly laborious. Itâs so elementary though that, when it was all over, I felt like a fool.
And yeah, Iâd been educated at Cal Tech and the Harvard Law School and so forth. So very eminent places miseducated people like you and me.
The elementary part of psychologyâthe psychology of misjudgment, as I call itâis a terribly important thing to learn. There are about 20 little principles. And they interact, so it gets slightly complicated. But the guts of it is unbelievably important.
Terribly smart people make totally bonkers mistakes by failing to pay heed to it. In fact, Iâve done it several times during the last two or three years in a very important way. You never get totally over making silly mistakes.
Thereâs another saying that comes from Pascal which Iâve always considered one of the really accurate observations in the history of thought. Pascal said in essence, âThe mind of man at one and the same time is both the glory and the shame of the universe.â
And thatâs exactly right. It has this enormous power. However, it also has these standard misfunctions that often cause it to reach wrong conclusions. It also makes man extraordinarily subject to manipulation by others. For example, roughly half of the army of Adolf Hitler was composed of believing Catholics. Given enough clever psychological manipulation, what human beings will do is quite interesting.
Personally, Iâve gotten so that I now use a kind of two-track analysis. First, what are the factors that really govern the interests involved, rationally considered? And second, what are the subconscious influences where the brain at a subconscious level is automatically doing these thingsâwhich by and large are useful, but which often misfunction.
One approach is rationalityâthe way youâd work out a bridge problem: by evaluating the real interests, the real probabilities and so forth. And the other is to evaluate the psychological factors that cause subconscious conclusionsâmany of which are wrong.