Why is it called What the Dog Saw?

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Malcolm Gladwell is one of the biggest selling non-fiction authors of our generation, with smash-hits like Outliers, Blink and The Tipping Point. We also previous did an episode on his newest book, Talking To Strangers.

This book is a collection of his essays and newspaper articles. We picked some of our favourites, taking us on a deep dive into three important distinctions: The Arts of Failure, The Nature of Secrets, and Success in the Young and the Old.

In this episode, we look at the difference between:

• Choking VS Panicking
• Prodigies VS Late Bloomers
• Puzzles VS Mysteries

Support the show by grabbing a book through our link, either on Book Depository or Amazon

The Art of Failure

Wimbledon Final, 1993

It’s the third and final set. Jana Novotna is leading 4-1, and she’s serving at 40-30. She’s one point away from winning the game, and effectively, 5 points off claiming the most coveted championship in tennis.

The point before, she hit a backhand that clipped the top of the net and dropped over to the other side, so her opponent, Steffi Graf, could only watch on with frustration. She stood poised and confident, went through her usual routine, bounced the ball a couple of times, then lobbed the ball up to serve. She yanks down too hard and the ball went into the net. On her second serve, it was visually much worse. The ball toss, the arch of the back, the power. it looked like she slumped, and she double faulted.

40-40. Deuce.

On the next point, she served well. Graf popped it back high, and Novotna was slow to react. She badly missed a simple forehand volley.

Advantage Graf.

On game point, she hit her overhead shot straight into the net. Now, instead of leading 5-1, it was 4-2. Graf served well and wont he game easily

4-3.

On Novotna’s next serving game, rather than serving for the match, she was serving to break the momentum. She wasn’t tossing the ball high enough, it wasn’t the serve of a confidence player. She double-faulted 3 times in a row, the hit a forehand wide and lost her service game. It was now 4-4.

Graf made quick work of the next two games, coming back from 1-4 down to winning the set 6-4 and claiming victory, hoisted the Wimbledon championship plate high in the air

What Happened???

Did she suddenly realise how close she was to victory and she got nervous? Did she remember that she’d never won a major tournament before? Did she remember that she was playing against the greatest player of her generation? Stefi Graf won 22 grand slams and spent 377 weeks ranked #1.

Novotna was unrecognisable. She didn’t look like an elite tennis player – she looked like a beginner, missing the simplest of shots. She was crumbling under the pressure, but she had no idea why. It was just as baffling to her as it was to everyone watching on from the sidelines.

Isn’t pressure supposed to bring out the best in us? It makes us try harder. We focus, we concentrate harder. We get a boost of adrenaline. We care more about how we perform.

So why did this HURT her performance, not HELP it?

Choking VS Panicking

This section looks at how humans falter under pressure. Pilots crash, divers drown. Under the glare of competition, basketball players cannot find the basket and golfers cannot find the hole. In sports, what do we say? We say that they “choked” or they “panicked”. Both are negative things, both are basically just as bad as quitting, both can end in eventual defeat… but Gladwell says there are massive differences between the two. Even though we use “choke” and “panic” interchangeably in sports, the two are actually two very different phenomena.

Two Types of Learning

EXPLICIT LEARNING: At the very start of learning a new skill, you’re trying hard. When you’re learning to hit a forehand in tennis, there are so many things you need to consciously think about: the way you grip the handle, the angle of the racquet, the speed your swing, the force of your swing, how far you follow through, how much spin to put on it, where to aim, where to hit it, when to hit it, how to hit it… This is like “System 2” thinking from Thinking, Fast and Slow – the slow and effortful thinking.

IMPLICIT LEARNING: Once you’ve hit ten thousand forehands, you no longer have to think about how you hold the racquet, you ‘just pick it up’. You’re no longer actively thinking about all of the specific elements, they just happen. You say that these become ‘natural’ to you, but really you’ve just done it so many times that you no longer need to think about them. This is like the “System 1” thinking – it all happens without you consciously using your brain. Professionals have done so much practice that everything they do becomes implicit.

Choke

To make it to the top of your field, you’ve gone through the explicit learning face and it has become implicit. For Novotna to make the Wimbledon Final, she’s obviously hit hundreds or thousands of serves in both practice and in games. It is implicit – her body knows intuitively exactly what it needs to do. When you’re in “flow”, you’re running purely on the implicit learning. You’re not thinking about those small individual actions (the angles, the speed, the spin), you’re just thinking about hitting the ball.
But under conditions of stress, the explicit systems take over. We starting THINKING again.

For Novotna, she reverted back to her younger self. She regressed to that young child learning to hit a ball for the first time. She was trying to calm herself down by slowly thinking through every move: how high to toss the ball, how far to arch her back, how high to jump, how hard to swing the racquet. She was no longe acting on instinct like the professional she was, she was acting like that 8 year old girl first learning to serve.

Jana choked.

Panic

Panic is actually something entirely different.

Consider the following story of a NASA specialist suffering a scuba diving accident. Sophie was 19 at the time, and doing her open-water diving certification. She’d been learning for 2 weeks, and it was their first dive out in the ocean without an instructor, just her and her buddy. The exercise was to dive down to about 40 feet deep, then adjust your gear so that you stay stationary. Too much weight and you sink down, too much air and you float up.

Once you achieve this, you have to do an exercise where you test your ‘spare’ regulator (“regulator” is the thing you breathe through – the tube and the mouthpiece that regulate the high pressure from the tank into a normal breathing pressure). To test it, you unclip the spare regulator from your vest, take the main regulator out of your mouth, put the spare into your mouth, then either press the button or exhale sharply to blow out the water, then start breathing normally.

This is something you do at the start of every dive – test the spare, the switch back to the main regulator and re-clip the spare for an emergency. You do this one person at a time.

Sophie’s buddy did hers (took out the main, tested the spare, then put the main back in) – the buddy did the OK sign, all clear, then it was Sophie’s turn. Sophie unclipped her spare, took her main regulator out of her mouth, put in the spare, then exhaled to clear the line.

Then she breathed in – but she sucked in water. She got a little worried, but tried to remain calm. She tried to exhale again to clear the water out of the tube, but then something clicked – the hose must’ve come off from the tank, the air started gushing out of the regulator and bubbling in her face.

Sophie panicked.

Straight away – she grabbed for her buddy’s air supply and tried to rip it out of her mouth. It was a physiological response, without conscious thought. She was trying to fight her impulses, and tried to think of some solution to this problem. She couldn’t think of anything.

Then she remembered the rule of scuba diving – if you can’t take care of yourself, let your buddy take care of you. So Sophie dropped her arms back to her side and just stood there, waiting for her buddy to help her.
This was a classic case of “panic”.

Stress wipes out Short Term Memory. She reverted to the most basic of human impulses – GET AIR! People with a lot of experience tend not to panic, because even when short-term memory is wiped out, they still have some residual past experiences to draw on. But for novices – they have what psychologists call “perceptual narrowing”. You become obsessed on the one thing you’re focusing on, and you miss everything else.

Sophie forgot that, even though her spare had failed, she had a perfectly good source of air – the MAIN regulator that she had been breathing through perfectly less than 2 seconds earlier. She also forgot that her buddy had a spare – the one that she’d just watched her test successfully and put back on her vest. Instead, she only saw the main regulator that her buddy was currently breathing from.

When she gave up and allowed her buddy to help her, her buddy simply picked up Sophie’s main regulator that was floating just off to the side of her, put it in Sophie’s mouth, and pushed the button to clear the water. Sophie could continue breathing normally.

What Does This All Mean?

Panicking is a more conventional failure, something we can understand easily. If the scuba diver had another 2 years of flying experience, she might not have panicked. This fits with what we believe – performance ought to increase with experience, and pressure is an obstacle that we can overcome with diligent practice.

But choking makes little intuitive sense. Novotna’s problem wasn’t a lack of practice or experience – she was superbly conditioned and at the top of her game. After her Wimbleon third set 4-1 collapse in 1993, she played in the third round of the French Open in 1995 and lost in the third set after she was leading 5-0. It seems like the reason for the second failure was the first. she was in a strong position, but she knew that “I can still lose”. The second failure built on the first – once the cracks started to appear, she remembered what happened last time and she way way too “inside her head”, and she crumbled.

The problem is that we’ve always assumed that all of these types of failures are the same, we assume that they’re all based on panic. We tell the failure to buckle down and work hard. If you choke on a school exam you’re told to study harder, if you choke in the Wimbledon final you’re told to go back to the courts and practice serving more. But this won’t help. They already have all of the technical abilities they need to succeed, they’ve explicitly learnt them and they’ve implicitly learnt them. The only thing that can help is if the pressure is taken away. If the cameras were turned off and the crowds walked out and the queen watching on from the sidelines had left the Wimbledon arena, Novotna might not have felt as much pressure and been able to stay in flow and recover from that first double fault.

If you’re taking a test and feel like your entire future is dependent on you acing the test, because getting a good grade means getting into a good college which means getting a good job… then the perceived pressure can lead to choking. But obviously, pressure is par for the course. Choking is a central part of the drama of professional sport because the crowds HAVE to be there – the ability to overcome the pressure of the spectators and the TV cameras is part of what it means to be a champion. But we also need to realise that this kind of ruthless inflexibility does NOT need to be applied to every area of our lives… sometimes a poor test score is not an indication of a poor student… a poor performance does not necessarily reflect on the ability but rather the domain they find themselves in.

Although we sometimes use them interchangeably, PANIC is in a sense the OPPOSITE of CHOKING. Choking is about thinking too much, Panic is about thinking too little. Choking is about a loss of instinct, Panic is a reversion to instinct. They may, look the same, but they are worlds apart.

Prodigies VS Late Bloomers

“Genius”, in the popular conception, is inextricably linked with “precocity”. Doing something truly creative, we’re inclined to think, requires the freshness and exuberance and energy of a talented youth:

• Orson Welles made his masterpiece, Citizen Kane, at age 25
• Herman Melville wrote a book a year through his 20s and caped it off with Moby Dick at age 32
• Wolfgang Amadeus Mozart wrote his breakthrough “Piano Concerto No 9 in E-flat major” at age 21
• T. S. Elliot wrote the poem “The Love Song of J Alred Prufrock”, voted by literary scholars as the most important lyrical poem in all of American history, at age 23

Researchers agree that in some field, youth is a massive advantage.

• creativity resarcher James Kaufman says “poets peak young”
• Mihaly Csikszenmihalyi, the author of “Flow” agrees saying: “the most creative lyric verse is believed to be that written by the young
• Hward Gardner, Harvard creative expert, says “lyric poetry is a domain where talent is discovered early, burns brightly, and then peters out at an early age”

BUT, then there was a study of literary scholars who all had to vote on the most important poems of all time. These included works from TS Eliot, Sylvia Plath, Robert Frost, Elizabeth Bishop, Ezra Pound… The looked at the age of the poets when these top 10 were written: 23, 41, 28, 38, 30, 30, 42, 40, 59. Turns out there was really no correlation between “age” and “importance”, and this definitely went counter to the ideas that poetry is a domain reserved for young geniuses and when you get old you lose it altogether.

Old Masters and Young Geniuses

There was a study called “Old Masters and Young Geniuses: The Two Life Cycles of Artistic Creativity”. It found that, one one hand, you have Orson Welles peaking at age 25. But on the other hand, you have Alfred Hitchcock, making movies like Vertigo and Psycho, having one of the greatest runs by any director in history between age 54 and 61. Then you’ve got Mark Twain publishing ‘Huckleberry Finn’ at 49 and Daniel Defoe writing ‘Robinson Crusoe’ at age 58.

The perfect personification of these ideas is to look at two famous artists: Picasso VS Cezanne. Picasso was the incandescent Prodigy. His first ‘masterpiece’ popped out at age 20. He went on a wild tear, pumping out most of his most-known masterpieces by age 26. He fits the bill perfectly for the “genius” stereotype. Cezanne didn’t, at all. In the Musee D’Orsay, the greatest collection of Cezanne’s in the world, all of his most famous works came at the END of his career.

A Picasso from his mid-20s was worth on average 4X more than a painting he did in his 60s. For Cezanne, a painting from his 60s was worth more than 15X the paintings he created as a young man. The” freshness” and “exuberance” of youth meant everything to Picasso, but did nothing for Cezanne. Cezanne was a “late bloomer”. We know all about the prodigies and the geniuses. But for some reason, our society has forgotten to account for the Cezanne’s , the late bloomers of the world.

Approaches To Creativity

Picasso took a very specific approach to his creativity. It was a “conceptual” approach. Picasso would have a clear idea of what he wanted to do, then he executed on his vision. Picasso once said “I can hardly understand the importance given to the world ‘research’… In my opinion, to search means nothing in painting, to FIND is the important thing. I have never used trials or experiments or research, I just paint what I know needs to be painted”.

But Late Bloomers take the opposite approach – they use “open-ended exploration”. Their goals are imprecise, so their procedure is tentative and incremental. It’s all about experimentation. The imprecision of their goals means that these artists rarely feel they have succeeded, and their careers are consequently often dominated by the pursuit of a single objective. These artists repeat themselves, painting the same subject many times, gradually changing it in an experimental process of trial and error. They consider the production of a painting as a process of searching, in which they aim to discover the image in the course of making it. They typically believe that learning is a more important goal than making finished paintings. Experimental artists build their skills gradually over the course of their careers, improving their work slowly over long periods. These artists are perfectionists and are typically plagued by frustration at their inability to achieve their goal.

Picasso wanted to find not search. Cezanne said the opposite: “I Seek in painting”. Cezanne was painting a portrait of Gustave Geoffrey. He made him endure 80 sittings over 3 months, then announced that the painting was a failure and threw in the towel. When Cezanne painted a portrait of his Art dealer, Ambrose Vollard, he made Vollard arrive at 8am in the morning and sit in a rickety old stool until 11:30 at night without a break. They did this 150 times, then Cezanne abandoned the project, saying that it wasn’t right.

Cezanne would paint the scenery backdrop, then repaint it, then paint it again… He was notorious for taking a knife and slashing through a canvas out of rage and frustration about not being able to get it right.

Mark Twain was the same, following a trial-and-error method. His routine procedure seems to have been to start a novel with some structural plan, which soon proved to be defective. He would then create a new plot to overcome the previous difficulty and rewrite everything he’d already written. Then he’d hit another road block, and have to start all over again. Huckleberry Finn, going through this arduous process and writing, re-writing, tossing it in the bin, ripping it to shreds then trying to piece it back together, then writing again… took over 10 years to complete.

The Cezzannes and Mark Twains of the world bloom late not as a results of some defect in character, or distraction, or lack of ambition… but because the type of creativity that proceeds through trial and error necessarily takes a long time to come to fruition.

Implications

Now we’ve divided creativity into two types: “conceptual” and “experimental”. This brings with it a number of important implications.

We often think that “late bloomer” means “late starter”. We figure that someone who comes on to the scene later was probably doing something else, then later in life they switched paths and managed to do well in this new path. We assume that if they started on this new path earlier, then they would’ve achieved this same success, just earlier. We think they don’t realise that they could’ve been great at this all along, so it’s only when they turn 50 that they have sme mid-life crisis and realise what they should’ve been doing for their whole life.

But this isn’t always true. Cezanne started painting from the same early age as Picasso did. We think that they were “discovered” later, we think that they were always good, but they were just hidden in the fringes and it wasn’t until someone uncovered them that their genius was revealed, even though it was something that was already lurking there the whole time. But again, this isn’t true – it’s not that the market was slow to appreciate their gifts, it’s that they actually weren’t good until later in their careers.
Cezanne painted something called The Banquet at age 31, and art critics say it was basically a piece of shit and no one can deny it. It wasn’t until later, when he’d developed his skills, that he could actually pull off the things he was trying to pull off. Cezanne was trying something so elusive that he couldn’t master it until he’d spent decades practicing.

“On the road to great achievement, the late bloomer will look like a failure”. While the late bloomer is revising and despairing and changing course and slashing canvases to shreds after months or years of work, what he/she produces will look like the kind of thing produced by the artist who will never bloom at all.

Prodigies are easy, they look like winners from the get go. Late Bloomers are hard – they require forbearance and good faith. Thankfully Cezanne didn’t have a guidance counselor in high school who took a look at his sketches and tell him to try accounting. Whenever we see a late bloomer, we must wonder how many others like them were thwarted because they were prematurely judged for their talents (or lack thereof) and gave up.

Some genius comes from knowing exactly what you should do, then doing it. But some genius comes from trying, failing, writing, re-writing, abandoning, starting again, then trying something different altogether. “Sometimes creativity genius is something that is obvious from an early age. But sometimes creative genius is just something that emerges after 20 years of working at your kitchen table”.

Open Secrets: Puzzles VS Mysteries

When Gladwell wrote this story in the early 200s, Osama Bin Laden’s whereabouts was a puzzle. At the time of writing, the US couldn’t find him because they didn’t have enough information. There is a simple factual answer – he is in a specific place at a specific time, and you just need to have enough pieces of the puzzle to put it all together and work out the answer. The key to finding bin laden would probably come from a piece of information from someone on the inside

The problem of what would happen after Saddam Hussein was overthrown from government is a mystery. There is no simple, factual answer. Mysteries require judgements, assessments, predictions, estimations, theories, hypotheses. Puzzles are hard to solve when there is not enough information. mysteries can become hard to solve when there is too much information.

The distinction between a “puzzle” and a “mystery” is not a trivial one. Let’s look at September 11 as an example. If you treat the September 11 attacks as a puzzle that could’ve been solved, then your response would be to increase the amount of intelligence gathering, recruit more spies, add to the volume of information you gather about Al-Qaeda. If you view Sept 11 as a mystery, then adding more information could just make things worse. The important thing to focus on is the quality of synthesis of the information. You want to improve the analysis of information within the intelligence community – you want more thoughtful and more skeptical people dissecting the information you already know about Al Qaeda

The Enron Story

This is probably one of the most well-known company collapses in history. WIKIPEDIA SAYS: he developed a staff of executives that – by the use of accounting loopholes, special purpose entities, and poor financial reporting – were able to hide billions of dollars in debt from failed deals and projects. Jeffrey Skilling was sentenced to 292 months in prison – 24 years. His lawyer asked for a simple 10 month reduction in sentence. He didn’t try to fight the charge, just plead for leniency. If his sentence was reduced, he could serve his time in a low facility. But after witness upon witness testified about how people had lost their entire life savings and were now living off eating cat food, the judge refused – Skilling was sentenced to spend the bulk of the rest of his life with the murderers and rapists and the genuine hardened criminals. If you sat through the trial of Jeffrey Skilling, you would come out thinking that you were trying to solve a puzzle. The prosecution said that the company had conducted shady side deals that no one quite understood. The executives were accused of withholding vital information from shareholders. They painted Skilling as a liar, a thief and a drunk – he was the one person to blame for obscuring the vital information from being made public. “We were not told enough” is the central assumption of the Enron prosecution.

But the prosecutor was wrong. Enron wasn’t really a puzzle. Enron was a mystery.

Mark-to-Market

The first element that made Enron a mystery was their accounting system. They used “mark-to-market”, which is a system used by firms engaging in complicated financial trading of long-term contracts. Say for example, you have a $100M contract with the California government to supply electricity from 1996 to 2016. How much is that contract WORTH??? You aren’t going to get it all paid out for another 20 years, but that $100 is clearly very important to the company’s bottom line. If energy prices slowly drop over the years, this contract with the locked in price is going to be super valuable. If it goes the other way and electricity production becomes more expensive or there is some government taxes added, you could have just lost 10s of millions of dollars.
With “mark to market” accounting, you estimate how much revenue the deal is going to bring in and put that number in the books at the moment you sign the contract, then as things evolve over time (prices, taxes, inflation, costs, etc), you adjust your balance sheet accordingly. Option pricing takes a similar approach – an option only has value at the end of the contract, but it can be “in the money” or “out of the money” to varying degrees throughout its life. using mark-to-market, you judge the price of the option based on the current market conditions, rather than it having no value until it is eventually executed.

The issue is, if on Enron’s balance sheet it says that there is a $10M profit, it could mean one of two things…. Either they’ve just signed a $100M contract and have to pay costs of $90M so they have $10M cash in the bank left over, OR, they’ve just signed a $100M deal and are expecting that over the next 20 years they’ll be making a profit of $10M. You may not be actually getting this money for years into the future, and the end results may be way different than your predictions. Both are two very different things – one is cash profit in real time, one is paper profits projected from future predictions.

The prosecution said that Enron had hidden important truths… but everything this stock analyst learned about the company had been through reading all of the publicly available information that everyone had access to. One hard-core stock analyst even had a little confusion about the reports, so he called up Enron and asked them about it. Not only did they answer his questions, they flew him out to their HeadQuarters and set aside half a day with their top financial controllers to talk through every element of their reports. A lack of information was clearly not the problem, and Enron were clearly not hiding anything.

SPECIAL PURPOSE ENTITIES

The next element that turned Enron into a mystery was it’s reliance on “Special Purpose Entities”. This sounds like an effed-up system, but it happens in all big corporations. If your company isn’t looking healthy, a bank may not lend more money to you, or they may charge a much higher interest rate. If you need $100M dollars lend to you, and you have big energy contracts that will pay you $100M over the next couple of years, you can create a new “SPE”. The bank would usually look at the corporation as a whole to determine if they should lend money to it or not. But by creating a new sub-entity, you sell the $100M oil contract to the sub entity, the bank sees this and it looks good, so they’re willing to lend $100M against these future expected earnings.
SPEs are commonplace in corporate america, and are a perfectly legal loophole to get better credit deals. Enron created such an elaborate and complicated web of SPEs that all fed into each other and were all owned by each other that, like a stack of dominos, when some started to crumble it eventually triggered the collapse of the whole company. “Enron’s SPEs were evidence of recklessness and perhaps incompetence, but you can’t blame Enron for covering up the existence of all of their side deals… they didn’t. They disclosed them openly to the public”.

Some may argue that they didn’t disclose ENOUGH information. But what is enough?

Enron had three-thousand SPEs. The paperwork for each entity is over 1,000 pages. So to read every piece of information about every SPE would be a 3 million page document.

What about an edited version of each deal? A professor at Duke Law School did this an each was summarised down to 40 pages each. That makes 120K pages still, in 12pt font single spaced…

What about a summary of the summaries?? That’s what the bankruptcy examiner on the Enron case put together. It was a thousand pages long.

What about a summary of the summary of the summaries??? That’s what the auditing committee put together, a summary of only the most significant transactions. And it was 200 pages long. Those 200 pages were complicated pages… this was only pulled together with the benefit of hindsight and some of the finest legal and accounting talent in the nation…

There’s no blaming Enron for trying to hide anything. Every piece of information was in plain sight, fully disclosed to the public… But the problem in this case was not that there wasn’t enough information (like trying to solve a puzzle), it was that there was TOO MUCH information that no one could make sense of it (a mystery)

Prostate Cancer

Diagnosing prostate cancer USED to be a puzzle. A doctor would do a rectal exam, and if he found a lumpy tumour on the surface of the prostate, he would take it out (the prostate, not the finger). That one piece of information was enough to solve the puzzle – if there was a lump, you had prostate cancer.

But now, it has become a MYSTERY. Doctors are no longer looking to diagnose cancer, but they’re looking for EARLY WARNING SIGNS that cancer MIGHT develop in the future. They do blood tests for elevated levels of PSA. If the results look problematic, they conduct an ultrasound and take pictures of the prostate. Then they perform a biopsy, removing a small slice of the prostate and looking at it under a microscope.

BUT – most of this flood of information is inconclusive. High PSA doesn’t mean cancer, and “normal” PSA doesn’t mean no cancer. Also, there is debate around what the “normal” range is in the first place. The biopsy under the microscope is also a mystery – you’re not looking for cancer, you’re looking for signs of something that might eventually one day in the future possibly turn into cancer – and this is a very subjective thing. Two equally skilled physicians can both look at the same sample and come to the exact opposite conclusion. Also, even the presence of potential cancer is not necessarily a bad thing – prostate cancers grow so slowly that they may never actually cause any long-term harm.

What used to be a puzzle that could be solved with certainty (you have cancer) is now a mystery that can be at best “highly probable” or “tentatively estimated. The development of new ways of collecting wider ranges of information has turned the diagnosis of prostate cancer – and for that matter, MOST cancers – from a puzzle into a mystery. it is no longer dependent on the amount of information you have, but the pathologists experience and ability in working out subjective conclusions.

In Summary

“A puzzle grows simpler with the addition of each new piece of information”. If I tell you Osama Bin Laden is hiding in Pakistan, it gets easier to find him. If you learn that he is in the north-west corner of the country, it becomes easier still. If you are told that he is in a two-story compound with barbed wire on the fence, it becomes easier again.

But in an era where companies disclose anything and everything, the idea that our predictions and forecasts are better off with every new piece of information we’re told about a company is totally wrong. If things go wrong in a puzzle, the culprit is obvious: it’s is the person who withheld information. But mysteries are a lot murkier: sometimes the information is inadequate, sometimes we weren’t good enough at making sense of the information, and sometimes the mystery cannot be solved at all.

Puzzles come to a satisfying conclusion. Mysteries often don’t.

Solving puzzles remains critical – we still want to know where Osama is hiding and where North Korea are building their nuclear weapons. But MYSTERIES are increasingly taking centre stage.

Puzzles are “transmitter dependent” – the solution of a puzzle is based on what information you are given. Mysteries are “receiver dependent” – it isn’t about how much information you get, it’s about how you understand the information that is in front of you
There was no issue with the transmitter of the Enron information – they openly confessed to the market exactly what they were doing and why. There is an argument that as Enron’s business practices got more complicated, Wall St analysts should’ve kept up the pace and evolved to understand them better. One critical clue was that Enron paid no income tax for it’s last five years. Even though on paper they were making hundreds of millions, the IRS doesn;t care about your paper profits – they only tax the income you ACTUALLY receive at the time that you received it. Enron paid no tax because there were no actual realised profits coming in the door. In the eyes of the IRS, Enron wasn’t making any money. Enron never hid the truth. they made it clearly obvious that they were stretching the truth and doing slightly dodgy stuff, but they weren’t committing intentional fraud. if you wanted to know more about it, you just had to look.

Solving puzzles requires energy and persistence (youth). Solving mysteries requires experience and insight (age). In the case of puzzles, we blame the transmitter – we place the CEO in jail for 24 years and assume that our work is done. Mysteries require us to revisit the list of culprits and spread the blame a little more broadly. If you can’t find the truth in a mystery – even in a mystery shrouded in propaganda – it is not JUST the fault of the propagandist… it’s your fault as well.