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on 16 August 2017
Well written, clear and entertaining. Lots of interesting examples. Love almost everything Tim Harford has done. Really enjoyed the idea of extending Darwin's ideas about evolution of species through natural selection, to the economic sphere
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on 27 October 2017
This is my second Tim Harford book. It won't be my last.
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on 5 January 2017
As expected
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on 5 May 2014
Tim Harford takes popular economics to a new level. This book isn't as instantly engaging as some others in the genre, but that's because he goes into much more depth. He hasn't chosen topics for their entertainment value but has taken important issues and asked what we can learn by looking carefully at the evidence. He is particularly trenchant on the problems of delivering aid to developing countries. Unfortunately, there are no easy answers, but perhaps charities should begin telling us what they are doing to ensure donations are used effectively. An organisation that did that would get my cash.
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on 26 August 2011
This book starts really well with an interesting take on the idea that many successes arise from trial and error, and it's important to learn from what doesn't work. Tim Harford gives some novel examples on how individuals have managed to overcome "group think" and achieved success by breaking the established mode of doing things. Unfortunately, after a few chapters, I felt that there was some repetition and the book lost it's "aliveness". It seemed as though he had an idea for a book but then ran out things to say, so kept saying the same thing in a different way. Perhaps would have been better for being a shorter book with less repetition
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TOP 100 REVIEWERon 23 June 2013
After reading and then re-reading this book, I remain unconvinced that success [begin italics] always [end italics] starts with failure but agree with Tim Harford that it frequently does, usually through a process of trial and error in combination with experimentation and elimination. There are two keys to the success of that process: learn from each error, and, do not repeat it. Long ago, Charles Darwin observed, "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change." I was again reminded of that observation as I began to work my way through Tim Hartford's lively and eloquent narrative.

Here are his own thoughts about the resiliency that is required of those who seek success, however defined: "The ability to adapt requires a sense of security, an inner confidence that the cost of failure [what I prefer to view as non-success or not-as-yet-success] is a cost we will be able to bear. Sometimes that takes real courage; at other times all that is needed is the happy self-delusion of a lost three-year-old. Whatever its source, we need that willingness to risk failure. Without it, we will never succeed."

The quest for business success involves constant experimentation. Obviously, the prospects for success are improved substantially within a workplace culture that encourages, supports, recognizes, and rewards prudent experimentation. But, as with ideas, the more experiments that are conducted, the more likely that there will be a breakthrough. The first challenge to leaders is to establish such a culture; the next and greater challenge is to sustain it. Harford has written this book to help his reader respond effectively to both challenges. His approach is philosophical, yes, because there are significant issues with important implications and potential consequences to take into full account. However, in my opinion, his approach is also pragmatic and his recommendations are eminently do-able.

Peter Palchinsky (1875-1929) is one of the most fascinating people discussed in the book. He was a Russian industrial engineer (often viewed as a technocrat) whose progressive ideas about human rights during Stalin's consolidation of power led to several arrests and finally, execution by a firing squad. Here is Harford's brief but precise explanation of Palchinsky's principles: "First, try new things; second, try them in context where failure is survivable. But the third an critical step is how to react to failure...[to avoid] several oddities of the human brain that often prevent us from learning from our failures and becoming more successful...It seems to be the hardest thing in the world to admit that we have made a mistake and try to put it right."

These are among the dozens of passages of special interest and value to me, also listed to indicate the scope of Harford's coverage.

o The Soviet Union's "pathological inability to adapt" (Pages 21-27)
o Why learning from mistakes is hard (31-35)
o The Tal Afar experiment (50-56)
o Friedrich von Hayek and "knowledge of the particular circumstances of time and space" (74-78)
o Lottery tickets, positive black swans, and the importance of variation (83-86)
o Skunk Works and "freak machines" (86-89)
o "We should not try to design a better world. We should make better feedback loops." (140-143)
o The Greenhouse Effect, 1859 (154-156)
o The unexpected consequences of the Merton Rule" (169-174)
o Why safety systems bite back (186-190)
o Dominoes and zombie banks (200-202)
o Making experiments survivable (214-216)
o Adapting as we go along (221-224)
o Google's corporate strategy: have no corporate strategy (231-234)
o When companies become dinosaurs (239-244)
o "Challenge a status quo of your own making"(249-256)

Here is a brief excerpt from Chapter One: "We face a difficult challenge: the more complex and elusive our problems are, the more effective trial and error becomes, relative to the alternatives. Yet it is an approach that runs counter to our instincts, and to the way in which traditional organisations work. The aim of this book is to provide an answer to that challenge."

Bullseye!
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on 4 July 2011
I'm not sure entirely who is expected to buy this latest book by Tim Harford, but I wonder if the person-in-the-street, such as myself, might just be a suitable audience, rather than other economists.

My knowledge of economics is extremely basic. I've read some of a book (in German) by a German economist friend, and I listen to More or Less on Radio 4, which is of course presented by Tim Harford. His excellent presentation style on that programme made me pick up this book with some anticipation.

I wasn't disappointed. The same friendly, chatty style appears throughout this book. Things are explained clearly and efficiently and you aren't left feeling like you're a bit thick if you aren't conversant with the latest economic theory. The book abounds with examples in daily life of what he's talking about, whether it's military engagements by the US army or employee benefits in Timpsons the keycutters. It made the book always interesting and lent authority to his arguments.

The book is very well structured with chapters dealing with overall situations (such as the Afghanistan/Iraq wars, climate change, the financial crisis, business structure) but broken down into many subheadings which mean it's easy to pick the book up and read for a few minutes without completely losing the thread. Tim Harford's research and wide-ranging knowledge help to make this a fascinating read.

I did feel that at times there was a fairly black and white presentation of events, particularly with regard to the hugely complex Afghanistan conflict. It was as if "it was all going wrong, and then someone adapted/came up with a new plan and now it's great." Undoubtedly many of these adaptations made a significant difference but I wasn't convinced they were quite as magic-bullet as I felt they were portrayed. Another example is talking about the way some companies are structured. One of the companies mentioned in glowing terms throughout is one that an acquaintance works for and their story is somewhat different about life in that business. As always, there are many facets of each situation and life is complex but I felt that this didn't always come across in this book.

However, for an economics newbie such as myself it was a really good introduction to Harford's theme of adaptation - that innovation and variety are key to the health of economies, businesses, and more.
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on 16 April 2012
This book brings a relatively simple message which is convincingly argued and illustrated by telling examples related to very topical subjects (climate change, how to tackle poverty, the financial meltdown, the war in Iraq...).
Harford posits that the world has become such a complicated place that it is not realistic to imagine that on basis of a rational analysis of data ready-made solutions on all problems can be found. It is more realistic to arrive at appropriate solutions by testing different scenarios, by evaluating them subsequently and selecting the solution best adapted to the circumstances. Failures are inherent to this method, however are useful and should lead to better solutions, hence the book's subtitle `Why success always starts with failure'.

As is amply shown by a wide range of examples a lot of companies and institutions have purely centralised organisations which ignore mostly the practical experiences of people in the field, with oftentimes awful consequences for these same people and catastrophic results for the whole organisation.

Harford demonstrates this by the experience of the American army in Iraq. The American defense secretary Ronald Rumsfeld was a dogmatic proponent of a centrally commanded army, which bases its top-down orders almost exclusively on its advanced information and communication technology. That the officers in the field needed some flexibility to react to local circumstances and that some instructions were utterly inappropriate was completely ignored by central command. This culminated in Ronald Rumsfeld not accepting reality and is tellingly illustrated by his stubborn, absurd refusal to use the word `insurgency' in a press-conference on Iraq, a word that most appropriately described the situation at that moment. The army became only more successful after systematically adopting strategies which had proven their practical worth in Iraq.

Confronted with complex challenges, companies do not have a do-for-all recipe to solve every problem and true expertise is hard to come by. The conclusions of a study on the efficiency/validity of expert-opinion is quite revealing: an evaluation showed that the value of the advice of these so-called experts was negligible.
As a result companies could be in a quandary to act if even the experts turn out to be of little help. Harford points out that biology could offer the answer by showing how species do adapt to different circumstances: variation and selection.

Companies should use the same strategy and adapt to their environment by trying out different strategies (variation) - however in such a way that the company can cope with a failure - and subsequently select the appropriate strategies. This method is not that evident as for organisations as well as for individuals it is difficult to accept failure, learning of them is not that easy either.
In order to be able to do an efficient selection process, it is of utmost importance that correct feedback is accepted and organised. Hierarchical companies function mostly by counteracting this correct information flow: people sugar-coat their opinions to their superiors who in the end get a very `political' impression of what happens.

Harford is an economist and this is obvious by the practical value attributed to the money motive to solve some of the main current problems: the most efficient way to tackle global warming is by taxing energy use, fraud in the financial world would be discovered earlier or more frequently by rewarding whistleblowers generously (Until now most whistleblowers have been de facto penalised for their denouncing frauds).

I did find it very revealing how Harford points out the similarities between the `failure' of the financial meltdown and an industrial catastrophe as for instance the explosion of the oil and gas rig Alpha Piper: Both are failures of very complicated systems with catastrophic consequences. How the disaster of the explosion of the Alpha Piper came about can be explained quite easily and the reader can vividly imagine how it all went wrong. It turns out that the financial meltdown was not that different, most likely more complex but - this is the most worrying - in this case safety measures were mostly non-existent or completely inappropriate. In industrial processes safety measures are taken almost for granted. It is disconcerting to be aware that no contingency plans exist(ed) in the case of the much more complex and more encompassing financial system.

This book brings home a very important lesson, shows it applicability to such diverse and important issues as poverty, global warming, the financial crisis... The myriad of well-chosen examples add to its attractiveness.

I hope this book is widely-read, understood and lessons are learned. We could all profit of that.
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on 30 November 2012
This is an inspiring and amusing argument for experimentation as a key strategic technique for the modern age. The book is full of amazing accounts of big plans that turned into epic disasters, from 19th century imperial Russian failures to organise mining to US military attempts to control Iraqi insurgencies and the recent meltdown of the banking sector. Harford compares those failures with successes such as the Spitfire airplane and Google's internet domination, suggesting the solution in the form of a checklist:

- Variation: seek out new ideas and try new things
- Survivability: try new things out at a scale where failure is survivable
- Selection: seek out feedback and learn from your mistakes as you go along

Harford calls this checklist the Palchinsky method, after an early 20th century Russian engineer Peter Palchinsky, who recognised that "real-world problems are more complex than we think", because of they have a human dimension and a local dimension, and are likely to change as circumstances change. I'm sure this will sound familiar to anyone who has ever been involved in a real-world software project. As the key aspects of this solution, Harford calls for adaptive planning and opening up lines of communication from the field to the planning office.

Harford focuses on innovation but also covers topics as diverse as the nature of mistakes, what causes latent errors that are not noticed until the very instant we can least afford them, strategic planning, effectiveness of expertise in today's fast-moving environment and isolating 'skunk-works' groups in large organisations.

This book deserves to be read by all business project and product sponsors, as well as anyone serious about delivering effective products and projects. If your boss needs convincing that lean startup ideas are good, and an explanation why It fits in nicely with the Lean Startup ideas, and explains why delivery plans should be more about options that could be explored instead of scope that is nailed down by committment. Authors strong views on climate change come through in the middle of the book where he argues about possible solutions, which I felt broke the reading flow and felt out of place in the book. However, the rest will surely be an interesting read for most people following my work. You'll be inspired by a ton of stories and great quotes. Here are some of my favourite ones:

- "Return on investment is simply not a useful way of thinking about new ideas and new technologies"
- "Ideal way to discover paths through a shifting landscape ... is to combine baby steps and speculative leaps"
- "For an organisation that needs to quickly correct its own mistakes, the org chart can be the worst possible road map"
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on 17 August 2011
The breeding of bulldogs - Now a one person but two bulldog job with a special new hammock - personal space flight, the history of longitude, charter cities and US tactics in Iraq are just some of the subjects you can learn about in this very entertaining book.

The central thesis is that success always starts with failure. That's clearly the case with evolution and with markets. Progress takes place through variation and selection. The book considers the case for the same processes where markets don't operate. In armies fighting wars, in aid policy, in dealing with climate change, in the regulation of financial markets, in businesses and in out personal lives.

I have enjoyed reading every chapter of the book. But only th chapter on climate change is fully persuasive (bring on a carbon tax and markets). In the case of the US in Iraq, it's persuasive that the right answer was found on the ground and not at the top of the military chain of command. It's also persuasive that it would have been better for top commnders tone ore open to therm Ning ideas sooner. But there's no account given of all the variations you might need to encourage to find the winning one. Only the winning one gets a mention. Could you really fight a war or an insurgency on the basis that everyone does what seems best to them - and later we'll see what works? Maybe that's the best way, but Tim Harford is far from showing that.

Still, I did thoroughly enjoy reading it nd on that basis would recommend it to others.
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