Foxes v.s. Hedgehogs
In The Wealth of Nations, Adam Smith champions the division of labour as the primary source of productivity, using the vivid example of a pin manufacturing factory: “One person draws out the wire, another straightens it, a third cuts it, a fourth points it, a fifth grinds it.” By specialising in one task, each worker becomes highly skilled at what they do, generating massive efficiency gains in the process. Output per worker rockets upwards and the factory becomes a well-oiled machine, producing millions of pins a day.
Today, this process of specialisation is taken for granted and is ingrained into the way most people think about their life. From a very young age, we are asked “what do you want to be when you grow up?”. Most of us may be able to dodge this question until late high school or even after entering college, but as we get older we are nudged more and more forcefully into picking a single option. Once you land your first job, this process of specialisation only accelerates until one day, you find that you are an expert in pin straightening techniques.
I recently read three books that drew attention to this focus on specialisation in our modern culture: Range by David Epstein, Superforecasting by Philip Tetlock and Originals by Adam Grant. I wanted to share some of the key takeaways from these books and how we can all benefit from embracing generalisation.
In 1984, newly tenured psychologist and political scientist Philip Tetlock was thirty years old, and by far the youngest member at the meeting of the US National Research Council’s committee on American-Soviet relationships. He listened intently as renowned specialists on Soviet and American policies delivered their authoritative predictions on how the next few years of the Cold War would pan out. The new Soviet leader Konstantin Chernenko was a frail, old man who was expected to die soon, and there was great disagreement on who would replace him. Experts on both ends of the political spectrum expected his successor to be another stern Communist Party man, but they clashed on why things would turn out that way. Liberal experts were convinced that President Reagan’s hard line was strengthening Soviet hard-liners, causing a neo-Stalinist retrenchment. Conservative experts thought that the Soviet system had perfected the art of totalitarian self-reproduction and would continue to invade its neighbours and support insurgencies around the world.
The experts were right about Chernenko, who died in March 1985. But few people saw what was coming next. Mikhail Gorbachev, an energetic and charismatic 54 year old, was named the general secretary of the Communist Party. Gorbachev swiftly changed direction, working to liberalise the Soviet Union, rebuild relationships with the US and reverse the arms race.
It wasn’t long before the same experts knew exactly why this happened. It was obvious to the liberals. The Soviet economy was on its last legs and a new generation of leaders was weary with the struggle with the US. It was bound to occur, and Reagan probably slowed the inevitable with his hard line rhetoric. It also made perfect sense to conservatives. Reagan had called the Soviets’ bluff by upping the ante in the arms-race, causing Gorbachev to fold.
Tetlock suspected that no matter what had happened, the experts would have been just as skilled in ignoring their predictive failures and retrofitting a story that made it appear as though they saw it coming all along.
Struck by this lack of accountability for expert forecasts, Tetlock decided to put 284 serious, card-carrying experts to the test through a project he called Expert Political Judgement (EPJ). Some were academics, others were government officials and a small number were famous political and economic thought leaders.
Forecast questions for this group spanned time frames of one year to ten years and covered a broad range of topics. This meant that the experts would sometimes be asked to forecast in their area of expertise, but more often not, allowing Tetlock to compare the accuracy of true subject matter experts with informed outsiders. To ensure that EPJ accurately separated lucky and unlucky streaks from underlying skill, the project lasted twenty years and covered 82,361 probability estimates about the future.
When Tetlock published his results in 2005, he found that the average expert was roughly as accurate as a “dart-throwing chimpanzee”.
However, averages can be misleading. Hence the old joke about statisticians drowning in water that is four feet deep on average. In the EPJ results, there were two statistically distinguishable groups. The first failed to do better than random guessing, and in the long-range forecasts even lost to to the chimp. The second group beat the chimp but only by a small margin, just beating simple methods such as predicting no change or predicting the most recent rate of change. Still, however modest their foresight, they had some.
So why did one group outperform the other?
Tetlock found that it wasn’t what they thought- whether they were liberals or conservatives, optimists or pessimists. The most important factor was how they thought.
One group organised their thinking around Big Ideas. Some were socialists, others were free-market fundamentalists. Some were environment doomsayers, others believed in the persistence of resource abundance. As diverse as their ideologies were, they were united by the fact that their thinking was so ideological. They sought to fit complex, inter-related problems into clean cause-and-effect templates, using terms like “furthermore” and “moreover” to pile on reasons why they were right and others were wrong. They were reluctant to change their minds even when their predictions clearly failed, telling people to “just wait”.
The other group was more pragmatic. They drew on analytical tools from different disciplines, based on the type of problem they encountered. They often shifted mental gears, using words such as “however”, “but” and “although”. They spoke in the language of probability and were more willing to change their mind when they were wrong.
Tetlock described the difference between these two groups using the metaphor of the hedgehog and fox, borrowed from philosopher Isaiah Berlin’s 1953 essay. Berlin, in turn, drew on the words of a 2500-year-old poem from the Greek warrior-poet Archilocus:
“The fox knows many things but the hedgehog knows one big thing.”
Hedgehogs are Type A personalities who believe in Big Ideas- i.e. governing principles that underlie every single aspect of the world. Think Karl Marx and the class struggle or Sigmund Freud and the unconscious. They often brand themselves as specialists in one field.
Foxes on the other hand are scrappy individuals who believe in many small ideas and taking a multitude of approaches to problems. They are comfortable dealing with uncertainty and complexity and are prototypical generalists.
In the EPJ data, foxes beat hedgehogs. Resoundingly.
What’s the problem with Hedgehogs?
To see why hedgehog specialists performed so poorly, let’s take a look at an archetypal hedgehog.
Larry Kudlow, the current Director of the US National Economic Council, got his start as an economist in the Reagan administration. Kudlow’s Big Idea is supply-side economics. When President George W. Bush passed substantial tax cuts, Kudlow was certain that a massive economic boom would follow. The reality was disappointing- economic growth and job creation was positive but slow, especially compared to the Clinton era which began with a tax hike. Nonetheless, Kudlow stuck to his guns and claimed the ‘Bush Boom’ was in full swing. In December 2007, when the first rumblings of the Global Financial Crisis began spreading through the economy, Kudlow claimed that the US was about to enter the seventh consecutive year of the boom. As the months passed, economic conditions worsened and worries mounted, but Kudlow remained confident. “We are in a mental recession, not an actual recession” he wrote repeatedly until September 15, when the collapse of Lehman Brothers threw the global economy into chaos.
How could Kudlow be so consistently wrong?
This is a textbook example of confirmation bias. Since, hedgehogs only know one Big Idea, they view everything through this single lens. looking for information that aligns with their worldview, dismissing alternative perspectives.
To a person with a hammer everything looks like a nail.
There’s also a hubris that comes with success. If a hedgehog has been right about something once, they tend to become overconfident and are less likely to seek critical feedback even when the context is radically different.
Not that being wrong hurt Kudlow. In January 2009, in the depths of the GFC, his new show The Kudlow Report, premiered on CNBC. It is clear that hedgehogs make great TV. Inspired by a Big Idea, hedgehogs tell neat stories that grab audiences. Hedgehogs are also confident, ignoring any pesky doubts that are raised, which is more satisfying for viewers who tend to find uncertainty disturbing.
Speaking of the GFC, specialisation played a key role in its formation. As Epstein writes in Range, “insurance regulators regulated insurance, bank regulators regulated banks, securities regulators regulated securities and consumer regulators regulated consumers”. However, the provision of credit spans all these groups. With no one looking across all markets, a massive systemic issue was able to form.
Specialisation can also lead to a tendency to follow entrenched norms, simply because ‘things have always been done that way’. For example, it is standard procedure for cardiologists to use stents to treat chest pain. However, there has been no conclusive evidence showing their effectiveness. In fact, a study from Harvard showed that a patient was more likely to survive a cardiac issue when a National Cardiologist Conference was occurring and all the nation’s top cardiologists were occupied.
The dangers of specialisation are best illustrated by the following parable, which has been told since the first millennium BCE:
A group of blind men, who have never come across an elephant before, learn and conceptualise what the elephant is like by touching it. Each blind man feels a different part of the elephant’s body, but only one part, such as the side or the tusk. They then describe the elephant based on their limited experience, and their descriptions of the elephant are different from each other. They then come to blows, suspecting that the others are being dishonest.
The lesson here is that humans have a tendency to claim absolute truth based on their limited, subjective experience. If we curl hedgehog-like around one single idea, we can close our mind off to the bigger picture and how all the pieces fit together.
The Benefits of Being a Fox
Foxes, on the other hand, are skilled at cobbling together various different perspectives. In 1906, the British scientist Sir Francis Galton went to a country fair and watched as hundreds of people guessed the weight of a live ox. Their average guess was 1197 pounds, one pound less than the correct answer of 1198 pounds. This was an early example of the powerful phenomenon called the ‘wisdom of the crowd’ - aggregating the judgement of many consistently beats the accuracy of the average group member. This is because useful information is dispersed widely, with one person holding a scrap, a second holding another and the third having an even bigger piece.
For example, when a butcher at the fair looked at the ox, he contributed his knowledge based on years of experience, while a farmer did the same. A third person who remembered what the ox weighed at the last fair added even more information. Hundreds of people added useful data points, creating a collective pool of knowledge far greater than any individual possessed. Of course, many would have contributed myths and mistakes, but these errors pointed in different directions, cancelling each out. With valid information building up and errors nullifying themselves, the net result was an incredibly accurate estimate.
This is exactly how foxes approach problems. They seek information not from one source but many and develop multiple ideas instead of one Big Idea. They then aggregate these different perspectives into one conclusion. They do exactly what Galton’s crowd did, except the whole process occurs inside one skull.
The best metaphor for this process is the vision of the dragonfly. Like humans, dragonflies have two eyes, but each eye is an enormous sphere covered in up to thirty thousand lenses. Unique information from each of these lens flows to the dragonfly’s brain, where it is synthesised into vision so superb that it can see in almost every direction simultaneously and pick off insects at high speed. Marcel Proust puts this dragonfly eye metaphor a little more eloquently: “the real act of discovery consists not in finding new lands, but in seeing with new eyes.” In Tetlock’s study, foxes were more likely to make a conscious effort to collect multiple views on the same issue, a practice that was reflected in their significantly better forecasting results.
The effectiveness of taking different perspectives lies in the power of analogical thinking. For example, Johannes Kepler was able to make seemingly magical leaps of the mind in astronomy by comparing the mysterious force holding planets together as a “moving power”, likening planets to “boatmen in a current’. This was the first time that astronomical phenomena were couched in terms of forces rather than intrinsic ‘souls’ or ‘spirits’. He eventually decided that celestial bodies pulled one another and larger bodies had more pull, correctly claiming that the moon influenced tides on Earth.
Claude Shannon, the electrical engineer who launched the Information Age, was only able to do so because of a philosophy course he took to fulfil a requirement at the University of Michigan. Here, he was exposed to the work of English logician George Boole, who assigned a value of 1 to true statements and 0 to false statements. This resulted in nothing of practical importance until Shannon did a summer internship at AT&T’s Bell Labs and recognised that he could combine telephone call-routing technology with Boole’s logic system to encode and transmit information electronically. It was the fundamental insight on which computers rely and “it just so happened that no one else was familiar with both those fields at the same time”, said Shannon.
Foxes are also better positioned to cope with the the rise of artificial intelligence and automation that will likely transform the future of work. The jobs that are most at risk today involve tasks that are procedural and do not require lateral thinking. Paralegals, for example, face the very real possibility of being replaced by machine learning algorithms that can process legal documents at an exponentially faster rate than humans. Due to their interdisciplinary approach, foxes are inherently better at ‘out of the box’ thinking and will be able to thrive in jobs that require creativity that cannot be replicated by a machine (yet).
Specialisation isn’t all bad
None of this is to say that hedgehog specialists are unnecessary. Einstein was a hedgehog. Throughout his life he endeavoured to find simplicity beneath complexity and derived elegant theories to prove it. These theories changed our understanding of physics and underpin the technologies that we take for granted today such as satellites and solar panels. But, he also spent the last 30 years of his life with mathematical blinkers on, trying desperately to find a unifying theory of everything and adamantly refusing to believe in the randomness of quantum mechanics, a field which he ironically helped to create.
Furthermore, in Range, Epstein writes that in a ‘kind learning environment’, where cause and effect patterns remain relatively stable, early specialisation can be crucial. For example, in golf, a story such as that of Tiger Woods can emerge, where rigorous practice from the age of three can produce one of the best players of all time.
Specialists are also able to exercise their passions. For the individual that finds an occupation that they truly love, the ability to attain mastery in a discipline can spark tremendous joy and allow them to work in a state of flow. On top of this, specialisation can lead to a clarity of purpose. Individuals and companies can gain a reputation at being good at one particular thing, leading to further opportunities and growth in this one discipline.
Where the benefits of being a hedgehog may break down is in ‘wicked learning environments’ where the patterns of cause and effect are more obscured. It is rare to be in a situation such as golf or chess where all the information is always visible to the player and hyper-specialised practice can lead to consistent improvement. As Robin Hogarth put it, life is much more like ‘Martian tennis’. You can see that there are other players on the court with balls and rackets, but you have no idea what the rules are. It is up to you to derive them and they can change at any time without notice.
… And being a generalist isn’t all good
However, taking it to the extreme as a generalist can also be harmful. Being a jack-of-all-trades clashes with the anti-diversification mantra espoused by Warren Buffett and Charlie Munger of Berkshire Hathway. As I discussed in my piece on mental models, based on the Pareto Principle (20% of actions account for 80% of results) focusing your time and energy into one discipline will likely enable you to achieve predefined goals faster.
Being a generalist can also make things overly complex. There is often a beauty in simplicity. For example, in his book Why the Mighty Fall, Jim Collins examines what went wrong at companies that used to be darlings of Wall Street but then collapsed. He finds that the undisciplined pursuit of more often leads to a lack of focus, moving the company’s core activities away from what they are good at. Both companies and people can be plagued with ‘decision fatigue’- the more choices that we are forced to make, the more the quality of our decisions deteriorates. For this reason, most of our leaders tend to be hedgehogs, as they cannot afford to suffer from this decision fatigue. Famously, a frustrated President Truman once demanded for a ‘one-handed economist’, as all of his advisers would say “on the one hand…on the other…’”.
In 2017, Charlie Munger was asked for his advice on whether to be a specialist or generalist. His response was insightful:
I don’t think operating over many disciplines, as I do, is a good idea for most people. I think it’s fun, that’s why I’ve done it… So, it’s been a wonderful path for me, but I think the correct path for everybody else is to specialise and get very good at something that society rewards, and then to get very efficient at doing it. But even if you do that, I think you should spend 10 to 20% of your time [on] trying to know all the big ideas in all the other disciplines. Otherwise … you’re like a one-legged man in an ass-kicking contest. It’s not going to work very well.
The sweet spot
As Tetlock caveats in Superforecasting, there are two types of people in the world: those that believe that there are two types of people in the world and those that do not. The tension that is created between being a generalist or a specialist is generally a false dichotomy, with both models having their pros and cons as seen above. Henry Hazlitt sums up the situation:
If one tries to be the Rounded Universal Man or to take all knowledge for his province, he is most likely to become a mere dilettante and dabbler. But if he becomes too specialised, he is apt to become narrow and lopsided, ignorant on every subject but his own and miss the cross-fertilization of ideas that can come from knowing something of other subjects.
Considering the pitfalls of going to the extremes of both specialisation and generalisation, there appears to be a sweet spot in between them: being a T-shaped’ generalised specialist.
While a generalist has roughly the same expertise in all areas, a generalised specialist develops a core competency whilst maintaining interdisciplinary knowledge.
This unique combination of broad and deep experience is critical for creativity. In Originals, Grant cites a study comparing every Nobel Prize winner from 1901 to 2005 against typical scientists of the same era. Both groups achieved deep expertise in their chosen fields of study, but the Nobel Prize winners were at least 22 times more likely to partake as an amateur actor, dancer, magician or other type of performer. The most successful scientists are deeply immersed in their domain, but also belong to the wider world.
“To him who observes them from afar, it appears as though they are scattering and dissipating their energies, while in reality they are channelling and strengthening them”
— Santiago Ramon y Cajal (Nobel Laureate)
When Galileo made the shocking discovery of mountains on the moon, his telescope was not powerful enough to support that finding. He was looking at exactly the same thing that other astronomers were, but he recognised the zigzag pattern separating the light and dark areas of the moon thanks to his artistic training in chiaroscuro. He had the necessary depth of experience in physics and astronomy, but also the breadth of experience in painting and drawing.
Leonardo da Vinci was perhaps the best known generalised specialist. As well as his world-famous art, da Vinci also dabbled in engineering, literature, mathematics, music and history. Ultimately, his forays into physics and optics allowed him to excel in the portrayal of shadow and reflection in his paintings.
Seinfeld may have never seen the light of day if it hadn’t been for a producer, Rick Ludwin, who went out on a limb to fund its first season. Ludwin had depth from spending well over a decade working on different comedy sketches and breadth from brief forays into late-night talk shows and TV specials. Having seen such a broad spectrum of entertainment, he saw promise where others had doubts (focus groups widely panned the Seinfeld pilot). Ludwin supervised the show for its entire length and he hired writers who had the same insider-outsider background as him. Almost all came from late-night and had never worked on a sitcom before, which meant that there was never a shortage of off-beat ideas.
At the end of the day, there is no single answer to whether we should be specialists or generalists. It can be a deeply personal decision, based on an individual’s values and objectives in life. However, it is important to be conscious of the benefits and drawbacks of each approach and recognise where our years of accumulated expertise may actually be holding us back rather than pushing us forward.