Farleigh's 5 : Bad Errors and 4 More Ideas

0:00Well, Richard, we're here to record Farleigh's Five. What do you have for us this week?

0:04Richard Farleigh: Thanks, Morgan. This week, I've been thinking about making errors, choices, old movies, business similarities, and business cards. Great. Looking forward to it. Okay. So number one is, what type of error would you like today? In an ideal world, there will be no uncertainty, but reality demands difficult choices. Now, we're all guaranteed to make errors, but we can often choose what kind. Take, for example, what I will call, for simplicity, false acceptances and false rejections. Now, to me, governments are obsessed with avoiding false acceptances. Now, I recently had dinner with a minister for families.

0:46Richard Farleigh: He's a lovely man named Josh McAllister. And he was explaining to me that it's extremely difficult to be accepted as a foster carer because of the concerns about a child going to a bad home, which would lead to abuse or neglect. So consequently, tens of thousands of children are stuck in the system waiting for a permanent home. The cost of keeping these kids in care homes is a staggering£300 ,000 plus per child per year. And those kids are on what I would call a horrific statistical pipeline towards homelessness, criminality, and depression. Can you imagine? These kids grow up in care homes when they could have been fostered.

1:28You know, why do you think governments are so scared of these false acceptances?

1:31Richard Farleigh: Yeah, well, part of the problem is the press. I mean, governments are naturally scared of the one big bad story on the front pages. The multitude of small but sort of slow-moving bad outcomes will rarely be written about. What's severely underpublicized is the sheer number of children stuck in the system and there's thousands of decent families wishing they could provide these children with a loving home. I mean, the fear of one false acceptance can therefore create thousands of false rejections. And unlike a child placed in a bad home, a child left waiting to be put in a home rarely makes the front pages.

2:10Richard Farleigh: Josh McAllister wants to change this. And how do you think he'll get on with that? Do you think he'll do it? Yeah, well, he says you don't get long to make an impact as a minister. I mean, ministers get reshuffled. I mean, he says they have a year, give or take. I mean, he needs to move fast and he needs to battle the inertia. And as someone who has spent myself four months in a child's home, in a children's home, I'm wishing Josh well, as well as he can do on that mission. And another fear of false positives is a ban on assisted dying. I mean, we are more focused on the risk of potential victims, people who are wrongly sent to their deaths by family and relatives.

2:49Richard Farleigh: But the trade-off to that is the thousands of people who might actually want to escape the tragic pain and suffering that they're experiencing. In business, there was an expression, you don't get fired for buying IBM. In other words, it's okay to make a false rejection by not buying an unknown brand, even though that may have been a better choice. hmm is there ever a time when the attention is placed you know on the missed opportunities well i mean the counter example is dragon's den when founders entered the den to pitch just five dragons we had the choice do we take a gamble and invest or do we declare or do we declare i'm out sometimes i mean the dragons reject a business only for it to become a huge success Trunky, for example.

3:36Richard Farleigh: The press loves it. Silly dragons, Mr. Great Opportunity, is written all over the pages. The false rejection is what gets the headline. For me, on the other hand, my own desire not to miss out on a good opportunity might have been the reason I've helped start more than 120 businesses. I mean, I love business, and maybe I'm even a deal junkie. I mean, I'm terrified to miss out on the next big thing. And I've had some good successes, but nothing huge like a Spotify or a Dyson. And I would have made more money by just investing in the US stock market. So it's probably an example of me saying yes to things that I should have said no to.

4:11Do you think you've always been a little bit of a deal junkie, Richard?

4:15Richard Farleigh: Well, I was more disciplined. When I was managing money for an investment bank in my 20s and early 30s, my job was to take aggressive bets in the market. And in that situation, it's easy to think if I don't have risk on, I'm not working. So if you're managing$500 million in capital, say, and it's sitting there doing nothing, you feel like you're not doing your job. But it's vital to understand, and I used to teach my traders this, that sometimes no trade is the best trade. So it sounds like sometimes a decision to do nothing is actually the best decision. Yes, that's exactly it. You know, this whole decision-making process isn't that easy, which really leads me to number two this week, which is number two, can you please just decide for me?

4:58Richard Farleigh: I mean, we often see value in having more options available to us, especially in economics. We generally value choice, yet somewhat paradoxically, we also want to avoid it entirely. Do you have any examples? Yeah, take, for example, going to a restaurant and ordering food when the menu has, say, half a dozen pages. How relieved are you when someone says, I'll order? You think, great, I don't have to think about it. The truth is having options can paralyze us, And I call this decision fatigue. Now, I'm not always sure how to say this, but have you ever heard of a fable called Buridan's Ass? Buridan's Ass.

5:39Richard Farleigh: I can't say that, I have no. Well, it's actually about a donkey. It's not about a, it's about an ass, which is a donkey. It's about a donkey which sits exactly between two tempting bales of hay. And unable to decide which one to eat, the donkey eventually dies of starvation. It illustrates the dangers of being so paralyzed by indecision that we fail to act. And after studying economics, I was always fascinated by whenever there were exceptions to economics. So when I went into markets, I was trying to find when economics didn't apply, for example. And in this case, having too many options was a negative for that ass or was a negative for that donkey.

6:20Richard Farleigh: And I once received advice that when you're presenting options to someone, whether it's a client or your boss, you should always include a recommended choice for example you might say to your boss you can have option a b or c but based on your research i'm suggesting that we move forward with c and the person the person on the receiving end will appreciate it i mean you've shown your ability to make a call while also making his or her life easier well what about you richard i mean you are your own boss do you ever get tired of having to make these you know more trivial decisions or making your own decisions in general?

6:54Richard Farleigh: Yeah, yeah, I do. I do. You know, I seem to make decisions all the time. So yes, I do. And I always think about this intriguing book I read about 40 years ago, but I've never forgotten it, called Dice Man. I think it was by Luke Reinhart. But it follows a man who is so fed up with making small, trivial decisions in his life that he delegates the whole process to a dice roll. And at the start, he uses the dice for little decisions. But later he becomes dependent and he even decides to leave his wife because the dice told him to. And his extreme habit brings him fame and followers and he gets known as the dice man.

7:33Richard Farleigh: And he eventually gets invited onto live television to debate a priest. A priest versus a dice. How did that go? Well, the priest tells him, God gave you will and for you not to exercise that will is against God's wishes. It's almost a sin. And Dice Man, and I've never, I haven't forgotten reading this, and you know, Dice Man just sits there in front of the priest and he rolls his dice to decide how to answer on national television. But the dice instructs him not to answer at all, just to sit there quietly. And he leaves the priest, he's just sitting there utterly bewildered and unhappy. You know, it was quite a real scenario.

8:14Richard Farleigh: And I just thought, how cool is that? I thought, So, you know, I don't recommend to people making huge decisions based on a dice roll, but the book does paint an important thing in life, which is the difficulty of making decisions. Sometimes we'd all just love somebody to make the bloody decision for us. Yes, too right, mate, too right. Now, so let's get on to number three. Now, this number three this week is about watching old movies. My kids have a rule. They won't watch any movies made before the year 2000. So I've been trying to prove them wrong, but every time we sit down to watch something that I've chosen, I'm left thinking, actually, this film isn't as good as I remember.

8:56Richard Farleigh: Do you have any films in particular? Yeah, well, I used to love this old movie called The Party with Peter Sellers in it, and I found it hilarious. I used to rank it as sort of the funniest, best movie I'd seen. But now when I watch it, it's just painfully slow. And I think people often say that our attention spans are shorter now because of social media algorithms. But I don't think it's entirely new, this whole process. I think we've been speeding up for a long time. I mean, we have less time. We're busier. Many family units now consist of two working adults, not one. I mean, these factors all play a role.

9:29Richard Farleigh: Perhaps it's even been developing for generations. And, you know, maybe as human beings, we're just not meant to make really long drawn out. You know, not always meant to make really long, drawn-out decisions. Maybe we enjoy thinking quickly and learning fast. Maybe we just haven't been able to previously. But having said that, I'm going to try the kids out on something about Mary. Now, surely they're happy with that movie, even if I had to let them look at their phones at the same time. Number four is more serious. Number four is look for similarities before differences. Now, one of my friends left formal education at 15 years old to work as a labourer on a construction site.

10:07Richard Farleigh: Now, after hearing this, you might think that his prospects were fairly limited, but what followed was one of the most useful life experiences someone could have had. Can you tell us what happened? Well, he now owns and runs a very successful building company, and he can walk onto any construction site and find issues that most workers and managers would completely overlook. It's simple. because he's done just about every construction job under the sun, from mixing cement to digging basements, he knows how it's all done. And he's very aware of any second rate shortcuts, for example, and it's very impressive.

10:45Richard Farleigh: So after hearing this story, it's easy for you to assume that you need specific knowledge to run a business. But actually, I'm not so sure. And I met with a lady recently who had inherited and is now running a substantial farm. And I asked her out curiosity. Do you need to know a lot about farming when you start? And she actually knew nothing. So she was a little bit like Jeremy Clarkson, you know, she knew nothing about, I don't know, fertilizer costs and soil humidity. Yeah, yeah, exactly. Nevertheless, she's succeeding. And I don't believe that's unique to farming. Now, in my book, Humble Stumbles, one of my propositions is that there are more similarities in business than there are differences.

11:28Richard Farleigh: And I believe the same principle has allowed me to get involved and support 120 different businesses, spanning from fish food to semiconductors to online fashion. You know, I've probably done a wider range than just about anyone in terms of being involved in business and the similarities that have stood out. So there are often enough similarities that you don't need to have milked a cow to understand how to run a farm. And you don't need to write code to start a software company. You could argue that as long as you have experts within the company who do understand the nuances of, say, farming or coding, the manager or CEO or the person leading that company doesn't necessarily need to.

12:09Richard Farleigh: Yes. And I think that goes for most businesses. So, you know, I'd say look for the similarities before you look for the differences. OK, so now let's get on to number five, which I think is a fun one. and if the title I would say is have you seen my pills they were they were labeled LSD you're wondering what I'm going to be talking about okay but how many times have you returned home from a function with a stack of business cards only to look at them the next day with no clue who was who I mean it's happened to me too often oh my god I mean sometimes you want to contact somebody the next day who you can't remember then which card belonged to who Yep.

12:50Well, let me tell you, no one forgets my business cards. Why? Let me guess, your picture's on them. Oh, no, I bet you've got the really nice thick cardboard and the fancy raised printing.

13:02Richard Farleigh: No, no, no, no, no. My cards only cost, you know, five pounds a pack from a budget printing service. They have a picture of a chess piece. I'm a chess player. They have a picture of a chess piece on the front, and my contact details are in fancy color, you know, bright green, blue, and purple, which I, you know, there was a colorful design done by my daughter her when she was about 10. But what makes my cards really memorable is the reverse side. Some of my cards have trivia questions, but others, you know, which and sometimes even make people answer the trivial questions before I've talked. It's a bit of fun.

13:33Richard Farleigh: But others have jokes on them. And the joke, for example, one of the jokes is a boy asks his granny, have you seen my pills? They were labeled LSD. And granny replies, forget the pills. Have you seen the monsters in the kitchen anyway they're you know dad jokes but they're on the back there and sometimes i find myself giving out bunches at a time because everyone wants to get these cards and everyone starts reading out the jokes to everyone uh to everyone else so my card is actually a great conversation starter i mean it's not something just destined to be binned and speaking of conversations uh morgan i think that just about wraps us up thanks richard that makes five and i guess it'll be same again next week perfect mate i'll speak to you then