Three Keys to Unlocking Great Insights

Insights are unexpected shifts in the way we understand how things work. We can’t plan for insights but we can still increase our chances for gaining them. One tactic is to exploit anomalies. For example, Albert Einstein performed thought experiments about riding on a light beam and then turning on a light. Surely that light should seem frozen, moving at the same speed he was. But recent work suggested that the light beam would move away from him —at the speed of light. When faced with such an anomaly, the tendency is to dismiss it. Einstein couldn’t see how to explain it away so he tried another tack —taking it seriously. He speculated that as his speed increased, time would slow down and objects would appear shorter. Thus was born the special theory of relativity.

Most of us try to dismiss anomalies and for good reason —they’re often spurious. However, when we brush aside an anomaly we’re just holding on to our usual beliefs rather than breaking through those beliefs to make an insight.

Consider the example of Harry Markopolos, a financial analyst, who in 1999 was challenged to match Bernie Madoff’s financial results. Markopolos looked at the data publicly available on Madoff’s hedge fund and within minutes announced, “This is bogus.” Markopolos spotted an anomaly: Madoff only reported losses in three months out of seven years. Markopolos’s insight was that Madoff, despite his high social standing, could not legitimately be generating these kinds of returns. Madoff was arrested nine years later.

Anomalies distress us —they complicate the neat stories we tell ourselves. Colleagues who voice conflicting viewpoints disturb our harmony. We feel impatient with subordinates who seem confused; we don’t wonder what is confusing them. We get discouraged by failures and setbacks that upset our schedule, rather than diagnosing the reason for the failures. If we want to find insights, we could do worse than poke around anomalies, conflicts, confusions, and setbacks.

A second tactic is to explore a new perspective. This tactic is particularly useful for breaking free from fixations. Fixation on flawed beliefs thwarts many insights. The Madoff fan club fixated on the wonderful returns he was generating. We can break free of fixation by bringing in people with fresh eyes, like Markopolos. Or we can shift our own perspective. We can adopt a “failure perspective” by doing a project PreMortem —imagining at the start that a project has failed and then trying to diagnose what would have caused the failure. Meredith Whitney adopted a failure perspective in 2008 by imagining that Bear Stearns, a pillar of Wall Street, was in trouble. Whitney used this skeptical lens to review the numbers and was surprised to discover just how vulnerable the company was. Another new perspective is to ask ourselves what changes we hope our replacement would make. Andy Grove calls this the “revolving door” test. He and his CEO mused about what a new CEO should do at Intel, and they both agreed the CEO would get Intel out of the memory chip business. Their conclusion prompted them to make that decision themselves.

Third, embrace urgency. Most of us dislike time pressure. We would rather have ample time to think things over. But we’re less likely to act on insights unless we feel some urgency. Kodak provides a cautionary example. Kodak knew that the future belonged to digital photography —Kodak invented the digital camera. But Kodak was making good profits from the sales of film, and didn’t have a sense of urgency to change its business model. We can artificially inject urgency by asking ourselves what option we would consider if our situation required immediate action —a desperation perspective.

These three tactics run counter to our natural tendencies to dismiss anomalies, retain the perspective we’ve been using, and stay relaxed. The three tactics won’t guarantee insights. There’s no set of procedures for grinding out discoveries. But the tactics can help to shake us out of complacency so that insights can emerge.

[This piece was originally published in Speakeasy, the Wall Street Journal online magazine.]