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  • [MUSIC]

  • I want to start out with a story.

  • This is a story about a sergeant in the Army, Edwin Montoya,

  • and he was stationed in Iraq.

  • It was just before Christmastime.

  • And he was in the mess line getting some dessert, in fact it was cheesecake.

  • And as he is sort of standing there grabbing his cheesecake about to start eating,

  • there's a major explosion, a huge explosion.

  • A terrorist has set himself off and blown up the mess hall.

  • And Sergeant Montoya dives under a table.

  • When the noise deadens he comes out, takes a look, and he's okay.

  • But he's a medic, and around him is a carnage of people.

  • All sorts of people, some not so badly injured, others very badly injured.

  • And as a medic, his job is to think about who am I going to treat,

  • and who am I going to really not be able to help

  • or who can make it on their own at least for a little while?

  • And so he's faced with that enormous complexity and enormous uncertainty,

  • and what does he do?

  • And what he does is he does what a number of people do

  • ranging from that grandmotherly Janet Yellen to crickets to Mark Zuckerberg.

  • He faces complexity with simplicity, and in particular simple rules.

  • And Sergeant Montoya invokes the simple rules of medical triage,

  • in his case Janet Yellen facing some of the complexity of the federal reserve,

  • the US economy, the global economy.

  • Actually has some relatively simple rules around interest rates that revolve around a number for inflation.

  • It's got to be over 2% and a number for unemployment,

  • it's got to be below 5% before she'll raise rates.

  • Mark Zuckerberg is also facing some complexity,

  • has some simple rules especially around hiring.

  • And crickets, you're probably wondering why crickets are in the picture.

  • Well, if you're a cricket, you've got a really short life span and

  • you've got a really small brain, you have to keep it simple if you're a cricket.

  • 什麼是簡單的規則?So they're definitely into simple rules.

  • What is a simple rule?

  • Simple rules are shortcut strategies that save time and

  • effort by focusing your attention and simplifying how we think.

  • So basically a simple rule is a rule of thumb.

  • Maybe get a little more granular though because you might have already

  • thought of that.

  • This is 1.0 on simple rules.

  • First of all simple rules are simple.

  • That means of all things, simple rules are two to five rules.

  • Not a lot of rules, two to five, something you could remember.

  • Second thing is simple rules depend on the person and situation.

  • So the rules that you have might not necessarily be my rules.

  • And then thirdly, simple rules relate to a specific activity.

  • There are not platitudes like, be nice to your mother, or

  • the customer comes first kind of platitudes.

  • Let me give you a few more specifics.

  • Some rules are simple.

  • So the three food rules of Michael Pollan.

  • Many of you know or have probably read Michael Pollan's book.

  • Michael Pollan is the Is the well-known University of California Berkeley

  • professor who wrote the Botany of Desire, The Omnivore's Dilemma, books like that.

  • On many refrigerators around the world, people have posted

  • Michael Pollan's rules for eating, and his rules are pretty simple.

  • Eat real food that your grandmother would recognize.

  • So if your grandmother wouldn't know what it is, don't eat it.

  • Small portions and eat mostly plants.

  • Now, if you think about within that, that's real easy to remember, and

  • yet you can eat cantaloupe, kale, blueberries, fish and

  • meat occasionally, lots and lots of plants, but not too much.

  • So fairly simple, yet it doesn't really restrict you all that much.

  • Second idea, several rules depend on the person's situation.

  • The skinny middle aged guy is Michael Pollan.

  • He has one set of rules.

  • The other people are Stanford football players.

  • They actually have their own eating rules.

  • Stanford football team's eating rules are, eat breakfast because they're students,

  • and if you recall your student days you stay up late, and get up late and

  • often skip your breakfast.

  • Eat your breakfast is the first rule.

  • The second rule is stay hydrated,

  • because these are active young guys and they tend to get dehydrated and

  • that's not good for your body, so they're supposed to drink water.

  • And the third rule of the Stanford football team for eating is,

  • eat as much as you want, as long as you can pick it, pluck it or kill it.

  • If you think about that and it's got some similarity to Michael Pollan right?

  • Your grandmother would recognize anything you can pick, pluck and kill so

  • basically an emphasis on non-processed foods, but

  • beyond that, the rules are pretty different.

  • Stanford football players are not into portion control.

  • They're into eating as much as you want.

  • Stanford football players are not into mostly plants.

  • They eat a lot of protein and they need a lot of protein.

  • They're growing people who need to build muscle.

  • So the point is, simple rules depend on the situation, they depend on the person.

  • Giving that we're sitting here in the business school,

  • let me give you more of a business example.

  • This is a comparison between Indiegogo and

  • Kickstarter, the two crowdfunding platforms.

  • Indiegogo has a set of rules around which kind of projects can be on Indiegogo.

  • The rule is pretty simple, it's anything goes as long as it's legal.

  • So, you can fund your root canal, you can fund your trip to Europe, you can

  • fund your business, your movie, your Jamaican bobsled team, whatever you like.

  • Or you at least attempt to fund it on Indiegogo, as long as it's legal.

  • By contrast, Kickstarter has many more rules.

  • In particular,

  • Kickstarter has some rules around that you have to fit in certain project categories,

  • typically around the arts, although they do have some business categories.

  • But you have to fit into about 13 categories, and Kickstarter over

  • the years has kicked out about 25% of the projects that are submitted to it.

  • And it's also curated by real people who are looking for the merit of the project.

  • So what's the point here?

  • The point here is the same activity, picking Crowdfunding projects,

  • different rules.

  • Why the different rules?

  • I think it partly reflects the background of the founders.

  • Indiegogo is founded by a of people, actually Berkley people

  • and it's an egalitarian philosophy.

  • Essentially the idea is, who are we to tell who can be on the internet?

  • The internet's for everybody and we're not going to be gatekeepers.

  • Everybody deserves the opportunity to grab a rich uncle off the internet.

  • In contrast, Kickstarter is coming out of a background out of the arts.

  • In fact one of the founders explicitly was thinking about Kickstarter

  • as a way to publicly fund the arts.

  • The arts are as a curation model and

  • they were simply picking up on the curation model of the arts.

  • So same process, different rules, different people.

  • Finally, simple rules refer to a specific activity that you do repeatedly.

  • So, for example, choosing foods.

  • You choose foods everyday, specific activity.

  • If you're Kickstarter or Indiegogo you pick projects everyday.

  • So these are repeated things that you do everyday, focused activities.

  • What are they not?

  • What they're not, is for example, they're not simple rules for who to marry.

  • One assumes that you only marry once or twice or maybe three times.

  • >> [LAUGH] >> But, it's not a repeated activity.

  • [LAUGH] So, there's no simple rules for eating.

  • As I said before, simple rules are not about some

  • massive opportunity or platitude.

  • So, for example, there aren't civil rules for curing world hunger,

  • that's too complex a project.

  • So, it's focused on particular activities that you do often.

  • Okay, that's the beginning of the story, simple rules 1.0.

  • Simple rules 2.0 is telling you a little bit about types of rules.

  • It turns out that there are different kinds of rules.

  • And that's relevant for a couple of reasons.

  • One is, some rules are easier to learn than other rules.

  • So some are easy, some are hard to learn.

  • Secondly, somewhat ironically,

  • harder learn to rules tend to be more high performing, lead to higher performance.

  • So learning the harder to learn rules is more related to high performance.

  • And the final reason it's important to learn the different kinds of rules is

  • because having a repertoire of rules is also more

  • effective than just having one kind.

  • So, that's why we're going to talk a little bit about kinds rules.

  • First rule I mentioned to you was a boundary rule.

  • A boundary rule people use when deciding yes or no.

  • For example, you're a judge and you want to design yes or no on bail for

  • someone who's under arrest.

  • Or which alternative do you choose among a lot of alternatives?

  • So most, two kinds of situations.

  • So whenever you have mutually exclusive alternatives or

  • you just have too many alternatives and you've gotta pick one.

  • Give you an example out of Google.

  • When Google was less complex than it is now there were some problems

  • around trying to get product development projects done quickly.

  • How to keep up with search features, for example.

  • And there was some thinking about how do you actually develop products faster?

  • And maybe we should reorganize the way we do product development.

  • A number of other ideas.

  • Finally came up with the idea what was really stopping them and

  • slowing them down was their hiring.

  • And they decided the key was, how do we hire top computer scientists faster?

  • Because in general, top computer scientists are way more productive than

  • not so top computer scientists, average computer scientists.

  • So how do we get those people?