Seeing What Others Don't

First published in the UK by
Nicholas Brealey Publishing in 2014

www.nicholasbrealey.com

© Gary Klein 2013
The right of Gary Klein to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988.

ISBN: 978-1-85788-619-1
eISBN: 978-1-85788-943-7

Book Design by Pauline Brown

British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library.
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PART I

ENTERING THROUGH THE GATES OF INSIGHT

How Do Insights Get Triggered?

CHAPTER ONE

Hunting for Insights

THIS WASN’T SUPPOSED TO BE A MYSTERY STORY. It started out innocently as a collection of clippings from newspapers and magazines. I would come across an article describing how someone made an unusual discovery, and I’d add it to a stack on my desk. The stack included notes describing stories I’d heard during interviews or in conversations. Like other enthusiasms, the stack sometimes got covered up in the competition for space. But unlike the rest, this stack survived. Whenever it got completely buried, it recovered each time I found another article and searched for a place to put it. This pile of clippings endured the occasional bursts of house cleaning that sent many of its neighbors into the purgatory of my file cabinets, if not the trash basket. I’m not sure why it survived. I didn’t have any grand plans for it. I just liked adding new material to it. And I liked sifting through it every few months, savoring the stories.

Here’s an example of the type of incident that made its way into my stack. Two cops were stuck in traffic, but they didn’t feel impatient. They were on a routine patrol, and not much was going on that morning. The older cop was driving. He’s the one who told me the story, proud of his partner. As they waited for the light to change, the younger cop glanced at the fancy new BMW in front of them. The driver took a long drag on his cigarette, took it out of his mouth, and flicked the ashes onto the upholstery.

“Did you see that? He just ashed his car,” the younger cop exclaimed. He couldn’t believe it. “That’s a new car and he just ashed his cigarette in that car.” That was his insight. Who would ash his cigarette in a brand new car? Not the owner of the car. Not a friend who borrowed the car. Possibly a guy who had just stolen the car. As the older cop described it, “We lit him up. Wham! We’re in pursuit, stolen car. Beautiful observation. Genius. I wanted to hug him it was so smart.”

I like this kind of story that shows people being clever, noticing things that aren’t obvious to others. They’re a refreshing antidote to all the depressing tales in the popular press about how irrational and biased we can be. It feels good to document times when people like the young police officer make astute observations.

What changed the fate of this stack of discoveries was that I couldn’t answer an important question. I am a cognitive psychologist and have spent my career observing the way people make decisions. Different types of groups invite me to give talks about my work. In 2005, I learned about a movement called “positive psychology,” which was started by Martin Seligman, a psychotherapist who concluded that his profession was out of balance. Therapists tried to make disturbed and tormented people less miserable. However, eliminating their misery just left them at zero. What about the positive side of their experience? Seligman was looking for ways to add meaning and pleasure to the lives of his clients.

I felt that the concept of positive psychology applied to decision making as well. Decision researchers were trying to reduce errors, which is important, but we also needed to help people gain expertise and make insightful decisions. Starting in 2005, I added a slide to my presentations showing two arrows to illustrate what I meant. Here is an updated version of that slide:

To improve performance, we need to do two things. The down arrow is what we have to reduce, errors. The up arrow is what we have to increase, insights. Performance improvement depends on doing both of these things.

We tend to look for ways to eliminate errors. That’s the down arrow. But if we eliminate all errors we haven’t created any insights. Eliminating errors won’t help us catch a car thief who chooses the wrong moment to flick his ashes.

Ideally, reducing mistakes would at least help us gain insights but I don’t believe that’s how it works. I suspect the relation between the arrows runs the other way. When we put too much energy into eliminating mistakes, we’re less likely to gain insights. Having insights is a different matter from preventing mistakes.

When I showed this slide in my seminars, I got a lot of head nods. The participants agreed that their organizations were all about the down arrow. They felt frustrated by organizations that stifled their attempts to do a good job. Their organizations hammered home the message of reducing mistakes, perhaps because it is easier for managers to cut down on mistakes than to encourage insights. Mistakes are visible, costly, and embarrassing.

However, I also started getting a question: “How can we boost the up arrow?” The audiences wanted to know how they could increase insights. And that was the question I couldn’t answer. How to boost insights? I had to admit that I didn’t know anything about insights. This admission usually drew a sympathetic laugh. It also drew requests to come back if I ever learned anything useful about insights.

After one such seminar in Singapore, I had a long flight back to the United States to reflect on the up arrow. I wished I could help all the people who wanted to restore a balance between the two arrows in the equation. And then I remembered my stack of clippings that was waiting for me back home.

So in September 2009, I started my own investigation of insight. I began collecting more examples. I was just poking around, nothing serious. I wanted to explore how people come up with unexpected insights in their daily work. Most studies on insight take place in laboratory settings using college undergraduates trying to solve artificial puzzles. I wondered if I could learn anything useful by studying the way people form insights in natural settings.

I didn’t anticipate that this project was going to dominate my attention for the next few years. I didn’t foresee that I was going to get drawn into a mystery.

Actually, I got drawn into two mysteries. The first was, What sparks an insight? What happens that lets us make sense of a jumble of unconnected and sometimes contradictory facts, events, and impressions?

Once I got going on that one, a second mystery arose (covered in Part II): What prevents us from grasping an insight? Even when it sits dangling in front of our eyes, ripe for the plucking? Even when others brighten at what they have unexpectedly uncovered?

As I tried to sort that mystery out, I began wrestling with a third issue, more of a challenge than a mystery: Are there any practical ways to increase the flow of insights? That’s what my audiences wanted to know, and we’ll come to it in Part III. But I’m jumping ahead. At the start, I just wanted to get a better sense of what happens when people have insights. Here are a few of the stories from my collection.

LIGHTING UP LIFE

Martin Chalfie is a soft-spoken man with a relaxed way of describing complicated topics. He is a professor in the Biological Sciences Department at Columbia University, conducting research on the nervous system of worms. One day, almost twenty-five years ago, he walked into a casual lunchtime seminar in his department at Columbia to hear a lecture outside his field of research. An hour later he walked out with what turned out to be a million-dollar idea for a natural flashlight that would let him look inside living organisms to watch their biological processes in action. Chalfie’s insight was akin to the invention of the microscope, enabling researchers to see what had previously been invisible. In 2008, he received a Nobel Prize in Chemistry for his work.

You can tell that he’s still a bit surprised at the way things worked out for him. He majored in biochemistry at Harvard, but after a disastrous summer laboratory experience at the end of his junior year, he soured on the notion of becoming a researcher. He finished the requirements for his major in his senior year but mostly took courses in law, theater, and Russian literature. He didn’t know what he was going to do after college. After graduating in 1969, he worked selling dresses in his parents’ dress manufacturing business and also taught at a day school in Connecticut. But when one of his old laboratory projects turned into a publication, he gained the confidence to apply to graduate school at Harvard, and he completed his PhD in 1977.

When the Nobel Prize Committee called him in October 2008, he was sleeping and never heard the phone ring. Later, when he finally woke up, he knew that the prize was to be awarded that day, and in the absence of any notification, he assumed someone else had won. He said to himself, “Okay, who’s the schnook that got the Prize this time?” He opened his laptop, went to the Nobel Prize site, and discovered that he was the schnook.

Something happened to him during the hour he spent at the seminar that started his path to the Nobel Prize. Chalfie was studying the nervous system of worms. The type of worms he investigated just happened to have translucent skin, an incidental feature that had played no part in his project up to that point. To study the neurons of worms, Chalfie’s assistants had to kill the worms in order to examine their tissues. Chalfie hadn’t given the methodology for running these experiments much thought because it was the standard way for researchers like him to do their work.

The speaker at the April 25, 1989, lunchtime talk, one of the regular Tuesday seminars arranged by his department, covered a range of issues that didn’t particularly interest Chalfie. Then, in the middle of the talk, the speaker described how jellyfish can produce visible light and are capable of bioluminescence. In 1962, a Japanese scientist discovered the protein that fluoresces to produce a green light in the jellyfish. When ultraviolet light is shined on the protein, it reacts by emitting green light.

That was Chalfie’s eureka moment. Suddenly, he understood that if he inserted the green fluorescent protein (GFP) into his transparent worms, he could shine ultraviolet light on it and see where the protein was spreading. He could track the cells into which he placed the GFP. He thought, “I work on this transparent animal, this is going to be terrific! I’ll be able to see the cells within the living animal.”

Chalfie doesn’t remember much about the rest of the lecture because he was so busy making notes about how he could use this GFP as a biological flashlight.

Today, these biological flashlights are a workhorse of molecular biology and a multimillion-dollar industry. Other researchers cloned the GFP so that technicians don’t have to chop up lots of jellyfish to extract it. The GFP now comes in additional colors, such as blue, cyan, and red. The GFP is easily inserted into a variety of organisms, not just jellyfish and worms, and it has been put to all kinds of uses. When scientists add the GFP to a virus that is injected into mice, they can watch the virus spread and interact with the immune system. Cancer researchers have inserted the GFP into viruses that grow inside prostate cancer cells, making the physiology of these cells visible. The GFP can be added to a molecule that binds to nerve cells so that surgeons can illuminate nerve fibers that they might otherwise have cut by mistake.

The protein has other important uses. One is detecting pollution. When inserted into a bacterium, the GFP glows brighter as pollution levels increase. Another use is for agriculture. Farmers no longer have to spray an entire field. Instead, they can track which plants the insects are attacking and spray only that part of the field. Some technologists have wondered if it is practical to grow bioluminescent trees that could replace streetlights, thereby reducing shadows and cutting energy costs. There was a puppy named Ruppy (short for Ruby Puppy). She was a cloned beagle, the world’s first transgenic dog, and she glowed ruby-red when the protein was activated.

Chalfie’s insight about luminescence shows some classical features of the way ideas fit together to form insights. His discovery came without warning. It was emotional, a sudden jolt of excitement. It emerged from a combination of ideas—the transparent worms and the protein that emitted green light. His insight transformed his direction. Before Chalfie walked into the seminar, his investigation of the worm neurons was central to his work and the methods were the background. When he walked out of the seminar, his ideas for a new method took center stage.

No one else in the lunchtime audience had this insight because only Chalfie was studying a transparent animal. And the insight was an act of creation that resulted in something new—Chalfie could use the green fluorescent protein to watch the workings of neurons in a living organism.

If we had an insight Geiger counter, these cues would set it off: a sudden discovery, a jolt of excitement, a combination of ideas that fit tightly together, a feeling of confidence in the new direction. And no one else has the insight, despite receiving the same information. These cues tell us that an insight has just appeared. They are like the green light that Chalfie used to trace living processes.

SPOTTING A MASTER SWINDLER

Bernie Madoff ran the largest Ponzi scheme in history before being arrested in 2008. But a side story described an obscure financial analyst, Harry Markopolos, who way back in 1999 became convinced that Madoff was dishonest. For the next decade, Markopolos set off on Madoff’s trail like Inspector Javert in Les Misérables trying to bring Jean Valjean to justice, except in this case, Madoff was guilty of more than stealing a 40-sou coin from a young chimney sweep. Like Javert, Markopolos was dogged in his pursuit of Madoff, offended by the thought that a lawbreaker should walk free.

Markopolos notified the Securities and Exchange Commission (SEC) about Madoff in 2000, and his warnings continued until 2008 when Madoff turned himself in. Markopolos got the brush-off each time. The SEC kept treating him as a crank because Madoff was highly respected, a former NASDAQ chairman and well-connected philanthropist. Madoff had sat on the Board of Directors of the Securities Industry Association. No one had heard of Markopolos, who was rumpled where Madoff was smooth, excitable where Madoff was calm. Markopolos himself admits that he is a bit eccentric—for example, naming his twin sons Harry Louie and Louie Harry. More seriously, you have to be a bit nuts to embark on a prolonged investigation the way Markopolos did.

Markopolos’s credibility wasn’t helped by the fact that he was a competitor of Madoff’s in the financial services industry. In addition, he hinted to the SEC about getting a reward. The Securities and Exchange Commission had reasons to be suspicious of Markopolos’s accusations.

Markopolos has his own explanations for the brush-off. The SEC bureaucracy isn’t well designed to catch frauds of this magnitude, and the SEC staff members don’t have the skills to pursue a complicated fraud. Markopolos also believes that government agencies such as the SEC are more interested in protecting Wall Street than in investigating it.

In Part II, we’ll explore the reasons that organizations such as the SEC stifle insights. My initial interest in Markopolos was that he recognized from the start that Madoff was dishonest. How did he do it?

In 1999, Markopolos was working at Rampart Investment Management Company in Boston. Frank Casey, one of Markopolos’s colleagues, challenged him to match the outstanding results of Bernie Madoff’s investment firm. Markopolos was skeptical that anyone could achieve such consistent rates of return, but he agreed to study Madoff’s success. And there is another detail to this example: Markopolos was also a certified fraud examiner.

Initially, Markopolos was just curious about how Madoff was operating. “We weren’t looking for a crime; we simply wanted to see how he made his numbers dance.” He got hold of the publicly available data on Madoff’s hedge fund and within minutes knew something was wrong. The numbers just didn’t add up. Madoff was said to be using a conservative strategy that wasn’t designed to yield consistent profits. Yet Madoff was claiming that his investments were profitable month after month. In fact, Madoff reported losing money in only three months over a period of seven years.

In his book No One Would Listen, Markopolos describes his reaction when he first saw a sheet of Madoff’s results:

I glanced at the numbers … and I knew immediately that the numbers made no sense. I just knew it. I began shaking my head. I knew what a split-strike strategy was capable of producing,^* but this particular one was so poorly designed and contained so many glaring errors that I didn’t see how it could be functional, much less profitable. At the bottom of the page, a chart of Madoff’s return stream rose steadily at a 45-degree angle, which simply doesn’t exist in finance. Within minutes I told Frank, “There’s no way this is real. This is bogus.”

The odds were astronomical against Madoff reliably sustaining the rate of return he had claimed for so many years.

Markopolos didn’t know how Madoff was cheating, although he suspected that Madoff was illegally misdating the times that he placed orders. The other explanation, that Madoff could be running a Ponzi scheme, seemed too far-fetched.

The Markopolos insight that Madoff had to be cheating was sudden, just like those of Chalfie and the young cop. Markopolos used his experience as a fraud investigator to spot telltale implications that others didn’t pick up on. Implications that were striking to Markopolos, Chalfie, and the cop were invisible to people without their background and training.

Markopolos, Chalfie, and the young cop all transformed their thinking. After arriving at the insights, they held a different set of beliefs than the ones they had started with. In Markopolos’s case, the insights contradicted his original beliefs. Before he looked at the numbers, Markopolos couldn’t imagine that a man with such renown and celebrity as Madoff could engage in a crude swindle. After he looked at the numbers, Markopolos wondered how Madoff was pulling off his fraud.

Yet the stories of these three men differ in important ways. Chalfie noticed how different ideas fit together. Markopolos and the young cop each noticed that some data points did not fit together. Chalfie’s insight was about how he could build on a combination of ideas. Markopolos and the cop had insights that certain beliefs were unlikely, if not impossible.

Right away, as I studied the incidents in my stack, I could see lots of differences among them and I doubted that I’d find a common script for how all of these insights worked. Here is a fourth incident.

STUMBLING ONTO A PLAGUE

Michael Gottlieb, MD, published the first announcement of the acquired immune deficiency syndrome (AIDS) epidemic. After receiving his medical degree, he did a fellowship at Stanford University on the immune system. In 1980, Gottlieb started out as an assistant professor at UCLA studying the effect of radiation on the immune system of mice. He didn’t find this type of research very captivating and was on the lookout for patients with interesting conditions. In January 1981, a young resident told Gottlieb about an unusual case—a thirty-one-year-old man with a yeast infection in his throat. The severe infection made it difficult for the man to breathe. Gottlieb knew that this condition typically affected people who had defective immune systems, and accepted the patient.

Gottlieb tested a sample of the patient’s blood. The results didn’t make sense. Our immune systems contain different kinds of white blood cells. Helper cells activate the immune reaction by triggering disease-fighting cells and guiding the body to produce antibodies that destroy microbial invaders. Suppressor cells keep the immune system in check. We have more helper cells than suppressor cells, particularly when we get sick. But this patient was just the reverse. He had more suppressor cells than helper cells. In fact, the patient had hardly any helper cells. Whatever was wrong with him, it was destroying only one type of white blood cell, his helper cells. Gottlieb couldn’t find any way to explain these results.

When the patient developed a fever and pneumonia several days later, Gottlieb made arrangements to assay his lung tissue. The patient had Pneumocystis pneumonia, a disease caused by a fungus that attacks the fibrous lining of the lungs and interferes with the transport of oxygen into the blood. This yeastlike fungus is sometimes found in the lungs of healthy people. However, it rarely gets out of control unless something goes wrong with a person’s immune system. Pneumocystis pneumonia affects cancer patients, people receiving organ or bone marrow transplants that require drugs to suppress their immune systems, premature infants, and the elderly. Healthy young adults don’t get it. So Gottlieb had another piece of evidence that this patient had something wrong with his immune system.

Gottlieb remembered other things about his patient. The attractive young man was a model who’d even had cheekbone implants. Gottlieb’s patient had moved to Los Angeles to live a gay lifestyle. Gottlieb overheard a telephone call in which the patient confided in a friend, “These doctors tell me that I am one sick queen.” Such candor, while common today, was unsettling thirty years ago. Like most people, Gottlieb wasn’t used to it.

A few months later, Gottlieb examined two others in the Los Angeles area with some of the same symptoms. Both also came down with Pneumocystis pneumonia. Gottlieb saw the similarity to his earlier patient and noticed a coincidence: these two men were also gay.

By April, Gottlieb had his fourth and fifth Pneumocystis pneumonia patients, with all the typical symptoms: swollen lymph nodes, fever, weight loss, and a nasty case of yeastlike fungal infection. Like the others, these men were gay.

To get the word out quickly, Gottlieb and his colleagues published their findings in the Morbidity and Mortality Weekly Report, issued by the Centers for Disease Control. That paper was the first public announcement of the beginning of an epidemic that came to be called “AIDS.” Gottlieb’s paper, “Pneumocystis Pneumonia—Los Angeles,” appeared on June 5, 1981.

Gottlieb’s insight centered on a frightening pattern. He didn’t know what caused this coincidence—his insight didn’t extend that far. He just knew that the cluster of cases seemed ominous. In December, Gottlieb had no inkling of the onrushing AIDS epidemic. By May, he was sounding the alarm. His belief system had been profoundly transformed. So had his medical practice; he began specializing in working with AIDS patients. Years later Gottlieb was Rock Hudson’s physician when the actor was first diagnosed with AIDS. Hudson, a six-foot, five-inch romantic actor, had often been voted the favorite leading man by film magazines. He was the first major celebrity to die from AIDS, giving the disease a face that the public could recognize.

Gottlieb built his career around his discovery of AIDS. He published more than fifty papers on AIDS in the mid-1980s and was an investigator on the early clinical trials of the HIV-suppression drug AZT. He was one of the founding chairs of the American Foundation of AIDS Research, a charity established through a $250,000 gift from Rock Hudson’s estate. Later, Gottlieb’s celebrity status was tarnished when the Medical Board of California reprimanded him and two other physicians for overprescribing painkillers for Elizabeth Taylor, another founder of the charity.

Unlike the first three examples, Gottlieb’s insight transformation wasn’t sudden. It grew from case to case. What began as a curiosity in January turned into a suspicion in February when Gottlieb saw the second and third AIDS patients, then transformed into a pattern with the fourth and fifth patients. Gottlieb’s insight was to see the pattern, as opposed to Chalfie, who spotted an opportunity to combine seemingly unrelated ideas, and Markopolos and the young cop, who both homed in on an inconsistency.

GETTING MY CAR FIXED

Insights aren’t reserved for people who win Nobel Prizes, sound the alarm about master criminals, or unravel the mystery of new epidemics. People have insights all the time. Sometimes we notice them, as in the story about the young cop who spotted a car thief. Usually, they’re so trivial we don’t pay much attention to them unless we’re collecting them as a hobby. For example, I was once scheduled to drop off my car for service on a Monday, but that afternoon my mechanic, Don Friessen, telephoned that he was backed up and wouldn’t be able to work on it until Wednesday. Unfortunately, it was the Wednesday before Thanksgiving and my wife Helen and I were driving her car out of town that morning. I didn’t want to leave my car at Don’s repair shop all weekend because then my house might look deserted with no cars in the driveway, possibly attracting the wrong kind of attention.