7 Apr, 15 tweets, 5 min read
THE PYRAMID OF RISK

Bigger risks are infrequent; organizations that use them as indicators of problems will only react when it's too late.

Instead, by measuring the basis of the pyramid, organizations can spot problems before they become catastrophes.

2/ In the 30s, a researcher by the name of Heinrich studied workplace incidents and noticed that for each death, there are many injuries.

And for each injury, many near misses.

And for each near miss, many unsafe behaviors.

Hence the pyramid shape.
4/ The pyramid of risk is one of the most important concepts that a manager must know.

Here is why.
3/ Question: imagine that over the years, the numbers of yearly deaths in a company is as follows:
1
1
1
0

Can we say that over the years, the company got safer?

No, because the sample is too small.
Maybe it was just good luck, and next year there will be 2 deaths.
4/ Instead, imagine that over the years, the number of unsafe behaviors (eg. % of workers without protective equipment) is as follows:
35%
35%
15%

Can we say that the company got safer?

Probably yes, because the sample is bigger thus more stable.

Hence the following principle:
5/ Trends measured at the bottom of the pyramid are stabler and thus more informative.

Instead, when you measure the top of the pyramid, you don't know if you're measuring performance or luck.
6/ Another principle: if you measure the top of the pyramid to know when it's time to make some changes, you'll guarantee a catastrophe.

If you assume that until there's a death your company is safe, you will get a dead employee.
7/ By the way, this is the mistake our governments committed in February 2020. They measured the top of the pyramid (COVID deaths) to know whether their country had COVID.

As a result, they guaranteed that there would be a lot of COVID deaths. They guaranteed late reaction.
8/ Instead, organizations that measure the bottom of the pyramid get a shot at catching a problem when they still have time to react and prevent a catastrophe.
9/ Of course, great organizations do not only measure the bottom of the pyramid.

They measure the bottom AND the top. The latter is necessary to prevent detachment from reality and to ultimately hold people accountable.

Measuring the bottom is necessary but not sufficient.
10/ You can apply this principle to your daily life too.

(examples below)
11/ If you measure your weight (the top of the pyramid) to know when to exercise, you'll guarantee that you'll get overweight before you react.

If you measure your amount of exercise (the bottom of the pyramid), you will prevent health problems before they occur.
12/ Similarly, as an author, I do not only measure my book sales (the top of the pyramid) but also my writing habits and the quality of my writing (the bottom).

This way, I catch problems faster and I iterate more – making my skills compound much faster.
13/ Conclusion: measuring the bottom of the pyramid will let you discover problems before it's too late and will let you iterate much faster – both of which are great for the long term.
14/ The top of the pyramid = lagging indicators.

The bottom of the pyramid = leading indicators.

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# More from @DellAnnaLuca

7 Apr
ALL MY BOOKS 10+% OFF
thanks to @Gumroad Day

Gumroad is the platform on which I sell my eBooks. It's their 10th birthday. To celebrate, they decided to cancel all transaction fees for the day, and I decided to match & pass the savings to readers

First, my most-sold book: "Ergodicity, as simple as possible."

It's the best book to get an intuitive understanding of one of the most important concepts to take good decisions regarding your career, relationships, and life in general.

A review:
31 Mar
THE DISTRIBUTED BRAIN

Why do we fall prey of illusions such as the one below?

The answer lies in how our brain is wired

2/ Let's look at a fragment of the previous image.

It looks coherent and could plausibly exist.
3/ Also the other two fragments, when examined one by one, look plausible.
31 Mar
THE DISTRIBUTED BRAIN

Why do we fall prey of illusions such as the one below?

The answer lies in how our brain is wired

2/ Let's look at a fragment of the previous image.

It looks coherent and could plausibly exist.
3/ Also the other two fragments, when examined one by one, look plausible.
30 Mar
THE HIVE MIND FALLACY

Principle: organizations are not influenced by incentives weighting on it; instead, their behavior is determined by the incentives weighting on the decision makers inside them.

This is because organizations have no agency; no hive mind.

1/N
2/ Let me explain with a metaphor.

When we talk about a colony of bees, we often believe it has a collective will (the "hive mind").

However, it never takes decisions itself.
Instead, its bees take INDIVIDUAL decisions, whose result converges on a group behavior.
3/ The same applies to companies. How often do we read headlines such as "Apple decided to design a car"?

However, Apple doesn't have agency.
Its managers do.

The decision was the result of individual managers taking decisions based on their individual information & incentives.
29 Mar
MEGA-THREAD OF ALL THE TIMES VIRUS LABS "LOST" DANGEROUS PATHOGENS

1/ SARS is documented to have escaped virus labs multiple times; twice from the same one

2/ The Institut Pasteur lost 2349 vials of SARS and once transported vials on a regular plane breaking protocols