Berkshire Hathaway is one of the most successful investment funds in the world and has been for decades. One of the driving forces behind the Funds success is the contribution of Charlie Munger. Munger is well known for developing mental models to inform decisions. One of these models is called Inverting, and we’ll take a critical look at inverting through a philosophical lens.
Munger reflects that he discovered the power of Inverting when working in meteorology for the USA Air Force. In order to improve the quality of his forecasts for the pilots, he inverted his goal. Instead of thinking about how we could keep the pilots safe, he thought about the best way to cause catastrophe. Once Munger had established the rules to create a catastrophic outcome for the pilots, he then focused on making sure he avoided those rules at all costs. The quality of his work quickly improved.
Inverting provides a perspective and generates insights beyond our current experience and knowlege. The four types of knowing capture and explain this well (drawn from Vervaeke and Lillicrap, 2012, Vervaeke et al, 2017).
The first two types of knowing are propositional knowledge and procedural knowledge. When we are asked to complete a typical task, there is, most of the time, propositions, and procedures which we can draw from. Propositions are the relevant facts pertaining to the task, and procedures are the steps required to complete the task.
For example, you are tasked with driving a package from point A to point B. The propositions are the initial building block;, how many miles do you need to travel, roughly how long will it take, how much petrol will you need etc. Nest we move to procedural knowledge. The procedures include the basic processes of driving a car, but also include planning a route, the steps to get from A to B. Collectively, you have identified the need to move from A to B, the resources and time you will need, and the route of how to get there.
The other two types of knowing are perspectival knowledge and participatory knowledge. Perspectival knowledge is the ability to take a perspective and look at a situation in a certain way. Regarding our driving task, it is taking, for example, the perspective that the journey is particularly difficult, and it will ne necessary to plan alternative routes and locate any gas stations ahead of need. If we used only propositional and procedural knowledge, then we would be taking only a limited and abstract perspective taken from a map. A broader perspective enriches our participatory knowledge, it allows us to participate with the task more effectively; there is a fit between ourselves and the emerging environment which we need to move through to complete the task (Gibson, 1977).
The above allows us to find a way back to Inversion. If we have never travelled the route from A to B, we will have only the perspective a map provides us. Such a limited reliance will significantly blunt our ability to effectively participate with the task unless the journey is very straight forward. To compensate for our lack of experience, we can invert the task—what is the most effective way we could fail this task? This immediately forces us to use our imagination to generate a wider and more varied perspective (McGilchrist, 2022)
As we consider effective failure tactics such as not leaving enough time, having enough petrol, assuming there are no road works and delays, we are increasing all four types of knowing- new relevant facts emerge, alternative procedures, different approaches, and ways of doing things. Inverting provides a mental model which does what Wittgenstein (2010) identifies as a noticing of aspect, looking at something we thought was familiar in a new way.
Inverting takes procedures and processes, and then enhances them through imagination, thereby increasing the ability to effectively participate in an activity. The lesson is not to assume a plan, regardless of it’s technical and logical strengths, is the only perspective required for effective participation.
Reading
Gibson, J.J., 1977. The theory of affordances. Hilldale, USA, 1(2), pp.67-82.
McGilchrist, I., 2022. Reciprocal organization of the cerebral hemispheres. Dialogues in clinical neuroscience.
Vervaeke, J. & Lillicrap, T. & Richards, B. (2012). Relevance Realization and the Emerging Framework in Cognitive Science. J. Log. Comput.. 22. 79-99. 10.1093/logcom/exp067.
Vervaeke, J., Mastropietro, C. and Miscevic, F., 2017. Zombies in western culture: A twenty-first century crisis (p. 104). Open Book Publishers
Wittgenstein, L., (2010) Philosophical investigations. John Wiley & Sons.
