#138 - Addition by Subtraction (From the Archives)

What Legos Can Teach Us About Corporate Strategy

Sep 04, 2022

Hi 👋 - Happy Labor Day weekend to readers in the US. Today, dipping into the archives to look at addition by subtraction. People typically favor solving problems by addition rather than subtraction. Instead of decluttering, we buy a new ottoman. This bias impairs problem solving and drives bad strategy. Thanks for reading.

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Less is More

Steve Jobs described innovation as “saying no to a thousand things.”1 To Jobs, focus meant turning down hundreds of good ideas to concentrate on a few carefully selected options. His ability to say no and subtract bucks the normal human tendency to solve through addition. As individuals, this tendency blinds us to easy solutions. At companies, it leads to bad strategy.

Marie Kondo aside, people favor addition to subtraction. When asked to make improvements, we typically add things rather than removing them. Instead of decluttering, we buy a new rug. A recent study by Gabrielle Adams, Benjamin Converse, Andrew Hales, and Leidy Klotz, all from the University of Virginia, found this result across a variety of situations2.

In one study, the goal was to save a Lego man from being crushed with a brick. The figurine was perched below a Lego tower of dubious structural integrity. Participants were asked to modify the blocks so that when a brick was placed on the roof, it wouldn’t collapse. One solution was to remove the orphan pillar support (pictured below). Another was to buttress the pillar with more Legos. The overwhelming majority of participants, 78%, chose the latter.

Source: Nature, Adding is favoured over subtracting in problem solving, April 7, 2021.

Multiple observational studies arrived at the same conclusion. These included rearranging patterns to make them symmetrical, rewriting an essay, and brainstorming ideas to improve a college. Across these studies, eighty to ninety percent of participants choose an additive solution - more colored squares, more words, and more collegiate programs.

This research suggests we have a blindspot for solving problems by subtraction. By default, we seek to add:

Adams et al. demonstrated that the reason their participants offered so few subtractive solutions is not because they didn’t recognize the value of those solutions, but because they failed to consider them.3

Attempts to nudge people to subtract can help somewhat. For example, in another variant of the Lego experiment, participants were paid $1 for their solution, less $0.10 for every additional Lego they used. This time, about 40% of participants solved the problem by removing the single block compared to 22% who chose that solution unaided4.

Adams has a few hypotheses for why this happens. People might receive less credit for subtractive solutions than additive ones. Alternatively, loss aversion and the sunk-cost fallacy could keep people away from solutions involving subtraction. Lastly, being more prevalent, additive solutions may be easier to recall and replicate. To overcome this additive bias, the researchers suggest that managers and policymakers explicitly ask for proposals that reduce rather than add.

Via Negativa

In his book Antifragile, statistician and former derivatives trader Nassim Nicholas Taleb’s tells a story about the pope meeting Michelangelo. Awed by David, his marble masterpiece, the pope asks Michelangelo for the secret to his craft. His response:

It’s simple. I just remove everything that’s not David.

Improving by subtracting is an ancient idea. Via negativa, Latin for the negative way, is a recurring concept in Antifragile. Taleb sees it an important tool for managing risk in a complex world. Via negativa is a recipe for what to avoid and what not to do. To be strong, avoid what makes you weak. For example, you get rich by not going bust. It’s what Charlie Munger was getting at when he quipped:

All I want to know is where I’m going to die, so I’ll never go there.

While not second nature, sometimes the best solution involves subtraction. Just ask Michelangelo.

Good Strategy, Bad Strategy

The bias towards addition over subtraction helps explain the dearth of good corporate strategy. According to Richard Rumelt, a strategy expert and author of Good Strategy, Bad Strategy, most large companies either don’t have a strategy or have a rubbish strategy. Like addition, bad strategy is the default.

To Rumelt, good strategy has three elements5: a diagnosis, a guiding policy, and a set of coherent actions.

The diagnosis defines the problem, ideally clarifying the situation and suggesting where to focus. The guiding policy is the approach to overcoming the problem. Lastly, coherent actions are how the policy is carried out. To accomplish their aim, actions should be coordinated. Slogans or goals, without a coherent plan of action, are empty calories.

Good strategy requires deciding what’s most important and concentrating energy and resources there. This requires acknowledging trade-offs and accepting limitations. It’s about how you act, given the hand you were dealt, instead of bellyaching about what hand you’d prefer or explaining why it’s a bad hand.

Energy, time, and talent are scarce. Given finite resources, a shift in one direction means a shift away from another. As such, subtraction is a necessary component of good strategy. Yet, as Adam’s research shows, this doesn’t come naturally. Back to Rumelt:

Good strategy works by focusing energy and resources on one, or a very few pivotal objectives whose accomplishments will lead to a cascade of favorable outcomes. One form of bad strategic objectives occurs when there is a scrambled mess of things to accomplish - a “dog’s dinner” of strategic objectives. A long list of “things to do,” often mislabeled as “strategies” or “objectives,” is not a strategy. It is just a list of things to do.

Of course, none of this is easy. The gravitational pull in business is towards bigness: more people, more projects, more squeaky wheels, and, if you’re not vigilant, more bureaucracy. Overcome by this, Rumelt notes that:

Most complex organizations spread rather than concentrate resources, acting to placate and pay off internal and external interests.

Good strategy requires leaders that are comfortable saying no often. Steve Jobs said that he was just as proud of the things that he didn’t do as the things that he did do. That’s via negativa in action. Sometimes the best solution is removing a Lego.