Mike Lehr's Blog

The Freedom-Order duality expresses a dimension of our personality involved in interpreting how we balance freedom and order. It can help us – in real time – understand, appreciate and predict better the reactions of others to such things as processes, decision-making, management, customer service, change and organization.

However, all of this is arbitrary, subjective, meaning different people are comfortable with different levels of freedom and order. To some freedom is chaos because it seems anyone can do whatever he wants. To others order is slavery because there is someone or a rule telling her what to do. Therefore, since there are no absolute states for either, you can be the benchmark as the figure shows. This allows you to assess whether people are more freedom-oriented or order-oriented than you are by the feelings and thoughts they trigger in you.

For instance, more freedom-oriented people might make you feel they are:

You might also notice they tend to use words such as these:

By contrast, more order-oriented people might make you feel they are:

Similarly, you might find them using words such as:

In our daily business lives, this means adding process and procedures to those who are more freedom-oriented than we are might stir anxious feelings about becoming nothing more than an automaton. Conversely, more flexibility and options to more order-oriented people might trigger anxious feelings about what is the right thing to do.

Once we are sensitive to this, we can better position the change by adapting immediately to what we observe in others. To the freedom-oriented people, we will need to reassure the flexibility of adding their own dimension, and to order-oriented people reassuring clear definitions of their duties will exist. In essence, we personalize our approach and words to by appreciating people and their needs better.

The May 21, 2011 edition of The Economist had two articles casting a cloud over the skill inherent in successful stock market investing. Why is this important to intuition? It’s because we tend to have an emotional bias that overweighs outcomes in the evaluation of skill.

In fact, the article, “Poker-faced”, cites Steve Levitt and Thomas Miles of the University of Chicago as having found more skill present in poker than in stock investing. Simply stated they found that historically good poker players tend to do better than those without a history of success do. However, such a correlation didn’t exist with stock investing, and thus, they concluded there is “little evidence of skill” in stock investing. Thus, we could claim that poker is more like investing and the stock market is more like gambling.

The other article, “The Missing Link”, reinforces this unpredictability of the stock market by surveying several studies saying there is no correlation that a good economy translates into rising stock prices. Yet, in spite of these articles, we often see investment professionals tout their historical performance to attract additional clients.

Nevertheless, we know that top poker players don’t always finish on top; it’s not unusual for them to go home early. Moreover, poker is more self-contained, more controllable than the stock market. Everyone plays with the same, small, finite deck of cards and, depending upon the tournament, the same amount of money. By comparison, the stock market is anarchy.

We like to believe there is a direct link between outcomes and skills as opposed to having outcomes linked to a myriad of forces beyond our control. The belief gives us security in an uncertain world.  Yet, it will encourage us to see more skill in stock investing than in poker.

This past month, I conversed with a resident of a Muslim country. He commented on how many of his fellow citizens couldn’t understand why Americans thought they were free. “They have all these laws directing them. They can’t drive as fast as they want and they even need the government’s permission to drive (licenses).”

Coincidentally, the December 16^th 2010 edition of The Economist reported on driving in Iraq. It’s true, at least there, that Iraq has far fewer driving restrictions than the United States has. It doesn’t even require driving licenses. However, driving there is dangerous. In fact, “the health ministry estimates that six times as many people now die in car accidents as fall victim to political violence.”

I also ran across an article about choice in the same issue. “Too much choice, concluded Sheena Iyengar of Columbia University and Mark Lepper of Stanford, is demotivating.” The article went on to suggest that this is from the anxiety people often feel when making decisions; too much freedom of choice increases anxiety.

There are people who seem to prefer less, and almost no, freedom in their work. They prefer clearly defined directions, rules, policies and procedures dictating their thinking and actions. Why? I have come to learn that this produces a different kind of freedom for some: freedom from responsibility. How can we be responsible for decisions we did not make or regulations we did not write? For some it also produces certainty; they know what the “right” decision is.

As the diagram to the right asks, “When does more freedom become chaos and uncertainty to us?” For each of us, that varies. For some of us, it restricts freedom so much that it might not even seem like freedom anymore. So, is freedom for everybody?

While helping a non-profit, a board member said, “We can only deal with a problem if we know there is one.” Here the state knowledge assumes alters our perspective. In this case, it causes us to ignore the idea of prevention, dealing with problems before they arise. In reality, problems don’t care whether we know or prove they exist. Thus, if knowledge’s form can alter our perspective and prevent us from seeing potential solutions, it is important to have a grasp on the different states of knowledge.

To that end, I’ve created the map to the right. It has five basic states: Unknown, Aware, Know, Prove and Quantify. Each is a subset of the previous one:

Knowledge Map

• Unknown: Not knowing what we don’t know
• Aware: Knowing what we don’t know, or not being able to express what we do know
• Know: Knowing without proof but being able to express what we know
• Prove: Using approaches that adhere closely to the scientific method or the one used in courts of law.
• Quantify: Being able to count, calculate or formulate.

By looking at knowledge’s states in this manner, we see how much reality we exclude if we only accept what is quantifiable and provable. Imagine in warfare or the game of poker if we took no action unless we could prove it was the right one. Business is not immune to this. Therefore, success is more determined by how we treat what we don’t know or barely know and not by how we treat what we can prove and quantify. Thus, if we lived by the advice of the board member above, we would surely fail without a great amount of fortune.