Simplicity
Taleb argues that designers who bear the consequences of failure have a reason to keep systems simple. People rewarded for appearing sophisticated may instead add complexity whose costs fall on others.
THE IDEA
Now skin in the game brings simplicity—the disarming simplicity of things properly done. People who see complicated solutions do not have an incentive to implement simplified ones. As we saw, a bureaucratized system will increase in complication from the interventionism of people who sell complicated solutions because that’s what their position and training invite them to do.
Things designed by people without skin in the game tend to grow in complication (before their final collapse).
There is absolutely no benefit for someone in such a position to propose something simple: when you are rewarded for perception, not results, you need to show sophistication. Anyone who has submitted a “scholarly” paper to a journal knows that you usually raise the odds of acceptance by making it more complicated than necessary. Further, there are side effects for problems that grow nonlinearly with such branching-out complications. Worse:
Non-skin-in-the-game people don’t get simplicity.
When to use it
Product design: Resist feature bloat by having designers and developers directly use the product.
Policy making: Evaluate proposed regulations by asking whether the authors would bear the consequences of unintended side effects.
Academic writing: Simplify papers to convey core ideas clearly, rather than adding complexity to impress reviewers.
Organizational structure: examining whether layers of approval improve decisions enough to justify their delay and cost, and who bears those costs.
FROM THEORY TO EVERYDAY LIFE
In practice
Bureaucratic Process Overcomplication
A government agency introduces a new compliance form that grows from one page to thirty pages over the years, as each new administrator adds a safeguard to avoid blame, without bearing the cost of the added complexity.
Startup Simplicity
A small startup with founder-investors builds a single-purpose tool with minimal features. Because the founders will suffer if the product fails, they resist adding unnecessary complexity, leading to a cleaner user experience.
A MOMENT TO REFLECT
Put it to work.
Think of a system you interact with that has grown overly complicated. Who designed it and did they have skin in the game?
How can you introduce simplicity into your own work by ensuring you have direct responsibility for outcomes?
In what areas of your life are you tempted to add complexity because you are rewarded for perception rather than results?
CONTINUE THE CONVERSATION
Source texts
- Skin In The Game Hidden Asymmetries In Daily Life (Nassim Nicholas Taleb)