#62 - Tripwires in decision-making: Van Halen and Minnetonka

Plus: A tiny thought on why a bald man is more powerful than a balding man

Hello, dear readers! Welcome to issue #61 of Curiosity > Certainty 👏

Earlier in the year, around March, I started a book consumption habit. I tried to consume the same book across formats—text (physical and/or kindle) and audio. I did this with three books: How to Change, Atomic Habits, and Nudge. I also wrote extensively (breaking the book down to chapters or key concepts) about what I learned from these books—the process of reflection and synthesis another step to cement the lessons down. Most of the writing was for LinkedIn; some of it found its way here.

The gist of what I learned is nothing you wouldn’t imagine for yourself—more formats = better retention. The surprising bit was the writing. Putting into words (and some pictures) made me think hard about what I had grasped. It exposed the chinks in my understanding and bothered me enough to have them fixed.

Teaching what I have learned can only push my understanding further. When it comes to any concept or mental model, as cognitive psychologist Gary Klein says, there are four attributes: how do they work + what are their limitations + how can one get around them + what are people likely to be confused by. Most can do the first three; only a teacher knows the fourth.

So that’s what I have decided to do. I’ll teach what I have learned about decision-making and better thinking. I don’t know if I’ll be any good at it, but the only way to know is to take a shot at it. So, wish me luck! If this makes you curious, leave a public comment here or reach me privately at satyajit.07@gmail.com. I would love a conversation.

On to this week’s issue where I tell you two stories about tripwires—one to know when to stop a loss, and the other to know when to double down—and two tiny thoughts.

A lesson from Van Halen on how to decide in advance for bad times

A common mistake is that a decision once taken is done and dusted. 

A decision is a bet on a set of conditions. When those conditions change, it is time to review the decision. But we often set no triggers to alert us when things go off track. We pump money into marketing a new product without a limit on the drop-off rate, we place an order for a trade without a trigger price, and so on.

How can we change course before reaching a dead-end? 

We can learn from Van Halen, a rock band from the 70s and 80s who were also operations gurus.

A Van Halen concert was unlike any other in scale. In his memoir Crazy from the Heat, lead singer David Lee Roth talks about how their gear would be carted in nine trucks when the standard was three. The production design was high end; the prep work, back-breaking. The band feared a small screw-up by venue stagehands would cause serious injury on stage.

Because the band was always touring (just in 1984 they did over 100 concerts), they had no time to run thorough checks at each new venue. So they came up with an ingenious way to ensure things went smoothly.

Van Halen set up a tripwire. 

The band demanded a bowl of M&M’s backstage, with all the brown ones removed. ‘There will be no brown M&M’s in the backstage area, upon pain of forfeiture of the show, with full compensation.’ They hid this clause inside an encyclopedia-fat contract.

Upon arriving at a new venue, the band would first glance at the M&M bowl. Any sign of brown meant a line check of the entire production. If the organizers missed the clause, it was likely they missed other things more important. That was a red flag that the band could not ignore.

A tripwire is an alarm that goes off when things change beyond what is acceptable to you. It is designed to limit exposure to risk. During times of change, we lose your perspective of what’s acceptable. Or we may forget to notice. 

A tripwire hardcodes sensible behavior in advance by setting two parameters: metric and time (‘get to X point in Y time’ = ‘if we see a brown M&M before a concert’)  

We can set a tripwire for a variety of scenarios: lose an important business opportunity, attrition touches a number, or we see a certain number of patients with the same undiagnosed condition (The trigger that led to the announcement of the AIDS epidemic was a spate of five similar cases clustered between January and April 1981 in Los Angeles).

In a changing environment autopilot is our worst enemy. A tripwire is our insurance against the worst-case scenario.

(This post of mine caught the attention of the Van Halen fans on LinkedIn. For those interested in band trivia and stories, head over to the comments to the post here.)

How David beat Goliath with a positive tripwire

We may understand why it’s important to set a tripwire for when things go awry. Van Halen and their M&M’s are proof. 

But a tripwire doesn’t just check our slide into the abyss. It can also accelerate our charge to success. This is often ignored.

In the late 70s, Minnetonka introduced liquid soap in the crowded bar-soap US market ruled by Unilever, P&G, and J&J. Dispensed from a distinctive (and novel back then) plastic hand pump, the product (Softsoap) showed early potential in local pilots with boutique distributors. 

Minnetonka leadership recognized the opportunity–if they could get shelf space for 6 months without the big players snapping at their heels–and what stood in the way of the opportunity–they needed to have enough hand pumps if demand shot up through the roof.

What did they do? They set up a positive tripwire.

At the time, only two suppliers made the hand pumps they needed and Minnetonka signed options contracts with both. Minnetonka secured itself the right to purchase the hand pumps at a preset price and by a date. And sure enough, soon it had the world’s supply of plastic hand pumps! 

The big players had to wait for supply to build back up or build factories to make their own pumps. Either way would take several months. By controlling the supply chain, Minnetonka built itself a moat that secured domination for years ahead.

Just as a negative tripwire limits exposure to risk, a positive tripwire helps double down on opportunity.

As a founder, it could be to press the pedal on hiring when conversion hits a certain number. 

As a parent, it could be to support your child once she starts willingly putting in the hours to learn something. 

As a creator, you could set one for when you gain a certain number of weekly followers (funnily enough, my post on how Van Halen used positive tripwires has taken off like nothing before). 

When opportunity knocks, we blow our chances by hesitating to open the door because we haven’t decided in advance who a good visitor is.

Tiny Thought #6

A completely bald head has no insecurity. A balding head does.

Likewise, a hermit has no relationship issues. But a social butterfly does.

The bald head or hermit haven’t solved their original problem. Just created new categories to avoid feelings of inferiority.

Tiny Thought #7

‘If I want an opinion from my line cooks, I'll provide one’--the late Anthony Bourdain, Kitchen Confidential. Line cooks deliver Six Sigma consistency in kitchens. Shop-floor workers do the same in factories. Quality, as we’re most familiar, is built on zero variance. But knowledge work is different. You need to trigger innovation. That’s precisely the conflict in modern management of knowledge workers: how to scale up processes without losing on innovation.

If you like my tiny thoughts, go ahead and share them with a friend or more.

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Thank you for reading! I would love to how I can make this newsletter more useful for you. Let me know in the comments or write to me at satyajit.07@gmail.com. Stay well!