Joe: In 1958, the average company on the S&P 500 stuck around for 61 years. Today, that lifespan is just 18 years. Most strategies are built for a world that no longer exists. What if the key to survival isn't a better plan, but a better mindset? Lewis: Wow, 18 years. That's brutal. It feels like the corporate world has become a high-stakes game of musical chairs, and the music is speeding up every single year. You blink, and your company is gone. Joe: Exactly. And that's the entire premise of the book we're diving into today: Strategic Mindsets for Uncertain Times by Robert McLean and Charles Conn. These guys are serious strategists, with decades of experience at top-tier consulting firms and nonprofits. This book is actually a follow-up to their Amazon bestseller, Bulletproof Problem Solving. They argue that in this chaotic environment, the old rules just don't apply. Lewis: So it's not about having a perfect map anymore, because the landscape is constantly changing. It's about having a better compass. Joe: Precisely. And their first, most provocative idea for that compass is that we need to become... imperfectionists. Lewis: Hold on. ‘Imperfectionist’ sounds like a great excuse to be sloppy. How is that a winning strategy? It feels like every business guru for the last fifty years has been telling us to be perfect, to optimize, to get it right the first time. Joe: That's the core tension. The authors argue that in a world of deep uncertainty, the pursuit of perfection leads to one of two disasters: either you make a huge, reckless bet based on flawed assumptions, or you get paralyzed by analysis and do nothing at all. Imperfectionism is the middle path. It’s about making small, thoughtful moves, learning from them, and adapting.

Joe: Let me give you a classic example from the book. Think about Amazon in the early 2000s. They wanted to get into consumer finance, a market they knew nothing about. Lewis: Right, a very dangerous playground. Full of giants. Joe: Absolutely. So what did they do? They didn't go out and buy a massive bank. They made a series of small, almost invisible moves. They bought a tiny company called TextPayMe and rebranded it. It didn't get much traction. They invested in another company, Bill Me Later. They hired a team from a failed startup called GoPayGo. They launched a physical credit card reader called Amazon Local Register. Lewis: I don't even remember half of those. Sounds like a string of failures. Joe: On the surface, yes. TextPayMe closed down. Local Register was withdrawn. Bill Me Later got bought by PayPal, not Amazon. From the outside, it looked like a mess. It was the opposite of a perfect, clean strategy. But what was really happening? Lewis: They were learning? Joe: They were learning. They were building capabilities, understanding the market, and figuring out what customers wanted, all without betting the farm. Each of those "failures" was a low-cost tuition payment. And all that accumulated knowledge eventually led to the massive success of Amazon Pay, which now has a huge share of the US market. That's imperfectionism in action. It's strategy as a series of small, survivable experiments. Lewis: Okay, that makes sense. It’s like learning to swim by splashing around in the shallow end instead of just diving headfirst into the deep. But what’s the alternative you mentioned? The big, reckless bet? Joe: The book gives a chilling example: Bank of America's acquisition of Countrywide Financial in 2008, right in the middle of the financial crisis. Lewis: Oh boy, I remember this. This was not a small splash. Joe: This was a cannonball. On paper, it looked like a brilliant, decisive move. BofA wanted to dominate the mortgage market, and Countrywide was a huge player. They bought it for $4 billion. It was a single, massive, "perfect" bet to reshape their business overnight. Lewis: And it turned into a complete nightmare. Joe: A fifty-billion-dollar nightmare, by some estimates. The acquisition was a toxic mess of subprime loans and legal liabilities that haunted Bank of America for years. They made one giant, irreversible bet based on the assumption they could handle the risk. They were wrong. That’s the danger of trying to be perfect and decisive in an uncertain world. Lewis: So you have Amazon’s messy, iterative learning on one end, and Bank of America’s disastrous, perfect bet on the other. And I guess the third option is the deer in the headlights. The Blockbuster model. Joe: Exactly. Risk-aversion paralysis. Blockbuster saw Netflix coming. They knew the world was changing. But instead of making small, imperfect moves into digital, they clung to their brick-and-mortar model because it was what they knew. They were so afraid of making the wrong move that they made no move at all. And we all know how that ended. Lewis: One store left in Bend, Oregon. It’s a tourist attraction now. It’s fascinating how the authors frame this, because it’s so counter to the typical corporate ethos of control and predictability. The book is highly-rated, but I can see how this idea would be a tough pill to swallow for a lot of CEOs who built their careers on five-year plans and hitting perfect targets. Joe: It requires a fundamental shift in mindset. It's about admitting you don't have all the answers and being okay with that.

Lewis: Okay, so being an imperfectionist means you're willing to act without all the answers. But how do you even know what to act on? Where do the ideas for these small bets even come from? You can't just experiment randomly. Joe: That's the perfect question, and it leads directly to the next two mindsets the authors talk about: being 'Ever Curious' and having a 'Dragonfly Eye'. The ideas come from looking at the world differently. Let’s start with curiosity. The book tells this wonderful story about Edwin Land, the inventor of the Polaroid camera. Lewis: Oh, I like this already. Joe: It's 1943. Land is on vacation with his three-year-old daughter, Jennifer. He takes a picture of her with his camera. And Jennifer, being a three-year-old with no concept of film development, asks a very simple, very naive question. Lewis: What was it? Joe: She just asked, "Can I see the photograph, Daddy?" Lewis: Wow. So simple. A question no adult at the time would have even thought to ask, because everyone "knew" you had to take film to a lab and wait. Joe: Exactly. But that question, from someone who didn't know the rules, sparked an idea in Land's mind. He went for a walk, and as he later described it, within an hour he had mentally solved the entire puzzle—the camera, the film, the chemical process for a dry camera that could produce a picture instantly. A three-year-old's curiosity unlocked one of the most iconic inventions of the 20th century. Lewis: That’s incredible. And it’s a bit sad, because the book points out that research shows our curiosity levels plummet after the age of five. It's like we're systematically trained out of this superpower. We learn the "right" answers and stop asking the "dumb" questions. Joe: We become "pattern imposers," as the authors say. We see a new problem and immediately try to fit it into a pattern we already know. But in uncertain times, that's deadly. The old patterns don't work. You need that fresh, curious perspective. And that curiosity then fuels the next mindset, the 'Dragonfly Eye'. Lewis: Dragonfly Eye. What does that mean? Joe: A dragonfly's eye is a compound eye, made of thousands of tiny lenses, each seeing the world from a slightly different angle. The idea is to view a problem not through one lens—like the finance lens or the engineering lens—but through many different lenses simultaneously. Lewis: So it’s like putting on different pairs of glasses—one for the customer, one for the competitor, one for the regulator—to see the whole picture? Joe: Precisely. The book has a brilliant case study on this. In the UK in 2010, there was a huge problem with recidivism. About 60% of prisoners were reoffending within 18 months, costing the government a fortune. The traditional lens was a social services lens: how do we provide better counseling or job training? And it wasn't working well enough. Lewis: So they needed a new lens. Joe: They got one from a man named Sir Ronnie Cohen. His background wasn't in social work; it was in venture capital. He looked at this social problem and put on his VC glasses. He asked a different question: "What if we could tie a financial return to a reduction in reoffending?" Lewis: Wait, so you’re saying he wanted to turn saving society money into an investment product? Joe: That's exactly what he did. He created something called a Social Impact Bond. Private investors put up the money—in this case, £5 million—to fund the rehabilitation programs. If the programs succeeded in reducing recidivism by a certain amount, say 7.5%, the government would pay the investors back their principal plus a profit. If the programs failed, the investors lost their money, and the government paid nothing. Lewis: Whoa. That completely reframes the risk. The risk of failure shifts from the taxpayer to the private investor, who is now highly motivated to make sure the programs actually work. Joe: You got it. It's the Dragonfly Eye in action. By looking at a social problem through a financial lens, they created a revolutionary new tool. And it worked. The Peterborough bond succeeded, investors got their money back with a return, and the model has now inspired over a trillion dollars in similar sustainability-linked financing globally. They solved an intractable problem by changing the way they looked at it.

Joe: And once you have that new perspective, that new idea, you can't just assume it's right. You have to test it. This leads to the next mindset, which has a bit of a technical name: 'Occurrent Behavior'. Lewis: Okay, 'Occurrent Behavior' is a bit of a mouthful. In simple terms, what does that actually mean? Layman's terms, please. Joe: It just means you prioritize generating new, real-world data through experiments over relying on old, historical data. You don't just analyze what has happened; you create situations to see what is happening. You run the test. Lewis: You get out of the spreadsheet and into the real world. Joe: Exactly. And the story for this one is my absolute favorite in the book. It takes place at the US Federal Reserve back in the mid-20th century. They had this massive, costly operation where hundreds of people would just sit in vaults all day, manually counting stacks of used currency that came in from commercial banks. Lewis: That sounds mind-numbingly boring and expensive. Joe: It was. Two guys, Ted Hall and Don Watters, thought there had to be a better way. They noticed that the error rate in the counts was actually very low. So they had a hypothesis: what if, instead of counting every single bill, we could just weigh the bundles of cash? Lewis: Like weighing gold? Joe: Precisely. The idea came from seeing precision scales at a Wells Fargo museum. They hypothesized that a stack of 100 one-dollar bills should have a standard weight. If a bundle weighed the correct amount, it was probably fine. If it was off, then you could manually count it. Lewis: That is so simple it’s brilliant. But I can imagine the bureaucracy at the Fed was not thrilled with this idea. Joe: You can bet. So they had to prove it. They set up an experiment. They took two large pallets of cash. One pallet would be verified the old way, with human counters. The other pallet would be verified their new way: weighed against a standard, with only a small statistical sample counted by hand. And to make it a real test, the chair of the Federal Reserve himself, Arthur Burns, came down to the vault to observe. Lewis: The pressure is on. What happened? Joe: The results were stunning. The pallet that was hand-counted, the "bulletproof" old method, turned out to be riddled with errors. But the pallet that was weighed and sampled? It had zero errors. Lewis: Come on! That's incredible. The simple scale beat the army of human counters. It proves you can't just trust 'the way we've always done it.' Joe: It’s the perfect example of occurrent behavior. The experiment created new data in real-time that was more valuable than decades of institutional habit. It was a clear, undeniable result. Arthur Burns, the Fed chair, looked at the results and said, "It seems like we have a clear answer." They abandoned hand-counting and adopted the weighing method, saving millions.

Lewis: So it all connects. You start by being an 'imperfectionist,' which gives you the psychological permission to act even when you're not 100% sure. Joe: Right, you step into the ambiguity. Lewis: Then, your actions are guided by a combination of 'curiosity'—asking those naive questions—and a 'dragonfly eye' view to find novel approaches that others miss. Joe: You're looking for the unconventional angle. Lewis: And finally, you don't just trust your brilliant new idea. You validate it with 'occurrent behavior'—running small, real-world experiments that give you fresh, undeniable data. Joe: Exactly. It's a dynamic loop: Act, Learn, See, Test, and repeat. It’s a complete system for navigating a world you can't predict. Lewis: The big takeaway for me is that this isn't about being reckless. It's the opposite. It's about being relentlessly experimental and smart about how you take risks. The authors say all strategies are wagers on an uncertain future. The question is, are you making one giant, blind bet like Bank of America, or a series of small, smart ones like Amazon? Joe: That's the heart of it. It’s about making your wagers thoughtfully. It’s about having the courage to be imperfect and the curiosity to always be learning. In a world that’s changing faster than ever, that might be the only strategy that truly works. Lewis: I'm curious what our listeners think. What's one 'perfect' plan you've seen fail spectacularly, or one 'messy' experiment that ended up succeeding against all odds? We'd love to hear your stories. Joe: This is Aibrary, signing off.