Magazine / The Art of Storytelling in a World of Information Overload

The Art of Storytelling in a World of Information Overload

Arts & Culture Book Bites Creativity

Morgan Housel is a partner at The Collaborative Fund. He is a two-time winner of the Best in Business Award from the Society of American Business Editors and Writers, winner of the New York Times Sidney Award, and a two-time finalist for the Gerald Loeb Award for Distinguished Business and Financial Journalism.

Below, Morgan shares five key insights from his new book, Same as Ever: A Guide to What Never Changes. Listen to the audio version—read by Morgan himself—in the Next Big Idea App.

1. Best story wins.

Whoever tells a story that catches people’s attention and gets them to nod their heads is the one who tends to be rewarded. Great ideas explained poorly can go nowhere, while old or wrong ideas told compellingly can ignite a revolution. Morgan Freeman can narrate a grocery list and bring people to tears, while an inarticulate scientist might cure disease and go unnoticed.

There is too much information in the world for everyone to calmly sift through the data, looking for the most rational, correct answer. People are busy and emotional, and a good story is always more powerful and persuasive than ice-cold statistics.

If you have the right answer, you may or may not get ahead. If you have the wrong answer but you’re a good storyteller, you’ll probably get ahead (for a while). If you have the right answer and you’re a good storyteller, you’ll almost certainly get ahead. That’s always been true, always will be true, and it shows up in many areas of history.

2. Does not compute.

A lot of things don’t make any sense. The numbers don’t add up, the explanations are full of holes, and yet they keep happening. People making crazy decisions and reacting in bizarre ways seem to defy rational thinking. But most decisions aren’t made on a spreadsheet, where you just add up the numbers and a rational answer pops out. There’s a human element that’s hard to quantify and explain, and can seem totally detached from the original goal, yet carries more influence than anything else.

Historian Will Durant once said, “Logic is an invention of man and may be ignored by the universe.” It often is, which can drive you mad if you expect the world to work in rational ways. Attempting to distill emotional and hormonal humans into a math equation is the cause of so much frustration and surprise in the world.

3. Expectations and reality.

Your happiness depends on your expectations more than anything else. So in a world that tends to get better for most people most of the time, an important life skill is getting the goalpost to stop moving. It’s also one of the hardest.

A common plot of history goes like this: Things get better, wealth increases, technology brings new efficiencies, and medicine saves lives. The quality of life goes up. But people’s expectations then rise by just as much, if not more, because those improvements also benefit other people around you, whose circumstances you anchor to. Happiness is little-changed despite the world improving.

“Your happiness depends on your expectations more than anything else.”

It’s been like this forever. Montesquieu wrote 275 years ago, “If you only wished to be happy, this could be easily accomplished; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are.”

John D. Rockefeller never had penicillin, sunscreen, or Advil. But you can’t say a low-income American with Advil and sunscreen today should feel better off than Rockefeller, because that’s not how people’s heads work. People gauge their wellbeing relative to those around them, and luxuries become necessities in a remarkably short period of time when the people around you become better off. Investor Charlie Munger once noted that the world isn’t driven by greed; it’s driven by envy.

4. Calm plants the seeds of crazy.

There is a very common life cycle of greed and fear. It goes like this: First you assume good news is permanent. Then you become oblivious to bad news. Then you ignore bad news. Then you deny bad news. Then you panic at bad news. Then you accept bad news. Then you assume bad news is permanent. Then you ignore good news. Then you deny good news. Then you accept good news. Then you assume good news is permanent.

And we’re back where we began. The cycle repeats. It has always been the case, and always will be.

The 1960s were a period of scientific optimism. In the previous fifty years, the world had gone from horse and buggy to a man on the moon, and from bloodletting to organ transplants. This caused a push among economists to try to eradicate the scourge of recessions. If we could launch intercontinental ballistic missiles and walk on the moon, surely we could prevent two quarters of negative GDP growth.

Hyman Minsky, who spent most of his career as an economist at Washington University in St. Louis, was fascinated by the boom and bust nature of economies. He also thought the idea of eradicating recessions was nonsense, and always would be.

“Minsky’s big idea was that stability is destabilizing.”

Minsky’s seminal theory was called the financial instability hypothesis. The idea isn’t heavy on math and formulas. It describes a psychological process that basically goes like this: When an economy is stable, people get optimistic. When people get optimistic, they go into debt. When they go into debt, the economy becomes unstable.

Minsky’s big idea was that stability is destabilizing. A lack of recessions actually plants the seeds of the next recession, which is why we can never get rid of them.

Imagine a world where the stock market never went down. Market stability is all but assured, and stocks only go up. What would you do? You would buy as many stocks as you possibly could. You would mortgage your house and buy more. You’d consider selling a kidney and buy more still. That would be the reasonable thing to do! And in the process, the price of stocks would get bid up. Their valuations would become ever more expensive. They would get so expensive that their future return prospects would decline close to zero. And at that very moment, the seeds of breakdown would start to sprout. With assets priced high and no room for error, markets would be hanging on by a thread, crushed at the first sniff of anything less than perfection.

The irony is that when markets are guaranteed not to crash—or, more realistically, when people think that’s the case—they are far more likely to crash. The mere idea of stability causes a smart and rational movement toward bidding asset prices up high enough to cause instability.

Stability is destabilizing. Put another way, calm plants the seeds of crazy. Always has, always will.

5. When the magic happens.

Necessity is the mother of invention, and a constant truth you see throughout history is that the biggest changes and the most important innovations don’t happen when everyone is happy and things are going well. They tend to occur during, and after, a terrible event—when people are a little panicked, shocked, worried, and when the consequences of not acting quickly are too painful to bear.

Many of the greatest technologies we enjoy today came directly from, or were heavily influenced by, the military: Jets, rockets, microprocessors, microwaves, nuclear energy, Penicillin.

“Big, fast changes only happen when they’re forced by necessity.”

Are militaries home to the greatest technical visionaries? The most talented engineers? Perhaps. But more importantly they’re home to Really Big Problems That Need to Be Solved Right Now. Innovation is driven by incentives, which come in many forms.

On one hand there’s, “If I don’t figure this out I might get fired.” That will get your brain in gear. Then there’s, “If I figure this out I might help people and make a lot of money.” That will produce creative sparks.

Then there’s what militaries have dealt with: “If we don’t figure this out right now, we’re all going to die, and Adolf Hitler might take over the world.” That will fuel the most incredible problem-solving and innovation in the shortest period of time that the world has ever seen. It’s always like that in a panic. In business, managers look at their employees and say, “Go try something new. Blow up the playbook, I don’t care.” That is not something that gets said when the economy is booming and the outlook is bright. Big, fast changes only happen when they’re forced by necessity.

World War II began on horseback in 1939 and ended with nuclear fission in 1945. NASA was created in 1958 two weeks after the Soviets launched Sputnik, and landed on the moon just 11 years later. Stuff like that rarely happens that fast without fear as a motivator.

To listen to the audio version read by author Morgan Housel, download the Next Big Idea App today:

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