Disagreements of Taste and Disagreements of Position
Lessons on navigating conflict
Hi all,
Today is the first edition of a new format for Signals & Stories! In the first section, Brendan’s MBA, I’ll share 3 interesting facts/trends/articles from my coursework at Columbia that relate to real signals. The second section will be a short, deep-dive essay on one particular signal.
This is all in an attempt to provide you more thoughtful insights… and myself more homework.
Hope you have a good start to the fall season this week.
Thank you,
—Brendan
Brendan’s MBA
(click above to read the full article online)
Unicorn Founders: Many people intuit that founders of $1+ billion businesses tend to be young, precocious geniuses. But research at Stanford GSB shows it’s never too late to start a successful business (see: Ilya Strebulaev)
Rich vs. King Effect: Founders must choose between optimizing for financial returns (“Rich”) or optimizing for control for their company (“King”). King founders tend to grow smaller businesses. (see: “Rich versus King”: The Core Concept)
Book Recommendation: How the World Really Works: The Science Behind How We Got Here and Where We’re Going, Vaclav Smil. “Many people nowadays admiringly quote the performance gains of modern computing (‘so much data’) or telecommunication (‘so much cheaper’)—but what about harvests? In two centuries, the human labor to produce a kilogram of American wheat was reduced from 10 minutes to less than two seconds. This is how our modern world really works.”
Disagreements of Taste and Disagreements of Position
(click above to read the full article online)
“You Do You”
When my classmates make career decisions that seem crazy to me, it’s usually because I don’t fully understand their personal circumstances. Many have borrowed $200k in loans at a 12% interest rate and need visa sponsorship to stay in the U.S. The stable grind of investment banking, with its stratospheric compensation, is a reasonable—not crazy—career decision for them. I’m just not in their shoes.
When people make “crazy” decisions or believe “crazy” things, it’s usually not because they are truly “crazy”. They seemingly do or believe crazy things because they have access to different silos of information—and therefore, different incentives—when making decisions. “Most debates are not actual disagreements,” Morgan Housel writes, “they’re people with different experiences talking over each other.”
Psychologists call this bounded rationality. People make approximately rational decisions based on what they personally experience. If you live in a Rust Belt state hollowed-out by globalization, and you’ve experienced falling real wages and witnessed opioid addiction, you will believe certain “rational” things about America that drastically depart from the beliefs of those strangers in San Francisco or Boston. And if those strangers moved to Indiana and abdicated their cushy jobs, their beliefs would probably start to change too.
Here’s what I find interesting about bounded rationality:
If you disagree with someone, it might be because they have access to different incentives sourced from different information or personal experiences.
This means that certain disagreements in life can be easier to resolve than you might think! If you and the other party can access more of the same information, you will both come closer to drawing the same conclusions.
The key is to differentiate between disagreements that can benefit from information sharing and those that cannot. The key is to differentiate between what I informally call Disagreements of Position and Disagreements of Taste.
Disagreements of Position: Both parties hold strong, yet flexible, positions shaped (mostly) by objective facts. Information sharing can help. Example: A negotiation between two companies over an acquisition.
Disagreements of Taste: Both parties hold strong and inflexible positions shaped (mostly) by subjective experience. Information sharing can’t help. Example: A Thanksgiving political debate between two people from colliding socioeconomic and religious backgrounds.
Disagreements of Taste
With Disagreements of Taste, the information people use to form beliefs are based mostly on matters of personal circumstances and experience, family upbringing, religious background, and other circumstances or ingrained beliefs that cannot be easily changed. One person (or group) has their own bubble of experiences, and the other person (or group) has their own. Bounded rationality leads both parties to believe they are right.
Disagreements of Taste often occur over differences in minor personal preferences (Hilton vs. Marriott, LeBron vs. MJ, McKinsey vs. BCG) OR more serious differences in political or religious leanings. Regardless of the topic, all Disagreements of Taste tend to be tedious squabbles unlikely to be resolved due to irreconcilable bounded rationality. One person has their bubble; the other person has theirs. Unless it’s a matter of life or death (i.e., war), life can (and should) move on as amicably as possible. In most cases, energy can be conserved for more productive conversations.
Disagreements of Position
In 1978, Egypt and Israel could not agree on who should control the Sinai Peninsula. Israel had occupied it since 1967, and Egypt was not happy about losing a territory they held for thousands of years. Hopeless gridlock.
Actually, as told in the classic book Getting to Yes, they were able to negotiate a peace through the Camp David Accords. Egypt could have Sinai back if they promised to maintain a limited military presence. This compromise emerged only after each side shared information and realized their interests were more aligned than they had thought.
Each side overcame bounded rationality and found common ground. Lives were saved.
You can think of Disagreements of Position like negotiations, in which each side has taken a different position based on differing information and incentives, but those positions can be potentially changed. Unlike Disagreements of Taste, it’s productive to spend time hearing the other side.
Getting to Yes has several great examples of Disagreements of Position that were successfully negotiated:
A man who got $1,000+ back from his landlord after learning his apartment was actually rent controlled—and his landlord was illegally over-charging him.
A labor dispute between a company and its union. One aspect of the proposed resolution involved more joint training and socializing to break down bounded rationality barriers.
The proverbial boy and girl arguing over how to split an orange. When they mutually realized the boy needed the peels to make a drink and the girl needed the fruit for a salad, they could reach an agreement.
With Disagreements of Position, I find it helpful to check if there is any important information I have that the other person doesn’t have (or vice versa) that could align our perspectives and better “split the orange”. This requires putting myself in the other person’s shoes, asking why they believe what they believe, listening to their answer, and seeing if that new information changes my perspective. Sometimes, it does.
Summary
People are rarely crazy. If you disagree with someone on something, it’s often because they have access to different incentives sourced from different information or personal experiences.
Instead of dismissing them as crazy, the productive action is to judge whether the disagreement is a Disagreement of Taste or a Disagreement of Position.
If it leans toward a Disagreement of Taste, it’s often best to politely respect their opinion and move on.
If it leans toward a Disagreement of Position, you can try to break out of your bounded rationality, see their perspective, and see if you can come to a “wise agreement”.
I think there is a real “skill” in discerning between Disagreements of Taste and Disagreements of Position. When we treat a Disagreement of Position like one of Taste, we give up too soon, missing an opportunity to productively strike a deal. When we treat a Disagreement of Taste like one of Position—the proverbial “Thanksgiving table political debate”—we give up too late, causing all kinds of bruised feelings.
I think the “skill” of discerning and handling these types of disagreements is increasingly important. As our country’s demographics diversify, our organizations get more complex, and our digital information feeds become more siloed and manipulated by algorithms, there are just so many more opportunities for disagreements to happen at work, school, and online. While this “skill” does not prevent the root causes of why we disagree as much as we do these days, it can help us better navigate a world that is increasingly riddled with disagreement.
Thanks for reading!
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—Brendan