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How Real Is It?

Conventional wisdom tells us that as we age, we slowly but inevitably decline. Our bodies lose energy and resilience. Our memories fail, and we are slow to come up with new ideas.

And science has pretty much gone along with this account, citing evidence culled from standard tests of memory, vocabulary and calculation. The older we get, the worse we do on such tests.

But maybe the problem is with the tests. A recent story in The New York Times, notes “a new kind of challenge to the evidence of a cognitive decline, from a decidedly digital quarter: data mining, based on theories of information processing.”

Michael Ramscar and a team of linguistic researchers from the University of Tübingen in Germany. “applied leading learning models to an estimated pool of words and phrases that an educated 70-year-old would have seen, and another pool suitable for an educated 20-year-old. Their model accounted for more than 75 percent of the difference in scores between older and younger adults on items in a paired-associate test, he said.”

That is to say, the larger the library you have in your head, the longer it usually takes to find a particular word (or pair). “It’s not that you’re slow. It’s that you know so much.”

From a different quarter, Dr. Laura Carstensen at at Samford, noted : “Given that most cognitive research asks participants to engage with neutral (and in emotion studies, negative) stimuli, the traditional research paradigm may put older people at a disadvantage.” Dr. Carstensen argued that this ignore a “positivity effect,” the bias of older people to recall words and associations with positive connotations.

Zach Hambrick, a psychologist at Michigan State University, discriminates two kinds of intelligence, fluid and crystallized: “fluid intelligence” includes short term memory, analytic reasoning, and the ability to abstract information from its context; while “crystallized intelligence,” is about accumulated knowledge, vocabulary and expertise. Hambrick and his colleagues have shown that crystallized knowledge . . . climbs sharply between ages 20 and 50 and then plateaus, even as the fluid kind (like analytical reasoning) is dropping steadily — by more than 50 percent between ages 20 and 70 in some studies.”

“In essence, what Ramscar’s group is arguing is that an increase in crystallized intelligence can account for a decrease in fluid intelligence.” In other words, our senior moments are offset by an expanded knowledge base and expertise.

The Times notes that such new studies are “not likely to overturn 100 years of research,” or at least that many years of conventional wisdom. Neuroscientists have some reason to believe that neural processing speed, like many reflexes, slows over the years; anatomical studies suggest that the brain also undergoes subtle structural changes that could affect memory. We are not crazy to think that our minds actually do decline with age. (See, “The Older Mind May Just Be a Fuller Mind.“)

Still the picture is turning out to be far more complex than most of us had assumed. The Times pointed out that in the past “some scientists have questioned this dotage curve. But these challenges have had an ornery-old-person slant: that the tests were biased toward the young, for example. Or that older people have learned not to care about clearly trivial things, like memory tests.” I know that I have such an ornery slant myself.

But it is also true that as I get older I care less about impressing others with things that don’t matter to me. I am careful to use my energy wisely. I care about fewer things – but then I care more about the things that do matter.

In an age that celebrates youth, it is good to have support for a more nuanced view of aging.

Big Time

You usually don’t want to fail — unless there is a clear secondary gain, like getting yourself fired from a bad job or thwarting a parent who is over-invested in your every success. But we can be too careful. Risk-taking – even excessive risk-taking – may be the path to surprising discoveries and important breakthroughs, according to Astro Teller, Google’s self-described “Captain of Moonshots.”

Google has set up a lab to attack really big problems, Google X, what they call the “Moonshot Factory,” according to the BBC. The “X” stands for the unknown, of course, but it also stands for the number 10, which is how many years they are prepared to work at any given goal before getting it right.

Teller notes: “You must reward people for failing. If not, they won’t take risks and make breakthroughs. If you don’t reward failure, people will hang on to a doomed idea for fear of the consequences. That wastes time and saps an organization’s spirit.”

Teller says he gets pitched lots of cool ideas, like a frictionless surface that can levitate objects. “That didn’t make the cut,” he says, because “it’s not a problem.” “After identifying a problem,” he says, “there has to be a science fiction-sounding product or service that, if it worked, would make that problem go away.” He quickly adds a third feature of a Google X moonshot: “There has to be some reason to believe the science or technology underpinning that solution, that makes us think the idea is only mostly crazy.”

Probably the best-known example of a Google “moonshot” is their work on self-driving cars. The problem it addresses is the death of a million people a year as the result of roadway accidents. “The science fiction solution it came up with was driverless cars that don’t crash.” According to the BBC: “Google has now clocked up hundreds of thousands of miles of testing that suggests this technology will work and could transform our world.” (See, “Secret Google lab ‘rewards staff for failure’”)

Google X projects have many inspirations and many starting points. But Mr. Teller says “not one of them has started from the conventional business question: ‘How can we make a ton of money?’ That is, he explains, because these ideas are about huge, transformative, disruptive change, not the marginal, incremental change of a conventional business.”

That’s visionary, but it also calls into question the rational behind most businesses. Google has deep pockets, very deep pockets – along with an unusual disregard for the bottom line. Could it be that this represents a freakish geek mentality, a disregard for money? Their motto has been “don’t be evil.” Perhaps that boils down to solving problems and having fun.

On the other hand, it could be that this is a new business model poised to produce our first multi-trillion dollar business.

I suspect, it’s that. For a business, profits are essential — eventually. But in an age of “investor capitalism,” what matters more than profits is the price of its stock. Investors today are not looking for dividends but for shareholder value. Google’s stock prices have risen astonishingly, but from the perspective of the giant potential payoffs from “moonshots,” today’s profits may be virtually irrelevant.

The model, here, is Apple, swollen with profit but struggling to grow its stock price and attract new investors. Financial commentators note that Apple needs something like a “moonshot” to take it to a new level, something beyond the iPhone.

Perhaps, for Google, the sky is actually the limit.

The Facts Economists Ignore

Economists have had difficulty accounting for the sluggish job market, but it might be useful to talk with businessmen about it.

For economists, jobs are commodities, governed by supply and demand. When the supply is up, the lesser demand should drive down prices. That, in turn, should lead to greater demand. Wages are down, indeed, if you consider the growing numbers of those who are overworked and underemployed, working part-time, when they want full-time jobs. Still, employment doesn’t go up significantly.

When reporters speak to small business owners, they get a more realistic appreciation of why the growth in jobs is so glacial.

The Wall Street Journal interviewed Brian Feeney in Arkansas about his small manufacturing business. In 2011 he expanded capacity, automating “work once done manually, reducing by about a quarter the number of employees needed. . . . Now, guardedly optimistic after two years of brisk demand, he is adding a second automated production line to support a fifth weekly shift, creating seven production jobs.”

You can hear the fear in his voice when he explains why he waited too long to expand: “It’s that beaten-dog mentality,” said Mr. Feeney. “We were thinking, ‘this is too good to be true.'”

According to The Journal, he is not alone: “Companies large and small have balked at hiring and expanding since the financial crisis, fearing the halting recovery would falter.” Macy’s Inc. said it will invest in online operations and build new stores, laying off 2,500 workers but keeping overall employment flat in the process.

Xerox decided to expand an existing plant rather than build a new one: “the two other locations it considered, including one in Europe, would have required more hiring and training. “Those sites would have created more jobs,” said its Senior Vice President. But, he added: “That’s more operating expense.” According to The Journal, “Other companies are meeting demand without hiring or building at all.” (See, “Why Hiring Lags Behind Even as U.S. Factories Hum.”)

Looking back on his reluctance to hire, Mr. Feeney said: “If I was really smart, as soon as we got that first line running, I would have put the second one on order, and we would have been six months ahead of where we are.” But, clearly, he did not think it was “smart” to hire.

That fear may have been irrational, and certainly it led to a delay in production and a significant loss of profits for the company. But it is widespread, and it translates into job avoidant behavior.

Businesses today do not want to hire workers if they can possibly avoid it, and for reasons not so hard to grasp. Not only do they have to pay wages, but benefits as well, and prepare to take on the additional costs of insurance, potential liability, lawsuits for discrimination, etc. Off-loading these problems – and costs – to others is preferable.

Steven Rattner, writing in The New York Times on he “myth” of the return on industrial production, notes: “we need to get real about the so-called [manufacturing] renaissance, which has in reality been a trickle of jobs, often dependent on huge public subsidies. Most important, in order to compete with China and other low-wage countries, these new jobs offer less in health care, pension and benefits than industrial workers historically received.” (See, “The Myth of Industrial Rebound.”)

Rattner is able to see and speak more freely about this, perhaps, because he is a businessman himself. We need jobs, to be sure, but businesses lack the motivation to create them. Theories and incentives won’t change that.

Misleading, Unfair, and Dangerous

Yet another way that life isn’t fair: “Two economists say . . . that investors assign higher share values to companies run by attractive chief executives.” The report in The New York Times went on to state: “these chiefs are paid more than less-appealing counterparts and that the better looking the C.E.O.’s, the better they are at undertaking financially successful deals.” They can actually measure it.

No one can be thoroughly surprised by this. Studies have shown for years that we are more drawn to attractive people, we rate them higher in interest and intelligence, we want to be associated with them, etc. etc. That is the reason that ads feature attractive people, usually young, but otherwise those who have aged gracefully and kept their shape.

If the difference it too extreme, of course, it can backfire. We might be intimidated. Moreover, beautiful women with large breasts can arouse entirely different associations. But, in general, we are drawn to beauty – and largely unaware of how that attraction skews our judgment.

Andrew Ross Sorokin, writing in The Times went on to note: “As shallow as it may be, better-looking people have been shown in various studies to have higher self-esteem and more charisma, are considered more trustworthy and are better negotiators.”

That makes sense since attractive people, constantly experiencing the advantages they enjoy in the eyes of others, will inevitably come to believe they are actually smarter and more talented than their less attractive colleagues. As a result, they are also likely to become more confident and assertive.

But obviously there are limits. Beauty doesn’t actually make people smarter, more trustworthy or better leaders. Sorokin went on to note the other side of the coin: “managers who are perceived as more trustworthy perform worse and generate lower risk-adjusted returns when compared to those who are perceived as less trustworthy.” People successful at inspiring confidence are likely to be tempted to exploit the trust they arouse, and they might even cultivate the traits that allow them to dupe others. At the very least, it could easily make them lazy.

Another study conducted last year found that “hedge fund managers whose photographs are rated as more trustworthy are able to attract greater fund flows.” That same study, which relied on a group of people to examine photos of hedge fund managers, found, however, that “managers who are perceived as more trustworthy perform worse and generate lower risk-adjusted returns when compared to those who are perceived as less trustworthy.” (See, “Never Mind the Résumé. How Hot Is the C.E.O.?”)

A good thing the researchers dug more deeply into their data. They allow us to see the unfair advantages our biases confer on others, but they also alert us to the dangers – for us and for those who are endowed with beauty, self-confidence and charisma. Those advantages are seductive, misleading, and dangerous.

In fact, if we look at the deeper lesson of this study we see a society infatuated with appearances, reliant on superficial impressions, all too willing to make bad decisions – and then blame the person who turned out to be not what he or she seemed.

Big Business is Getting Into the Act

Neuroscience has convincingly demonstrated what many psychologists have always known: bias is inevitable and ever-present. Now big business is coming to be aware of its high cost to productivity.

Using new programs that train people to learn about their built in prejudices, they hope to maximize the contribution of such frequently overlooked groups as introverts, ethnic minorities, and just plain strangers – not to mention overcoming the far more blatant and ubiquitous problems of discrimination against women and blacks. The Wall Street Journal reported: “As many as 20% of large U.S. employers with diversity programs now provide unconscious-bias training, up from 2% five years ago, and that figure could hit 50% in five years.”

It described a program at BAE, a major defense contractor, and described the approach of Melissa Lambert, one of the trainers: “I don’t want you to feel guilty about any biases that you have,” she told her group. Over the course of two hours, attendees watched brief videos, participated in partner exercises and discussed research summaries to understand why bosses make employment decisions that inadvertently give preference to tall individuals, thin ones, those without arm tattoos or extroverts.”

“It’s a blind spot,” Ms. Lambert observed. The trick is to “hit the pause button and question things” before you act, she said. This “no fault” approach is vital, not only to prevent people from being defensive but to help them understand how inevitable and normal such biases are.

The Journal noted: “BAE launched its unconscious-bias training amid a multipronged push to bring more women and minorities into its managerial ranks.” This was not only to comply with regulations prohibiting discrimination but, more importantly, recruit the kind of talented people that had previously been screened out during the hiring process.

The hiring panels previously “had a tendency to select white males,” recalls BAE’s chief talent officer. Between May 2011 and May 2013, BAE says, the number of women and people of color in senior management rose nearly 10%.

But to reach those numbers BAE had to do more that train employees to be aware of their unconscious biases. Among the efforts that the chief executive Linda Hudson spearheaded in 2011: “A woman or a person of color now participates in interview panels for potential middle managers and executives.” That not only provides a wider perspective on potential hires, it can also inhibit the expression of prejudice among whites. Moreover, BAE is moving towards color-blind applications so that screeners are deprived of the information that could trigger their biases from the beginning. (See, “Bringing Hidden Biases Into the Light.”)

Training does not dispose of bias, prejudice and discrimination. Many such attitudes are deeply entrenched, and they are often also supported by self-interest. Members of groups that have enjoyed privileged access to certain jobs, for example, will not want to relinquish their advantages. Moreover, identities are often deeply entrenched and linked to attitudes towards other identities. Removing the bias towards others will undermine the identity itself. But these are steps in the right direction.

Ultimately, biases will only disappear when differences that make a difference are no longer perceived, and that’s not likely to happen anytime soon.