From the Trading Floor to Service Improvement

13 Aug

I’ve recently being reading the excellent, What I Learned Losing a Million Dollars. The story is about trader, Jim Paul, who enjoyed huge success on the markets only to lose it all in a matter of months. In the aftermath of Paul’s financial defeat, the authors, Paul and Brendan Moynihan, take a look at the philosophies and methods of the world’s most successful traders to extract some common lessons. The problem is, these philosophies and methods differ so widely, they contradict. The blueprints for success are so individual and numerous, it is impossible to generalize “what works”. However, the authors do discover one common theme running through all the successful trader strategies. They all agree on how not to lose.

Making sure you’re protected against losses, having a plan to minimize loss and an exit strategy, is a methodology all the successful traders apply. Moving straight into another area, Weick and Sutcliffe (2007) argue that the most resilient organisations have an obsession with “what could go wrong?” In other words, they too, know how not to lose. Crandall et al (2006) identify that expert\novice differences are sharply pronounced when the question “what could go wrong?” is asked. The expert can answer fluently with detail, the novice struggles. Implicitly, these three examples make an interesting point about research methodology, especially when conducting research with a focus on improvement. I’ll outline what I mean below.

Asking respondents, service users, team members “what could we do to improve?” can produce some interesting and usable data. However, this “positive” data becomes validated when the questions “what should we avoid doing?” and “what has gone wrong in the past?” are asked. It is possible to not only use the “negative” data as a means of analysing and validating the positive “data” but it can also produce greater levels of insight and independent agreement, similar to Paul and Moynihan. My theory why this occurs is simple-asking people what “should be” naturally visualizes the future, the bumps can get smoothed out as context becomes replaced with expectation. Asking what should be avoided and what has gone wrong, results in the respondent reflecting on experiences, examples where strategies have had an outcome.

I’ve recently analysed a large amount of health related data. The difference between the “positive” and “negative” questions is pronounced. Not only is there additional insight but greater levels of independent agreement. This is a lesson which can be applied from the trading floor to service improvement. Sometimes when designing strategies, improving services or exploring solutions, the best place to start is avoiding loss. It’s a point on which most people agree, but a point most likely to remain hidden.


Paul, J. Moynihan, B. (1994) What I Learned Losing a Million Dollars. Columbia Business School Publishing

Crandall, B. Klein, G. Hoffman, R. (2006) Working Minds: A Practitioners Guide to Cognitive Task Analysis. The MIT Press

Weick, K. Sutcliffe, K. (2007) Managing the Unexpected: Resilient Performance in an Age of Uncertainty. Jossey-Bass.

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