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1992 Debate with Ross Perot, Bill Clinton, and George H. W. Bush

Controlling Outcomes by Controlling Table Stakes

Nielsen estimates that 84 million people watched the first presidential debate of the 2016 election. That was 36.4% of eligible voters and 60.5% of actual voters. Given how many US voters watch the presidential debates, participating in the televised debates is considered a table stake for having a shot at being elected president.

The official sounding ”Commission on Presidential Debates” decides who gets to be on the debate stage. It’s formation and stated purpose is interesting:

After studying the election process in 1985, the bipartisan National Commission on Elections recommended “turning over the sponsorship of Presidential debates to the two major parties”. The CPD was established in 1987 by the chairmen of the Democratic and Republican Parties to “take control of the Presidential debates”. The commission was staffed by members from the two parties and chaired by the heads of the Democratic and Republican parties… (wikipedia)

The League of Women Voters had been the previous host of the debates.

In 1988, the League of Women Voters withdrew its sponsorship of the presidential debates after the George H. W. Bush and Michael Dukakis campaigns secretly agreed to a “memorandum of understanding” that would decide which candidates could participate in the debates, which individuals would be panelists (and therefore able to ask questions), and the height of the lecterns. The League… released a statement saying that it was withdrawing support for the debates because “the demands of the two campaign organizations would perpetrate a fraud on the American voter.” (wikipedia)

Ross Perot’s 1992 bid for president as an independent was disruptive. Perot took 19% of the vote and many believe that had he not run, Republican incumbent George H. W. Bush would have been re-elected instead of Democrat candidate Bill Clinton.

The CPD excluded Perot from the televised debates in 1996.

Changing the Table Stakes

Four years later, the commission changed the rules of the game entirely, requiring that candidates have at least 15% in 5 national polls in order to get on the debate stage. Which polls count are consider to be “national polls”? The CPD decides.

The creation of the Commission on Presidential Debates (a cartel) and the 15% rule clearly benefit the candidates of the two major parties in the United States at the expense of all third-party (or independent) candidates and the voting populace. This legal collusion has been extremely effective at controlling who has a serious shot at running for president and who ultimately becomes president.

So not only is being on the debate stage a table stake, but having 15% in “5 national polls” approved by the CPD is considered a table stake as well.

When structured in this way, table stakes can be a form of moat or barrier to entry. So whoever controls the table stakes can have tremendous control over the outcome. Check out Jeffrey Pfeffer’s Power: Why Some People Have It and Others Don’t for a few great examples of establishing and controlling tables stakes in corporate environments – even if you’re at the bottom of the power hierarchy.

Why are we so so so bad at finishing projects on time?

Why don’t we learn from past experiences when it comes to planning new projects? Why aren’t even our best laid plans realistic?

Surely you’ve noticed this – whether it’s getting your taxes done, that big presentation for work, or planning your wedding.

Why do 80-90% of mega projects run over budget and over schedule?

Why has it taken – for example – nearly 100 years to expand the Second Avenue Subway in NYC? The original project was expected to cost 1.4 billion dollars (a 1929 estimate in 2017 dollars) and now with Phase 1 completed ($4.5 billion to build just 3 of the 16 proposed stations), Phase 2 is expected to cost $6 billion.

This phenomenon has been dubbed The Planning Fallacy – the topic of today’s Freakonomics podcast and the inspiration for this post.

Don’t have 45 minutes to listen? Keep reading.

Why do we fall for The Planning Fallacy again and again?

  • When planning a project we naturally focus on the case at hand, building a simulation in our minds. But our simulations are rosy, idealized, and don’t account for all of the complexities that will inevitably unfold.
  • We also focus on succeeding, not failing, creating an optimism bias. This means we don’t think enough about all the things that can go wrong.
  • We’re overly confident, believing in our abilities and the old “this time will be different“ line too much.
  • We ignore the complexity of integrating all of the parts of a project together.
  • We intentionally misrepresent a project’s plans in order to get it approved.
  • We rely too heavily on our subjective judgement instead of the facts and past empirical data.
  • And of course: incompetence, fraud, deliberate deception, cheating, stealing, and politicking.

Interested in why things fail? Read The Anatomy of a Disaster.

So how do we plan better?

  • Use past projects – even if they’re not exactly comparable – as a benchmark for projects being planned.
  • Track and score the difference between forecasts and outcomes.
  • Get stakeholders to put skin in the game, creating rewards and penalties for good and bad performance. #IncentivesMatter.
  • Use data and algorithms to reduce human biases.
  • Use good tools to help you focus. Asana co-founder Justin Rosenstein warns against “continuous partial attention” – a state of never fully focusing on any one thing.

Success Building Software

I build projects for a living – mostly product strategy and software for start-ups or innovation groups within larger companies. I plan and execute on projects everyday and I still struggle with the planning fallacy in other areas of my business (did I mention my corporate taxes are due in 7 days?).

But the secret sauce to my successes building products has always been to 1) have personal expertise in what’s being planned and built, 2) refine and go over the plans until your eye bleed looking for possible pitfalls, and 3) have a clear and easy-to-follow process to keep you focused on the right thing at the right time.

Terms & Concepts

The Planning Fallacy – Poorly estimating the timeline, quality, and budget of a planned project while knowing that similar projects have taken longer, cost more, or had sub-par results.

The Optimism Bias – Focusing on the positives of a situation over the negatives.

Overconfidence – Thinking that we’ll perform better than we actually will.

Coordination Neglect – Failing to account for how difficult it is to coordinate efforts and combine all of the individual outputs into one complete system.

Procrastination – Choosing to do things that we enjoy in the short term instead of the things we think will make us better further down the road. In the episode, Katherine Milkman called procrastination a “self-control failure” – my new favorite phrase.

Reference Class Forecasting – Using past and similar projects as a benchmark for how your next project will perform.

Strategic Misrepresentation – Underestimating the costs and over representing the benefits of a project.

Algorithm Aversion – The big thing that Katy Milkman thinks is holding us back from using “data instead of human judgement to make forecasts” better.


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