Jeff Immelt left General Electric in worse shape than he found it.
Critics were harsh when he stepped down as CEO in 2017. Some said his mistakes were obvious, the solutions easy.
Immelt had a great response for them: “Every job looks easy when you’re not the one doing it.”
“Easy” makes a good story. It’s short, persuasive, and comforting.
But it’s a deceiving story. Everything worthwhile has a cost, so few things worth pursuing are even a shade of easy.
The idea that things look easier than they are applies to many fields and explains many headaches. It’s prevalent in investing, where competition collides with luck in a way that makes a hard task (outperformance) occasionally look easy.
The appearance of “easy” comes in different flavors. A few of the overlooked ones:
1. “Easy” because there’s a delay between benefit and cost.
The cost of exercising is immediate. Exercise hurts while you’re doing it, and the harder the exercise the more the hurt.
Investing is different. It has a cost, just like exercising. But its costs can be delayed by years.
The benefits of investing (stocks go up) can come today while the cost of those gains (volatility, uncertainty, dread, doubt) can come months or years down the road.
Whenever there’s a delay between benefit and cost, the benefits always seem easier than they are. And whenever the benefits seem easier than they are, people take risks they shouldn’t. It’s why there are investing bubbles, but not exercise bubbles.
2. “Easy” because you underestimate the role of others.
Harvard professor Boris Groysberg studied superstar Wall Street analysts transfering to another firm. If the analyst’s success was due to their skill, their talent should come with them when they change jobs. But it didn’t. Groysberg writes:
Star analysts who switched employers paid a high price for jumping ship relative to comparable stars who stayed put: overall, their job performance plunged sharply and continued to suffer for at least five years after moving to a new firm.
Several things could explain this. The big one is that success didn’t belong to the analyst to begin with. Being an analyst seems like a solo endeavor – just your brain against the world. But things like doors opened for you because of your firm’s reputation, the input of colleagues who didn’t get the credit, and a culture supportive of your unique personality play a role.
Knowing you’re part of a group but thinking your talents directly lead to your results is cognitive dissonance on steroids. As the saying goes, “Like every self-made man he worships his creator.”
3. “Easy” because luck is underappreciated.
Jim Paul and Brendan Moynihan write in their book What I Learned Losing a Million Dollars:
The potential for temporary success by pure luck beguiles people into thinking that trading is a lot easier than it is. The potential for even temporary success doesn’t exist in any other profession. If you have never trained as a surgeon, the probability of your performing successful brain surgery is zero. If you have never picked up a violin, your chances of playing successful solo violin in front of the New York Philharmonic are zero. It is just that trading has this quirk that allows some people to be successful temporarily without true skill or an edge—and that fools people into mistaking luck for skill.
The key here is the overwhelming odds of denial when experiencing luck. Associating success with skill feels amazing. And it feels amazing because you get excited about your ability to repeat it. The thrill of a winning trade is not just the money you make; it’s the money you anticipate you’ll keep making in the future.
4. “Easy” because you don’t realize your competitive advantages have diminished.
Scott Adams once wrote about goals vs. systems. Goals have an end date – once you meet them, you’re done. Systems are forever. You keep doing them regardless of progress.
The goals-systems idea can make any task feel deceptively easy.
Say you work hard at becoming great at a thing. One day you realize hard work paid off and you’re good at that thing – legitimately better than others. It feels great.
Now that you’re great you feel justified to cut back and not work so hard. You look at all you’ve achieved and breathe a sigh of relief. Enjoy the fruits of your labor.
Doing your thing now feels easy because your hard work led to a competitive advantage. You have experience and can automatically do things others can’t.
But now that you’re taking it easy, your edge wears off. Competitors sneak in and you miss the evolution of your trade. The competitive paranoia that used to keep you on your toes transitions to an egotistical ignorance.
Life feels easy and looks easy. But that’s only because you’re blind to the reality of what’s going on around you. And you probably won’t realize it until it’s too late.
5. “Easy” because you only see the finished product, not the labor behind the scenes.
Watch a comedian do a Netflix special. It’s funny, it’s flawless. They make it look so easy, like they’re just naturally funny.
But it’s not easy. No one can tell jokes for 60 minutes off the top of their head. They can’t even do it with months of practice.
What you need to get a good set of jokes is years of telling bad jokes – grinding through audience heckles – before you find the good ones that stick.
Before a world tour a few years ago Chris Rock said:
When I start a tour, it’s not like I start out in arenas. Before this last tour, I performed in this place in New Brunswick called the Stress Factory. I did about 40 or 50 shows getting ready for the tour.
One newspaper profiled these small-club sessions. It described Rock thumbing through pages of material, with several jokes not landing with the audience. “I’m going to have to cut some of these jokes,” he says in the middle of the act.
Everything looks easy when you can’t see behind the scenes.
6. “Easy” because you view a task in isolation, without the competing interests of outside forces.
When stocks are rising, everyone thinks they’ll be greedy when others are fearful. Then markets fall, and everyone realizes it’s easier to say you’ll be greedy than to actually do it. Maybe your clients lost faith in you and fled. Maybe your spouse begs you to staunch the bleeding. Maybe you lose faith in your own skills.
It’s hard to imagine these things when everything’s going right. But when things go wrong, they’re ubiquitous.
Same thing in business. An outsider can look at a CEO’s decisions and say, “Why did you do that? Why don’t you just do this?” Beyond everything being 20/20 in hindsight, the problem with this is that it’s hard for an outsider to see how many competing forces can prevent what look like easy decisions. Most CEOs don’t need good ideas. They already have them. What they need are ways to implement good ideas when customers want one thing, employees want another, and shareholders something else. Which is never easy.
Why competitive advantages die
What I believe least
This is hard because nothing is black or white