Motley Fool Hidden Gems Investing - The Power of Regret, with Dan Pink

Episode Date: January 30, 2022

"No Regrets" is a popular tattoo but a bad mindset. In his new book “The Power of Regret: How Looking Backward Moves Us Forward", best-selling author Dan Pink shares how we can apply the feeling of regret to improve our lives. In this conversation with Chris Hill, Dan also discusses: - The research project that led to people around the world sharing their own regrets - How reaching out to old connections is never as awkward as you may think - The future of offices and remote work - His personal experiences with comedian Bob Saget - The potential of no Major League Baseball season this year For more information about Dan and his new book, visit http://danpink.com Host: Chris Hill Guest: Dan Pink Producer: Ricky Mulvey Engineers: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

Don't you wish you could just hit skip on the worst parts of your life? You know, the same way you can skip an ad? I get it. I'm Siaya and I live in Ice Cove. I've made some questionable decisions that didn't end up the way I planned. And today I'm still figuring it out. Somehow things usually get worse before they get better. Apparently, that's how I roll.

So bundle up and come along for the bumpy ride. Stream a new episode of North of North Tuesdays on CBC Gem. Never looking backward is a colossally stupid idea. What you want to do is you want to look backward, but you want to look backward in a particular way that allows you to understand your choice, unburden yourself of that choice, extract a lesson from that choice, and apply it going forward. I'm Chris Hill, and that was Dan Pink, author of multiple bestselling books, including Drive, To Sell is Human, and When, The Scientific Secrets of Perfect Timing. His new book is The Power of Regret, How Looking Backward Moves Us Forward.

I wanted to talk with Dan about his book, and since he's written about the business world, I also got his thoughts on where companies are going with office space and hybrid work. And since I know he's a sports fan, I also asked him to save the Major League Baseball season. I know that probably wasn't fair of me to ask since, you know, he's not actually involved in the negotiations between baseball owners and players, but I don't regret asking. Until I read Dan's book, I never really thought of regret as being something with great power. So I started by asking him what got him interested in this topic. You know, I think it was because, mostly because I realized that I had

regrets of my own. And if there was a catalytic moment, and you can certainly relate to this with two kids in college, is that I had my elder daughter graduated from college in 2019. And I'm at her graduation and I'm having this out-of-body experience where I can't believe this kid is old enough to graduate from college. And I also can't believe that I have a kid who's graduating from college because I'm like 24. And so I'm having this out-of-body experience and I'm thinking about, well, what was my college like? And I started thinking about all these regrets that I had that I didn't work hard enough, that I didn't take enough risks. One that really bugs me is that I felt I wasn't kind enough. And when I came back, I just sort of sheepishly mentioned it to a few

people. And instead of the recoiling, people leaned in, which to my surprise, I really wanted to talk about this. And that's an interesting reaction for a writer. It's a really, really interesting reaction, especially when you come up with a topic that you think isn't going to go over that well, and people instead just glom onto it. And so, I started looking at some of the academic research on it, and I ended up actually putting aside a book that I was writing at that moment, and spent a month researching regret, and then wrote an entirely new proposal, and had it go to my editor and say, I got some good news and some bad news. The bad news is the book you think I'm writing, I'm not going to do that anymore. The good news is that I think I have something

better. Yeah, I did have that thought, because you and I have talked about this before. I remember talking to Scott Galloway about this. It doesn't matter how successful a nonfiction writer is when they go to their publisher with, here's my idea for a book. As often as not, the publisher will be like, oh, God, really? You want to do that? There's no trust in the track record. So it's nice to know that they respond the way they did. And as you indicated, there is a lot of research on this topic. You get to some of the research in your book. But you did research of your own? Can you share sort of your thought process around the research that you originated and how you went about it? Sure thing. Yeah, I'm glad. And thanks for asking about that,

because I'm really, I'm kind of psyched about that. So I did look at about 50 years of research in mostly in social science, some neuroscience and medical science on regret. But I also did two projects of my own. One of them was something that I called the American Regret Project, where working with a company called Qualtrics, I put together the largest public opinion survey of American attitudes and regret ever done. We surveyed 4,489 Americans, beautiful, gorgeous representative sample, and to ask a whole bunch of questions about American attitudes about regret, in part to try to understand what demographic differences there were. At the same time, I did something else, which I called the World Regret Survey, where I guess it basically just

set up a website and invited people to contribute their regrets, hoping to get several hundred. And I got, well, I mean, we're over 17,000 now. So I ended up with 16,000 regrets from 105 countries. And those proved just an incredible, incredible source of insight and emotion and, in a weird way, inspiration. And you include some of them in the book. Every chapter begins with a few regrets that actual people have sent you. I was struck by the fact that there's such an enormous range of things that people regret. Some people regret what on the page seem like very big decisions. But I was really struck by the people who have a regret of something they did long ago and it seems like kind of a small thing and yet it's stuck with them and and maybe that

gets to sort of the power of regret that um that it doesn't matter how small it is it can stick with you you know what most people it's it's a fascinating insight that you're that you're making there because very few people talked about regrets in terms of their size the fact that it happened and it was meaningful to them is enough. And I think what's interesting is while there, and I think your insight is really powerful here. So while there is a wide variety of regrets about the domains of life,

so we have people, I mean, one of them that really stuck with me was a 70-something-year-old woman in New Jersey who regretted stealing candy when she was a kid. You know, 60 years later, she's still bugged by that. So we have people with regrets about careers and health and romance and family and so forth. So they run the gamut of the whole human experience.

But what I found in looking at that giant trove of regrets was that deep down around the world, it's kind of amazing, people kept expressing the same four core regrets over and over and over again, irrespective of the domain. And that took me to a place through this avenue of regret that I didn't expect to reach. Right. And this is where you and your team really build on the research of the past 50 years with categorizing the four types of regret, foundation, boldness, moral, and connection. If you can, how did you sort of, did that just sort of become apparent over time? Like, oh, we're starting to see this pattern and it breaks into these four groups? Sort of. You know, it's like, you know, I'd love to tell you a story of how I bolted upright in the middle of the night and had this epiphany about the four core regrets. But but it was much more undramatic and laborious than that, as I was just reading through these regrets and trying to categorize them and, you know, sort of thinking of categories on the whiteboard.

But the other thing is that is that these two different pieces of research work together. So, for instance, when I did the quantitative survey, I thought I was going to get at the question of what people regretted. And I had them categorize their regrets by domain. And what I found is what researchers have been finding for 50 years is that they regret a lot of things. Just as you're saying, they span. And it's like, God, that's so unsatisfying. And so I started thinking a little bit differently about the qualitative regrets. And there I started seeing some patterns.

Let me give you an example, because I think that this it makes it makes more sense in the in the specifics. So let's take a regret. OK, so so I know that a lot of the fools are entrepreneurs. I'll give you one. I'll give you an entrepreneurial idea here. Fools start a travel agency that serves people who went to college, who regretted not studying abroad. I've got hundreds of those. All right. So so so so that's so think about that regret. So that's call that an education regret. Then I've got people, hundreds around the world. who have a regret that says, ugh, I've always wanted to start a business.

I've always wanted to go out on my own, but I never had the guts to do it. Okay, that's a career regret. Then I have, once again, hundreds around the world who, almost with the exact same formulation, X years ago, I met a man slash woman whom I really liked.

I wanted to ask him her out, but I was too chicken to do it. And I've always regretted it. Okay, that's a romance regret. But to my mind, as I started seeing this, those are all the same regret. Those are all regrets about boldness. Those are all regrets about being at a juncture in your life and having a choice. Do I play it safe or do I take the chance?

And when people play it safe, they often regret it. Not always. And when they take a chance, they don't always relish it. But it's pretty overwhelming that we regret not taking that chance. That's a boldness regret. And to me, all these four core regrets reveal something. I mean, again, it's weird, Chris, because I didn't expect to go there. But all these four regrets, in a way, reveal like what makes life worth living.

And one of the things that makes life worth living, one of the components of a good life is like doing stuff, trying stuff, learning, growing, leading a psychologically rich life. And so boldness regrets are one of the core, are one of the really most significant regrets that people have. I think that's probably the category that most stock investors can identify with, because two of the biggest regrets when it comes to investing are, I should have bought this stock earlier, or I should not have sold this stock. And the reason we don't buy the young, upstart, unprofitable company

is because of the risk factor involved in it. the reason we don't, you know, the reason we sell that young, unprofitable upstart company after it's gained 30% in a year is like, oh, this isn't going to, you know, it's playing it safe instead of being bold. I think in many ways, these four core regrets go to not only the how we invest, but to some extent, why we invest. So, I mean, so a good example of it, which you see over and over again, I mean, I think anybody who's listening to this probably doesn't have many in this first category of foundation regrets, but foundation regrets are, you know, boldness regrets are if only I'd taken the chance. Foundation regrets are if only I'd done the work.

And what that means is people who regret not studying hard enough in school, a lot of those, smoking, huge numbers of people regret smoking, not taking care of their health and not saving money. And one of the things that comes out with, I mean, obviously fools know this, is the power of compounding interest in both a literal and metaphorical sense. And foundation regrets are these things where you make small decisions early that seem to have no huge consequence, but over time they accumulate, and then they become kind of unstoppable. So I have one guy who I found very poignant who said,

you know, he says, I regret not saving money diligently ever since I started working. He's 43. It's nearly crushing every day to think how hard I've worked over the last 25 years, but financially, I have nothing to show for it. And what does that tell us, though? And I think it's something that Fool investors understand, is that an element of a good life is stability.

We want to have some kind of stable platform. When our lives are unstable, when our lives are chaotic and unpredictable, that drains our ability to lead a satisfying life. And so foundation regrets are a challenging one because the nature of regret requires some kind of agency on the part of the person who has the regret. Regret is your fault, not someone else's fault. But with foundation regrets, it can be kind of challenging. So it's harder to save if you graduate from college burdened with massive student loans. It's harder to do well in university if you went to a secondary school that wasn't very good.

So with foundation regrets, we have to be a little bit careful of agency. but they're really, really important. And having that stable foundation is extraordinarily important to people. So let's get to a couple of things in the book that are, you know, again, the subtitle, How Looking Backward Moves Us Forward, because there's a lot of research you get to in terms of regrets that are by nature looking backward. But the great thing about your book, one of the great things about your book is that it provides us with insights on tools of like, okay, don't just look backward with regret. Here are the tools to look forward and make better decisions. One of the ones you get to is an example we've talked about on this show before.

You categorize it as self-distancing. The example we've talked about before over the years on this show is Andy Grove, the former CEO of Intel, who was faced with the decision of basically walking away from a profitable division of the company and investing in a new technology and sort of weighing that decision. And he turned to a trusted lieutenant and said, if you and I got fired, the people who replaced us, what would they do? And his lieutenant was like, oh, they would absolutely invest in this new technology. And he's like, okay, great. You're right. That's what they would do. That's what we should do. That is one of the most important elements in how we deal with our regrets.

At a big picture, we have to do some triangulation with our regrets. So you can say, you know, we have this philosophy out there of no regrets, all right, which is nonsense. So you can say, oh, I have a regret. Oh, it doesn't matter. I always look forward. I never look backward. That's a bad idea. That's a bad idea. Regret exists for a reason. Regret is instructive. If you do that, you're never going to learn anything. On the other hand, you can some people over index on their regrets and ruminate over them, wallow in them. In some cases, use the regrets as a way to exonerate themselves from doing something. That's a bad idea, too. What you want to do is you want to use your regrets as signals for thinking.

And one way to do that is exactly as you say with with self-distancing is take a step back and say, OK, what did I learn from this and how can I apply that moving forward? And as you say, Chris, you know, there's a pile of research showing that that we're better off solving other people's problems than our own problems. And so what we want to do is give ourselves some distance from those and some really kind of clever, interesting tactics like that. So you can you know, you can you know, for you, Chris, if you wanted to deal with your regret, you could say not what should I do, but what should Chris do? Talking to yourself in the third person, amazingly enough, seems to have that kind of power going forward in time and saying, hey, 10 years from now. what decision will I have wanted to make? The sort of replacing yourself that Andy Grove talked about is powerful there too. One of my favorite techniques and, and it is something that Tina Selig at Stanford university calls a failure resume, which is to put together a resume of

your failures. Okay. We all have these resumes and LinkedIn profiles that say that, you know, we're the greatest thing since, since sliced bread and that we probably deserve both the Heisman Trophy and an Oscar earlier in our lives. And these things, they just glisten if you look at people's resumes. They just kind of shine. And that's part of us, but it's not all of us. And so, the flip side of that, Tina says, is to create a failure resume, which is this glorious compilation of your screw-ups and your setbacks and your failures. I did this myself, listed them all. It's not pleasant, but you have to do it systematically, as you say. So, I listed those things. And then I said, what did I learn from this stuff? And how am I going

to apply it forward? And for me, it was revelatory, because I found that a lot of my mistakes keep coming back to the same kind of two core blunders that I was making. And I've more or less steered around those in the future. The self-distancing is such a great strategy. I have to confess, though, I was surprised reading your book to see the comparison between Julius Caesar and Elmo. I was not expecting that, but you're right. Those are, you know, Julius Caesar, Elmo, they're big for talking to the, you know, referring to themselves in the third person. They both talk about themselves in the third person. And so spanning, you know, a long amount of time and arguably a span of species suggests that this technique is

somehow useful to us. And this is actually an important thing in sort of how we analyze human beings. It's like, we think about something like regret, right? Regret is the second most common emotion that people express overall. It's the most common negative emotion that people express. So why is that? It must serve some purpose, right? All of us wouldn't be feeling bad if there wasn't a reason for it. And the reason for it very clearly in the research is that if you deal with it right, it's instructive. It points a way forward. And so never looking backward is a is a colossally stupid idea. What you want to do is you want to look backward, but you want to look backward in a particular way that allows you to, you know, understand where

you understand your choice, sort of unburden yourself of that choice, extract a lesson from that choice and apply it going forward. Is part of the process trying to do a better job in setting our own expectations. I just think about the research you have in your book around Olympic athletes, and in particular, Olympic medalists, and how across the board, people who win the bronze medal are happier than people who win the silver medal, even though the silver medal is a greater achievement, but the bronze medalists, um, you know, in some cases it's people who are just happy that they got a medal at all. And so maybe expectation setting is a, is a part of that. It is a big part of that. What that shows is that

again, our cognitive machinery is, is programmed for that kind of counterfactual thinking. And there are two different ways to do that counterfactual thinking. One is to imagine how things could have been better and that hurts. That's what regret is, but it's instructive. The other one, which is actually an okay tactic sometimes, is to imagine how things could have turned out worse. That's what I call, you know, an upward counterfactual regret is what I call an if-only. But the downward counterfactual, how it could have turned out worse, is an at least. So, you know, so the silver medalist is saying, oh, if only I had, I talk about a bike race in the book, if only I'd pedaled a tiny bit harder, I'd have won a gold rather than a silver.

Whereas the bronze medalist is like, oh, my God, at least I didn't slip from the lead like that other rider and lose out on the medal stand altogether. I described this race, which I didn't I didn't see live, but I saw a video of it. And, you know, when they come over the finish line, the bronze medal, the silver medalist who just placed second in the Olympics, she has her face buried in her hands and the bronze medal is exultant. and so this tells us something now how do we apply that going forward there's certain for certain kinds of regrets particularly for regrets of action and we can use that at least mechanism and so we have so i i sell that a lot in the in the database of regrets so you had people who said so you're basically finding a silver lining that can make you feel better doesn't

necessarily make you do better but it can make you feel better and feeling better is is okay sometimes. So the most common one of that was in the database was, I mean, once again, dozens, if not hundreds of people, I think they were all women who said, Oh, I really regret marrying that idiot, but at least I have these two great kids. So that's the, that's the silver lining. So you can, so you can take certain kinds of regrets and at least them certain kinds of action regrets. you can also undo. You know, you get it. I mean, you get a tattoo and you're like, oh, that was a stupid idea. You can have the tattoo removed. Yeah. That's one of my favorite stats in your book that for all the people touting, they have no regrets. The tattoo removal business in America

is a $100 million a year business. Yes. Maybe that's maybe maybe maybe your analyst should be looking for a publicly held tattoo removal technology. When you and I talked about your last book, When the Scientific Secrets, you said the research changed the way you live your life. When you make medical appointments, for example, they are always in the morning. By the way, having read your last book, I'm the same way. All medical appointments are before noon. All important medical appointments. I'll do a routine teeth cleaning in the afternoon, although I actually scheduled, because I think your listeners want to know this, I actually scheduled my next teeth cleaning for 8 a.m.

In case you were wondering about my dental hygiene here. Good to know. Has your work on this book, the research you've done, any changes for you personally? Yeah, several. I'll tell you the biggest one. It has to do with connection regrets, which was the biggest category of regrets. And connection regrets are if only I had reached out. And I heard so many stories all over the world of people who had a relationship or should have had a relationship, and it came apart.

And not romantic relationships, but relationships with parents or kids or siblings or other relatives or friends. My gosh, Chris, I mean, so much stuff about friends. And these relationships come apart in profoundly undramatic ways. They just drift apart. and what happens is that nobody wants so someone says oh i i should reach out but it's going to feel really awkward and the other side won't care and they're wrong they're just flatly wrong on both counts it's less awkward than you think and the other side almost always cares and so for me the big takeaway and it's one of the things i'm actually trying to work on this year is to just

reach out more to people who i were friends who i knew who i liked who were part of my life at one point. And I've always resisted that because I was like, it's going to be really awkward and they're not going to care if they hear from me. And this disabused me of that to the point where like my advice to myself that I'm trying to follow, but also to others is that if you get to a juncture in your life and you're asking yourself, you know, should I reach out? The answer is yes. If you've gotten to that juncture, you've answered the question. And I think to me, a huge takeaway from hearing all these regrets from around the world is always reach out. You've written about the workplace. You've written about what motivates

executives and employees. And we're at a point in time where so many companies are trying to figure out how to manage employees in an increasingly remote world. I know you're a naturally curious person. So what are you seeing in the stories you read about the future of the office and work culture? And where do you think this is going? Yeah, as for where it's going, I have no idea. But I actually think that this question of remote versus on-site is a proxy for bigger questions that have been unresolved and actually never addressed in the way we navigate organizations. Let me give an example of this. What kind of work should be done together and what kind of work should be done solo. We don't have a good theory of that. We have been making it up since white-collar work

began. We do not have a good theory of what should be collaborative and what should be alone. What kind of work should be done synchronously and what should be done asynchronously? We don't know that. We just have this habit of having synchronous meetings all the time. Big question that you alluded to. What is an office for today? I think that that is a huge question that is up for grabs, and we need to seriously think that. I think there are bigger questions, too, within the Great Resignation. It's like, what do companies owe employees? What do employees owe companies? This is a question that, you know, The Fool has been addressing through conscious capitalism, which, you know, I think it becomes more and more important each year.

And so, and I actually even think that these regrets give us some clues about effective organizations. You know, when we think about what people want, what do they want? They want a stable foundation. We know from regret, they want a stable foundation. They want a chance to learn and grow. They want to do the right thing, and they want connection and love. So in a way, those are the building blocks of a coherent culture, a culture that provides a sense of belonging, a culture that does the right thing, a culture that has a sense of purpose, a culture that fosters a sense of belonging, a culture that allows people to take sensible risks. And so, you know, I'm actually surprised, even though this has been a tough two years for

everybody, I'm actually surprisingly optimistic about what's going to happen once we turn the page. I do feel like this, that we could be in for a kind of a significant reboot. I hope so. Two more things and then I'll let you go. Recently, there was an outpouring of sadness over the passing of comedian Bob Saget, who, in addition to being respected and beloved in the entertainment community, was very much a doppelganger for you. I mean, you could have been Bob Saget's stunt double. Did you ever cross paths with him and connect in any way well okay chris so i did cross paths with him about which more in a moment but before i crossed paths with him i probably had people tell me that six seven eight times a year i would be on an

airplane and the flight attendant would say you know you look a lot like bob saget and i'm like okay thank you um and anyway i ended up doing a project a small project with him uh not that long ago where we were playing around with a podcasting technology and, you know, experimenting with new ways to do audio shows. And he and I got together to do something where we just took basically listener questions about what's your problem. And I got a chance to prep with him and I got a chance to work with him a little bit. And I have to say, I mean, it's almost cliche to say after someone has passed, but just a lovely guy. And, you know, like, here's this guy, he's a huge star, huge, recognized around the world. And he was like, on the prep calls before me, he was as

kind and generous to everybody at every level all along the way. In the way that we dealt with questioners, he was, I expect him to be funny, totally, he was. He was incredibly insightful and incredibly empathetic and so you know one of the things that you see is that all of us at some level are performing you know especially actors and sometimes you know somebody performs a role and underneath they're kind of an ass and this was almost the exact opposite that his public performance was more of like hey i'm gonna tell some dirty jokes um but deep down again in my limited knowledge of him he was just a just a very kind warm human being i was devastated when I heard it. I know you're a baseball fan, particularly the Washington Nationals. As of

right now, the season is in jeopardy because the owners of Major League Baseball teams and the Players Association have not come to a collective bargaining agreement. This would not be the first time the baseball season was threatened. So if you could stand in a room and deliver a message about the power of regret to the owners and the Players Association, what would you say? I it's a great question. I would. And in the last baseball strike, I was actually working at the United States Department of Labor for the secretary of labor. And at one point I said, you know what? Maybe I can just strap on my Superman uniform and solve this strike. And of course, that was the year that the World Series was canceled. So, you know, what I would say is, is maybe do a little bit of a little bit of the self-distancing. but it's self-distancing in time. Ten years from now, how do you want to look back on this

decision? If you're an owner, do you want to look back and say, in my effort to squeeze out every last cent, I shut down the national pastime and disappointed kids all over America and perhaps threaten the long-term health of the sport. And with the players, who I'm actually more sympathetic to, I would say, listen, you know, I understand where you're coming from, but remember that I want you to do the same thing. Look back 10 years from now, and what do you want your kids to say about you? How do you want your kids to view this? And I think that that kind of distancing in time can help them, not perfectly, but help them reach an agreement. The book is The Power of Regret, How Looking Backward Moves Us Forward. It's available

everywhere you find books starting on February 1st. That's all for today, but coming up this week, we've got a lot in store, including value investing, the NASDAQ, some big tech earnings from Alphabet, Amazon, meta platforms, and more. As always, people on the program may have interest in the stocks they talk about. The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.