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'Wait' Gives Procrastinators The Last Word

Frank Partnoy, "Wait: The Art And Science Of Delay"
Why We Should Just "Wait"
Guest: Frank Partnoy, USD Professor of Law and Finance, author of "Wait: The Art And Science Of Delay"

CAVANAUGH: This is KPBS Midday Edition. I'm Maureen Cavanaugh. One of the most popular new year's resolutions Americans make is to stop procrastinating. Thomas Jefferson said do not put off until tomorrow what you can do today. In short, Americans are constantly told to stop thinking and start doing. Until now. Author USD law professor and formerly investment banker frank Partnoy has a new book out called Wait. My guest, the author of Wait, the art and science of delay. Thank you for being here. PARTNOY: Thanks very much. Great to be back. CAVANAUGH: I don't have a lot of investment banking experts on the show, and since you are a former investment banker at Morgan Stanley, I have to ask you just a little bit about libor, the London interbank offered rates scandal. The alleged administration of key interest rates by big banks, that's what the scandal is about. You were quoted in Friday's New York Times as saying you should be shocked by this behavior, but you're not. Why weren't you shocked at what Barkley is doing? Or was doing. PARTNOY: This sort of misbehavior in financial markets has been going on for a long time. And the regulators haven't done much about it for 2†decades. So that shouldn't be surprising. We get a crisis every few months it seems. This one is a bad one, and I think it's an example of some of the problems that I talk about in Wait, that investment bankers were not willing to about the long-term, the consequences of manipulating this interest rate. And people should be aware is this just a survey the banks get. They don't have to borrow at these rates. Once a day they there will O own trade organization an estimate of what their borrowing rate is. And if it's wrong, if it's a fraudulent estimate, there's no consequence for that. So it shouldn't be surprising for people to see bankers misestimating when there's a consequence. CAVANAUGH: Is this typical in finance? PARTNOY: This one is new, but in general, fraud has been rampant in the financial markets over the last couple decades, and it's just getting worse and worse. I proposed that banks should have to put their money where their mouth is in terms of their LIBOR submissions, and if they put a rate out there, they should be willing to borrow or lend at that rate. Not surprisingly, the banks don't like that proposal very much. But as long as we have loose regulation and the kinds of incentives for short-term gain without long-term paying at the bank, we'll continue to see these scandals. CAVANAUGH: What does a scandal like this due to that relationship? PARTNOY: It doesn't seem to damage the relationship irreparably. We tend to stick with our broker, we think whoever is advising us couldn't possibly be like this, and often they're not. But there's a lot of resilience in the financial industry. Sometimes a couple of tear-jerking ads about a bank talking about saving for your children's education or retirement, that'll wipe away and erase any scandal. CAVANAUGH: The way decisions are made by Wall Street financiers prompted you to the subject of this new book. Tell us about the seminar sponsored by Lyman brothers. PARTNOY: Part of the motivation was that I've always been a procrastinator, and I wanted to understand it. I feel like I get it more now. But the immediate emptus was this incredible course that Lyman brothers put together in fall of 2005, before the financial crisis. They brought four dozen of their top executives to the palace Holtz on Madison avenue, New York, and they brought in some of the lead decision making theorists from Harvard, they designed implicit association tests to test the biases they thought their executives might have. And they brought in Malcolm Gladwell who just published his best-selling book, Blink. And Joe Gregory, the president of Lyman brothers loved Blink, he liked snap-decision making, the idea of reacting within two seconds, passed out copies of the book on the trading floor to his traders, encouraging this fast decision making. So they had this course then quickly marched across Manhattan and proceeded to make the worst snap decisions in the history of financial markets. And I just thought, wow, we really need to redesign the course that people on Wall Street are taking to reflect current thinking, recent research, that shows that delays are often better, that reacting quickly can be incredibly dangerous. And that this course would be useful for people outside of Wall Street as well. That was one of the motivators that got me started. Then I interviewed a lot of senior people in business and government and tried to reflect the recent research on decision making. CAVANAUGH: So is that the main message of your book, Wait? That you should just -- taking your time to make a good decision has been wrongly dismissed by previous thinkers? PARTNOY: Part of it is exactly that, that we have had this kind of antiprocrastination industry that started in the 1970s with people telling us to get things done, first things first. And that has made us feel terribly guilty about procrastinating. And it's just part of the human condition. We're going to be procrastinating some of the things we have to do. But the overarching message is that there's a 2-step decision making process that people can follow that leads to good decision. The first is to think about what time in the world you're living in, what's the maximum amount of time you can take for a decision? If you get an e-mail, does it really have to be responded to in a second? Might a day be okay or a week? Then the second step is really to procrastinate, to wait until the last possible moment. I'm not suggesting that everyone should just lie around on their sofas and do nothing. CAVANAUGH: Why not! Lives lives PARTNOY: Psychologists call that passive procrastination. Active procrastination, you're putting things off but you're doing it because you're prioritizing. If someone has a dirty closet, as my wife and I do, that's okay if you're spending your time with your family or working effectively at your job. If you're working on a cure for cancer, why should we be see critical on you putting off cleaning your closet? CAVANAUGH: People we think of who make split-decisions, athletes, tennis players, people who drive race cars, thinking all the time, making all these calculations in the fraction of a second, you say this is actually some research that shows that even people like this make better decisions when they wait for the last possible moment to return a serve, let's say? PARTNOY: That's right. There's an incredible amount of research on superfast athletes, we might have been told these people are good because they're fast, they're actually good because they're slow. They get fast in order to go slow. In tennis, you only had about 500 milliseconds to return a professional serve. You don't have enough time to make any kind of conscious act. But the difference between a professional and an amateur is just about 50 milliseconds that the professional can create of additional decision making time to process information about the speed of the ball, that by getting really fast at their stroke, they can start at 450 milliseconds. It's mind boggling. But that frees up time in the middle to observe and process information. And that's a framework for all of us to approach decisions. If you have a day, waiting until the last possible moment frees up information for you for all kinds of things. If you need to apologize to someone, we're taught at kids that you should say you're sorry right away. But the search shows that effective apologies are delayed as long as possible. >>> And what about the waiting of date something PARTNOY: And dating also, you think that people now are subject to the crutch of technology in all kinds of ways with e-mail and social media, and dating is the worst. You have all of these photos on the online dating sites. And I spent a lot of time with and interviewed the president of it's just lunch, the international dating network. Their approach is interesting. They say that a photo is one of the most dangerous pieces information you can get because it leads you to snap react, we're hardwired to snap-react to faces. And you won't get any good information about chemistry or compatibility. They suggest that you go to lunch, that's the right amount of time, about an hour, and don't make any judgments about the person initially. That you wait until the end of lunch, and then you thought ask yourself one simple question: Would I like to go out with this person again in and the people actually will not let their clients see photos. They think that's one of the worst possible things you can do in advance of a first date, to make a judgment based on a photo. CAVANAUGH: Slow down the first impressions. PARTNOY: Exactly right. And we're as human beings capable of making incredibly detailed analysis of first impressions. We snap-react in all kinds of ways that can be valuable but they also can be quite dangerous. And research shows that although we could get a lot of information in a split second that we do much better if we wait 30 seconds or a minute or five minutes. CAVANAUGH: Is this in your sense your book, validating the idea about making a problem or an issue and maybe just sleeping on it, giving it some breathing time in your head? PARTNOY: Absolutely. And again with the crutch of technology, people are having a harder time doing that. But successful business executives, people who are happy in their personal lives, have fought against technology and preserved this ability to sit back and think about a problem, take time, take a breath. And problems will change. We all regret snap-reacting, sending that e-mail when we shouldn't have. CAVANAUGH: Oh, yeah. PARTNOY: And waiting a little while, taking a breath, will change the nature of the problem as we get new information. And sometimes problems will go away. I talked to several CEOs who had been told this, if you just took everything in your in-box and just move today to your outbox, you'd have done the right thing 99% of the time. So I hope that Wait will give people some ammunition for taking a little bit more time with their decisions. CAVANAUGH: Have you compiled any lists of famous active procrastinators? PARTNOY: There are the truly famous ones like Agatha Christie, bill Clinton, a very renowned procrastinator. I feel like I do a pretty good job. [ LAUGHTER ] PARTNOY: And there are a bunch of not so good procrastinators that I talk about as well. So I don't want people to think merely that they can put everything off. CAVANAUGH: Sure. PARTNOY: John Perry, a psychologist at Stanford, as some interesting is recommendations about procrastinators. He says you're always going to be procrastinating something, so pick a couple of things that you know you won't do and put them at the top of your list. I put write the great American novel at the top of my list, and I put that off every day. And instead of doing that, I'll get something else done. CAVANAUGH: Thank you so much for doing this. PARTNOY: Thank you. I appreciate it.

Frank Partnoy At Warwicks

Talk and book-signing at Warwicks

Wednesday, July 18, 7:30p.m.

7812 Girard Avenue

La Jolla

Frank Partnoy has been in the news a lot lately.

Partnoy, a University of San Diego law and finance professor and renowned expert on Ponzi-schemes, has been a go-to interview for "The New York Times" and others trying to uncover the breadth and depth of the scandals swirling around big banks here and in Britain.


But these days he's also in demand because he's swimming against a very fast-moving stream and wants us to join him. In fact, he thinks we should wait -- take a deep breath or two or three -- before making decisions, and he's written a book to tell us why.

"Wait: The Art and Science of Delay" could be Partnoy's answer to Malcolm Gladwell's "Blink," a best-seller praising instant, split-second conclusions as "really powerful and, occasionally, really good." In fact, says Partnoy, we can benefit by making all kinds of decisions -- even snap decisions -- at the last possible moment.

If you've watched professional tennis, you might believe that returning a 100+ mile-per-hour serve is mostly instinctual. Partnoy cites Jimmy Connors and Chris Evert, both professionals, both champions and both the best of their time at return-of-serve. Somehow in the milliseconds before receiving the ball, they were able to process tons of information (speed, velocity, wind, angle) and only then, make a move. A move that was nearly always successful.

Other chapters explore high-frequency trading and the dangers of such high-speed market manipulation; first dates and why initial impressions are often wrong; and, finally, the point when delay becomes procrastination.

For Frank Partnoy, life's big questions cannot be resolved in the blink of an eye. They require input and analysis over the long haul, something we don't allow ourselves much of in these fast times.