The Two-Second Advantage: How We Succeed by Anticipating the Future-Just Enough

This gave him the information he needed to react, staying just a moment or two ahead of everyone else. As he famously said, "I don't skate to where the puck is, but where it's going to be." By doing this, he became the best player of all time.

So, what does Gretzky's success have to do with modern business? Well, quite a lot actually. Most organizations today are looking for ways to stay ahead of the competition. They're constantly trying to anticipate what their customers want. And they struggle to anticipate future trends. If you're in a leadership role, then you're probably already in this battle yourself.

Recent findings in neuroscience tell us that all of us have the ability to predict like Wayne Gretzky. Our brains are hardwired to be predictive machines. Those of us who are exceptional predictors, like Gretzky, are well placed to make a success out of our lives and careers.

It doesn't matter if you're a CEO, a professional athlete, an artist, or a sales clerk. If you can learn how to predict activities, people's reactions, or situations just a moment or two before everyone else sees them, you'll always be ahead.

This plays out in business all the time. The sales professional who gets more sales than anyone else knows how to anticipate a client's reaction to her pitch. The consultant who has the most success turning around failing companies can predict how teams will respond to his suggestions for change. There are a million different ways we can use the art of anticipation in our lives. And, this is exactly what we learn about in "The Two-Second Advantage."

This fascinating book explores the science behind prediction, and how organizations are using this information in computer technology to make more accurate predictions about their customers.

So, is this book for you? Well, if you're at all interested in neuroscience or computer science, and how emerging research is relevant to your own life, then you'll love this book.

Vivek Ranadive is the CEO of TIBCO Software, and co-owner of the Golden State Warriors American professional basketball team. He's an often-cited expert on real-time computing and he's also the author of the best-selling book "The Power of Now."

Kevin Maney writes for Fortune, The Atlantic, Fast Company, and several other publications. He's the author of the best-selling books "The Maverick and His Machine and Trade-Off."

So, keep listening to find out how our brains go about making a prediction, how being adventurous helps you make better predictions, and how one American company is using the power of prediction to detect the major life events of its customers.

"The Two-Second Advantage" is divided into nine chapters. Thanks to the intriguing research and the authors' compelling writing style, the pages fly by. Once you pick up this book, you're not going to want to put it down.

The first several chapters focus on the science of prediction. The authors explain how our brains access information and form predictions. The biology is complex and completely fascinating, and we could take up the rest of the podcast just explaining this short section of the book. But we have more to cover, of course, so we'll do a quick sum-up.

There are some scientists who believe our intelligence is founded on our ability to predict. In fact, our brains are designed more for prediction than for information gathering. When we learn things, our brains group similar items and experiences into chunks of information.

For example, we chunk together information about our boss's behavior, how to use a computer, or how our colleague acts on a Monday. Chunking makes us efficient, and predicting goes hand in hand with chunking.

Whenever we see or do anything, our brain accesses the chunk of information that's relevant. It says, Oh, I've seen this before, this is what's going to happen next. When our prediction about that chunk is right, the chunk is strengthened. When it's wrong, the chunk learns and adjusts. This new information is added, and our prediction will probably be a little bit different, and more accurate, next time.

We're constantly making predictions, sending those predictions out into the world, and then learning whenever they turn out to be right or wrong. And the more up-to-date and comprehensive our chunks of information are, the better predictions we make.

The authors make an insightful point here. They state that when we make predictions that are always right, we get bored. This information switches us onto autopilot. A good example of this is driving. Most of the time, when we drive we're on autopilot. It's when we encounter information outside our chunks that we get excited, and start to learn.

Here's an example. Some people like feeling very safe in life. They live in the same home for decades, always vacation in the same place, read the same authors, and they stay with the same job for years. Other people, however, love having their predictions challenged. They eat new foods, travel to foreign countries, try new jobs, and constantly seek out obscure authors to read.

Neither extreme is good, so the authors say. If you're too safe in your choices, you don't get enough new experiences and information to build better, more complex chunks. But always learning new information and having new experiences isn't that great either, because you don't repeat your experiences enough to solidify them into chunks that can help you predict. The most talented, successful people fall in the middle of these two extremes.

So the lesson is this. We should all try new things, especially in our careers. We should meet new colleagues, try challenging projects, and develop our skills. But we also need to spend time doing each of those things, so our brain can develop the experiential chunks it needs to make accurate predictions in the future.

As you can imagine, this is a pretty simplified explanation of how our brains work, and how we learn and predict. The authors draw on science from many different researchers and experts, and the first few chapters of the book are captivating. The authors also give us plenty of real-life examples from great athletes, celebrities, and business leaders to show us what they're talking about.

The middle part of the book talks more about technology, and how researchers are using all the information about how we predict to improve computer systems and processes, so that they, too, can predict more accurately.

The problem, the authors say, is that our current computer systems are operating the same way they did 60 years ago. Sure, they're faster now. But, the amount of data they have to sift through is enormous. And, the amount of information in the world is now doubling every eighteen months.

So, we have plenty of information. But often, executives and organizations can't get their hands on the right data, at the right time, to make accurate and timely predictions.

Although our current systems have their share of challenges, the authors give some interesting examples of how we're currently using computers to help us make smarter predictions.

Swiss company Cablecom is the nation's largest broadband TV and Internet provider. It recently came out with database analytics software that looks at customer defections. The company found out that while most people cancel their service in the 13th month, they actually start thinking about canceling in the ninth month.

The company used this data to change its marketing tactics. It began sending promotional deals during the seventh month. And, cancelations dropped by one-fifth.

Another fascinating example of how organizations are using computers to predict and change customer behavior is the American bulk-buy retailer Sam's Club. The company is now using an opt-in software called eValues, which they launched in 2009.

What's so remarkable is that this software can predict, with almost frightening accuracy, the major life events of Sam's Club customers. And, it sends them coupons for relevant products on their mobile device or through email.

Now, we're not talking about when a family is likely to go through their 10 pack of toothpaste, although the software does do that. We're talking about when the Jones family is about to have a baby, or go through a divorce. The system can predict events like this, often before customers have told anyone else they were about to make such a major life decision.

Sam's Club got so worried their customers would get creeped out that they sent out an email explaining how the system worked.

So, how does a computer predict a major life event like a new baby, even before the couple has ultimately made a decision about it?

The authors say the eValues software first culls billions of historical transactions from the company's history, all sorted by individual shoppers. This way, the software can build individual models of each customer, based on this data. Put simply, the software is chunking information, just like our brains do. Once customers enroll, the system also keeps track of every purchase they make.

The software also looks at predicted data. For instance, how long it might take a family of four, on average, to go through a twenty pack of toilet tissue. Then, a few weeks before the family runs out, they get a coupon for more toilet paper.

Sam's Club found that seemingly random purchases can predict major life events, such as a marriage or divorce. And, along the same lines, the system knows when somebody is likely to start shopping for a new washing machine, or a big screen TV. Before they ever start comparing prices, Sam's Club customers get a coupon for these items.

With their regular print coupons, Sam's Club sees a redemption rate of around one percent. But with their eValue coupons, they see a redemption rate of 20-30 percent. So, the system is working. Perhaps a little too accurately, at least for some people's tastes.

These are just a few examples of how certain organizations are using computer technology to make more accurate predictions.

The last part of the book looks at how being able to predict events better could change our world, for the better. The authors believe that, with more effective computer technology and applying some of the principles they identify in the book, governments could predict, and prevent, another economic meltdown.

Doctors could predict the next flu pandemic, and take steps to avert it before it even starts. Law enforcement professionals could stop a potential terrorist attack in plenty of time. And, companies could predict what their customers wanted before the competition did, which could lead to some wonderful new innovations.

So, what's our last word on "The Two-Second Advantage?"

This book is, without a doubt, an enlightening and engaging read. If you have any interest in neuroscience, and the implications this science has for your everyday decisions, you're going to love this book. There's a wealth of insight and information here, and if you're anything like us, you'll have a hard time putting this book down.

The authors did a fantastic job keeping the information solid. All their research is attributed, and they interviewed some very high profile people for the book. So although there is some theorizing in the book, there's also quite a bit of fact.

It's important to realize, though, that this isn't a how-to book. You're not really going to learn how to get better at predicting events, and there aren't any quick tips or exercises to do at the end of the chapters.

Rather, this is the kind of book you read for the wealth of information it contains, and to understand what might help you, and your organization, be more successful.

"The Two-Second Advantage," by Vivek Ranadive and Kevin Maney, is published by Crown Business.

That's the end of this episode of Book Insights. Thanks for listening.