The people who make the most consequential, avoidable mistakes in high-stakes fields are frequently not the novices. They are the experienced experts. Veteran surgeons skip a step they have performed ten thousand times. A test pilot with more hours than almost anyone alive crashes a new aircraft. A professional investor with a Rolodex of contacts and a wall of Bloomberg terminals buys the fraud everyone later says was "obvious." How can deep expertise and catastrophic, simple error live in the same person?
What are errors of ignorance and ineptitude?
Atul Gawande's answer, in The Checklist Manifesto (2009), starts with a distinction that reorganizes the whole problem. Failures in any complex field come in two kinds. Errors of ignorance happen because we don't know enough. The knowledge doesn't exist yet, or we never learned it. Errors of ineptitude happen because we didn't correctly apply knowledge we already had. For most of history ignorance was the binding constraint. We didn't know what caused infection, or how to price a bond, or why a bridge fell.
That era is largely over in mature fields. The problem now, Gawande argues, is that "the volume and complexity of what we know has exceeded our individual ability to deliver its benefits correctly, safely, or reliably." The knowledge is in the building. It just doesn't get used at the right moment.
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Why do experts and investors need a checklist?
Investing is that kind of field. By the time you finish the course you'll know to check promoter pledging, to normalize a cyclical to mid-cycle earnings, to run the quality-of-earnings screen before valuing anything, to size for the downside. Knowing isn't the hard part. The problem is remembering to do each of them, every time, under time pressure and emotional pull, while the story is exciting and the price is moving. A checklist is a machine against ineptitude.
Beginners resist the next point harder than any other, and it's a humbling one. A checklist is most valuable for the experts, and for the dumb stuff. It doesn't exist to teach you the exotic, once-in-a-career judgment call. No list can encode that. It exists to catch the small number of stupid, avoidable, recurring errors that even the skilled make because they're on autopilot, distracted, rushed, or emotionally captured. The steps everyone "already knows." The step you've done a thousand times and so no longer see. You don't have to take any of this on faith, either. It's been measured.
What is the evidence that checklists work?
- Aviation: the origin. On 30 October 1935, at Wright Field in Dayton, Ohio, the U.S. Army Air Corps flew a competition to choose its next long-range bomber. The clear favorite was Boeing's Model 299, the aircraft that became the B-17. On its demonstration flight it climbed, stalled, crashed, and burned, killing two of the five aboard, including the pilot, Major Ployer P. Hill, one of the most experienced test pilots in the country. The cause was not mechanical. Hill had forgotten to release a lock on the elevator and rudder controls. The plane was so much more complex than its predecessors that a newspaper called it "too much airplane for one man to fly." The Army could have concluded the design was unflyable, or demanded more training for already-elite pilots. Instead a group of test pilots invented something almost insultingly simple: a pilot's checklist, a short card of the critical steps for takeoff, flight, and landing. With it, B-17s went on to fly, in Gawande's telling, some 1.8 million miles without a serious accident. Modern aviation safety was founded on that lesson. When complexity outruns memory, a better memory won't save you. A list will.
- Surgery: the trial. In 2008 the World Health Organization tested a 19-item surgical safety checklist across eight hospitals on four continents, from Tanzania to Toronto. That's a deliberately brutal test of range. Most of the items were obvious. Confirm the patient's identity and the correct site. Check that antibiotics were given and that the team members knew each other's names. The sponge and instrument counts had to match. Haynes and colleagues published the results in the New England Journal of Medicine in 2009. Major post-surgical complications fell from about 11% to 7%, and the inpatient death rate from about 1.5% to 0.8%. That's a reduction of roughly a third in complications and nearly half in deaths, from a laminated card, in operating rooms staffed by trained professionals.
- The ICU: the killer item. Peter Pronovost at Johns Hopkins cut it down further, to a five-line checklist for inserting a central venous line: wash hands, drape the patient fully, clean the skin with chlorhexidine, avoid the femoral site, remove unnecessary lines. It was rolled out across Michigan's ICUs in the Keystone project, and catheter-related bloodstream infections fell dramatically. In many units the median rate reached zero. The program was credited with preventing on the order of 1,500 deaths and saving roughly $175 million over about 18 months. Not one of those steps was new to a single doctor in the state. Doing them reliably was.
What do the three cases have in common?
Look at what those three cases have in common. None of the checklists taught anyone anything. Every professional involved already knew every step. The whole gain came from turning "known" into "reliably done." In Gawande's terms all three attacked ineptitude, and none of them touched ignorance. You get the same lever as an analyst. You'll spend a year acquiring the knowledge, and the checklist is what makes you use all of it, every time. That matters most on the day you're excited, tired, anchored to a number, or falling in love with a story. As Charlie Munger put it, "no wise pilot, no matter how great his talent and experience, fails to use his checklist."