Susie, my wife, booked us to go and see a film on Sunday evening – “The best exotic Marigold Hotel”. A very funny film and well worth watching! You can’t leave the film and not remember the line that one of the leading characters, Sonny, keeps saying throughout the film:
“Everything will be all right in the end; if it’s not alright then it’s not the end.”
Apparently this is a quote of the Brazilian writer Fernando Sabino: “No fim tudo dá certo, e se não deu certo é porque ainda não chegou ao fim” – but I am not sure if he really was the originator or not. Doesn’t matter. It is a great quote. Actually, Susie has often quoted the first bit at me and it is strange, but somehow, everything always does work out in the end….
Anyway, it got me thinking back to the Thursday Thoughts theme two weeks ago about optimism – and the Optimist’s Creed.
And so it was that last night I got to Chapter 24 in Daniel Kahneman’s Book “Thinking, fast and slow” (which I started to review last week) only to find that this chapter – entitled “The Engine of Capitalism” is all about optimism too! Or perhaps, more accurately, over-optimism. Coincidence or what?
Kahneman summarises in a section entitled “COMPETITION NEGLECT“:
“It is tempting to explain entrepreneurial optimism by wishful thinking, but emotion is only part of the story. Cognitive biases play an important role, notably the System 1 WYSIATI (What you see is all there is):
We focus on our goal, anchor on our plan, and neglect relevant base rates, exposing ourselves to the planning fallacy.
We focus on what we want to do and can do, neglecting the plans and skills of others
Both in explaining the past and in predicting the future, we focus on the causal role of skill and neglect the role of luck. we are therefore prone to an illusion of control.
We focus on what we know and neglect what we do not know, which makes us overly confident in our beliefs.
What was more extraordinary is that as I was reading this, a good friend and follower of this stream, David Brunnen wrote to me and sent me this link: http://www.innovationpolicy.org/my-new-book-title-eh-the-future-will-be-okay with the comment: “Worth a read I think – partly because of his realistic assessment of US R&D funding and partly because Rob gets close to the tendency that has long-plagued the ICT world – eternal optimism and hype.”
Even more coincidence. Anyone else thinking about optimism, over-optimism and the way we think about the future? Please join in the flow by commenting below!
I was browsing the bookshelves in a provincial airport lounge last month. I really like browsing business books in these sorts of places (as opposed to ordering books from Amazon). You find things you would not normally find and you can pick them up and read the gist of what the book is about in a very tactile way. Something Kindle struggles with, I think.
Anyway, I came across a what looked like interesting title “Thinking, Fast and Slow”. Being one always on the look-out for new Thursday Thoughts, I bought it and have started to read it…
The book is written by Daniel Kahneman who was awarded the Nobel Prize in Economics in 2002 for his pioneering work, developed with Amos Tversky, on decision-making and uncertainty.
Interestingly, there is a quote on the front cover by Steven Pinker which says “(Kahneman is) certainly the most important psychologist alive today”. I thought the blend of economics and psychology would be interesting – and I have not been disappointed!
To begin with, Kahneman’s says that we all have two “systems” of thought. He adopts terms originally proposed by the psychologists Keith Stanovich and Richard West referring to two systems in the mind: System 1 and System 2. Thee labels of System 1 and System 2 are, apparently, widely used in psychology. For those of you, like me, who are mere lay-folk in the art of psycho-babble, this was news!
Here is an extract from the introduction which outlines the two systems:
“When we think of ourselves, we identify with System 2, the conscious, reasoning self that has beliefs, makes choices and decides what to think about and what to do. Although System 2 believes itself to be where the action is, the automatic System 1 is the hero of the book.”
Kahneman describes System 1 as: “effortlessly originating impressions and feelings that are the main sources of the explicit beliefs and deliberate choices of System 2”.
In rough order of complexity, he describes some examples of the automatic activities that are attributed to System 1:
Detect that one object is more distant than another
Orient to the source of a sudden sound
Complete the phrase “bread and…..”
Make a “disgust face” when shown a horrible picture
Detect hostility in a voice
Answer to 2 + 2 = ?
Read words on large billboards
Drive a car on an empty road
Find a strong move in chess (if you are a chess master)
Understand simple sentences
Recognise that a “meek and tidy soul with a passion for detail” resembles and occupational stereotype
The highly diverse operations of System 2 have one feature in common: the require attention and are disrupted when attention is drawn way. Here are some examples:
Brace for the starter-gun in a race
Focus attention on the clowns in the circus
Focus on the voice of a particular person in a crowded and noisy room
Look for a woman with white hair
Search memory to identify a surprising sound
Maintain a faster walking speed than is natural for you
Monitor the appropriateness of your behaviour in a social situation
Count the occurrences of the letter a in a page of text
Tell someone your phone number
Park in a narrow space (for oct people except garage attendants)
Campare two washing machines for overall value
Fill out a tax form
Check the validity of a complex logical argument
The interesting thing that I have learnt so far is that we use System 1 and System 2 interchangeably throughout the day – and each system performs very important and different functions. Kahneman’s main thesis is that the intuitive (System 1) often arrives at a conclusion or judgement without the detailed logical evidence for that decision being through by System 2. There are many examples he gives where this is so – and here is one of them from page 43 of the book:
“A disturbing demonstration of depletion effects in judgement was recently reported in the Proceedings of the National Academy of Sciences. The unwitting participants in the study were eight parole judges in Israel. They spend entire days reviewing applications for parole. The cases are presented in random order, and the judges spend little time on each one, an average of 6 minutes. (The default decision is denial of parole; only 35% of requests are approved. The exact time of each decision is recorded, and the times of the judges’ three food breaks – morning break, lunch and afternoon break – during the day are recorded as well.)
The authors of the study plotted the proportion of approved requests against the time since the last food break. The proportion spikes after each meal, when about 65% of requests are granted. During the two hours or so until the next feeding, the approval rate drops steadily, to about zero just before the meal. As you might expect, this is an unwelcome result and the authors carefully checked many alternative explanations. The best possible account of the data provides bad news: tired and hungry judges tend to fall back on the easier default position of denying requests for parole. Both fatigue and hunger probably play a role.”
The book is certainly worth a read and I hope that even these small excerpts have make you think – even if only to understand we all have two systems of thinking that dance to the daily cycles of our more basic animal behaviours – and that, for all important decisions, gut-feel or intuition is not enough and that it is important to engage System 2. An aspect of thinking I sometimes struggle with! And it appears I am not alone – since the book highlights this as one of the main causes of human suffering in the world today.
You are probably past the point of setting New Year’s resolutions and have forgotten the one you set last year. Yet when you look back a year and look forward a year, it is surprising how little changes and how much stays the same.
Sure, 2011 was turbulent for many. In Europe, we seemed to leave the year with an uneasy sense of unknowingness about what lies ahead in 2012 for the Eurozone. And we are told that the world is now so connected that we don’t need New York to sneeze before the rest of the world catches a cold. The sneeze could come from Berlin or Beijing or anywhere else for that matter.
Yet there is nothing like a conscience and a critical review to remind you of what you committed to and what you forecast might happen…. And writing a blog is somehow a very public way of saying that I commit to something at the start of a New Year.
So it was that I was surprised to find that I went public this time last year to reduce my bodyweight. Apparently this is the most common New Year’s resolution that people make. I did actually manage to lose a stone between January and April last year – only to put on 9 pounds between April and Christmas!
So often, (in weight loss AND in business performance), the gains are difficult enough to achieve – but even harder to sustain. It is not that my body needs to be as heavy as it is. It is more about habit – and changing the habits that have been laid down over a lifetime. It didn’t take much for me to revert to my old habits as the summer came and the bees started to make honey!
Reading the press over the New Year, it was interesting to see that the UK population has become more and more obese – and some say over 35% is now obese. As has the banking system and, perhaps many of the service organisations that try to service our needs – or so the current UK government thinks.
So the question for me is how to we can reduce weight and sustain a healthy lifestyle in a world that seems to becoming more obese.
My diet last year where I managed to lose a stone in weight was not really a diet. I never felt hungry the whole time I was on the regime. I simply reduced the number of calories I ate.
In a similar way, the two puppies that we took on in September are a good weight – because they get fed the correct amount of food each day. It is interesting, also, that we have never been as healthy as our parents and grandparents were the 1940s when the country had food rationing.
It is not so much, then, about reducing weight. It is more about eating the correct amount you need to achieve and maintain a natural bodyweight.
So, for this year, as well as reducing weight (another stone would do), I resolve to try to sustain the weight loss. I would also like to do the reverse for my business – increase the revenues and sustain the flow! Funny that in March last year I earned the most in a month when my weight reduced the most!
Maybe one idea works with the other. Who knows? Maybe the Lean Folk know. Makes you think, anyway!
One of the great treats of Thursday (in addition, of course, to Thursday Thoughts) is Melvyn Bragg’s “In Our Time” broadcast twice each Thursday on Radio 4.
Last week’s programme (HERE) was about Heraclytus – one of the greatest pre-Socratic philosophers which is well worth listening to if you missed it last Thursday.
One of Heraclytus’ greatest observations was that everything flows, that everything is in flux, that everything changes. How right he was! It is interesting that there is not much new – for this is one of the foundations of lean thinking that underpins so much of modern management thinking.
Another famous quote of his was:
“No man ever steps in the same river twice,
for it’s not the same river and he’s not the same man.”
So as the speed of change has accelerated over the past three years, one begins to wonder whether anything is a constant.
The Ancient Greek Philosophers knew it all! Makes you think!
The “In Our Time” archive (going back to 1998) is well worth browsing – a rich variety of thoughts previously broadcasted on Thursdays long forgotten. I’m sure you will find something of interest – even if Ancient Greek Philosophy is not your passion!
Go on, step into the river! It is always different from the last time you stepped in. And you yourself will have changed since the last time too!
Slightly more than three years ago I was part of a worldwide team of volunteers within IBM researching the implications of climate change across every major industry sector on the planet. I led the Telecoms stream and discovered that although the Telecoms sector accounts for about 2% of man’s carbon footprint, this negative aspect was balanced by the associated benefits of reducing the impact of other more carbon-gulping industries such as Travel and Transport.
Yet through the whole study, IBM framed the study not in terms of carbon reduction – but in terms of sustainability. The pursuit of sustainability has confused me somewhat since then for a number of reasons. Firstly, nothing is sustainable for ever. Everything changes. Secondly, the whole carbon reduction movement has been (and continues to be) over-ridden by the world’s financial crisis. And thirdly – and perhaps most importantly – I had never taken the time to look into the principles behind sustainability so that I could explain it to someone else with clarity and simplicity.
All that changed last week. From my research into the future of money, I came across an excellent TED Talk – and website by Bernard Lietaer – a German Professor who specialises in another of my interests – Community Currencies. Lietaer’s pursuit for different models for money in the TED talk took him to ecology and a rather splendid discipline of “Ecological Economics”. Made sense to me (and the bees) – so I researched further.
Lietaer’s ideas originated from some earlier research from Robert. E. Ulanowicz – a Professor at the University of Maryland Center for Environmental Science. He defined sustainability as a state between efficiency and diversity – elegantly shown by a green ball in balance at the top of a convex curve:
Lietaer further shows in his joint paper with Ulanowicz and their co-author Sally Goerner that this model is as equally valid in organic, biospheres as it is in economics. Lietaer proposes that the reason for the financial crisis is that the system became more and more efficient at the expense of diversity. Makes sense.
So the challenge is to move from the (left-brained) obsession with efficiency and cost-cutting and move to the right by encouraging diversity and communication (right brained stuff). Also makes sense.
So to get out of the current economic crisis we need – complementary (or local) currencies that build diversity back into the system. And quickly.
You can read more on Bernar Lietaer’s ideas on his website. And below is an abstract of the paper:
I’m off to see another lecture on the future of money at the RSA next Thursday. So next week’s Thursday Thought might be a hat-trick on this subject. Even if the authorities have removed the tents from StPauls by then!
This week, the bees went to bed for the winter. Fed down with verroa treatment in the hope that most colonies will survive the winter.
I have also had three very different conversations this week about the importance of Business Processes. In each conversation, I came to a different set of conclusions. However, there was one over-riding idea that shone through from each conversation. The obsession with the current process-centric religion in management thinking has actually made many of our service-based organisations less, not more effective and less, not more efficient.
The first conversation came from an experience I had with a US-based hosting company I have used for about ten years. Last year they put SAP into the company. Two months ago the company was sold. The service has been declining for about a year. Coincidence? I don’t think so. The new process involves forcing you to ring a US telephone number which is actually answered by someone in the Phillipines who filters you so they can direct you to the right department. The problem I had involved both Domain Names and Hosting – so I ended up being put through to two departments. In the end I was double-billed and had to ring back a week later to complain – when I went through the same rigmarole – and was sent an email to say I couldn’t reclaim the money because it was against company policy. I rang a third time and finally got through to someone who sorted me there-and-then. Sounds familiar? More like a telephone company? Yes, indeed. I then got hold of the Director for Customer Experience and Process Design on LinkedIn to share my story. He was a Harvard MBA. He saw my profile but ignored me. The company is called Network Solutions.
The second case was with a former colleague whom I had lunch with. He is an aspiring partner at one of the big five consulting practices. He told me he was writing a paper about the importance of process design in telecoms companies. I cited the above story and said that Presence was more important than Process. He looked quizzical. He could not compute. He was not sure how he could implement Presence and make money out of the idea from a consulting assignment.
The final conversation was with an enlightened ex COO of a Telecoms company with whom I had lunch with on Tuesday. He said he was process mad – yet when you listened to his stories of how he managed processes, there was a great deal of practicality and experience blended in with the importance of providing the right information to the right person at the right time to turn customer issues and questions around on the first call.
In the crusade to banish the obsession with Process centricity, I continue to marvel at the bees that I keep. They don’t have crazy processes to waste time. They have developed an approach that balances Process AND Content (or pollen/nectar collection) IN THE MOMENT so that they can respond with far more intelligence than just following a book of rules. Interestingly, the model they use shows that outsourcing is extremely wasteful and makes no sense at all. If you have to hand off, do it only once (not three times like ITIL). The models from the bees also demonstrates the sense of investing in small, agile “cells” of capacity and capability tuned to specific types of demand.
To summarise, I believe it is time to create a new management paradigm based on Presence (modelled much more on the natural world that the bees have developed over 50 million years). It creates a paradigm shift that takes us away from the insanity (or caetextic thinking) of process-obsession and into a new much more organic model based on cells or colonies that can respond to demand of various types a seasonal basis.
Just like the bees do.
I am writing a book on the idea – so expect more like this in future postings.
I have also posted Presence over Process on MIX – The Management Information Exchange – please add comments and vote for the idea there or add your comments here as you wish. Always valuable!
I always enjoy this time of the year. For me, in many ways, the 1st of September is the start of a New Year.
If you can remember when you were young, or even more recently, if you have children, this time of the year marks the start of the academic year. It is back to school week and also Freshers week for those starting University. It is a out-of-sync start to the year when, in the Northern Hemisphere, we are all heading into Autumn and Winter. Perhaps the original designer for the academic cycle was an Antipodean when it coincides with Spring. Who knows?
Anyway, I have found over the past three years of running a small consulting business that there are definite peaks and troughs in demand for an extra pair of (external) hands to kick-off a new campaign or project. And that cycle is very much in in line with the school year. I can see a definite trend of individuals buying in three cycles – September/October, January/February and April/May/June. Nobody buys anything in August!
So with this New (Business) Year, I decided, whilst on holiday in August, to do a few radical things – just to mark the occasion. I’ve upgraded my apple computer (because the old one broke beyond repair). I’ve changed broadband service provider to Zen (having been struggling with BT’s customer service for several years). And I have also decided to move from my old-style accountant to one that can handle the cloud, is more proactive and help the business grow. All these changes have definitely given me a “back to school”, start of a New Year refreshed feeling.
With these somewhat mundane changes, I have also been reflecting on the past three years and what goals and objectives I should set the business for the next three years. After all, I run a business called Objective Designers! So I was very amuzed to get an email this morning from a great productivity blog I subscribe to called “ZenHabits”. I was reading an earlier entry called “No Goal” – which struck a chord. What if we actually have no goals? What then? I love the two quotes at end of the ZenHabits post:
‘Always remember: the journey is all. The destination is beside the point.’
“A good traveller has no fixed plans, and is not intent on arriving.” Lao Tzu
Why do we set all these goals and objectives? What purpose do they serve? Is there really an alternative framework with no goals, no budgets, no plans. Just free-and-easy go-with-the-flow business? I can see this probably wouldn’t work in big business, but for a micro business, it is an interesting idea. Many self-employed folk around the world probably do this naturally anyway!
Anyway, it makes you think – which is what this blog is all about!
In the week that Steve Jobs gave up as CEO of Apple, I was reminded by a good friend, Cliff, of part of Jobs’ address to Stamford students in 2005:
“You can’t connect the dots looking forward. You can only connect them looking backwards, so you have to trust that the dots will somehow connect in your future. You have to trust in something: your gut, destiny, life, karma, whatever – because believing that the dots will connect down the road will give you the confidence to follow your heart, even when it leads you off the well-worn path, and that will make all the difference.”
The idea that “dots will connect down the road” is such an interesting one. So many things become obvious with the benefit of hindsight. So it was, whilst on holiday in Sicily over the past ten days, that I was thinking about the importance of coincidences when looking back in life.
How many times in your life have you thought “That’s a coincidence!” – and the event or chance meeting has led to something important developing further down the road?
There is also the famous puzzle about how many people you need to gather together in a group for there to be less than a 50% probability that two in the group will share a birthday. The answer is not, as may would think 183 (or a half or 366) – but it is, in fact, a mere 23! Therefore coincidences are actually more common than we might at first think!
James Redfield in his book “The Celestine Prophecy” develops the main character with him beginning to notice instances of “synchronicity”, or the realisation that coincidences may have deep, sometimes spiritual meanings.
And, as Einstein charmingly said: “Coincidence is God’s way of remaining anonymous.”
To bring me back to Steve Jobs – his creations (or the creations of Apple) have been important at certain transition points in my life – whether they be the first Apple 2 I bought in 1980, or the Macbook Air I ordered today because my MacBook Pro that I got when I set up Objective Designers 3 years ago packed up last week!
Whether you believe these deeper meanings or not, REFLECT ON IT: When have coincidences changed your direction in life – or the decisions you have made? They have for me. Maybe they have for you?
Please think about these coincidences that have turned your life….and, if you think you have a good story, please put it in the comment box below!
Living in Kent in the UK, I have always been fascinated by local currencies and hop tokens. These were issued by local farmers to the hop pickers who came down from London – and could only be spent in the local village or on local beer (provided by the farmer!). However unfair, this really was localism in action!
So it is, as Europe and the US faces its currency crisis, trying to payoff old debts with a money system that is totally broken, it becomes so interesting to look to history and the so-called Wörgl experiment. This was conducted from July 1932 to November 1933 and is a classic example of the potential efficacy of local currencies in a time of financial crisis.
Wörgl, a small town in Austria with 4000 inhabitants, introduced a local scrip during the Great Depression. By 1932 unemployment in Wörgl had risen to 30%. The local government had amassed debts of 1.3 million Austrian schillings (AS) against cash reserves of 40,000 AS. Local construction and civic maintenance had come to a standstill. On the initiative of the town’s mayor, Michael Unterguggenberger, the local government printed 32,000 in labor certificates which carried a negative 1% monthly interest rate and could be converted into schillings at 98% of face value. An equivalent amount in schillings was deposited in the local bank as cover for the certificates in case of mass redemption and earned interest for the government.
The certificates circulated so rapidly that only 12,000 were ever actually put into circulation. According to reports by the mayor and economists of the day who studied the experiment, the scrip was readily accepted by local merchants and the local population. It utilized the scrip to carry out 100,000 AS in public works projects involving construction and repair of roads, bridges, tanks, drainage systems, factories, and buildings. The scrip was also accepted as legal tender for payment of local taxes.
In the one year that the currency was in circulation, it circulated 13 times faster than the official shilling and served as a catalyst to the local economy. The heavy arrears in local tax collection declined dramatically. Local government revenue rose from 2,400 AS in 1931 to 20,400 in 1932. Unemployment was eliminated, while it remained very high throughout the rest of the country. No increase in prices was observed. Based on the dramatic success of the Wörgl experiment, several other communities introduced similar scrips.
In spite of the tangible benefits of the programme, it met with stiff opposition from the regional socialist party and from the Austrian central bank, which opposed the local currency as an infringement on its powers over the currency. As a result the program was suspended, unemployment rose, and the local economy soon degenerated to the level of other communities in the country.
So there is a way out of the currency crisis – if only we looked to history and suppressed the central banking systems. I cannot see the dollar and euro surviving in their current state for much longer without some re-thinking. Makes you think what we could do if we took localism to the next stage of its natural development.
In a week where the Murdoch media empire appeared to lose its power, I came across this video “The Story of Stuff”- perhaps the most important “News of the World” that Murdoch’s empire was at the heart of ignoring.
Even if you have seen it, watch it again: it will make you think again about how the world works.
It is interesting how, with the launch of Apple’s Lion operating system we are still seeing “Design for Obsolescence” as one of the main design principles from what many say is the best design company in the world. It’s time for Apple (and the rest of us) to re-think design for the 21st century so that we can close the circle, not keep pushing the 99% waste down the pipe. Designing for Pull has to be a major factor in this redesign philosophy – and something I will come back to in future posts.
