THE WRONG PROBLEM

Economic Promises Met Through “Need Not Greed”

Paco — Wed, 12 Nov 2008 17:43:05 +0000

Economies are funny things. They are essentially made up of promises. If these promises are honoured they tend to lead to more and bigger promises. Promises generally entail good things but they may also involve sanctions.

Mostly in life we learn either to keep promises or to suffer sanctions and then move on. We are born selfish and greedy but generally find that life rubs along more smoothly if we curb our worst excesses.

Economies can be viewed on two dimensions financial and ontological (the nature of things). Financially they can be simple or complex: Ontologically they can be either physical or ideas based. On the diagram below movement up and right increases the reliance on promises promises to deliver on valid ideas and through financial complexity.

America epitomises the massive interconnectedness of promises to the rest of the planet a club that China is now joining.

Icelands position on the chart shows their failure to deliver because their ideas got far ahead of their economic sophistication. India is building relations based on ideas, whereas Brazil is at the moment mostly delivering physical promises. Saudi Arabia is the ultimate single commodity rich country promising oil through complex financial mechanisms. Sub-Saharan Africa is largely disconnected from the world except for its exploitation by others and Haiti promises nothing to no-one.

Thomas Friedman offers an interesting insight in his book The World is Flat. He describes how the global economy has transitioned from competition and collaboration between countries, through competition and collaboration between companies to the newly emerging competition and collaboration between individuals. He sees a flat world as one in which everything is possible and in which everyone can join in. He sees a world where growth in ideas can fuel economic growth and need not denude the planet of resources especially if one of the big ideas we need is how to do just that!

Promises based on need not greed might be the clue to a useful way forward. The global economy over the last ten years has arguably been based on ideas fuelled by greed. Many of these ideas have involved sophisticated but ultimately risky and value destroying financial products that nobody needed. The world is not short of genuine needs especially as many people in the world have become dependent on promises that have yet to be met in standards of living, healthcare, education, security and the rest.

This leads to thoughts on the role of government. We have seen intervention in the worlds financial processes because governments, on behalf of their citizens, saw that we could all end up in the Disconnecteds box of my matrix. The next question for them is how far they need to go in replacing the failed promises of the last ten years with new more resilient promises for the next ten. It seems to me that there is a very fine judgement to be made between sustaining an economy based on failed promises – propping up General Motors, for instance, – whilst building an economy based on resilient promises – in global healthcare, global education, global environmental protection, global security, global energy resilience.

It seems probable that in the same way that multi-national companies flourished regardless of governments, in this new flat world individuals and collaborators could flourish. They probably need governments to provide the right context but as ever these governments will have to deal in the traditional 4Cs of politics Collaboration, Competition, Coercion and Compromise.

So we will need investment in this economy and this will come from governments, companies and individuals. Perhaps the most interesting development will be how individuals invest. Traditionally this has been either through taxes or the stock market. Maybe in the future there will be more investment directly in projects that have clear benefits and transparent mechanisms for achieving returns.

The problem of the cat

Paco — Mon, 09 Jun 2008 15:47:38 +0000

The problem is – “The cat sat on the mat”. So that’s easy then. So we can all get on with solving it!

I have deliberately chosen one of the simplest statements in the English language to illustrate the complexity of the issue. Look at the following versions of this statement where the bold emphasis is on the word stressed.

“The cat sat on the mat”
“The cat sat on the mat”
“The cat sat on the mat”
“The cat sat on the mat”
“The cat sat on the mat”
“The cat sat on the mat”

Thus we have six distinct problems already. Taking each in turn we can see that each one has its own possible nuances.

“The cat sat on the mat.”

This was not any cat – it was the cat – the cat that everybody knows about, the one with so many stories, the one with the reputation, the one some people love and others hate – in short, the one with all the political and emotional baggage that makes it very difficult to make any simple rational statements about it that don’t have many layers of possible meaning.

“The cat sat on the mat.”

Of all the cheek! – the cat sat on the mat when it had been put there for the baby princess. Or was it the dog that was expected to park his derriere there – or whatever other person or member of the animal kingdom capable of sitting.

“The cat sat on the mat.”

I expect you’re getting the hang of this. Substitute any verb you like – prayed, peed, read, walked, adjudicated, scratched. Whichever you choose, clearly the cat was expected to do anything but sit on the mat.

“The cat sat on the mat.”

Again we have the entire array of prepositions at our disposal – near, over, in front of, – all being ways in which the cat could engage with the mat other than sitting on it!

“The cat sat on the mat.”

We’ve been here before – the mat with all the political and emotional baggage!

“The cat sat on the mat.”

He clearly was expected to sit somewhere else – in fact anywhere but on the mat.

So if you see the statement of the problem written down you could expect that to be definitive. It is, however, far from it. The statement could have an almost infinite number of meanings.

The solution is clearly to talk to whoever has stated the problem – firstly to hear the emphasis they put on the words, but also to allow the possibility of questions to arrive at a more precise statement of the problem.

But what if the problem is in an organisation or a family or in society. Who do you speak to and what if they all give different answers?

The premise of this blog is that most people working on problems in organisations will be working on the “wrong problem” – because the chances of them working on the “real problem” are vanishingly small.

So next time you hear somebody in a pub say, “Why doesn’t somebody do something about it?” before you give unqualified support, remember the problem of the cat.

Thoughts on Resilience

Paco — Tue, 03 Jun 2008 13:21:40 +0000

I have concluded that the important umbrella concept is RESILIENCE. It frames the question – Is this approach resilient? – a question that can be applied to all our endeavours from:– the smallest household project, o Will this repair to the shower outflow fix the poor drainage problem permanently?– through business problems, o Will this project ensure continued improvements to productivity?– to the big global questions of our time,o If we switch to nuclear power will this solve our energy problems?

Resilience rolls up a number of other concepts rather neatly. It combines the idea of sustainability with scenario planning. (Will this approach be sustainable under best, expected and worst case scenarios?) It also focuses attention back on the choice of problem to solve. More often than not a solution that is not resilient will force a change in the scope of the problem being solved consider the sharp intake of breath when the plumber begins the process of convincing you that you need more than just this leak fixing.

It is this last that provides the strap line for much that I will focus on in the future Dont waste time and money fixing THE WRONG PROBLEM.

Welcome to my new blog

Paco — Fri, 23 May 2008 15:32:16 +0000

This blog provides a forum to help organisations understand how to avoid wasting time and effort fixing the wrong problems.

I will post once a week.