Bob McGannon introduces some rules for breaking the rules when talking about intelligent disobedience which I found to be useful in general even without considering the notion of intelligent disobedience. He suggested some really quick considerations:
Do it as an exception: only when the standard rules don’t work.
Don’t do it in stealth: Convey your intention and explain the reasons you’re breaking the rules.
Not to be passive aggressive: you don’t play nice and say you’re going to follow the rules and then leave your boss’ room and then break them.
Don’t break the law: if a rule is based on a law, you need to make sure that you’re not acting in a manner that breaks the law.
Why putting these ideas upfront is important for management and also within the context of any organisation is that you want people to be acting intelligently and have a clear robust process for exceptions. It doesn’t mean you create extra bureaucracy; if anything, it is to allow people to act wisely and be allowed to face the music later if they agreed it is a mistake.
Within an organisation, by introducing these ideas, you empower employees and treat them maturely as individuals rather than a cog in the system. In practically all areas of life, when we need people to be more autonomous, we naturally will end up hiring the best people.
Through the Linkedin learning course by Bob McGannon, I became acquainted with the idea of intelligent disobedience. I think the premise that he lays out is pretty interesting. That the human world is made of many rules and usually, 95% of the time, these rules work but then there is always 5% of the time when it doesn’t. This is when circumstances are extraordinary, when the situation is not as expected by the rule-makers and so on.
The exceptions are what calls for intelligent disobedience. After all, the reason that a person should be put in a job is not because he knows all the rules on the job. He needs needs to be able to follow, but more importantly, he needs to know when to break them. If rule-following is all it takes, then the cockpit of most commercial aircraft technically don’t require pilots. It is the need to take exceptional actions that we need professionals to take certain roles.
Talents are basically known to be the ones who break rules. They don’t get punished for them; in fact more often than not, they are celebrated. Philip Yeo is a good example of that in Singapore. In fact, he probably exhibited most traits of intelligent disobedience in most of his stories of defiance that he recorded in his book, “Neither civil nor servant”. To a large extent, risk-taking involves a lot more nuanced thinking than the manner our Singaporean culture allows for.
The previous two posts are really just preparing me for this final one about returns on capital. We have talked about the aspirations of labour and that perhaps capital should be more like labour, where it is not just trying to get a return to multiply itself, but actually to look to more qualitative returns as well. But how would capital do that?
We see examples of this done using state capital. The government uses its capital to invest into public infrastructure, education or even public housing; all of these drives returns at broad economic and social levels. And this can generate more taxes in the future but the idea of the government isn’t to actually be able to generate more taxes in the future. Having more taxes is good because it can sustain the pace of these investments but the actual return is what the society reap in terms of better standards of living, greater knowledge in the people and so on.
Yet private capital holders are not exactly thinking this way. Private capital holders act as if most of what matters is that invested capital reaps more capital. And imagine if this was applied to the government, that it simply invests more so as to gain more taxes. It might end up investing in more coercive approaches to extracting more taxes. Or to just invest in areas that gives it more power.
If companies starts developing a vision of the future and of the world it wants to build, and define the returns on capital as what gains the world get in steps towards those vision, one could expect businesses to behave differently. In other words, we start investing the way we would want to be able to practice charity or giving effectively. We put our money where there can be most impact and action towards the future we want to see in the world. The returns come when we are able to step into the future that we had envision, not when the money flows back in. In most cases, if that future in our vision materialises, the monetary gains should come in to sustain that vision. If it doesn’t, then something is missing somewhere, and you either find another vision or path to invest into, or harness further resources needed to move towards that.
Labour is different from capital; the output of labour is meant to upkeep life, and in order to keep labour going, the returns are used to enrich labour in different ways. It could be investing to enhance skills and hence quality of labour; it could be food for sustenance and continued provision of labour; there is also enjoyment and entertainment, that labour needs to have meaningful life. The returns on labour is not to have more labour, nor to expand labour, but to live, to enrich life of labour.
Labour also has fixed lifespan; it needs to be utilised or it gets wasted. It cannot remain stationary or stagnant the way capital could. It does not hold its value when it is not being worked. And being worked, it accumulates greater value more quickly. Hence, labour can be chasing something more basic and yet more elusive than what capital chases.
When money was less easily printed, more of a medium of exchange and unit of accounting than an object of desire or a means of comparing riches across large groups of people, capital was not just a stash of cash. Capital was productive capacity vested in some kind of hardware or tangible ‘thing’. It could be a plot of land, or a buffalo, or a building that can shelter one from a storm.
When you have a plot of land, you’re chasing produce or crop yield. But it doesn’t stop there because crops can decay, so you have to find your market. And even in the market, you have to be clear what you hope to get eventually with the crops you sell, because the money that you hold might get debased quickly or you could be just bartering the crops. So you might think alright, I want to be able to improve yield, so the gains will go towards a buffalo, or some tools. Or you use the crops to pay workers, so you get more help and work the land more intensively.
You ‘save’ by preserving food, or having more children (whom you feed with the extra crops). And so the land, which is your capital chase for returns but what you get in terms of returns may not be more land or more ‘money’ but more goods, a richer experience of life. When humans try to regulate that by creating money, and then try to introduce price stability and the notion that money or at least the value is somewhat more persistent than other things in the world, our perception of how the world works gets skewed.
We accumulate money and try to accumulate even more with the money we get. All the while, it becomes just a meter that is counting scores without changing your life. Sure, you can exchange money for luxuries and a so-called better life. But why not just postpone that and make more money in the meantime? So the game of capital is just chasing returns, almost perpetually. The result is that capital seeks to indebt people; and the central banks ease the problem by printing more, creating inflation so that people will be led to consume, and to actually behave a bit more like when money was less trustworthy.
But this itself becomes a bit of a solution for easing recessions, stimulating the economy – kick-starting some kind of positive cycle that leads to growing activities and expansion of economies. And the whole system goes back to being a dog chasing its tail. The growth in our economy is simply to achieve more growth. And that is starting to behave more like capital again. No wonder capital wins labour in the game, because we’ve all been led to play the economy like capital’s game.
Perhaps if we understand labour a bit better, we can steer capital for the better?
I have written about green ammonia and hydrogen before. And I might keep talking about them because they are important candidates as energy vectors in a decarbonised world. They are quite likely what is considered as the end points of the transition for the world towards zero carbon or low carbon. What does it mean to transit to green ammonia or green hydrogen? What needs to take place, and who will move first? What should the players be looking out for in order to make the switch?
We need to start defining intermediate steps for the switch. There is actually very little doubts about the inevitability of the switch. Yes there are concerns that it might be energy intensive, the costs are high, and the market is not formed yet. But realistically, most new things are like that. When the Apollo mission took up 60% of the computing power of United States in order to perform its calculations for the project, there wasn’t anyone saying the industry is not formed yet we should wait for better computers before we send man to the moon. We just viewed the mission as a series of problems to be solved, within the budget constraint.
The transition needs a budget; it can be a small one or it can be a large one. The issue is that the businesses needs to take a stance and say that climate change and the transition is a mission I want to be on, and to explore the series of problems to be solved in order to complete the mission. And we don’t wait for costs to come down before we make the transition, we take active steps towards it. That is also what leadership is about. That is really the only issue people should be considering.
So for example, if you’re providing equipment for natural gas systems – be it power generation, cogeneration, for steam methane reforming, etc. You need to start thinking about the smaller pieces of things: are your valves able to handle hydrogen? Do the membranes in your cryogenic tanks work if it was to be filled with hydrogen? What about your manpower, are they able to be trained in the safe handling of the gas? All these to prepare for the transition. You won’t be able to make the transition overnight or achieve it through a single project. It takes much smaller steps.
Transition means being in an in-between state, crossing over to something which is supposed to be perhaps a less temporary state. The challenge, however, is that one can get stuck in transit. Natural gas as a fuel risk being in that state because it wasn’t really adopted fast enough as a transition fuel. And now renewable electricity from solar and wind has more or less leapfrog it in terms of cost advantage. Once battery or other energy storage technology moves along the cost curve and decline sufficiently, natural gas might even be bypassed.
So the world is in a somewhat confused state. When is it right to use gas? What should be counted as alternatives for decarbonisation? In any case, gas prices are spiking now so what does it mean? Should that mean we move forward into more renewables which might even be more expensive? Or we move backward into coal?
These decisions are not meant to be made in categorically; because the entire system needs to be considered. And what is at the margin in terms of choice needs to be clearly identified. If the additional unit of power that satisfies both energy security and the quantity demanded can be obtained through renewables, it should be used. Of course if that is not available, one might have to step back into more carbon-intensive processes. Availability can also be based on budget.
Natural gas itself, needs to be displaced by greener fuels without threatening the underlying combustion technologies that underpin the gas turbines. But that is perhaps for another day.
As a strategy consultant in a firm that focuses on the energy transition, we deal with all sorts of topics around it, particularly around supporting technologies, new and greener fuels, etc. Now there is a camp of people who thinks the transition is as good as moving from horse-draw carriage to the internal combustion engine – you don’t need the carriage-makers to change, you simply need newer players producing new goods to displace them. So thinking the brown or grey players can move into green is wishful.
There is another camp that believes the transition is made only when the players who are still in the carbon-intensive side of the game joins in. After all, light bulb manufacturers are still needed as LED takes off – the new LED technology simply adapts to all the legacy connectors which older bulbs had used. Basically, we still needed the components of the carriage-makers to join up into the supply chains of the new players.
When it comes to climate change and all the issues around making sure we preserve the quality of life on earth for the future generation, it is really difficult to think about costs. And it is a bit of wishful thinking to imagine that the current energy crisis in Europe now is an excuse for the oil & gas sector to hang around in its present form. The sector doesn’t have to cease to exist, just not in the same form as it did with the same activities as it did.
How to get them to make the transition, is a much harder question to answer.
To make life a little more complex, because data is often insufficiently precise the manner we conceptualise them; therefore, there is a need to try and estimate the actual underlying data. And so estimation means new data is being created – that which may describe our reality but to an imprecise state. The estimations are based on actual empirical observations overlaid with some theory or stories about what it means for similar sort of situations and so on.
The more actual empirical observations, the statistical theory goes, the more we are able to refine our story (or the model) in order to improve the estimations. But the difficulty is that we can make mistakes in empirical observations; and certain assumptions have to be made about these mistakes and how much margin they end up constituting when we are dealing with large numbers of observations.
Incorporating intelligence about reality through theories or stories in different ways can help to deal with these mistakes as well. Being able to do so skillfully requires a strong understanding of both the statistical theories and also creativity in terms of introducing parameters into modelling.
In a world full of disorder, we try to order them. And to really get a better sense of the reality, we gather data. While the notion of data in the modern world seem to be about bits and bytes, 0s and 1s; data collection dates far further in history. And it is important how our observations and the rich data that we actually collect with our senses matter. Before bits and bytes, there was no easy way to store data in a common denominator; we relied on different mediums including rocks, cloth, paper, film, codification (eg. music notations).
And research or learning in the past proceeded that way. It works, even if the knowledge accumulation is not as fast. Curation and developing good quality data hence matters more than gathering these things at high frequency. Things don’t change that much. Which is why I always think Charles Booth’s survey of the poverty situation in London is such an amazing endeavour with brilliant insights. It reminded me that I don’t need thousands or millions to go out there and perform social research about the society, economy or culture. I could just do things on the field with friends, with people who cared. And to simply describe observations to be gathered together.
Such rich, and more ethnographic research can prove to be more valuable, perceptive, and lasting. Ultimately, data points we gather from this world does not give us any sort of order. We are the ones who order the data points and try to make sense of it. Through a story, with a theory. The data points themselves cannot tell us much even when put together unless we have the mind to be able to see patterns, and tell the story.
