Success factors in life vs exams

When you get back your exam scripts, do you focus on the questions you got right or the questions you got wrong? When I was a teacher, I often reminded my students that those scripts were more valuable for the way they show you how you had gone wrong rather than places where you got things correct. And in fact, those lessons were probably the whole point of sitting for the exam – more important than the grades themselves. Grades do not show whether you are good or bad but merely reflects your progress in the attempts to master the materials you were provided.

The issue with life after graduation is that it is so different from exams. To begin, your score in exams is capped at 100 whereas in life, your upside is really infinite. Now that means that unlike in exams where you could hone in on your mistakes and try to deal mainly with the weak points, life cannot be managed by exceptions or by focusing on weak points. You’d end up trying to perfect areas or dimensions that do not matter at all. Because unlike examinations, you are no longer trying to complete all the questions. You are now looking for questions worth answering amongst infinite questions. It looks more like an examination where there’s endless questions you can choose to answer and you’re trying to get to correct answers for the questions you do attempt.

So then the strategy now can be to just pick the easy questions, those that you have a high confidence of being right. Or to start devoting yourself to being really good at a particular cluster or set of questions around the same topics or ideas. And you want to get away from questions that you don’t stand a chance at unless you happen to be really interested and think you have a shot in developing the ability to answer them. Notice these approaches are radically different from what we learn in school. But once you are able to see life this way, you start recognising you need a different approach from what you were brought up with.

Positive cycles in systems

There are certainly some positive self-fulfilling prophecies in life, and they represent positive cycles in life that we can do more to encourage and harness. Students who have teachers believing in them tend to end up doing better than if they were left on their own; encouragement matters, and more importantly, the social dimension of love and nurturing has an impact on the learning outcomes of students. That is an input for teachers beyond pedagogy, but are we training teachers to believe in their students?

The industrial system works best when we can identify success factors and then invest in them to keep those positive feedback loops in the system. The tricky part is how the industrial system seeks to interact with that ‘scientific management’ koolaid about measurability and creating metrics and indicators. As a result, some of those success factors that are strictly unmeasurable get left out. After all, how do you make sure that a teacher can ‘believe’ in the students evenly in the class? But that question, which is precisely what standardisation and industrialism are based upon, misses the point.

Some of these unmeasurable success factors can generate power feedback loops. Consider the culture of graciousness in a workplace, gentleness, kindness, patience. Just because we cannot correlate the attributes with outcomes doesn’t mean they do not exist. And we all are worse off because we have allowed measurability and ‘big data’ to take such a dominant position in our systems.

Electrification Tussle II

This post continues from yesterday’s blog post.

There will be players who cannot electrify their processes, and they will need solutions. Most of them would be using natural gas running through the pipelines. And for them to decarbonize, they would need either a renewable form of natural gas, which is probably the most acceptable solution for them technically. For some of them, burning green hydrogen could potentially work as well, assuming they overcome the issues around the lower energy content of the hydrogen. Let’s consider again the drive to electrify. Using green hydrogen for these industries is equivalent to electrification because green hydrogen production is driven by renewable wind or solar power production. The notion is ultimately to shift the energy demand of these hard-to-abate industries back to the electricity grid, except through green hydrogen. Except, of course, the green hydrogen route is a very inefficient use of electricity because of poor conversion by electrolyzers and then coupled with the fact that more energy might be used to transport or store the hydrogen.

What I’m trying to point to here, is not that green hydrogen isn’t a viable solution – because in due course, with technological improvements, it definitely can and should be used. But in light of the electrification challenges I highlighted in part 1 (yesterday’s post), green hydrogen does not help alleviate the problem. It tends to complicate it and put even more stress on the electricity system when trying to green the grid. The mix of policy stances involving the heavy promotion of green hydrogen, the attempts to accelerate the reduction in gas use domestically, and setting aggressive renewable energy targets (really more like renewable electricity targets) for the grid emissions factor are all putting a lot of pressure on the electricity system while trying to keep electricity cost pressures under control.

Already mentioned in the earlier blog post is that natural gas resources can serve as part of the transition story. Now, there are concerns and worries about an addiction to fossil gas. After all, the economy might actually be addicted to it because it is a very lucrative export for Australia and so even as the country tries to reduce domestic use, it is unlikely to give it up as an export. And the fear is that the addiction would make it harder to decarbonise. This is why the other area for the government to direct its resources and develop policies that channel efforts in the right direction would be to promote biomethane production and displacement of fossil natural gas through the use of biomethane.

It is almost a no-brainer. Yet, there were concerns about the costs of biomethane while the more costly green hydrogen is being subsidised in all directions. There were further concerns about the limits of the resource potential of biomethane when the grid resources for green hydrogen production are even more scarce and expensive.

In providing my opinions, I have not given any figures but assumed that readers can find and discover for themselves the relative costs, and other challenges associated with how the overall policy mix and energy transition conversation is creating needless bottlenecks and distorting the orderliness of the energy transition. I suggest that we direct our efforts as an industry, economy, society and country in a more sensible, coherent, and directed manner to navigate the energy transition. The technically sensible approach is available and on the table, let’s set that as a destination first, and then slowly navigate the political minefield to get to it. This would likely produce better results than to be muddling through the technical solutions while trying to satisfy various political constituents and be none the wiser as to which destination we’re trying to get to.

Just an additional note to say that these entries are purely my personal opinions and do not reflect any views of my employers or any organisations I happen to be affiliated with.

Electrification tussle

The more I observe the energy transition in Australia, the more I realise that its attempts at balancing many different principles and ideas are at odds with achieving an orderly transition. Too often, we cast the energy transition as a technical or economics problem but more often, it’s a policy and political science problem. At the heart of the debate, is the age-old welfare economics issue around winners and losers. And with lobbying, power plays, risk of job losses, and a mix of various different studies, academic and commercial contributing to various perspectives, it can be incredibly confusing for policymakers.

Having worked on the side of government and alongside policy makers when I first started my career in Singapore, I thought that the volume of noise that exists in Australia around the energy transition is startling. I recalled that there were a lot more ‘no-brainer’ type of policy directions and being in the government was a lot more about trying to steer a large, heavy ship towards the destination that we can more or less agree on. In Australia, it almost feels like the policymakers are simultaneously being pulled in a hundred different directions at the same time and trying to achieve it all.

If, at this point, we are seeing that the policy direction is towards electrification, then the actual effort will have to be looking at what can green the grid and focus on that. So there’s been funding towards more solar and wind, as well as batteries to help balance the load in the system. The next big challenge is grid stability and network capacity. This will require extremely large investments and infrastructure build-up that will take time. This means we cannot electrify everyone at the same time, and this phase-in of various functions being electrified will have to be determined and planned carefully. The risk of not working this out is high – the greatest being continually being held hostage by the coal-fired power capacities and unable to shut them down to green the grid because power demand is climbing faster than we can build the grid and renewable capacities.

Gas is a transition fuel for precisely this reason; and it can play its role in the transition in two ways. First, it continues to supply energy to industries that need heat, delaying their need to electrify and hence keeping power demand at bay. Second, it can provide peaking power and supplement or displace coal-fired power in baseload, playing a critical role in taking the most carbon-intensive power source off the grid. Yet this brilliant idea keeps getting drowned out by the fear that once the gas industry is entrenched, it won’t go away. The economic lifespan of combined cycle gas-fired power plants or open cycle ones is about 25 years though their operational life can be extended. This means that they can be introduced immediately and fired up to replace coal-fired power plants and the tail end of their economic life can be more for peaking uses to stabilize the variable renewable energy, deferring investment in batteries that have significant lifecycle carbon emissions themselves.

The earlier we cut coal, the better; by allowing gas-fired power generation, we also defer the need to scale up our network capacity quickly when the electrification drive advances. These actions can mutually reinforce each other and allow battery, wind, and solar capacities to enter the system gradually alongside network upgrades. We observe how energy cost on consumers have increased while trying to green the grid (levellised cost of electricity from solar and wind is not a strong measure given that they are not produced when needed); trying to force the electrification is not going to make things better. Coupled with the strong anti-gas sentiments would only mean costs will keep going up.

Part II of this article continues tomorrow.

Temptation to be an expert

For most of my life, I had wanted to be an expert. I wanted to be looked up upon for specific knowledge or intelligence, or smarts in some area. There were of course, some areas I was more keen on than others. And as I read more, and gravitate towards specific topics, I wanted more and more to be known as an expert in those subject matters. The problem is that I was curious about many other things as well; in things I would not consider myself expert in (yet).

So then my knowledge starts to broaden, and I get to know a lot more about a variety of things. And I begin to see patterns across the domains. And I begin to think of expertise less like a deep hole, and more like a network of connections across disparate bits of knowledge that others might not recognise as fitting together but you, as the expert, can see it. Precisely because of the lots of learning you had to get there – not by hoarding knowledge but by eventually seeing patterns in the knowledge you acquire.

And then you begin to belittle dense knowledge in any single field or narrow buckets of knowledge that serve specific and narrow purposes. You no longer think that an expert is worth becoming; if you were an expert in just one or a few areas, you are losing out so much more of reality worth exploring. Maybe I just need to be reminded that I never was keen on being an expert, just pursuing wisdom more than mere knowledge. And wisdom is truly a more worthwhile pursuit.

Active government

Mariana continues her tirade against government capture by capitalist in general. It is interesting how her lessons for government applies perhaps overall to organisations and businesses just as well. That the point of the economy is not the profits but the purpose of the activities themselves. In short run, going for the profits may work but in longer run, it is knowing what problems you want to solve and working on them effectively that brings about the profits.

For governments, that is perhaps the strongest point. But when it comes to corporates, I still think that it is natural for the capitalists to hijack the agenda of the government, lobby for the focus on growth and highlight all of the social benefits of economic growth so much so that government keeps staring that way. The dominance of the economic agenda and how the goals of societies have become caught up with the principle of growth is perhaps something we should be discussing and considering as a society.

In Singapore, how we want to grow our society next needs to be considered. I think the Forward SG initiative was attempting that exercise through the idea of (re)formulating our social compact yet all too often, the logic of resolving the issues seem to boil down to certain initiative, formation of committees or some kind of organisation to look into things. Maybe it is not about adding components? What if it’s about discarding some of our existing things? Including our emphasis on academic merit?

We ought not lose heart but keep the conversation going.

Guidance & belief

A good coach puts some pressure on you to do better and demonstrates his belief that you can do better in you. But more than that, the coach makes sure that what is expected of you is clearly communicated so that you have a clear vision of yourself accomplishing it. The ‘video’ that can be played in your head is important. If the resolution of this video is poor, then it is harder for the coachee to perform. And putting pressure on the person by reminding him or her of the deadline or final prize is pointless.

A coach doesn’t review a race with the runner telling that him or her that at different point of the race, how far or near he/she is still from the finish line. He tells the runner about his or her gait to improve, the rhythm of breathes. The how is more important than the what; but the why even more so. The good coach then reminds the runner of why he or she is running.

It is not possible for managers to help a team thrive without these coaching capabilities. Most managers would just be churning output without developing the team or sustaining the right motivation for the team to go on. Often this could lead to burn-out and poor morale. This is where a strong individual contributor needs to learn new skills to move into manager position and not thinking that he or she can just keep doing what they are good at.

Transition economics

What happens in economics when technological innovation happens? There’s a bit of dilemma between technological progress and economics because technology needs to progress to a stage when it upend the economics of an established technology – yet the incumbent is often enjoying scale economies as well as other effects such as network economies that can make it incredibly difficult for the new comer even if it is superior to existing technology at the scale that the incumbent operates.

In the Innovators’ Dilemma, that was being described and the strategy as well as the market approach is always for the new technology to chip away at the market of the incumbent technology by being appealing enough to a small group in the market to help it grow its scale and challenge the incumbent on more fronts gradually. Can the new technologies that we are trying to cross over towards make their way through this path in order to break the dominance of the incumbent technologies?

They probably won’t be able to move fast enough. And that is probably the justification for government to intervene and encourage developments. Yet governments do not want to be seen as favouring particular technologies. There is also a concern about creating inefficiencies in the market by distorting prices or forcing the taxpayers to shoulder the wrong costs.

Yet in reality, for the world to create a better future, there’s no real ways around it. The modern world was not built by shielding taxpayers from the wrong technological investments nor from carefully betting on the right technologies to take off. The complex problems around climate issues today are not so different from the public infrastructure challenges that people faced in the time before government had the kind of powers they have today. They are more complex, and we probably need more talented people working on them, both in the private sector as well as in government. In fact more so in government than ever.

The challenge remains the cost-benefit paradigms and all the free-market type principles to government and what intervention should be like. Without more mission-oriented policy-making principles and a system that is properly leveraging talents and passion, it will be difficult for governments around the world to assume the kind of role and leadership it needs to lead the transition.

Con-tinuing

Despite the bad press for EY in Germany and PwC in Australia; the big four and their sprawling professional services activities continues to grow. Accounting and audit services aside, advisory services appears to be in demand across the international business world. Overall across the economy, as best practices across the industry spreads, companies becomes more competitive and efficiency goes beyond just market prices and matching of customer demands. Innovation takes place as well.

Consultants, through advisory services helps information and knowledge work themselves out in the market. Mariana’s Big Con argument about economic rents however, might still somehow stand in the sense that the fees they attain may be somewhat outsized compared to the value created. And I’m referring more to generic type of business consulting as compared to technical advice or consulting that augments capacity of businesses during special situations such as a transaction or some kind of innovation project.

Yet I would say that the bigger con that is present in the market is the financialisation of our economy and everything that the financial industry abd banking does to generate rents. The issue is that the labour of financial industry keeps serving capital, and capital, with its sustained bargaining power (as pointed out by Thomas Piketty), continues to direct rents towards the financial industry.

The main force that can change this will be the government and regulators; there has to be more research and thinking around the manner we are setting up our economies.

Profitable transition

What does it mean if companies declare that they are committed to the energy transition including committing resources towards it, and massive investments, only to make a U-turn when oil & gas turns out to be way more profitable? It tells you that it had always been about the money it makes rather than the transition. Never mind that the fossil fuels continue to drive up carbon emissions and hurting the climate. In fact, maybe climate change would drive up demand for energy – especially in terms of heating or cooling, or requiring more activities in the economy to deal with and mitigate the impacts.

Can the work of accelerating the energy transition be left to the markets? Can profits really motivate companies to support the transition and reduce carbon emissions? Does the market demand understand, appreciate and would be willing to drive and pay for the transition? I don’t think so. Absent regulation, it is unlikely for the markets to drive the emergence of the solution. It is as if we want seat belt manufacturers to drive the messaging around safety and benefits of having seat belts rather than legislate it as a requirement in cars. Or just waiting around for cars to adopt them as the standard feature in a car.

We probably don’t have enough time for all that to make an impact on mitigating climate change. Regulations will be required. To put a price for carbon on the market, to push technologies and options in the market that will reduce emissions. We must also evolve and steer the regulation as our understanding of the technologies and impact on environment advances. We don’t have to get everything right on the first try but we do need to be trying.