Human Nature

Economist gets a lot of envy from psychologist from being able to publish papers about mundane psychological topics. Like creating a mathematical model of the failure to delay gratification and accounting for the costs of that. Behavioural economics seem a bit more like trying to create mathematical descriptions for common sense.

Of course this is possible because economics have made assumptions about humans that were wholly our of touch with reality for models that worked. At least for many decades, they kind of worked without too much fuss.

But we’ve built worlds that we are not really psychologically evolved to deal with and as a result, the deviation from the assumptions of the rational man became more and more significant. For one, the complexity of the computations needed in the modern world to make the best decision have really made it harder to assume rationality. Making decision across 3 choices is different from making it across “n” choices.

There are dimensions of scarcity in the real world economics failed to capture: computation/calculation, environmental limits and parameters, human’s limits on our mental wellness. Let’s look at economics with more humanity, shall we?

The Sine wave

I learnt that trigonometry wasn’t just about angles and they involved graphs whilst in High school (which is probably called Middle School in US and most other places). And that was when I came in touch with the sine wave.

It’s beautiful; lined up on the rightly scaled axis, it resembles a series of semi-circles alternating directions. It runs up a peak and then down the trough. In-between, the gradient is changing at a different rate continuously and forms inflexion points where the function strikes zero, which is when it changes concavity. Interestingly then, the gradient of the Sine function is given by the Cosine function.

There are cycles all around us; small ones and big ones. Cycles are representation of learning and unlearning, or learning and forgeting. They are also a stark reminder of the falseness of “This time it’s different”. Yet they also present opportunities. If you missed the peak or trough, get on the next one. Train yourself to watch the cycle and catch the indicators.

Thanks to cycles, we can bounce back, we can be sure anything and everything probably won’t last, but also that “only once” is probably not going to be true.

What are you protecting?

One of the most useful questions I discovered from my past work in public service is, “What is this for?”. It is important to be clear with out intentions and objectives before setting out to do something. If it’s for something we all can agree on achieving, it’s easier to get buy-in. It also helps remind us when we are trying to achieve too many competing objectives at the same time – how we might be setting ourselves up for disappointment.

Now I’d like to introduce a slightly different question and more for ourselves than for others. What are you protecting? Yes, when you determine to do one thing or another, what does it protect? Maybe it’s to clock some quick wins to cover your mistakes last week. Protecting your reputation. Perhaps it’s to keep your job by “justifying” your paycheck. Protecting your job.

You realise this is the “selfish” version of “What is it for?” And it is important for us to be aware of the selfish motives we have in proposing or doing something. That helps to recognise internal tensions and prepare us to resolve disappointments. Being honest begins with yourself.

Long run efficiency

I recently started working on excel modeling as part of my work. I’ve always been on the theoretical side of working on excel, having attended some trainings here and there but not really applying my skills to the fullest.

It was only in the hands-on of these things that I realise it takes a lot of creativity to model things simply and well. More importantly, being able to foresee how a user is going to approach the model or future expansions to the model required helps you do better.

Now the dilemma is often the trade off between being able to get the results quickly versus finding a more efficient way to arrive at the results. Most people who cares about only the outcome may not want to take detours around experimenting with more efficient methods. Once you perceive the clock ticking is for the outcome, you want to just trek down the path you know to that outcome, rather than take time finding shorter paths that may not bring you to your destinations.

The truth however, is that finding the new paths can have really great long term payoffs because if you’re going to repeat the same kind of tasks or model, you now know how to do it more efficiently. Yet how many of us invest in that? We prefer someone else to do the hard work and meanwhile we will just take the tedious way out.

Pathfinding for long run efficiency is in itself somewhat “inefficient” only when you perceive the clock ticking for the short run outcome. The story to tell yourself is that you’re looking at the long term efficiency. A good life is not made of a series of short term optimisations.

Abuse of Power

So a manager was serving quarantine in a hotel on an island off the mainland of Singapore. She just returned to Singapore from abroad and had to comply with the pandemic measures. She wanted to attend her yoga class via zoom but didn’t have her yoga mat.

So she called her staff to go to her home, pick up the yoga mat and bring it to the hotel on the offshore island. Her staff could have said no. But she didn’t. She was concerned about being loaded with unnecessary work, or being picked on, or worse, getting an unfavourable appraisal.

The culture of compliance in our workplaces is reinforced by the continued use of one-way appraisals. This breeds cronyism and favouritism unless there is sufficient checks on the power of bosses.

Why check their power, you ask? Because the cronyism can breed mediocrity and the culture reduces productivity, encourages hypocrisy. Beyond adopting 360 appraisals, a different attitude and approach to appraisal is needed in the workplace.

Spirit of Service

I’ve written before about public vs private sector jobs or career; and I’ve also shared about the story that we want to craft for ourselves. One of the biggest thing that I would urge all those considering public service to think about is the spirit by which you are serving in. Ultimately, as you enter the service, who are you serving, what are you serving?

Honestly, one of the best perks about being in public service is the claim to some sort of altruism – you’re here to serve the people; you want to help the companies, or the lower income families, or to advance the energy system of the country, etc. And of course, with that perk you will want to be able to take a high view of those in the service. This is perhaps why I think developing and considering the spirit of service is important before and while you are in the service.

Because bureaucracy can be self-serving, or serving the status quo. Because when you want to be fair and good to everyone you might end up having to withhold from everyone. And because when you develop measures to try and capture the intangibles, you can end up either giving up or maximising the metric rather than the genuine outcome. And when you get disappointed, the environment can conspire to make you think you cannot change things. These are hard truths, and the reality is not that close to the claims of altruism.

In the toughest of situation, it is the spirit of service that will keep you there and hold you accountable. When you’re tempted to maximise your career rather than uphold the interest of public. When it is all on you to call out selfish leaders. When political interest seem to overwrite public interest. These are times when you look back at the spirit of service and carry on. So be sure you’ve the right spirit to serve before you join.

What are you scaling?

Having a good teacher who is appropriately empowered in the classroom can make a difference to the lives of students. If he or she stays in education, generations of students can benefit. The good teacher is not able to make the same impact on many more students within the same amount of time. It doesn’t scale.

But we always think we can scale these things; we create curriculum, syllabus, scheme of work. We think we are scaling good teaching, schooling through creating systems of learning. And then we enforce mass education; and allow it to grow into bigger and bigger parts of the lives of our people.

What exactly are we scaling then? We might not be scaling the good things we are trying to grow; in fact as I write, good teachers are being driven to frustration by the system; good teaching is being sacrificed at the expense of needing to standardise things. We are scaling frustration, suffering and misalignment with the original intentions.

Telling stories

At some single-digit age I came to enjoy books, and stories. And at the age of 6 when I was in a mini-bus that was driving in and out of the Pinnacles Dessert in Australia, I spent hours telling stories to an attentive 4 year old friend I got to know in the tour group. I still recall his name was Marcus.

I seem to enjoy telling stories since young. Teachers repeatedly described me as talkative in class though I was certainly not the extroverted sort. It was also because I had attentive parents who gave me time, aunties and uncles who listened to me, undistracted by phone screens.

When I grew a little older I had a lot of opportunities to listen to the stories of other people because I started doing a lot of community work with the elderly folks. That was when I begin to discover the importance and power of the stories we are weaving, which we tell others and more importantly, ourselves.

Being able to tell positive, powerful and encouraging stories about our lives can make a difference to it. That is why I started working with people to ponder over their story and to discover how they want to write it, tell it and use it to achieve their desired careers. Head to my coaching page learn more about my coaching practice.

Complexity & Bureacracy

We all want to work for good companies. The brand names, the recognisable ones that makes the relatives go wow and continue conversation about what you do during Chinese New Year gatherings. Or maybe actually we just want a good boss who can give us that sense of mission, offer appropriate advice at the right point and empower you to operate independently.

One of the big challenges at large corporations or organisations is bureacracy. They use it well too; such as to relieve employees of certain administrative duties and make respectable specialisations out of them. In fact, for some specialisations, you might be really performing optimally only in large organisations with the structure for you to utilise your potential.

But all of that generally builds upon complexity. Bureacracy generates complexity partly as a product of layers but also because complexity tends to justify bureacracy so it becomes a self-reinforcing cycle. Do you want to be part of that, to contribute to that complexity, or do you prefer to pursue simplicity?

Growing in commoditised markets

Do you have a set way of thinking about innovation in business? These days, governments are heavily involved in funding research and development in a bid to help their economies lead the way in one area or two. These are all good except when people come to think of it as a one-size-fit all approach to business problems.

When a product or market becomes commoditised and competition reduces pricing power, the prescription tends to be about differentiation and “innovation”. The nature of the product or service is important to consider what kind of innovation there can be. A lot of commoditised businesses are simply cash cows: mature and cashflow generating but not growing.

The optimal way to grow with less risk is not to try and change the product. It is to consider consolidating the market slowly and one at a time. Find niches to acquire and gain scale, focus on optimising costs to enhance profitability and then use that to make more acquisitions. This is basically what is known as “roll-up” strategy commonly practised by private equity firms.

This sort of innovation is less visible but more profitable and meaningful for those companies. Maybe you won’t be poster child for being a company who went through “transformation”, but that’s okay!