Headlines – Page 2

Making things measurable

One of the most powerful ways for people to influence others to do something about certain causes is just to measure it. The most successful example being the creation of GDP as a concept to measure the economy. Suddenly, it displaced the more traditional metrics of population or military might (which involved more quantities than just number of troops involved).

There are always issues with measurements created. They do not perfectly measure the underlying thing we’re trying to quantify for two reasons:

The measurement is inaccurate due to poor instruments used (proxies, poor surveyors etc)
The measurement does not reflect the actual underlying concept we are trying to quantify.

The first point can be improved over time. The measurement accuracy would not be perfect but over time, as long as the measurement required is well-defined, we would be able to capture the quantity or at least get really close to it.

The second point is trickier and it is going to always be imperfect. And herein lies the danger of trying to make things measureable. The Goodhart law features an important observation we ought to be constantly reminded of as we’re bombarded with figures like GDP growth, inflation etc. It doesn’t mean they are false! But the key is to be able to distinguish the measure from the underlying concept of what the measure is supposed to imply.

Sense of mission

People with a sense of mission in the workplace can be really hard to manage as it turns out. When you work on projects that have only tangential connection with their mission, they might not be motivated. When your projects are not aligned or even falls severely short of their sense of mission, they can cry foul and risk your business. They might have no interest in chasing the short term KPIs or pleasing you as a manager.

And with them, you might risk not getting the exact outcomes you or the organisation desired – especially when the organisation says one thing about their ideals and principles but is trying to do something else. So you might not want these idealists around.

But often, that is the only choice, and they are the only ones worth paying for. There are plenty of talents out there who are brilliant in what they have to do in the short run and deliver on KPIs but lack the sense of mission that the organisation badly needs. Organisations are like humans, and profits can be like good food, mistaken as the raison d’etre of living. People with a clear sense of mission helps put the organisations back on the right track.

Tracing culpability

My colleague alerted me to this recent judgment in Singapore of a man accused of drug trafficking. It made me think and wonder quite how we conceptualise, construct and then attribute culpability.

In many sense, our laws tries its best to identify evidence disinguishing intention from the outcome when it comes to crimes. This is why there is a difference between murder and manslaughter. So there is some kind of penalty both in terms of intent and outcome; and they compound.

Now the point is that intention is hard to tell; if a person fails to achieve an outcome, it is not always easy to be able to demonstrate his intentions. On the other hand, it can be hard to think that an outcome wasn’t driven by some kind of intent. And there is the intent that is long-developed and the one that emerges on the fly. They are all different.

So to what extent do we take responsibility? When we consume electricity from the grid, are we responsible for the emissions that were produced in generating the power? What if we tried to switch to green electricity but the solar panels aren’t generating so we are consuming from the grid? Who should be responsible of making sure supply chains are free of corruption and exploitation? Is the ability to shoulder responsibility based on financial capacity? Knowledge? Or other resources?

At the end of the day, if we managed to reduce our carbon footprint to zero as individuals and yet our fellow man continues to emit and eventually climate changes and affects all of us, are we being held culpable for a crime we didn’t commit and an outcome we did not intend?

Who are we to college admissions?

What is your positioning? What is your strategy in this application? I asked my intern who was applying to certain colleges. I’ve been called upon to put up a reference for this young colleague and I really wanted to help, as best as I can.

So me being the strategy consultant I am, asked those questions. It drew a blank. And of course, it was a little confusing for someone fresh out of A Levels to think of “strategies” around college applications. Or maybe not if you’ve so much help and advice from those who have gone before you. That, I feel, is exactly what those families with resources are able to equip their younger ones with.

Maybe I was wrong, that we need a strategy or positioning because the only positioning should be to be ourselves. It will take more excavation of ourselves and asking who exactly are we rather than artificially creating a persona we must fit into. In being able to “position” our application as much as possible as being true to ourselves, might be the most precious thing you can give to the college admissions office.

On the ground

I grew up with a diet of Chinese dramas about emperors and nobility or the martial arts world. Often, an emperor or noblemen travels incognito in their own territories. Or a martial arts expert who blends into the cityscape as just a beggar. Great and amazing people who turns up as ordinary. And that kind of being on the ground was actually celebrated, and seen as a positive form of leadership. It was something admirable.

Yet when I’m grown up we don’t seem to be taught to feel this way about being on the ground. Or about being management; there’s always images of cushy offices, well-stocked pantries, brainstorming rooms, being in meetings. Do MBA programmes teach their students how to be on the ground? Or even the benefits of all that?

We don’t hear such stories of management being on the ground in our modern day life often. The latest story I heard that is remotely similar is the CEO of Sheng Siong supermarkets going down to their Tanglin Halt branch to shelf food items when they were shorthanded. And he apparently does the ground work very often. There had been incredible stories about how Sheng Siong staff are cared for, and also care for one another. But if this was never a metric, why would the management bother? Shouldn’t we be challenged to consider being ‘on the ground’ as a metric or attribute leaders need to meet? As a culture, shouldn’t we redefine what good management should look like?

Self-sufficiency

When is self-sufficiency attractive? Or rather, why is it attractive? Does it have to do with trust, or lack thereof? Or does it have to do with pride? Or maybe these concepts generally go hand-in-hand. In Singapore, where our resources are scarce, it is difficult to be self-sufficient in things. We import almost all of our energy and food. And we learnt a long time ago that security can be achieved from diversification.

Same principle when it comes to an individual and recognising no man is an island. We have to work together and that’s why we form societies. The greatest beauty of the market economy is in allowing the greater society to be able to work together and co-create products, services in service of individuals that make up the society. At a global level, that idea has helped to enhance global collaboration to a large extent.

Trading relationships helps to stabilise politics as well; though of course, that is a big source of soft influence, and the challenge of forming connections and relying on others is that we lose some degree of our independence. Straddling that is important, and demystifying that allows us to be better leaders, not just as individuals but as a society, as a nation as well.

Google & Climate

Google left China and soon after that the shares of Baidu on NASDAQ soared above that of Google, going above 600 USD per share. The Economist reports on the message Google’s departure leaves for businesses in China, trying to warn business people that it is still not that easy to do business there.

Yet as Fortune explains, it’s not entirely about business. Beliefs of the founders of Google mattered, it seems. Well, I guess there is a concoction of complex ideas there but to simplify matters, let’s just say Google don’t agree with China and realised that dealing with China might entail too much costs (both in the business, social and emotional sense) and so they have pulled out. Yet they didn’t exactly pull out of the Chinese world, because they merely made Hong Kong their headquarters for the Chinese Language Google.

Meanwhile, it appears as if Climate Science is also under similar sort of mess. People are not agreeing with each other once again and making excuses here and there. But I believe The Economist makes a good point when they say that the uncertainty is precisely what justifies our efforts at combating climate change. The uncertainty should be what binds us together rather than become a point of contention. It’s stupid to agree that the science is uncertain and imprecise and then go on to squabble over what is the ‘true findings’ or ‘accurate data’.

Monetary Policy

As I mentioned about the difficulties of governing Economies and Greenspan’s disclosure on his workings on a paper in defence of his policies, The Economist recently wrote in their column about Greenspan’s recent defence of himself. Those interested might want to access his paper here.

In general, The Economist adopts a rather sarcastic tone when discussing Alan Greenspan’s role in the build up to the Subprime Mortgage Crisis in 2007. They are arguing that central bankers are around to ensure macroeconomic stability and therefore are expected to ‘play safe’ and manage the economy. That is, if reducing short-term interests rates could rein in the housing boom, that should have been applied. Even if Greenspan couldn’t have identified the bubble, and that the house prices are not related to the interest rates that central bankers could influence, the leverage growth in securitised markets might be worth managing:

By looking only at the effect of monetary policy on house prices, Messrs Bernanke and Greenspan also take too narrow a view of the potential effect of low policy rates. Several economists have argued convincingly, for instance, that low policy rates fuelled broader leverage growth in securitised markets.

Of course, having just read Dot.con and Lord of Finance, I do realise that central bankers’ attempts at interfering with specific market booms have often been ineffective or with rather disastrous results and thus choose to focus only on economic fundamentals like price inflation. Greenspan does have a point when he suggests that the central bankers are unable to deal with a global force that are changing the conditions of the economy. Very often, these efforts may create further imbalances that merely postpones a crisis.

Like I say, no one claims monetary policy is easy to conduct – it’s too often more of an art than a science.

Governing Economics

Many have attributed the housing bubble that eventually resulted in the Subprime Mortgage Crisis to the previous, one of the longest serving Federal Reserve Chairman, Alan Greenspan. We are pretty familiar with Greenspan, who have written Age of Turbulence. In his book, he highlighted his general argument against anyone who would finger-point him as allowing a bubble to inflate. He pronounce that it is impossible for anyone, whether the regulatory body or not, to accurately identify a bubble.

As for the Subprime Mortgage Crisis, politicians in the United States still blames it somewhat on Alan Greenspan and now that everything is cooling down, Greenspan offers his own defence. Although Greenspan was nicknamed ‘the Maestro’, he subtly attributes the period of great prosperity and low inflation to the globalization forces and technological advancement more than his skills at handling the monetary policy of US. In any case, he outlines his job at the Federal Reserve as an observer trying his best to keep to fundamentals of the economy and the crisis therefore comes as a surprise both because of how the economic agents have basically defied market assumptions namely on the issue of counter-party surveillance. Essentially the government cannot possibly provide the ‘self-interest’ that is supposed to drive the free market.

No one says that managing the economy is an easy job. Sound economics decisions by governments often turns out to be political disasters anyways so sometimes politicians stop heeding economists altogether. The recent issues that confront Tim Geithner is essentially similar; the economy is picking up thanks to his plans but people are unhappy with him. Figures on employment are not helping him anyways since the recovery is ‘jobless’ so to speak. Management of the economy is a huge balancing act for the government.

The idea of government has gone really far since the days of Locke’s conception of the social contract. The philosophy of governance in the modern world is just getting more complicated.