Life Archives - Page 9 of 66

You don’t stand a chance

When you participate in a lottery, you stand a chance to win. If you don’t buy the ticket – well then you don’t. I don’t believe in buying the ticket however, because I don’t want to play in that game of chance. The odds are stacked against me – and I’d think to myself ‘you don’t stand a chance’. Because buying the lottery ticket serves me no other purpose other than the chance.

Most other things in life are not like that. We participate in tenders knowing we won’t win. We come up against strong sports teams knowing we will lose. We go for auditions knowing our performance probably won’t make the cut. Why do we do all that? Not because of a blind hope but because we achieve more than just getting the chance when we take part in those. We leverage that opportunity to showcase ourselves, to show up, to prove to ourselves a part of our identity – as a musician, a dancer, as a professional who can do the work. We also use the chance to connect with audience, or prospective audience. Maybe it’s just one person, the judge, but it’s still an audience whom you did not previously have.

And that’s why we have to care enough to take action about sustainability, to change the way we consume, to speak up against actions that sets us on a course of no return, and ask for leadership that can lead us into a future we actually want to be in. Because it is saying something about ourselves, it is connecting with our future, and those same people who are going to live in it.

Economics of whatever

In my line of work as a strategy consultant, I sometimes work on techno-economic studies. Using a combination of statistical analysis, forecasting techniques and calculations, we estimate various different cost trajectories, and examine the economics of something. It could be a project, a technology, or a decision that a company is trying to undertake which has some cost impact and some benefits somewhere else.

In economics, we can only perform estimates when we assume all else equal. That’s the only way to perform proper sensitivity analysis. When you change more than one parameter, then you’d call it a scenario analysis. There are infinite possible scenarios when there is infinite parameters to shift or parameters with continuous range of possibilities. So when we model the economics of something, we’d always be varying something that we think we have control over, or that we expect will be changing in the near term, and see the effects on the economics.

Yet we often think that the economics of a technology or something will remain the same unless something drastic happens. More often than not, economics of technologies shift when various players in the market make different investments, either in the underlying technologies, manufacturing capacity for the gears and components, or simply into research and development. The actions of many different parties can have a collective impact of making the economics work when at first it doesn’t seem to work.

When we critique the economics of a new innovation or project, we often forget we are comparing them against the status quo where many are already very well-invested into. The years, decades and even centuries of using a technology, manufacturing it, creating complex supply chain and auxiliaries around the status quo. It is naturally hard to beat. But what is critical about a new technology is that the incremental investments can make a large impact, small changes to scale can also make a difference. Coordination and changing expectations play a big role.

Will the economics of new innovations change overnight? Unlikely, but they typically change faster than you and I can work out the math for the economics of it.

Malicious obedience

I have been going through Bob McGannon’s Linkedin course on ‘Leading with Intelligent Disobedience‘, he brings up the concept of ‘malicious obedience’. It is the behaviour that follows from ‘well, if that’s what you want’. And it is probably what we engage in more often than we are proud of.

I think by juxtaposing intelligent disobedience with malicious obedience, one suddenly recognise rules for the place they should be. Yet more often than not, we follow rules somewhat blindly, out of laziness, fear or lethargy, when there might be more wisdom and intelligence in breaking them. Of course, here, we recognise another dimension for following the rules – it is to do so with malicious intent.

Of course, the malicious intent might not spring up overnight. It could be employees who knew something was wrong and sounded the alarms but the management refused to heed. It could be a child protesting the stupidity of a rule at home and not having received the appropriate explanation for why the rule was in place. So the risk of not empowering others with the ability to disobey intelligently is that we send the wrong message about what obedience is about.

Rules for intelligent disobedience

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.

Intelligent disobedience

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.

What should capital chase?

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.

What can capital chase?

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?

Making the transition

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.

Reality distortion

The world is messy and complex; and humans make sense of it by creating some sense of order. It first started with creating routines, telling stories, and then we started making things, creating tools, building structures, which changed our own surroundings.

We started changing the environment we lived in, in very profound ways that we didn’t yet realise. We discovered fire and we burnt wood, or leaves, or anything that could be burnt. We then discovered fossil fuel and unleashed lots of productivity, and it sure took a long time to translate these productivity into higher standards of living.

In some sense, by telling the stories about possibilities and changing perceptions, we distorted our own realities. Realities of what will happen to us, about how the world works. Again and again, our assumptions gets busted; either by happenstance or actively resisting our old tales and developing new ones.

Steve jobs was described as having a reality distortion field around him that affected the developers of Macintosh. He manages to convince himself and those around him that those different requirements he put on those around him are possible. Using his charisma and marketing capabilities, he helped to encourage, motivate, taunt his people into persisting through incredible challenges and difficulties.

Distorting reality takes incredible courage; and one could also argue, foolhardiness. The problem of the survival bias is that we don’t see how often the people who follow the strategy fail so miserably they just wither and disappear. We only seem to see those success cases and stand in awe of how they push things through. So at what point are we stretching it? When can we be considered to have gone too far in dreaming? It’s a really tough call.

Reduce, reuse, recycle

The idea of the 3Rs were first mooted based on the order of action for each of the concepts. You were to first reduce usage of things that could turn into waste. Reducing packaging, not using disposables when that is not needed, no need for extra plastic bags and layers of bagging. No need for straws when you have a cup to sip from. No need for many other gift boxes, wrappers, or other fancy stuff.

Then you were to reuse if you fail to reduce. Maybe try to take a gift wrapper apart nicely so you can use it to wrap something else. Or reuse packaging into decorative materials and so on. There are limitless ways to reuse things; and they don’t have to be used in the same way they were used the first time. Paper is easy to reuse, as are many plastics that we take for granted and use only once. Single-use is a problem; not the materials in and of themselves.

Finally, recycling as last resort. It is not the first thing that should come to mind but the last. You have no way of reusing and you couldn’t reduce usage so you have to try and recycle it. Of course it doesn’t work when it is too much of a mixture, or too dirty, and the story goes. So a lot of post-consumer or post-commercial waste cannot really be recycled. they eventually get burned in some cases (like in Singapore) or buried (in landfills for most other places).

But what is recycling really? What counts? Crushing them and reforming new materials with them? How about just burning them in some kind of manufacturing plant that requires fuel – like in a cement plant? What to make of paper that gets simply shipped away elsewhere. And when organic waste becomes converted to fertilisers? Are they actually ‘recycled’? It’s really strange what we think of as recycling because technically, if things were left to nature – most of it is simply ‘recycled’, joining the string of things in the world back on the evolution path and lifecycle into something completely different.