Broken systems

In any civilisation, you’re in a system; so there are rules to follow, structures to abide by, and hence a sort of order emerges from the system. Of course the order can be disorderly but you get my drift. When however, certain realities don’t line up the way they do in a system, we think that it is broken.

I’m not too sure about that. Sometimes, we think that a system is broken because it is leading to an outcome which we don’t desire nor think is desirable. Whilst the designer or perpetrator of the system may agree with you on the outcome and results, they may not think the system is broken.

The reason being that their key objectives for the system does not align with yours. What you think as an undesirable outcome may be an unintended but necessary consequence of the system; and the results which you don’t agree with may not even be part of the consideration.

And that is the challenge when one works within a system. It is terribly difficult for a system to start paying attention to a new attribute that is worth looking at when measured against the values that inherently power the system. Effectively, the conversation goes like this:

You: ‘Hey system, you need to start looking more into the environmental damage you are causing while trying to make profits!’

System: ‘Ah, environmental damage. Does looking into it generate more profits?’

You: ‘Well, the point is thinking about we are trading-off environmental sustainability in our process of profit. Maybe we can rethink about the way we make a profit?’

System: ‘Sure! Come back to me when there’s a profitable way to reduce the environmental damage. Meanwhile, we carry on with what works.’

The reason we are facing climate change is not really because the system is broken but because the system we designed is working perfectly well – it is just trying to solve a completely different problem than the one we are facing or trying to get it to solve.

The only way is to establish new rules and new ways of doing things, of structuring our lives, our companies and our economy. This is why Enea Consulting, where I work at, has combined efforts with Isabelle Kocher de Leyritz to form Blunomy.

For now, the branding might still feel very foreign to an Asian mind, the URL quite strange (is the firm French or Malaysian?), the fonts on the website feels a tad bit too avant garde for the liking of the general masses. But the message, the intentions and planned actions are clear. We understand that the systems are not broken but they are simply not designed for the challenge that confronts us today. That is why we are not here to fix the system; we need new ones to replace them.

Just to reiterate that views presented here are entirely personal and do not represent the stance of any organisations I’m employed by or have any affiliations with.

Everybody and nobody, everywhere and nowhere

When you try to please everyone, very often, you end up doing and producing things that would make nobody happy. When you try to be everywhere, as I’ve seen some of my college coursemates who tried to attend multiple parties and networking sessions on the same evening, they end up nowhere.

Fearing that you miss out inevitably means you miss out on everything because you’re not even at where you’re physically present, which is just about the only joy you really can have.

We are not capable of pleasing everyone, nor designed to be everyone, or to be everywhere. Let us enjoy these things that constrain us rather than putting our emotional selves intensely at odds with them.

Beyond the edge of your circle

There are areas of our ignorance we are aware of, but there are also vast spaces of our ignorance we are unaware of. This area is perhaps where we would exhibit the Dunning–Kruger effect. It is really important for us to know and understand our circle of competence, and to create boundaries and rules for ourselves to navigate within, and beyond this circle.

Think of it as comparing a person who lives in a town for many years and know his way around it by his senses and strong local knowledge, against an out-of-towner who had got hold of a map and managed to navigate successfully to a few places of interest. The guy who is new in town tend to overestimate his understanding of the place and might make overly risky decisions or commitments as a result (eg. showing friends around, or bragging loudly about his knowledge of the best local foods).

One of the critical skills that we need to acquire especially as we are new to a space, and trying to grow ourselves, is to be able to develop not only the self-awareness but the toolkit to navigate a new space when one runs the risk of getting into the Dunning-Kruger effect. In fact, even as kids, we should already be conscious about what is happening and how we can deal with such struggles.

Two-part tariffs

In economics, when there’s even some monopoly power, the business can set prices and still have people buy their products. There is monopoly power everywhere; local convenience stores can price the way they do because there are some customers who are unable to switch providers or move. And so the businesses can price their products and somehow structure the pricing to be two-part tariff, which mean they can charge you a fixed fee and then layer on additional charges per unit of consumption.

They can take various forms. For example, a bakery can charge you $10 annual membership and give you 10% discount off the breads that you buy from them for the entire year. This way, they charge you a fixed fee and then get you to pay for more per marginal unit of consumption. The gym charges you a single registration fee and then monthly membership. Even devices such as reMarkable which is an e-ink writing tablet is selling its tablet and then charging people for a monthly subscription that allows people to sync their notes to various platforms, have unlimited storage, etc.

Even the smart phones involves getting you to pay for the device, then charging you for apps or gaining more revenue from additional services you use on the phone. The tariff structure has an alluring quality of pricing the overall good at almost marginal cost. Or does it? That’s what economic theory suggests but it is unlikely to be the case on digital goods and services. They are probably being priced at the long run marginal cost plus a premium to support long term development and innovation. Is that an efficient outcome? It’s hard to say.

What is more interesting, is that the two part tariff structure creates more stickiness for the customer to the producer. Having already paid for the first part, the customer tries to make more use of that, averaging down his/her cost per unit of consumption. This is the use of sunk cost fallacy and faulty thinking to trap consumers.

Unfortunately, it does work.

When you know something

When do you choose action when you’ve the knowledge? For example, when you know that your boss is saying something that is wrong to the client, when do you choose to correct him (or her)? What would you say?

What about when you know that you’re generating more trash by using the disposable takeaway container, or the cutlery? How about when you actually have a reusable container to use but wonder if it’s worth the effort to wash it? How do you balance your knowledge with your actions?

For far too long, we recognise that awareness and knowledge is the first step. But then getting from this first step to the point of action where it really makes an impact seem like a mystery. Psychologist probably had less luck figuring this out than marketers and social media platforms. The world’s most intractable problems are not to be solved through knowledge but action – how much would knowledge spur action, and how the mechanism works remains much of a mystery. But whatever we discover that we can do, why don’t we direct it towards helping to drive positive action towards the most challenging problems that mankind faces?

When you don’t know something

When you don’t know something, what is your response? It depends very much on whether you expected yourself to know it. As it turns out, when you don’t expect yourself to know it, you’d happily confess not knowing. But when you expect yourself to know it, then you’d often times get angry. It is usually at yourself, but then you’ll soon direct that at the questioner. How dare he or she question you on that?

Or, even if you confess you don’t know, you’d question the intention of the question. Or express surprise, thinking that should be something the questioner don’t ask, or would have to figure out themselves.

So when you’re new at work and you don’t know a tonne of stuff, do you lash at people when you’re embarrassed about things you don’t know and feel so vulnerable? Do you confess you don’t know and encourage others to help you?

How you respond when you don’t know something critically affects your ability to grow. The more you cover up what you don’t know and try to learn on the side, the more you have to be defensive, impatient, angry and resentful. And the more you’re able to cover up and pick things up on your own, the more isolated, alienated and resentful. So you have to choose how you want to grow when you don’t know – to be alone and proud of yourself; or to be surrounded by helpful souls and lifelong friends?

Downward counterfactual thinking

Counterfactual thinking is a concept in psychology that involves the human tendency to create possible alternatives to life events that have already occurred. I’ve no doubt this is a sign of intelligence and it is a residue in our ability to project forward into the future. After all, if you can imagine the different possible futures, you could also imagine different possible pasts.

The question is whether the content of your counterfactual thinking is upward or downward. In other words, do you think the reality could have been better or do you think things could have been worse? People could be more positive when they consider that something worse could have happened rather than the actual outcome. In that sense, downward counterfactual thinking is actually a habit or strong mental re-frame that helps improve our well-being.

Nevertheless, the mind tends towards negativity because it sticks more than the positive. What I think is interesting is that different positions we are in can cause us to have inclination towards upwards or downwards counterfactual. It is interesting how being in second place encourages upward counterfactual thinking more than being in third place – just because you only have one person in front of you. So there are some kind of defaults that our counterfactual thinking drifts towards.

That’s not to say you can’t change your defaults. Part of my coaching practice especially around mindset shifts is exactly about that.

Blue bins

In the first episode of my recently launched podcast, I kind of ranted about the blue bins in the National Recycling Programme that Singapore has. My major gripe was that the system for blue bins which was completely open access and operated by riding on the back of the public waste collection system was designed to fail because by seeking to include everyone, it made securing a clean stream of recyclables harder.

I noted that an alternative system where people sign up to gain access to the blue bin, and pledge to abide by the ‘rules’ of using the blue bins could do better. They could pledge the following:

  1. they will use the blue bin only for recycleables allowed,
  2. they will ensure the items are cleaned and ready for recycling,
  3. they will only access the blue bin themselves,
  4. they will ensure the blue bin is locked after their use,
  5. they will not deposit into the blue bin when it is full or when they note it is contaminated

Friends at Upcircle has shown that by giving assurance to people who care and show up for the environment that you are able to deal with the recyclables properly, you can actually obtain good quality post-consumer recyclable stream. By preventing those who doesn’t care about recycling from taking part in pseudo-recycling by their own terms, we can actually do better.

Recycling better by excluding people isn’t exactly the best narrative to the ears but in due course, that can actually change the culture.

What do you do with slack?

I recently spoke to a financial advisor. Not an independent one, just from a firm who was not tied to a single insurer. The idea is getting the best deal, the most competitive deal. This is a marketing business, about serving clients, reaching people. That’s a shame because financial planning should be about brains and not how much you like someone.

But maybe I’m ahead of myself because if brains mean to be able to optimise very well, lowering premiums as a share of overall risk cover, or increasing cover while keeping to the same levels of premium, then it’s not always that good. We need slack in the system. People who might be idling at any one time you sample the workspace. You need to ensure there is breathing space, chattering space, ideation space.

We pay for slack all the time; do you use up all your mobile data and telephone call minutes every month? Do you boil only enough water for a single pot of tea each time? Slack is not a bad thing and over-optimisation creates risks. Perhaps the risk is small but there is always a trade off to be made.

Copy with understanding

My mind often gravitate back to my school days. I did spend almost 20.5 years in school or something kind of education institute so my schooling life still constituted more than half of my lifetime so far. I wonder if the memories get more faint as you progress along. While I think the greatest lessons I learnt were outside the classroom, it was still largely the school days that were so formative, it helped produce ideas and principles that underpin how I thought about things.

It could also be some kind of survivor bias because the values or ideas that I subsequently discarded after going through the test of time. One of the values that I acquired over time in school was to ‘copy with understanding’. Basically, when you copy something – especially homework for school – you want to do so to save effort but you should at least spend some effort understanding why an answer is the right answer. At least for the particular question. Think about how the answer connects with things you’ve been taught or learnt. Consider how the question was asked and what the answer might be if the question changed, just by a little.

I learnt this value both ways, when I was copying the homework of others and when I dished out my homework for others to copy. I am glad I was in one of the more ordinary classes in school, where I had classmates who didn’t do homework and needed copying; and most were happy to collaborate and “distribute the work”. There were better classes where students mostly kept to themselves and classmates were individualistic and competitive.

Sometimes you look back and by the sheer force of time, things you thought were bad, turned out to be great after all.