Oh, Now I See!
“I was seldom able to see an opportunity until it had ceased to be one.” Mark Twain.
“Oh, now I see!” It’s a phrase we use so often to convey that we understand, or get it. We use sight as a metaphor for understanding all the time. The word lens is used to mean a channel through which something can be seen or understood. “Mary sees the world through rose colored lenses,” (an optimist, or naive). We are creatures of pattern recognition and our conjuring process requires imagery to put things in place, or to make sense of what we experience or think. We will typically apply what we know (our storehouse of imagery) to what we see and work hard to make sense of things.
Lenses matter and the choice of lenses have interesting effects on what follows. We believe that lenses allow us to see better, and that is true, but for a very limited and specific range of stuff. The lens is helpful in that it blocks out an infinite number of things we could see or consider so that we get clarity and detail on what the lens puts into focus for us. I’ve looked through telescopes and microscopes, sunglasses and readers, wide angle lenses and telephoto ,,,, all bringing into focus different stuff and making me oblivious to everything else around me. If driving fast, I do no longer see what was in front of me seconds before. Nor should I, be looking anywhere but where it’s critical when driving. Texting while driving is illegal in some states, thank goodness.
In our enterprises, we make choices about lenses all the time. We don’t call them lenses, even though they affect what we see and subsequently interpret. If our lenses are the wrong ones, then we’ll just have to deal with interpreting what we see and worry about what we don’t see. If our lenses cover too much to absorb at once, because we’re driving the business so fast, then we’ll just to trust our luck that we did not miss an important turn-off or on-ramp. If our business roadways are all smooth and devoid of danger or speed traps, then it doesn’t matter so much. If the scenery doesn’t change or we’re not trying to take our enterprise anywhere new, then all is good.
Among our most important lenses are what we measure, how well we measure, how often we measure, and what we do with what we measure. They are important if we do actually do something of value with what we measure in time to make a difference. It does us little good to find out that we missed a turn-off two weeks or a month ago, unless we’re pretty good at u-turns and restarts, except when opportunities don’t wait around for us to u-turn. Also, who decides what to measure, or who interprets what we measure, or who decides what to do with what we measure, or who reports what we measure, or doesn’t report what we measure is likely to matter a whole bunch too.
When we go for our annual physical, all the same measurement stuff applies, and we surely hope the doctor and the lab get it right. I lost a cousin to cancer this weekend because a doctor and a lab got the measurements wrong years ago when they could have done something in time to save Bob’s life.
So, when was the last time you checked the lenses you use at work, home, or play?
“There are three classes of people; those who see, those who see when they are shown, and those who do not see.” Leonardo da Vinci.
The Right Stuff
Fifteen years ago, I was on a consulting project in the UK. It had to do with the nuclear generation business and the most exciting part of the work centered around privatization and the large nuclear liabilities that had to be addressed (costs to decommission facilties and the processing of the nuclear waste). The financial impacts were very large .. 3.5 billion pounds.
That was for a big change that hinged on the role of private industry and the public welfare. The senior executives then had an unfailing committment to safety and to do the right thing for the right reasons for all concerned … it was wonderful to experience their behaviors.
We’re all familiar by now that BP is changing chief executives and the have set aside 32 billion pounds (as a likely minimum) for the oil platform catastrophe. There’s much to be learned … but leadership matters, and the good ones still lead from the front. Often in adversity, the best ones step up and change the course of events. Mr. Dudley appears to have the right stuff. …
Who’s Not on Board?
Not that long ago, a major mobile phone carrier had an effective advertising campaign with a catchy slogan. Yet, I found their slogan troubling. It was troubling in that their banner, “We have fewer lost calls” left with me an impression that “we’re not as bad as the other guys” was written with the intent to establish a positive differentiator of quality and reliability. My reaction then was that the goal was to be the best of the bad, or cream of the crap. Upon reflection, I realized that the problem was with me, and in fact, the carrier’s message was the right one. This carrier was actually speaking the language of quality, not of spin (as I confess was my reaction). Quality is measured by the likelihood of failure against a specification. In their case, our case, it was a message that what mattered to the customer was continuity of service and there is a probability that that service will be interrupted, and the best do it fewer times. The carrier must have studied Dr. Noriaki Kano and realized that in some cases, the best can mean fewer defects, and failures against a basic requirement can only bring dissatisfaction. For the basic requirement of service availability, a service unavailability measure is the right metric and satisfaction is not achievable, that is, zero defects can bring only zero dissatisfaction.
This last week, we witnessed what appeared as truly bizarre behavior from Apple. The new flagship, the iPhone 4, has a troublesome performance problem with the reception. The very beautiful phone integrated the antenna into a smooth metal casing, creating a problem when the phone was held in a particular, albeit very normal, way. Some would argue that the decision process for the product launch suffered from an unhealthy bias wherein form trumped substance and engineering warnings. It’s saddening, coming from an exciting and innovative producer of form and substance. What was befuddling was the chairman’s response to the defects. It began with hubris with what appeared a dismissive tone that trivialized the problem …. Customers don’t know how to hold our phone properly, what’s all the fuss about; it’s the bad media at play. As the evidence mounted of the reception calamity and the web took over, sharing the data, the next stage of responsiveness focused on an attack on the competition, asserting that other smart phones shared the same problem. From here it sounds like it’s about “my” product and brand, not the customer pain. That strategy was a big boo-boo. Motorola, HTC, and RIM did not remain silent, each stating that their designs did obey the laws of physics and sound engineering, after all, customers wanted continuity of service.
Today’s connected world is a dangerous place to forget that respect for the customer and respect for the competition are essential for sustainability of brand value and economic goodwill, just ask Toyota. I’ve always loved Apple’s creativity in form and substance. I also believed that Toyota put the customer first. Funny how often bigger does not beget better. It’s called entropy, another engineering insight often forgotten.
On reflection, I wonder how much of the problem had to do with poor engineering and how much with a culture of “enforced optimism” or some variant of the “emperor’s new clothes?” The evidence to date on the catastrophic BP oil rig explosion and the subsequent environmental opening of Pandora’s Box seem to support the dangers of “enforced optimism” leadership behaviors.
How often does the “enforced optimism” show up in planning (pick any type), budget sessions, objectives, progress reviews and reports, investor sessions, group decision making, scheduling and commitment setting, …., other stuff?
Thoughts?
Reddy or Not, Here I Come!
We have an app for that,” so goes the ad for a smart phone. I am still amazed by how life is changing through technology. The accessibility and choices at our disposal have redefined nearly everything, and to a great part for the better. Several years I joked about the day when I could sit atop a mountain with a laptop connected to the world and able to conduct my business, only to see someone smile and say, “It’s not that far away.” So, here I am on a mountain, loving the view, with the world at my fingertips, conducting my business and knowing that our readers across the world can share in the output this experience, when, how, and where they chose. We’ve shared the transformation of our lives and our enterprises as a consequence of leaps in telecommunications and the myriad of choices and facilitated activities available to us, our customers, suppliers, competitors, and our world.
New enterprises have jumped on the electronic carpet ride, perhaps working in a “cloud”, and creating new value propositions in a connected world. Business models have literally crumbled, leaving relics, much like those of Ozymandias, because brick, mortar, and paper have been replaced by electrons. In his grave, my very old friend, Reddy Kilowatt, both rejoices, and perhaps weeps as well, as the role of his offspring continue to transform the world. Perhaps it’s a bias, a consequence of a prior professional life, but I believe that nothing has come close to transforming the quality of human life as the availability of reliable electric power. In fact, the arguments that it’s about water, food, education and health care cannot stand alone without the platform built on our friends the electrons. We depend on many energy sources, but in many ways, they are often diminished in value without the electrons at play. Our electrons are such important servants that we store them in forms that make them available 24-7; in fact they make the world available to us 24-7.
I do confess the ancient part of me still enjoys reading books, paper books, but news and virtually all other content comes to me electronically. The effectiveness and efficiencies from 24-7 accessibility to current information and content is perhaps the most un-constraining breakthrough since the steam engine. There is little doubt that many enterprises have made huge investments in technological capacity and many have reinvented their capacity to transform. I wonder how much investment has gone into transforming the way we use the electrons within, within our own neural networks … the brain.
Questions:
• What proportion of decision making content is produced for us in a “report”? Does that report contain real time or past time data? Do we decide from the past even when the present is available?
• Is our critical information serviced to us through human “filters” or functions who decide what to search and how to package the answers?
• How long does it take to get an answer? Do we get a version of a Google or a bunch of gaggle?
• Do we get our critical “news”, much like many of us by waiting until the 6:00 PM broadcast on the “tube”; or does the critical data from which to manage and decide stream to us into the right virtual form?
• Does the data wait for you or do you wait for the data?
• When something is happening across the world that could impact the enterprise, do we learn about it when the impact arrives, much like a tsunami?
• Does out data warn us about what is about to happen or is likely to happen:
o To our business?
o To our customers?
o To our resources?
o To our employees?
o To our constraints?
Have we truly transformed our human systems to unleash the genius within, the genius that can create value and innovation from the real time accessibility available?
Are we Reddy?
Oh, Can You See By the Dawn’s Early Light?
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.”
So begins the second paragraph of the Declaration of Independence from Great Britain signed by the United States Congress on July 4, 1776. We in the US, celebrate July 4th as Independence Day this weekend with festivities, fireworks, picnics and devotionals to those whose lives were dedicated and often taken to secure these unalienable rights. In fact, the words could serve as anthem to peoples all over the world as a never ending objective and pursuit.
The instrument declared states as the independent parties, and in doing so established, “that these united colonies are, and of right ought to be free and independent states; that they are absolved from all allegiance to the British Crown, and that all political connection between them and the state of Great Britain, is and ought to be totally dissolved; and that as free and independent states, they have full power to levy war, conclude peace, contract alliances, establish commerce, and to do all other acts and things which independent states may of right do.”
The Declaration of Independence was a consequence of a people rebelling against abuses with no responsiveness to appeals or due recourse for resolution. It is interesting to recognize that the only activity specified that is specific to an individual is the right to establish commerce. The document enumerates abuses by the Crown and intolerable and unendurable behaviors and, not surprisingly, many can be traced to actions to serve commercial objectives, those of the Crown and to the detriment of the colonists. (It took a subsequent Constitution and Bill of Rights to establish governance.) But, to continue the thread, business strategies are in fact conquest strategies and occupation strategies, and governments align to these to different degrees. Political colonies have typically as occupation entities to be harvested.
The consequences of the boldness of the Declaration of Independence and subsequent execution have enabled many of us to pursue happiness, enjoy liberty, and create life with hope. Three important dimensions are forever present in my mind:
1. Declaration was followed by sacrifice and vigilance to earn the liberties and the responsibilities to sustain them. Declaring that we are or we will be better or great can warm the tummy for a bit, but it is execution and on-going management that makes it real. Projects exist to create processes and processes must manage to the objectives of the entities. This applies to governance of individuals, organizations, enterprises, societies, religious orders, groups, and nations.
2. As the world changes and our prosperities grow, our opportunities are a powerful magnet for others seeking life, liberty, and the pursuit of happiness. Although many believe that these rights come as a consequence of national versus global birth, perhaps through education or lack thereof, it is the right to earn them that effectively determines what we do and whether life, liberty and the pursuit of happiness is achieved.
3. The first two create obligations and responsibilities, societal and commercial. Recognizing the unalienable rights do not come as a geographical or political birthright … not because of where we were born, but rather, because you were born is important, particularly if we are to be civil in our behaviors among our global community. We must not act in a way that denies the right to the pursuit of opportunity to earn happiness, personal or commercial, simply because we can at this point in time.
I cherish the opportunities life in the United States brings every day, and am grateful that my loved ones can pursue their own dreams. I honor and respect those that live and die daily to protect these opportunities and am ashamed of those that deny them to others, here or abroad.
Today, independence is more complex, perhaps because prosperity has redefined for many what the pursuit of happiness is or ought to be. Somehow, I find it is easier to find clarity in challenging times, and rewarding to reflect on the earned independence we enjoy and the responsibility to continue to earn and never deny.
Happy 4th!
Betwixt and Between
L’Envers et l’endroit (Betwixt and Between) is a phrase coined by the French Algerian writer and philosopher Albert Camus in one of his essays. It captures our current dilemma in the Gulf with the forces at play, wrestling with a series of positions, all supportable from different perspectives, in a tug of war wherein winners will all become partial losers before it’s over. A federal judge in New Orleans (not a trivial point) has blocked the current moratorium on deep water offshore drilling in response to the economic damage that local drilling operators are experiencing. The relationships between economic forces and judicial behaviors are nothing new to any region, and the ethics of the action are not in question. It is an example of the power of the lens we put on an issue and the persuasiveness of a point of view. The lens can create a bias for what we consider or discount in the decisions we make.
Judge Feldman wrote that the Obama administration had failed to justify the need for such “a blanket, generic, indeed punitive, moratorium” on deep-water oil and gas drilling. “The blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger,” he wrote.
What would we decide if we had to make the call? Is the issue a deepwater drilling only? Is it about the safety of operating a deepwater well? Is the issue a life cycle one? Or is this pertinent to closures, perhaps similar to decommissioning industrial, nuclear or military facilities? How many deepwater wells have been successfully capped and decommissioned? Would we reach a different decision from a specific phase perspective? What is the risk profile of the cradle to grave operation? When is safety most at risk? What would the data collected say? Or, is the answer, “What data?” Are we deciding in the world of MS Word or the world of MS PowerPoint?
We may be confronting a precipice that challenges our current processes for decision making in a sea of complexity. Who should answer the question of whether to enforce or block a moratorium? Who loses if we make the wrong call? Who wins? Who is accountable for the effects that will ensue from decision and will accept personal consequences? In times of crisis, what is the appropriate balance across the executive, judicial, and legislative branches of government?
Do the same issues surface in our enterprises? How are decisions made in the planning, execution and closure of programs, projects, and processes? What are our processes for crisis management? How are moratoriums decided in our enterprises? Do we create chaos and false starts from our decisions?
What are the consequences of innumeracy in decision making and decision makers?
Truth or Consequences?
I heard someone on the news use the term “oil tsunami” to describe the river of oil currently sweeping across the gulf and the devastation it is delivering to those in the water and on shores. It is an interesting analogy in imagery, but it misses the big point, this growing glob of pestilence was triggered by man, by many people making a whole bunch of choices and decisions. The complexities of how it began and the complexities on how it may one day end are still unraveling. The forces of nature that have been unleashed still defy our technology, techniques, and even our collective confidence. Sadly, it does illuminate a darker side, not new, about the economics of the process. Responsible economists articulate the importance of incorporating the impacts of externalities into decision making. What that means is that what we do can have an adverse impact that transfers the burden, costs, and consequences of dealing with the mess to someone else. In the broadest sense, the total costs of what we do are bigger than our accounted costs and subsequent prices we charge.
This is not only about oil, it is about lots of stuff, including many of the apparent bargains we grab at the supermarket and the fast food chain; or other apparent benefits from subsidized markets . In retrospect, the people that are responsible for perpetuating the calamities like the oil spill can appear as sinister, sometimes a true characterization, but they are seldom so in isolation. To a great extent, the engines we put into play, as consumers demanding lower prices, and as investors expecting greater returns, create value systems with biases, meaning skewed or unbalanced. The levels of bias or balance are important dimensions of good or poor decision making. My oversimplification is that historically we are rewarded by one system, economic, and are constrained and sometimes punished by another, societal and public. These systems are not equal and have never been balanced, primarily because of one set of these consequences is pretty immediate and the second set is improbable and if so, in the distant future.
We, as individuals and as enterprises, are very cognizant of these consequences. Our perception and expectations of these consequences are big, really big drivers of behaviors. Lots of research by very capable people has validated this relationship between consequences and behaviors. Let’s not expect balanced behaviors from unbalanced consequences.
We, when in pain, will exercise economic consequences, but often as a reaction to harm done. On the flip side, our efforts to regulate and control some of these “big” behaviors are sadly oversimplified, undernourished, and in systems that are unattractive to the clever, talented, and ambitious among us. When we overlay on this system the behaviors of those focused on reelection and keeping their local economies well fed, we already know what happens.
Interestingly, this week, squeals are emanating from across the big “pond” about the economic impact that pensioners (investors in BP) are feeling from the precipitous drop in the value of, and anticipated dividends from BP. Posturing and deflected blame, insinuated bias on the part of the US press, public, and politicians as a cause for the externalities. Consequences are driving these behaviors as well.
Messy and complex, isn’t it? Thoughts?
It’s Your Call
A blown call costs a pitcher a perfect game. This week, it really happened and everybody felt terrible, apologies ensued and the guilty umpire felt genuine remorse and accepted full responsibility for the failed measurement. A poor measurement did not change the perfection of the real performance, a better gage, instant replay validated that, but rather the record of what happened. Those that missed this story and are evaluating the statistics of pitching performance will only have the historic data to evaluate, data that is a false witness of events. Imagine the effects of all the poor measurements in one year of major sports events. Do they change important outcomes? Do they steer rewards or punishments? How about all the stuff that goes on with gamblers in or out of Las Vegas?
Bad measurement in sports evokes big emotions, outrage, indignation and a score of aftereffects that include bragging rights. Does bad measurement in our enterprises conjure similar reactions? What are the chances that we are making decisions as a result of poor measurement, the wrong lens, an obstacle in the way, poor technology, get the picture? If so, the issue is ubiquitous. In over two decades of helping organizations with performance gaps, poor measurements have always been at play, sometimes with disastrous consequences.
The issue is not a simple one. For example:
• Do we use the data that we have and try to conjure meaning from it? Or do we start with what we want to know and then measure accordingly?
• Are we sure that the movement in the data is representative of what is actually happening within the process?
• Do different individuals or functions measure differently? Would they come up with the same value when measuring the same process?
• Does the data just not make any sense?
• How about our “calls” on what we evaluate? Do two managers reach the same conclusion about someone’s performance? If not, who is right? What are the consequences to the individual?
• Do we introduce our own bias into the measurement and evaluation?
• Do we have folks who are easier graders and those that are more demanding? Do they evoke similar or different performance?
• How much of our decision process rely on a subjective call (an opinion) versus an objective measurement (an actual number)? Do we know how often our calls are wrong?
• Do compliance requirements change how we measure performance?
• What happens when lab results are wrong? What if wrong results bring really bad news or they mask the bad news and bring good news?
• Are we ever surprised by events that would have been very visible had we measured differently?
• Does a part of the organization hide or hoard data?
• Do our customers measure our deliverables and call about problems that we should have prevented them from experiencing? What did our data say?
• Do we have our vision checked from time to time? Why is that?
• Do we ever catch how some advertisers deceive with clever use of statistics? How about in our enterprises?
• Is it safer for ourselves to call someone “safe” rather than “out” when we’re not sure, just in case? Consequences are often more severe in one direction versus the other.
• Have we ever spent a lot of money and resources on a decision made with poor data?
So, how’s our data today?
When is the Exam?
Ever been caught in a situation for which you were not prepared? Ever dream where you forgot to attend a certain class at school, did not go for months, and then remembered, and the exam was to be in one hour, forgot the room, hadn’t studied, and then … panic? It can be unnerving. It evokes a very special anxiety, an unforgettable sensation. This type of anxiety is different than a surprise calamity that came from nowhere and it was something you could not have prepared for. The anxiety that comes from being unprepared is different because the consequences are typically very severe, sometimes disastrous, but very possibly preventable, had we prepared for it or to be surprised. It is but one dimension of the cost of unreadiness. That cost of unreadiness is terrible, nightmarish, fraught with self doubt and remorse, and becomes overwhelming when it is basking in the public eye. Sometimes, others suffer because of our unreadiness.
Unreadiness has different faces; the most distinguishable differences often exist between those that serve the interest of shareholders and those that serve the interests of the public. There are events of unreadiness that are shared among sectors. One that is hard to escape is capturing our attention because it painfully highlights a frightening level of apparently ubiquitous unreadiness. One indicator of the issue is the overwhelming amount of rhetoric and buzzing about from spectators to visible execution from those jumping into the fight as ready and agile gladiators.
The current crisis with the river of oil gushing upward in the Gulf of Mexico is a behemoth that resists constraints and carries dimensions of destruction that will change economies, lives, careers, communities, and perhaps the lens through which we view ourselves. It behaves much as Pandora’s Box, opened and releasing unbridled and irreversible calamities. There are overlays of causes, inclusive of a stated strategy to reduce dependence on foreign oil, one that may have created or perpetuated cozy questionable regulatory behaviors with the offshore drilling permitting and oversight process. There will be plenty of time for blame to be delivered. Right now, however, it is a distraction from the priority plugging the spewing hell.
Plenty of pundits are weighing in with “who is in charge, which is guilty, how much should we punish ….” Yet the still small voices of, “we can help, we have experts, I will lead, follow me lads” can’t be heard or remain silent. When no one is ready, everyone is guilty. It comes back to the eternal conflict between decision making systems, values, paradigms between the world and rules of economics and the world ruled by the rules of variability, uncertainty, the laws of physics, today’s engineering, and yesterdays science. It is very much about yesterday’s science and yesterday’s patterns applied to tomorrow’s problems. We create black swans from white ones, by the decisions we make (might want to read the book … “The Black Swan” by Nassim Nicholas Taleb) and what we chose not to consider in those decisions.
David Brooks, the columnist, has articulated several times that extraction of energy resources (oil, gas and coal) continues to have costly risks, albeit acceptable by consumers so far. The laws of physics make that undeniable. The coal mine disaster, the current oil geyser, Somali pirates hijacking tankers, refinery fires; there are many. Yet, energy is essential to life as we want it to be and as we need it to become. Our current demand is not likely to drastically change anytime soon, but maybe our strategic objectives should. The 800 pound gorilla in the room is too big to avoid. What we are witnessing are the secondary effects of harvesting and extraction economies and technologies. All extraction and harvesting sources have to be converted and that process leaves scars. Whether lumber, pulp, agriculture, food, minerals, fuels, all leave scars.
So our gorilla wonders about our choices. Do we set the same standards across the choices? Do alternatives share the same decision hurdles? Do they share the same oversight and regulatory burdens? How does the consumption immediacy of today reconcile with tomorrow’s predictable constraints?
Consider one example. If oil and coal had to meet the yoke of regulation from cradle to grave that the nuclear generation alternative endures, we would have very different behaviors. Today, the cleanest and safest choice is treated like the red-headed stepchild, a behavior not shared by the rest of the technologically literate world. We unknowingly or passively take on the risks of oil spills and mining accidents, but howl at the thought of a geologically sound repository site for spent fuels and continue to foster an onerous permitting process for new generating facility construction. It’s a tough one to reconcile. Balancing the laws of economics with the laws of physics is tough enough, but when mixed with the laws of political electability, it can become next to impossible. This issue is more about tomorrow than about today.
But the nuclear debate did not get us Pandora’s Gusher, unreadiness did, cut corners did, questionable regulatory behavior and integrity did, poor situational awareness did, and maybe some hubris did. There seem to be some choices, and none are cheap, fewer easy. Raising the standards of readiness call for a different way to plan, manage, and reward. It means ensuring with preparedness and responsiveness rather than insuring with financial instruments and distributed risk coverage. The risks and consequences are radically different. Again, we can pick the laws of physics, build agility, and respond; or the laws of economics, acceptance of fragility, and react. There are differences between managing from fear or confidence.
The 800 pound gorilla wonders about how we will decide. When we have tough choices, do we seek affirmation or confrontation? What will be the costs of our unreadiness tomorrow?
“The art of war teaches us to rely not on the likelihood of the enemy’s not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that we have made our position unassailable.” Sun Tzu
Thoughts?
A Gulf of Inconvenience
The oil well disaster events of the last weeks have been nothing short of ugly. In the background, the echoes of simplistic politicians ranting “Drill, baby, drill!” strike discordance with the fears and unavoidable harm playing out in the Gulf and spotlighted on the nightly news. Congressional hearings into the events are fraught with finger pointing at those called to testify and between those testifying with blame becoming the volleyball, destined to be set up, passed, and slammed until it hits a score. In the meantime, on-the-fly brainstorming is generating and testing ideas to stop the river of oil spewing from its lifelong imprisonment below the surface of the sea; and has rendered predictable disappointments. There are lots of spectators watching, pundits blasting, gladiators battling to survive the ordeal, and some hiding from repercussions.
In the ensuing panic and spotlight, another scary dimension reemerges, how ready are we to tackle what we have not experienced before? Executives of the drilling operations confess, in retrospect, inadequacies in the analysis, evaluation, and preparation for the failures leading to the explosion and the current river of oil. It is messy, the oil spill, the accompanying chaos, and the level of activity to assign blame from the bleachers and the court of public opinion. There is one huge problem with the court of public opinion; it is typically concerned with assigning retrospective blame and exacting a full measure of justice. Often that justice comes as punishment for the convicted and increased regulation for everyone else. On the other side of these events, we will have to contend with choices about getting less and paying more. I wonder what the real cost of our current energy enriched lifestyle might be? I believe we all may experience some level of repugnance and disapproval of these energy extraction accidents, indeed very ugly, but are they a dark side of the convenience we enjoy? These events could have certainly been less likely, with different choices by the operators, their leadership and our shopping demands.
I want to be safe and comfortable, living the convenience that energy provides, but may be reluctant to bear the total costs. I don’t believe that I am alone. An interesting aspect of this scenario is fundamental to situations many industries may be facing. Do we create strategies with aggressive goals that lead to optimistic planning and biases in risk analysis? How much does the business strategy influence the science of decision making? Specifically, how are the random surprises of the variability in Mother Nature considered? When Mother Nature does not want to behave according to plan, do we change tactics? Do we change with deliberation or desperation? After all, when any of us are running behind schedule, the rise in anxiety and fear of failure is inescapable! How then, are choices made? Where do we anchor our thinking and decision making? How far do we explore the expensive options that Mother Nature may present, particularly when behind schedule and sunken investments are climbing!
What happens often is the juxtaposition of goals and decisions driven by the laws of economics and the subsequent actions driven by the laws of physics. We run the business with an economic lens, but Mother Nature can only behave with the physics lens (we can add the other sciences like chemistry, mathematics, geology). Sometimes we have to guess about what Mother Nature is going to do, and we’ll be wrong to some degree, sometimes really wrong. It happens to most of us, but we don’t necessarily think about it when things are going well at the well. As this plays out, we will discover poor decisions and we may be tempted to assign sinister or evil behind them. Right or wrong, we will seek blame and justice. Ugly positioning, influence peddling, legal battles, insurance nightmares and extended stalling strategies await us … these are driven by the laws of economics.
I want to be careful and keep the broad brush of judgment put away. I believe that regulation will constrain future actions and better protect us from harm, at a price. I still wrestle with my, or our, lifestyle and business decisions against this backdrop. Do I have the right scale when I choose? So, what price are we willing to pay and what risks are we asking some to bear?
How wide is the gulf that separates our convenience?
“Destiny is no matter of chance. It is a matter of choice: It is not a thing to be waited for, it is a thing to be achieved.” William Jennings Bryan
Thoughts?
