Monthly Archives: February 2017

Life Is Not A Straight Line And Being Fooled By Simplicity.

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Our brains are well conditioned to see what they expect. Image from: Illusions.org

We all make the mistake, even when we know better. If something is good then more must be better. A nice, straight, linear relationship … except it’s not … and very rarely is! At some point exercise will just injure and fatigue us, the extra serve of ice cream stops being a treat, working longer doesn’t improve your work performance and trimming more costs can make matters worse, etcetera. In these cases, there’s an inverted U relationship. Recognising when something else is going on can make you a better consultant, manager, and person.

Our day to day lives makes us familiar with other relationships in specific situations such as recognizing some diminishing returns relationships. That is, doing more will lead to improvements but less improvement for the same increase in effort. Weight loss could be an example. Another familiar relationship is in consumer pricing where the addition of more benefits and features leads to big increases in price (a logarithmic relationship). Mostly we’ve learned to expect these relationships and they influence how we think in a variety of situations however there is any number of things where we don’t know what to expect. We can’t be so certain what the relationship is. When that happens then logical errors are much easier to make e.g. if the threat of jail stops some crime then increasing the harshness of sentences will stop more crime. Perhaps, I don’t know exactly, however, the US has the death penalty and a very high murder rate for a western country, so maybe not. Perhaps you have to do other things if you want the murder rate to come down.

 

The Inverted U Curve.png

Very few social relationships will be as simple as those above and yet often we act as if eventhese are too difficult to consider. 

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Deregulation, Trump and Being Careful What You Ask For!

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Pittsburgh: One reason regulations were developed.

Regulation: A rule or directive enforced by an authority.

Trump has started rolling back regulation because proponents argue regulation costs jobs. Like most things it’s never really so simple e.g. rolling back the Clean Water Provisions allowing Kentucky coal miners to pollute streams and water tables impacts negatively on the communities the miners live in and those downstream. Many miners need the work and if the job bump happens then they and other members of the community will also need to endure the negative impacts, which will come later. It is also likely to see lower standards in any new mines and that comes with a hefty public cost – refer to Mining is Transient.  In the end, the mining community will still need to face the problem that the amount of coal mined will reduce, and the number of jobs will reduce.

Why regulations?: Business doesn’t generally like regulations. And it’s true there is a history of bad, outdated and poorly implemented regulations that do need reform. There are also good, well structured and implemented regulations that act to protect us and that includes business.

Regulations are generally assumed to be negative for business and a cost and (in the case of the USA particularly) they can be presented as unnecessary government interference/intrusion. The exceptions are when regulations help maintain a business’s competitive position e.g. stopping or limiting others entering their market. Then a  Continue reading

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Mining & Resources: Behind The Political Rhetoric

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From Queensland Mining and Energy Journal

Can Australia be ‘open for business’ and more strategic about the extraction and use of it’s resources at the same time? And does it really need to limit public scrutiny and make mining protections and applications easier to get through? Mining and resource extraction is absolutely essential to our industrial society. However the mining sector is powerful and influences government in ways that distort good economic and social policy.

It’s Transient:  Use public transport or a smart phone and you’re using a multitude of mined products. It takes a lot of money to do and a lot of money is made. Also keep in mind that all mining and resource extraction is transient though some projects are more transient than others. In any location it comes and it goes. It’s important when considering any project e.g. coal seam gas (CSG) extraction with it’s thousands of transient sites (4,489 Queensland sites in 2011) and environmental and social impacts. Income from any particular CSG site is relatively short lived 5 to 20 years.

Hidden Costs and Industry Strategy: Besides the potential to leave behind a very Continue reading

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Bullies, Full Frontal Shock & Awe And The Suffocation of Rationalism

A second post for the post-truth era. There’s a minor edit regarding Trump though this was written for other reasons – mostly frustration. Shock and Awe may just be what Trump supporters wanted. The difficulty is we all know how it worked out last time.  

It’s supposed to be a conversation however it doesn’t feel like it anymore. You’re being overwhelmed and it’s bullying. It becomes clear the person wants to appear tough-minded (the softer version), if not just tough (the harder version). They are so confident of their opinions they leave no handle for doubt. In the ‘soft version’ the person may suggest they are a ‘straight talker’ or perhaps claim they are speaking ‘common sense’. They can be populist and even charismatic. It’s like meeting a radio shock-jock in person. Regardless, they don’t want to hear what you think or know, they just want your approval, for you to recognise their dominance or authority.  And in some cases your capitulation and compliance. They ask no questions unless rhetorical. They prefer your silence and surprise. While their confidence can be engaging, here the problem is that you are aware the person is so shatteringly, eye-watering uninformed, misrepresenting or wrong that you can barely make out where to begin. And Continue reading

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