Tag Archives: Management

Not Every Relationship Is Straight. Looking for the unexpected.

confuse

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! 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  recognising 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 are 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 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
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