Tag Archives: Strategy

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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Filed under Change Management, Corporate Culture & Strategy, Uncategorized

Business Strategy – 4 Reasons for more discussion!

presentation1-7-638You don’t have to look far to find high flying, hyper successful, mega remunerated executives doing things they were warned not to do in Business School 101 – that is acting stupidly. The VW or Glencore case studies come to mind immediately. A less public (not always) and less obvious act of stupidity occurs when it comes to sharing a businesses strategy. Despite years of experience senior executives very often miss opportunities to generate, communicate and implement strategy effectively (another way of saying they make rookie errors). Instead they come off looking disengaged to the other employees of the enterprise, less intellectually competent than their resumé might suggest and less in control than they would like. Here’s 4 reasons why: Continue reading

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Filed under Corporate Culture & Strategy