EclecticLip

My brother forwarded me this article in the Financial Times recently.  Superficially about the fall of Rome and other civilizations, as chronicled by Joseph Tainter’s Collapse of Complex Societies, it links back to the fact that the complexity of the financial sector has increased far faster than the balance of the economy — the “real” economy.

The example of diminishing returns on increased complexity may also be observed in that the financial sector’s robustness in the recent past has relied on leverage, basically meaning that to make their money, they had to bet increasingly more. 

In this sense, complexity is a crippling strength — because it’s useful and produces great results at first, it continues to be turned to, even when the incremental benefits diminish and even dissipate away.  But because it once produced great results, there’s little impetus to try other ideas…

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For the book club’s “silver anniversary” selection, it returned to the theme of human behaviour examined previously in Gut Feelings (#13) and to a lesser extent in The Tipping Point (#4) and First, Break All The Rules (#12).  As complexity theory has gained prominence over the past year, research for a book on that topic was made, with the club eventually deciding on The Perfect Swarm.

The volume’s treatment of group intelligence and the problems associated with consensus decision-making, are highly-relevant to business decisions – and R&D in particular.  When research teams push new boundaries, they tend to defer to the most-expert member when it comes to drawing conclusions or deciding on a path-forward; but the book cites work suggesting that diversity of opinion is key for selection the best options.

As always, if you enjoy the book summary, please consider supporting the author by purchasing the book. 

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The Perfect Swarm (summary)

In line with the prior post, here’s a short rhetorical piece I put together for an earlier Climate Progress competition, from January 2009.

Regular programming will resume soon…

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(Originally written Sept 29 - posted Oct 13)

Joe Romm ran a competition at Climate Progress, to write what Canada would be like in 2050 if the pollution lobby held sway.  This is what I came up with, summoning everything I could from my rhetorical repertoire to write a melancholy dirge.

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As a preamble, let me note it’s not my normal manner to poke fun with a bayonet — this is a special little something I reserve for pompous commentators of such oracular conceit that they greet all others’ views with a dripping disdain. 

To be clear, I’m sure that — like George W. Bush — Dennis Gartman is a nice man.

I’m also confident that — like George W. Bush — Dennis Gartman is a victim of the Dunning-Kruger Effect, which causes the cripplingly incompetent to think they’ve got exceeding expertise.  (To be fair, Dunning-Kruger is epidemic in the financial sector; how many “expert” mutual fund managers actually beat the index?  There is no cure.)

Lastly, I’m certain that — like George W. Bush — Dennis Gartman still has enough fans that this qualifies as “pricking the powerful” as opposed to “kicking the downtrodden”.

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I’ll chatter more about SeaWorld in due course, but wanted to comment briefly on the San Diego Zoo’s “pandarrific” showcase exhibits, featuring China’s monochromatic bears.  Fascinatingly, the Zoo doesn’t own them; the pandas are loaned from China.  Like so much American prosperity. 

Despite their current vegetarian diet, pandas’ ancestors were carnivores, so they have a fairly short digestive tract.  As such, they don’t derive much nutrition from bamboo.  As such, they spend up to 14 hours a day eating — not altogether unlike cruise ship passengers.    Interestingly, the pandas only like the inner portion of the bamboo shoots; they’d “peel off” the outer strip of the bamboo shoots with their teeth — not unlike kids eating those “cheese-strings” sold in supermarkets today.  There was also a panda cub, sleeping in the treetops, ignoring the flashing cameras and cooing humans.  Preoccupied with panda life, the orca-patterned ursines were oblivious to the merchandising empire they supported on their furry little shoulders.

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Steven Sharp’s book The High Velocity Edge (previously titled Chasing The Rabbit) was chosen as the book club’s 24th book, on the recommendation of a university professor.  In some ways a complementary volume to The Toyota Way, the book proved an extraordinarily valuable read.  And happily, while the book is somewhat Toyota-centric, other successful organizations also received chapters of their own.

The author is a multiple Shingo Prize winner, and its premise is that success at Toyota and similar “high velocity” organizations comes not from the tools deployed at the firms… but rather, by the culture that invents those tools.  More bluntly, the use of “lean manufacturing” tools (5S, value stream mapping and so forth) does not correlate with corporate success.  The creation of a corporate culture with the discipline to remain dissatisifed with the status quo, is far more important.

As always, if you enjoy the book summary, please consider supporting the author by purchasing the book. 

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The High Velocity Edge (summary)

Another of my financial commentaries (”worth every penny you paid!”)…

Due to persistent economic stagnation, countries are trying to push their currencies lower.  (See the Der Spiegel article here.)  The reasoning is that if the currency is worth less, countries’ exports will be more competitive, and through greater exports they can recover economic health.  The problem is that everyone can’t do this at once — and right now everyone is trying to do this all at once.  Now, try as I might, I couldn’t make an elegant “currencies are worth less” / “currencies are worthless” pun, so I’ll just commemorate my valiant efforts with this here sentence. 

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(written Sept 27, posted Oct 9.  Got a lot done that day…    ) 

As to our trip to San Diego, we made it back, safe, sound, a bit lighter in the wallet and heavier everywhere else. 

The cruise ship was a fun experience; for three days we enjoyed a panda-esque lifestyle, eating and sleeping.  I’ll report more later, but very quickly, cruise ships — like all-inclusive resorts — are accessible to the First World’s middle classes due to differences in currency and labour valuation.  If staffed by fellow Westerners at prevailing rates, the experience would’ve been out of reach; it was made affordable thanks to the fact that wage standards in the crews’ home countries is much lower than here in Canada.

There’s nothing wrong with this arrangement of affairs, but from a sense of fairness one hopes that in the coming decades or centuries, future Filipino and Indonesian cruisers will enjoy the services of a Western crew, just to even things out.  And don’t get me started on building Chinese railroads…

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