Beware of economists and politicians with models

Beware of economists and politicians with models

The government sponsored ‘Round table’ starts next week.

It seems to me to be a sophisticated ‘balloon floating’ exercise by the government, one that should be supported, just in case it produces any useful outcome.

My expectation is that there will be a full range of balloons floated by all parties. The government can observe the public reaction without having the usually demanded ‘rule in or out’ commentary so hated by the Treasurer, and most sensible people.

One of the challenges for the public will be that the ideas floated will all be backed by extensive research and statistical models that ‘prove’ whatever outcome the proponents seek.

We humans like certainty, data that describes an outcome. Quantitative equals certainty: we are hard-wired to believe data.

It is a pity that the modelling will all be about the future, and frustratingly, there is no data that accurately describes the future.

Just because an economist, politician, business leader or self-serving shyster can produce ‘modelling’ that ‘proves’ an outcome, does not mean it will emerge. All it does is demonstrate they can create an equation that makes a + b + c + f = z. This does not prove z is an outcome of anything more than the equation.

The variables that will be fed into the various models touted as the bees knees, the teller of the future next week, will be a few cherry picked to deliver an outcome favoured by the modeller. In the event that the model spits out an outcome unfavourable to the proponent, no problem, fiddle with the variables until it behaves itself.

Given the above scenario, is it worth the time, effort and expense?

Absolutely.

You never know when and where a good idea will emerge.

You also must, if you are the government, put in place a process that ‘warms up’ the voting public to accept change, and change we must, or be left behind.

However, beware the stinking pile of crappy statistics spat out of dodgy economic models that will fill the news media next week.

We humans like certainty, data that describes an outcome. Quantitative equals certainty: we are hard-wired to believe data.

Frustratingly, there is no data that accurately describes the future.

This means that the output of economic models, no matter how mathematically sophisticated, are just that, mathematical outcomes.

Any similarity to outcomes emerging over a timeframe of more than a few months at most, are a function of luck, not mathematical foresight.

The disturbing problem with AI

The disturbing problem with AI

Remember when Lotus 123 arrived?

Most don’t, but I do.

Suddenly, my ‘To Do’ list had babies.

Lotus delivered the opportunity to answer questions that previously had required hours, days and even weeks of work to calculate by hand. That opportunity meant that every man and his dog were asking more questions, and expecting an answer yesterday.

The pattern repeated when Excel blew Lotus out of the water, and it continues as Excel continues to add functionality unimagined a few years ago.

Then, along comes AI, and again repeats the pattern, except, the pattern has been given a huge dose of steroids.

Not only do we and those to whom we report expect those answers immediately, we now also expect that the machine will also ask the questions, and offer alternatives.

Years ago, I learnt the hard way that the lists of jobs to be done my wife put on the fridge for my immediate attention was a trap.

Every time I managed to rub one off, several more appeared at the bottom of the list. Quickly the list became an unmanageable source of conflict, as expectations were so totally different, resources required rarely available, and priorities were both moveable, totally unclear, and seemingly never mutual.

So it has been with digital automation tools from Lotus to AI.

Failure to agree priorities, ensure adequate and appropriate resource availability, and focus aggressively on the agreed priority inevitably leads to conflict, confusion, and sub-optimal performance.

The follow up problem to the explosive growth of AI is that we have surrendered to the ‘instant gratification’ world of Tik Tok.

We want an answer, and we want it now!

This demand for immediacy combined with the massive capability of AI to deliver output unimaginable before Chat hit the headlines is eroding our need, and indeed ability, to think. Superficially, we no longer need to consider the ‘first principles’ aspects of challenges and opportunities that confront us: AI does it for us.

‘Thinking slow’ is not only unfashionable, but seemingly unnecessary.

However, it is my view that those who can ‘think slow’ in the face of the demand for immediacy will win in the end.

Thinking fast and slow in blogs used

Failure to agree priorities, ensure adequate and appropriate resource availability, and focus aggressively on the agreed priority inevitably leads to conflict, confusion, and sub-optimal performance.

You do not have to be using AI tools to know the timeless truth of that statement.

However, it is my view that those who can ‘think slow’ in the face of the demand for immediacy will win in the end.

How do we measure and value resilience?

How do we measure and value resilience?

 

 

‘Resilience’ is a word we are hearing a lot these days and will hear more today.

On this ANZAC day 2024, there will be a lot of words sprayed around that amount to acknowledgement of the resilience of ANZAC troops.

They clung to the cliffs on the Gallipoli peninsular, died in the mud of Passchendaele, slogged across the Owen Stanleys a couple of times, and lived under rocks in the seaside splendour of Tobruk.

It is used to describe both the personal characteristics required of the individual, and the culture of organisations.

The dictionary definition leaves a bit to be desired, referring to the ability of a person or organisation to return to a previous state. ‘Elasticity’ is a common simile.

How do we measure resilience? If we cannot measure it, as the saying goes, we cannot improve it.

What is the measure of resilience shown by the ANZACS in those meat grinders? Indeed, how do we measure the resilience of those at home, watching as the casualty lists were posted?

In a commercial context, resilience implies the degree to which an enterprise is able to absorb and adjust to the unexpected. Usually, it refers to the short term from the decisions made by others that drive an unexpected outcome that changes the status quo. Substantial competitive moves, new products that deliver new value, or the emergence of something that could be classed to some degree as ‘disruptive’.

Measuring by financial outcomes is misleading. Financial outcomes are the result of other decisions taken on the inputs to the business. Do that well, and you become financially secure, do it poorly and you go out of business.

The allied high command on the Western Front measured the outcomes of their initiatives by two things: the ground gained, and the casualties incurred. Of the two, the first was the more important to them. Field Marshall Haig never got close enough to the lines to understand the resilience required to ‘jump the bags’, again. The linkage and enormous gap between his orders, written in the splendour of the Château de Beaurepaire, and the squalor and death on the front lines that was the outcome, was never meaningfully acknowledged.

Measuring outcomes is always easier than measuring the inputs, then allocating cause and effect to the decisions but is rarely useful. Just as measuring your weight every morning will not assist you to lose weight in the absence of resulting reduction in calories, throwing yourself at a machine gun nest will not win ground.

It does however require resilience, courage, and dedication to both those beside you, the wider objective, and willingness to ‘do the work’.

In our modern world, despite the continuous marketing of the silver bullet products promising the contrary, there is no substitute for domain knowledge, planning, optimised resource allocation, and the sheer resilience to stick at it in the face of adversity.

It comes down to the culture at the micro level. How the individual behaves, and how that behaviour translates to the immediate group.

It has always be so.

It is a lovely autumn day in Sydney, as we reflect on those that gave us the opportunity to enjoy the freedoms we take for granted. It is also my beautiful daughters 38th birthday. Happy birthday Jenn!

How time flies.

The header is an arial photo of the gorge, hidden in the Wollemi State Forest, after the fires of 2019-20. The green spine is made up of the only stand left of Wollemi Pines. They have survived since the dinosaurs roamed the area. Resilience.

 

 

 

Trust: Is it the antidote to AI fakery?

Trust: Is it the antidote to AI fakery?

 

 

AI can put words in the mouth of any public figure and make it virtually indistinguishable from the real thing. It can create pictures that even experts cannot pick as digital facsimiles.

How can we trust anything we see or hear?

To date we have been able to pick the fakes by a range of tiny details. Spelling mistakes, poor grammar, or inconsistent details in a ‘photo’, but those days are now gone.

What will they be replaced by?

Trust?

How do you build trust on a base of quicksand?

Slowly. Carefully. Piece by piece. Showing up routinely and being consistent in the messaging by whatever means those messages are delivered. Always being both totally transparent and sometimes painfully honest, and always humble.

Beware, the blaring trumpet of confirmation bias will be blasting our senses from here on. Somehow, we must build an immunity and antidote, or we will be lost as a cohesive community.

The header of this post is the AI generated ‘photo’ by Boris Eldagsen that won the creative category at the Sony World Photography Awards in 2023.

While it was ‘early days’ in the public life of AI, the fact that experts failed to pick the ‘fake’ is disturbing. How are so called average people expected to be able to pick between the real speeches, transcripts, and photos of public figures when the experts make massive blues like this?

The experts disagree. Who knew?

AGI, or ‘Artificial General Intelligence’ is the point at which the magic of circuits has the ability to learn and respond to something for which it has not been taught. In short, it can think. It is a field of science that is being funded in the billions, weekly, and is a huge step forward from where we are now, with what is becoming ‘normal’ AI.

AGI pundits think AGI by 2030 is not just achievable, but a lay down misère, while the other camp think ‘probably never’.

Whichever camp emerges the winner, AI is with us, and is not going anywhere, except further into the corners of our lives.

Get used to it!

 

Are Planning and critical thinking mutually exclusive?

Are Planning and critical thinking mutually exclusive?

 

Metrics increasingly drive our commercial lives.

We need the metrics to ensure that we are focused on the outcome, it drives the resource allocation choices that must be made.

Usually, we face a series of binary choices, do A or B, then X or Y. This is comfortable for us, our brains are triggered by binary, friend or foe, run towards or run away, is it a stick or a snake?  Evolutionary psychology at work.

In the short/medium term this works well, it ensures focus on what is deemed currently to be important. However, it actively excludes stuff that is ‘interesting’ but not necessarily useful now. Those require us to accept risk, experiment, be comfortable with failure, all the things that our evolutionary psychology has bred out of us. Next time you want to spend some resources on something because it is ‘interesting’ but outside the plan, good luck getting that formally approved. You will have to be prepared to be an outlier, renegade, argue against what has gone before, and you know what happens to many of those who do that.

Breakthroughs only occur when someone forges a path towards the unknown because it is for some reason, interesting to them. It will always be inconsistent with the status quo, it will always be out in the fringes, messy, usually unseen by most, but that is where the breakthrough gold hides.

To see these outlier factors requires critical thinking, a disapproval of the safe optimised way forged by the status quo. By definition, you cannot plan for the unexpected. However, you can create a culture where critical thinking is encouraged, and fed into the processes that together can become a renewed status quo.

These interesting things do not comply with the way we create plans and budgets. They are long term; they do not accommodate the plans associated with most of the daily activities we undertake. They are the source of long-term breakthrough; they are often the result of serendipity. Penicillin was not developed because Fleming had an objective to develop an antibiotic. The product category ‘antibiotic’ did not exist. Serendipity took place, then it took 15 years and a war to become commercialised.

How many breakthroughs can you think of that emerged from a plan? They always come through long experimental slog, underpinned by critical thinking.

My conclusion is That critical Thinking and planning are not mutually exclusive, but are uncomfortable bed-mates. in the absence of the encouragement and culture that makes uncomfortable relationships possible, they will not survive together.

Header credit: It is a reproduction by Hugh McLeod of the wonderful copy written by the creative team at Chiat Day advertising for Apple after Steve Jobs returned. 

 

 

The saviour we should celebrate, not hide.

The saviour we should celebrate, not hide.

 

Never before has the need for creativity been more critical.

Never before have set about crushing creativity before it has a chance to bloom more than we do now.

My nephew is dyslectic, always had trouble at school, with teachers, sitting still, and anything that required him to read and write. In a parent-teacher interview when he was about 12, my sister was distraught and angry to hear that her son, who had by then built a computer from bits and pieces, powered by a cobbled together solar panel on the roof, would be lucky to progress beyond being a day labourer.

He was lucky. After scraping into a regional university with a practical focus, he earned a masters degree in electrical engineering, got bored, and went back and did medicine. He is now an ophthalmic surgeon, restoring sight in the footsteps of Fred Hollows.

Had his practical talent not been recognised by an academic with a long life of non-academic  experience behind him, my nephew may have continued tinkering in the garage while making his living on a production line. What a waste that would have been.

How many like him have we wasted?

How many like him will we continue to waste as we dose up the kids who cannot sit still in school, or colour between the lines, with Ritalin?

Back in 2008 an executive coach named Wayne Burkin wrote a book called ‘Wide Angle Vision: beat your competition by focussing on Fringe suppliers, Lost customers, and Rogue employees’.  The title says it all.

Creativity and the resulting change does not come from those who can colour between the lines, always behave in a disciplined manner, are prepared to do as they are told at all times. It comes from the outliers, the originals, the rebels, as Steve Jobs noted, those who ‘Think Different’.

Seth Godin’s remarkable essay introducing us to the ‘Purple Cow’ resonates even more now than when it was written back in 2003. Paragraphs 5 and 6 should be reproduced and stuck on every wall of every room that ever has a student of any kind in it, and every office of anyone seeking to be a leader.

Never have we needed those who think different to have their hands on the wheel of the  companies and institutions that together make up the economy, and will shape our kids futures more than we do currently.

 

Header cartoon courtesy of gapinvoid.com