The lazy employee revisited

For some reason, In praise of the lazy employee was one of my more popular postings. Now Fast Company is saying much the same thing in Hard Work's Overrated, Maybe Detrimental.

"Just listen to your heart" supports the Fast Company article at least as far as decision making goes.

The (un)Sustainable Commentator on growth

Just to keep the question series on growth going, here's what Wayne Maceyka is saying on The (un)Sustainable Commentator.

Check out Wayne's blog, too, and his extensive list of links in the right-hand column.

Questions on growth: a follow-up

After all of our good questions about growth, we've gone silent, so I was about to change topics. Then I saw The Growth Bubble on Tom Fiddaman's MetaSD and its link to Thomas Friedman's The Inflection Is Near?

It's a Friday night after a long week, so I'll leave it to you to make the editorial comments.

Sustainable Enterprise: the opportunity

If you're in or near the Portland, Oregon area or willing to travel to Portland, you might be interested in Willamette University's Sustainable Enterprise Certificate program. It consists of three two-day sessions: Understanding System Dynamics, Social Systems and Sustainability Success, and Creating & Implementing a Sustainability Plan. The first one starts April 2.

Check out their Web site, and sign up now!

The metric system and math skills

I once suggested that eliminating the use of the customary system of units in this country would help us learn and compete. Now Richard Slettvet, a local teacher, has made the same point in A logical way to improve math scores.

Is it time to act? Who will you engage?

Feel free to tell others about this post.

Questions on growth: a pre-evaluation

You've helped me accumulate quite a list of questions about growth, and I thank you. Here they are once again:

1. What if (aggregate) growth went to 0% forevermore? What would it mean to you, to your business, and to your personal life?
   
   
2. Do you think there's reason to believe growth could stay at 0% or below for a very long time? Is that of necessity either good or bad, or does its value depend upon our reaction?
   
   
3. Is it a good idea to try to keep growth positive? Why? Are there any downsides? Are there indeed any limits to growth, either in terms of annual growth rates or the overall size of anything?
   
   
4. As attractive as growth may be in the current worldview, systems ideas would indicate that the longer we try to keep growth going once we've exceeded the carrying capacity of the system (the planet), the worse the eventual and inexorable fall and the lower the eventual sustainable standard of living. If you favor continued growth, how will you overcome those seemingly inviolate systems limitations?
   
   
5. If the systems theories play out in the real world, how do we reasonably make the transition from our current state to a new, equilibrium state in ways that attend to people (social justice, the ability to procure what we need for life, the ability to make a difference or find purpose, etc.) and the natural environment (sustainability, the depletion of nonrenewable resources)?
   
   
6. Can we make such a transition a good thing and not a painful thing?
   
   
7. What do we owe our descendants? For how far into the future do we bear responsibility?
   
   
8. If these systems ideas have merit, what changes in mindset (in worldview) do we need to survive emotionally as well as physically? For but one example, negative growth has long meant failure for people leading businesses, but that could be the way of the future. Can we realistically change our mindsets and our systems so that satisfying needs (instead of generating growth) defines success?
   
   
9. In case these systems ideas don't apply in this situation (e.g., if technology can once again save us even in the face of decreasing energy supplies and rising population), can we design robust actions that work well in either eventuality? How do you answer Tom Fiddaman's questions about the sufficiency of technology?
   
   
10. Can the current economic "engine" be morphed into one based on such a radically different paradigm?
    
    
11. If we change to a different paradigm that's not built on growth, can we figure out how to get money into the hands of all who need it? Or will our reaction to low or zero growth be to trim people out of companies to keep the organizations viable while building unemployment?
    
    
12. Is an economy built on lending inexorably drawn to growth for survival?
    
    
13. How we to encourage understanding that quality of life can still improve while quantity of consumption decreases?
    
    
14. In light of the current economic crisis, how can we best protect the economy's life-supporting functions such food production, health care and ecosystem services amidst the chaos that will undoubtedly trim the less important financial and luxury markets?
    
    
15. What new national and international policies and institutions do we need to design in order to prepare for a transition to a steady state, or true cost, economy that recognizes the need for investments in natural and social capital as well as financial?
    
    
16. What would constitute the analogy of complex relationships those with "imaginary" components?
    
    
17. Will a state of zero net growth become a state of dynamic economic equilibrium, and will this new state actually make markets MORE efficient, and effective at elevating the state of the common man?
    
    
18. Why is our world so hung up on growth to begin with? How did growth get into our DNA? Has it always been there or is it just since the invention of the steam engine?
    
    
19. What do you do if evolution favors individuals or groups who aspire to growth?
    
    
20. What if the US and EU go green and China and Russia don't?
    
    
21. What if growth had to be -X% per year for Y years in order to reach a sustainable steady state (in material throughput)? How might social systems accommodate that peacefully?
    
    
22. What if technology has limited potential?
    
    
23. What would an evolutionary landscape that favored sustainability look like?
    
    
24. Can wealth can go up while the material flow goes down? How?
    
    

I've numbered them this time for easy reference. If you want to see who contributed each question, refer back to the original posting.

Now the next step: how would one go about answering these questions?

Before getting to the process, though, I'm curious how you think we would recognize a good answer. I don't expect that we'll all agree, but, rather than getting into a bunch of statements about our respective positions, I think we might learn more by first thinking about the criteria by which we'll evaluate potential answers.

I suspect our answers to that may be all over the map. As food for thought, I offer up the questions critical systems heuristics offers about motivation, control, expertise, and legitimacy. You can find one article by Bob Williams and Martin Reynolds on Bob's Web site: go to Systems Stuff and scroll down to the article called Critical Systems Thinking. You can see another introduction by Werner Ulrich here. He lists the questions starting on page 11, but you probably need to read the earlier pages to understand what it all means.

Once we have some idea how we'll evaluate potential answers (and how we think we should evaluate them), then we can think about picking approaches, methods, methodologies, or processes we think might be of use for each of these 24 questions.

So what do you think? How will you evaluate the answers to these questions? How do you think you should evaluate them?

Questions on growth

From time to time, I've posted some of my musings about growth. I had a related email discussion recently with a colleague, and one of my emails to him contained questions that I'd like to ask you, too.

We know the world's economies are currently experiencing hard economic times. Yet I wonder if thinking of this in terms of business cycles is the best way today. Jay Forrester has written, "Our greatest challenge now is handling the transition from growth to equilibrium".

If you think of the world in terms of business cycles, getting from bad times to good is a largely waiting game, assuming you've saved enough in the good times to carry you through the bad. Before refrigeration and long-distance transportation of food, that happened on an annual basis, too: you had to save enough food from this year's harvest to survive to next year's. Admittedly, some organizations are good at gaining ground during these periodic "yellow flag" situations, but many of us will just try to survive until the good times return.

If Forrester and others are correct and we're really moving from a long period of growth into an even longer period (possibly forever, at least in practical terms) of relative equilibrium, then dealing with those (equilibrium) times may require a fundamentally different mindset (as Cynthia McEwen and John Schmidt would remind us), not just a changed process.

• What if (aggregate) growth went to 0% forevermore? What would it mean to you, to your business, and to your personal life?


• Do you think there's reason to believe growth could stay at 0% or below for a very long time? Is that of necessity either good or bad, or does its value depend upon our reaction?


• Is it a good idea to try to keep growth positive? Why? Are there any downsides? Are there indeed any limits to growth, either in terms of annual growth rates or the overall size of anything?


• As attractive as growth may be in the current worldview, systems ideas would indicate that the longer we try to keep growth going once we've exceeded the carrying capacity of the system (the planet), the worse the eventual and inexorable fall and the lower the eventual sustainable standard of living. If you favor continued growth, how will you overcome those seemingly inviolate systems limitations?


• If the systems theories play out in the real world, how do we reasonably make the transition from our current state to a new, equilibrium state in ways that attend to people (social justice, the ability to procure what we need for life, the ability to make a difference or find purpose, etc.) and the natural environment (sustainability, the depletion of nonrenewable resources)?


• Can we make such a transition a good thing and not a painful thing?


• What do we owe our descendants? For how far into the future do we bear responsibility?


• If these systems ideas have merit, what changes in mindset (in worldview) do we need to survive emotionally as well as physically? For but one example, negative growth has long meant failure for people leading businesses, but that could be the way of the future. Can we realistically change our mindsets and our systems so that satisfying needs (instead of generating growth) defines success?


• In case these systems ideas don't apply in this situation (e.g., if technology can once again save us even in the face of decreasing energy supplies and rising population), can we design robust actions that work well in either eventuality? How do you answer Tom Fiddaman's questions about the sufficiency of technology?
  


• What other questions do you have?

Let me be clear: aggregate growth of 0% does not imply that there is no dynamism, no growth in the economy. Our need for certain products and services will increase, even as our need for others will decline. I'm only thinking of aggregate growth in posing these questions.

I have lots of questions and only tentative answers. Right now, I really am interested in seeing your questions, as I've seen the power of listing questions before trying to provide answers.

Later, we'll get to considering answers and how we might test those answers for reasonableness and usefulness.

Questions?

R in the news

If you're nervous about applying free software in your work, see what the New York Times had to say about R, the free statistics system. Thanks to Andrew Gelman for pointing out that article.

I'll highlight another free tool in my next posting.

Management Improvement Carnival: Annual Edition

John Hunter of Curious Cat has asked me to participate in the annual edition of the Management Improvement Carnival. I'm humbled to be invited and glad to participate.

The first station has to be Tom Peters' blog. I don't agree with everything he says, but I do find that he makes me think. Any of you who manage something are people, too. That's why my first link goes to his Christmas 2008. I share his sentiments, if not his bully pulpit. While I'm mentioning his blog, I'll also mention Repeat!.

The next station is MetaSD, the home of Tom Fiddaman and his Four Legs and a Tail. It's a good reminder of the leverage points we can seek in the systems in which we work as originally drafted by Dana Meadows, and it offers his notion that they don't necessarily compose an ordered list. Perhaps more importantly, it's a reminder that we need a mindset change to be successful in the world we're entering. Speaking of mindsets, Cynthia McEwen and John Schmidt of Avastone Consulting have published Leadership and the Corporate Sustainability Challenge: Mindsets in Action Report. While not a blog, that report does speak to mindset changes. Speaking of Tom Fiddaman, he has also posted My Bathtub is Nonlinear, an excellent reminder of the importance of grounding our assumptions in real data.

Times are tough, economically, and that's why I pick Paul Graham's Why to Start a Startup in a Bad Economy as the third stop. Don't do anything foolish, but don't think that the news from Wall Street necessarily predetermines your fate is the message, but he says it better than I. While I'm visiting non-conventional management sites, I'll stop at Elana Centor's Note to HR Folks: Hiring Over-Qualified People Is A Smart Strategy because you will need to hire again someday, if not today.

Speaking of saying things better, one of a manager's jobs is conveying information, and much of that information comes in the form of numbers and graphs. We do our organizations, our people, and ourselves a favor when we display such information clearly so others can make sense of it well. That's why the fourth stop in this carnival is at Andrew Gelman's An improved time-series graph instead of that notorious "spiraling down the drain" spiderweb. Follow the links, too, to see his earlier commentary. I'm a fan of Edward Tufte's approach to communicating information, and I'm a fan of the second graph in that posting. If you have to add drama, I like the third graph much better than the first, but I still think the second is the best of the three.

As important as data and statistics are, I'm reminded by xkcd's Decline that not everything we do, not even everything we do as managers, is best served by quantification and purely logical analysis. That brings me to Andrew Taylor's Not aloof and detached, but deeply, deeply human, a link to a Benjamin Zander TED presentation that, for me, brings together presentation skill and leadership in the service of his passion, music.

Finally, I'll take a view of another system we may not think of much, one that we very much need to be working well and one that may offer opportunities for some of us: food. Marilyn Holt's A Locavore Manifesto by Michael Pollan is a great education and reminder; click on the title of her post to get to the manifesto.

You may have thought I'd post about IT issues, about process improvement, or about systems or statistical analysis of management work. Those are indeed important, and I don't want to neglect them.

Yet I've found it helpful to start thinking at a high, systemic level to make sure I'm considering the important issues and to help me determine where I need more detailed information. While this, like most summaries of blog postings, can't claim to be as organized and logical as a book, I think it covers issues we need to concern ourselves about in business. From how we deal with people to the mindsets we bring to our work, from how to work in a tough economy to how to convey information, this covers a broad range. I closed with food systems because I wonder if we may be entering a period where the major systems we need for business—food, energy, the atmosphere and the overall environment—can no longer be safely taken for granted. That's why I think the desire and ability to view our challenges through a systems lens is particularly important as we enter 2009.

I'll conclude with with Tom Asacker's Nine Predictions for 2009, thanks to Tom Peters' Must Reading.

Follow-up:

To find the rest of the Management Improvement Carnival, check out these links:

• Management Improvement Carnival Best of 2008
  
• Got Boondoggle?
  
• Quality and Innovation parts 1, 2, 3, and 4
  
• Lean Blog
  
• Elegant Solutions
  
• Evolving Excellence
  

Were Bill and Dave right?

Much of the focus in righting the economic system seems to have focused on lending: fixing the effects of bad loans to get good lending going again so that companies and the economy can once again grow.

Yet, thanks to Justin Tilson, I discovered Chris Martenson's Crash Course. It makes the claim that debt is a key factor in creating growth and the problems of growth. I found the series interesting, but I wasn't in tune with his recommended solutions. They struck me a bit too much as "run for the hills" and not enough "here are some ways we together can craft systematic solutions." I should listen again to see if I get a different impression in a second pass, but I don't have the time. That's why I usually prefer well-written and -illustrated text to video—it's faster to read and faster to review—but that's just my personal preference.

Later, reading (or reacting to) James McCusker's Federal loan guarantees mean more jobs made me wonder: did Bill and Dave get it right on a more global scale than they perhaps realized?

What does that mean? If you know that I used to work at Hewlett-Packard and you recall any of the twentieth century history of high tech in the USA, you likely know that I'm talking about Bill Hewlett and Dave Packard. In one famous case, which you can find described in multiple books, Dave returned from his stint working in the US Department of Defense to find that HP was about to raise money through significant borrowing. His reaction made it abundantly clear to a generation or two of HP managers that HP did not raise significant money that way; HP funded future growth out of current profits.

Putting McKusker's commentary, Martenson's ideas, and Dave's values together, I wonder if a focus on supplying real needs and growing through profits rather than growth for growth's sake and growth through borrowing would be better for businesses, better for the economies of the world, and better for people.

Incidentally, McCusker is in favor of more loans right now to get the economy moving again. With so many people out of work, I realize that something must be done and that interim measures may not match long-term solutions. I'm musing about long-term approaches here; how to get from here to there is a different matter.

What do you think?

PS: If you wonder what Dave's reaction to debt was, ask an HP veteran of the time, or check out Chuck House's and Ray Price's upcoming book; I'm sure it will mention it.

Heretics, skeptics, and cynics: your ideal business partners!

Art Kleiner has written The Age of Heretics, celebrating those who are loyal to our organizations but see reality somewhat differently. Günter Grass wrote Aus dem Tagebuch einer Schnecke, celebrating, among other things, skeptics and questioners. Now the TP! Wire Service points to Working best: Cynicism not always workplace hindrance by Bill Repp of the Organization Development Group.

For more on the topic, see The importance of a focus on disconfirmation, Skepticism revisited, and Skepticism, numbers, and making sense.

Ideas from an integrated business and farming mind

Colleague Marilyn Holt runs a private M&A consultancy and runs a farm and writes. I've pointed to her blog before; today I want to point to a few more of her writings that some of you may find interesting.

First, she writes tips for Business Week. In these times, some of you might be interested in Increase Revenues While Decreasing Costs; you might find others you like linked from her blog.

Second, she also writes for EntreAlliance. She's just started a series called Seven Take-Away Lessons From a Failed Team. The first installment, Lesson # 1: Manage Your Brand, is the first of seven articles drawing business lessons from the recent McCain campaign for the presidency of the United States. Check it out!

More not good news

A bit over three years ago, I published Not good news; what do we do about it?, a story prompted by the Millennium Ecosystem Assessment.

Today, Grist News published Planet Ahead, a pointer to the World Wildlife Fund's 2008 Living Planet Report. In short, we're continuing to live beyond our (or the planet's) means, and, at current trends (not consumption levels, as reported in Grist according to my interpretation), we'll need two planet's worth of resources by the mid 2030s.

While they don't reveal the details of their model, it seems by their admission (p. 22) that it does not incorporate feedback effects. Thus it may miss behaviors that could prove dominant and perhaps more damaging over time.

One challenge is that the degradation is largely invisible to many of us. For one, many of the factors they measure are not bought or sold, so normal market forces don't make them visible nor work to manage their use. For another, the degradation is largely confined to tropical regions, yet I suspect most of us reading this live in temperate regions and don't really observe those changes.

Yet, amidst that gloomy projection, there is cause for optimism. They speak of "sustainability wedges" as an approach to help us have our cake and eat it, too, or at least to grow energy services and reduce greenhouse gas emissions.

The report is 48 pages long, so I've just skimmed it. I think it's well worth the time at least to skim it to become better informed on the current state of the world and current trends.

What does that mean for us in business? What does that mean for us as citizens? What are your thoughts?

Dealing with risk and uncertainty

Times are uncertain. Risks seem high. We may feel that the price of missteps is high; we know it's hard to decide what steps to take.

In situations such as this, how do you make decisions in and for your organization? How do you plan effective actions? How do you solve the inevitable problems that arise?

The German psychologist Dietrich Dörner, author of The Logic of Failure, has made a career of studying why people make mistakes and what we can do to improve. One of his key pieces of advice is to use computer simulation to get insight about the situations we face so that we can make better decisions in real life.

Perhaps today's uncertainties are your signal that the time is right to apply more systemic approaches in your work and to ground your planning, problem solving, and decision making with simulation that takes into account factors important to your business. Perhaps it's time to test and rehearse your plans before you implement them.

That's what we've been discussing here, and that's how I help others. If you're concerned that your standard approach to business may need augmentation in today's world, perhaps I can help you, too. Drop me an email or give me a call. There's no obligation—only opportunity.

The Age of Heretics: a review

I'm writing about a new book today, but first I have a disclaimer: I know the author, Art Kleiner, because I was on an extended panel discussion he led on organizational heresy that resulted in a small section of The Dance of Change: The Challenges to Sustaining Momentum in Learning Organizations. He and I have kept in touch from time to time since then, and he provided me a review copy of this book.

There. That's out of the way.

Art Kleiner has published a second edition of The Age of Heretics: A History of the Radical Thinkers Who Reinvented Corporate Management (J-B Warren Bennis Series). The executive summary: if you're in business, if you lead a business, if you consult to business, if you ever have thought of ways to make business work better, read this book!

Perhaps you read the first edition. So did I; I think I recommended it for the company library where I worked at the time and read it there. My recollection is that I liked that version, but I like this version so much more. Perhaps it's his new version; perhaps it's my added experience since I read that first edition (I no longer have easy access to check). Even if you read the first edition, read this one, too.

A heretic, in Art's view, is someone who simultaneously holds great loyalty to the organization to which they belong and a vision of a new truth the organization has yet to see. He has written about the evolution of organizational heresy by way of mini-biographies of archetypal heretics. There are too many for me to summarize, so let me simply refer to one as a way to whet your interest and to indicate what I think of the book.

I first discovered Chris Argyris's action science around 1992, about the time I began work with a group that eventually turned into a true high-performing work team. I had read The Fifth Discipline: The Art & Practice of The Learning Organization
and discovered reference to Argyris's work. As is often my custom when I read of new ideas, I like to find the original to learn more (perhaps I owe that to Dr. Malcolm R. MacPhail of Rice University, who would give extra credit in quantum mechanics for our reading related, primary research in its original language and writing summaries).

I picked up one of Argyris's books, probably about 400 pages long, and began to read. By the time I had read 50 pages, I had determined both that it was one of the most important books I had ever read and that I didn't have a clue how to apply its ideas. I kept reading.

At the same time, I was working with—managing—a team that had serious intra-group communications difficulties. I'd practice what I was discovering in meetings I held with them. Then I would come back to the book and try to discover where I had gone wrong. After a year or two of weekly meetings as experimental labs and after reading perhaps seven, eight, or more of Argyris's books, I discovered that the application of action science can facilitate breakthrough improvements in group productivity. I determined that action science has certain attributes:

• Action science requires great skills at discernment to see important incongruities in words that can help us improve our abilities to hold productive discussions in the presence of disagreements and even conflict. It also offers approaches to help us build our capabilities in discernment.
  
• Action science is a revolutionary approach that upends normal work cultures and offers the promise of real, revolutionary gains in productivity.
  
• There's an ethical principle that permeates action science. It's vitally important for each of us to find it and internalize what it means to us. That was, I think, central to my eventual understanding and use of action science.
  

Action science was perhaps the hardest material I've ever learned (even harder than some of the technical material I learned as an engineer). I think it was only the long, intense action research approach of reading, studying, reflecting, and doing (and often failing) that enabled me to comprehend and internalize it without a mentor or teacher.

Most books and articles I've read about action science (Bob Dick's and Tim Dalmau's Values in Action is a notable exception) attempt to make action science approachable, incremental, and easy to do. As important as some of those books are, I've come to the conclusion that those who see action science as anything but earthshakingly revolutionary and demanding of great personal courage and discernment have missed (or are hiding) the point.

Why this discussion? Because Art is the first writer I've seen who conveys that spirit in his description. He, like no other I've read, made that essence come alive. While you won't learn how to practice action science in the pages he devotes to Argyris's work, you may come away with a better impression of what it can do for you and for groups with which you work. Reading his words in conjunction with other material on action science may help you develop a deeper understanding and better practice of the approach.

Art did much the same for each of the heretics and their heresies throughout The Age of Heretics. He neither shied away from their warts nor downplayed the essence of their contributions. That has helped me put many past business and management developments into context, and that is why I recommend it so highly to you.

Now go read it!

The Creative Value Network

Ralph Windle has started a new blog. I'd like to welcome him and to feature his work, because I think he's focused on an important area: creating dialog, innovation, and progress at the intersection of the realms of science and the arts. Both groups (and more; the world doesn't lend itself to being divided into only two such groups, as classic as that grouping is) have much to offer the vital and urgent challenges we face, and the synergy of the two mindsets and the two sets of approaches could be vital for a number of reasons.

In times such as this, we have to work together to figure out our values and our priorities and to work together on the tough problems we face. I learned that over many years of work: you need to know your objectives, your goals, in order to make good decisions, and you need to involve all the people in the system if you want both a robust decision and a decision people will support. Robert Dugger made that same claim yesterday in a panel discussion called the "Committee for a Responsible Federal Budget Forum on Consequences of Federal Intervention in U.S. Markets" as presented on C-SPAN.

How does Ralph Windle figure into this? He and his Creative Value Network are focused on creating dialog among those in the sciences and the arts to foster innovation and creativity. Check it out, and join in the dialog; perhaps together you and the others can be part of making the world a bit (or maybe even a lot) better.

The Marblehead Letter

I've written about my musings on growth a number of times, even as I worried that my ideas might be controversial.

Now I've seen the Marblehead Letter, written by executives at a SoL conference in 2001, and I think those of you reading this blog might find it worthy of your time. Read both the full letter—it's only two pages long, and I think it states its questions better—and the summary, which hints at some of the signatories.

Note that the letter has questions, not answers, and note that the letter comes from people high in the ranks of major organizations.

I discovered this letter by reading Presence: An Exploration of Profound Change in People, Organizations, and Society, courtesy of InBubbleWrap and 800ceoread. For various reasons, that's been a hard book for me to get through, but I'm persevering (and those of you who have a copy can tell the page I've reached by this blog posting). Perhaps I'll blog more about it when I finish it.

What do you think? It's comforting to know that others are considering similar questions to the ones I've been raising. Question 3 is exactly what I want to work on, but reading it brings two thoughts:

• You can't address that one question in a vacuum; you have to consider their other questions and still more (for example) in the process. It is a systems issue on multiple levels.
  
• I wonder if they didn't go far enough in question 3. They want to reconceive growth. I wonder if and how and under what conditions overall sustained growth is possible and good for us. If, in aggregate, it is not (and I have yet to see evidence that the systems mantra of "there are always limits to growth" is false), I want to help find a new and successful way forward. While we have to address the long-term situation, I'm more interested in helping us figure out how to make the transition from growth to sustainability, whether on an organizational, societal, or personal level.
  

Those of you acquainted with some of the literature on growth will realize that a stable system doesn't mean there is no growth. For example, in a business sense, some technologies, products, or services outlive their usefulness, and their companies shrink or perhaps go out of business. Other technologies, products, or services are needed in increasing amounts, and their companies grow. Equilibrium in the aggregate doesn't require equilibrium in the details.

While I'm optimistic we'll figure out a way to deal with this, I still think the issue of growth is an integral part of one of the two major problems we face as a people. From what I read, we may well have exceeded the carrying capacity of the planet. If that be true, then these are important times, for the way we respond can likely have a major effect on the response of the systems in which we live, and the recovery of a system from overshoot can be harsh.

I really would welcome your comments on this.

Inspire your boss to great things

We all have bosses. We've all (hopefully) worked for really good bosses. We may have also had bosses who weren't nearly as good, at least in our eyes, and sometimes we're at a loss as to how we might deal with them.

James McCusker wrote Having image to live up to can inspire bosses. As he says, "[I]t's worth a try."

Of course, that presumes that the problem is "out there" with the boss, not with us. That's always worth testing.

Speaking of testing, if any of you have tried this approach that McCusker suggests, I'm curious how it worked.

Twittering away my life

Well, I'm not that into it, but I have started twittering. If you're a Twitter user, sign up to follow me, and I'll likely follow you, then, too.

Looking from the outside in...seven months and a trip later

Last January, Henrik Müller posted an article called "Amerika steht mit dem Rücken zur Wand" ("America stands with its back to the wall"). Now he's made a trip through the USA and written again in "Amerikas schwärzeste Stunde" ("America's Blackest Hour").

If you read German, check out the article, and let me know what you think. If you don't, here's the short version:

• The USA faces as serious a challenge as we've faced in years, perhaps as serious as the Great Depression.
  
• The difference between this challenge and many of the others since the Depression is that individual people are now impacted in real ways.
  
• While we have some number (he doesn't really guess how many) of tough years ahead of us, we have a way in our culture of getting through tough times successfully. He thinks our situation parallels that in Germany from 1993 through 2005, but he thinks we'll be more successful in breaking out.
  

If you do read German, feel free to add key points you think I missed. You can also read his comments in Google's translation.

What do you think? Maybe more importantly, where do you think we should be headed? What should business look like? How about the economy? How about society? How should we get there? Perhaps a return to 2006 isn't what we want or need for 2010. Feel free to add your ideas below.

Prediction, system dynamics, and Future-Fusion

Recently, I made the claim that we're better off focusing on adapting to the present than predicting the future. I've made similar claims in the past, too. I've even given one example in which predictions serve a useful purpose.

That's all a bit simplistic, of course. Even system dynamicists could be said to predict the future in a way: we show behavior over time we feel is more likely to occur (although we may warn people away from point predictions based on a behavior over time graph). In other words, I might suggest that your current policies could produce a boom and bust effect in your business, but I wouldn't want you to draw the conclusion that your business will grow another 172.3% by June 15, 2009 before taking a tumble that afternoon.

Because we all would like to know the future, I've experimented with blending system dynamics and Bayesian analysis to quantify the probability of a particular behavior pattern, for example. Of course, that probability is conditioned on both the historical data and the model being correct, which is a loophole big enough for a good-sized locomotive to run through: models are always incorrect. Still, I think this approach may give more useful insight in certain cases.

Now Kshanti Greene of Stottler Henke Assocates, Inc. has shown me a Bayesian tool they've developed called Future-Fusion, and I've been exploring it a bit. They are using Bayesian networks and the power of groups to get a better handle on what the future holds. Much as Data360 looks at the past, Future-Fusion attempts to look at the future. As of this writing, they've created four test areas which you can explore: the 2008 US presidential election, the Iraq war, corporate strategy, and energy. Try it out: learn how to use the system, see current predictions, and add your own (I think you only have to create a free account if you want to add your own predictions). Perhaps you'll learn something, and perhaps they will, too.

Kshanti has pointed out a recent addition to Future-Fusion that may intrigue some of you: time. They've enhanced their technology to allow limited dynamic execution of a network model, which begins to narrow the gap between Bayesian networks and system dynamics from the Bayesian network side, much as what I've tried has narrowed it from the system dynamics side. To try that out, go to the energy model, select a prediction (e.g., "Reduced SUV sales"), click "view graph," note the numbers, and then click "Next Time Step."

I think this is all still experimental in many ways, but it's a good opportunity to learn a bit about this technology by trying it out on real-life issues. I'll be curious what you discover.

Why are we here?

Why are we here in business, that is?

You can find lots of answers, and "making money" seems to crop up frequently, at least in informal conversations. Some of you know I used to work at Hewlett-Packard. At least at the time, it was governed to a large degree by "Bill and Dave stories": tales of how Bill Hewlett and Dave Packard responded in certain situations.

Today, thanks to Tom von Alten's note on Corporate blogging, I discovered Anna Mancini's blog called From the HP Archives… (she's the HP archivist) and this Dave Packard Quote.

Why are you in business? Why is your company in business? What is your contribution to society?

Bittersweet asphalt

No, it's not that I find asphalt bittersweet (I haven't tried tasting it). It's the news that I find bittersweet.

Five and a half years ago, I published Out of Gas: A Systems Perspective on Potential Petroleum-Fuel Depletion. In that column and in the accompanying simulation model, I suggested that delays due to debates over how to allocate shrinking petroleum stocks might hurt our ability to replace energy resources in a timely fashion.

Today, I read Asphalt shortage disrupts road projects. I'm sure you can find other examples, perhaps closer to your home, in which the imbalance in supply and demand of petroleum is leading companies to prioritize one usage over another, which can cause pain for the unfavored group.

Models such as this aren't designed to predict the future, at least in the sense that they tell you that a certain event will happen in a certain year. They're intended to give insights into the likely and potential ramifications of current and proposed policies, both formal and informal, that we've created. They're intended to help us test policies quickly, inexpensively, and at low risk, so that we can be more confident when we implement a policy in our organizations. They do not provide guarantees, but they can provide very useful and sometimes unexpected insights.

In which areas would you like to think more effectively about the effect your current policies could have on your organization's future?

How to act in tough times

We seem to be in tough economic times. (Did I hear "Duh" from the back row?) Tom Peters recently posted 26 Rules for Recessions. If your business is hurting, check it out. If it's doing really well right now, check it out anyway unless you're sure you'll never be hurting in the future.

I suspect those who think their business will never be hurting are mistaken, but they may not be open to this message today.

I suspect that you are an optimist with a grounding in reality, if you stick around here. I hope you're either not hurting or poised on the threshold of a transition that will help you succeed even more (see the second point).

If your business is hurting, or if it's doing well but you'd like to prepare for the next transition, whatever that is, let's talk.

Genesys can tell you if it's good enough for you

I've written a lot recently about the benefits of working without travel or commuting; I think this will be my last for a while. Genesys Conferencing has a calculator that can tell you how much you save by holding a remote, synchronous meeting instead of traveling to one place to meet. This fits nicely in the sequence of "It's good enough for ..." postings.

Naturally, this calculator is an ad for Genesys; I'll let them own the responsibility for the accuracy of their calculator. I do regularly work with their operators in meetings I moderate, and I will say that I've been pleased with their professionalism and friendliness.

How can I help you make your next meeting more productive, less expensive, and greener?

It's good enough for the whole Chorus

First it was Kate Lister, then it was Phil Woolas, then it was Fast Company, and now it's a whole Chorus. See how a small software company has become totally virtual.

It's good enough for Fast Company

I wasn't planning on continuing this thread, but Fast Company sent me a pertinent link this morning, predicting that "Within five years, technology will obliterate the need for business travel."

While I can conceive of video offering certain benefits, I wouldn't suggest waiting for technological solutions. Perhaps one of the most engaging and effective courses I've ever attended was the all-text-based email AREOL, put on by Bob Dick at Southern Cross University twice a year since 1995 (the year I took it). The key lies in the people and the process, not necessarily the advanced technology.

How can I help you today?

It's good enough for Phil Woolas

Yesterday I wrote about working without travel or commuting. Apparently Phil Woolas, UK Minister of State for the Environment, sees things the same way; he delivered a keynote speech at the Annual Climate Change Summit in Sydney while remaining in London.

What have you been doing to reduce GHG emissions, reduce fuel usage, and thereby improve productivity? I'm curious, and I'd welcome your comments.

By the way, it's my experience that you don't need a lot of technology to make working remotely successful; you just need to think and plan carefully how you'll be effective.

Why go to work today?

Why go, indeed?

Some time ago, I described why I think most of you have had me work remotely over the last eight and a half years and how that has helped you and society. Now Kate Lister makes similar points on The Oil Drum.

Environmental optimism: an example

Glen Hiemstra commented on my blog yesterday, and he also blogged about Al Gore's speech calling for a 10-year program to end the use of carbon-based energy sources for generating electricity.

Al Gore has presented a great example of environmental optimism on a grand scale, and he's done it in a manner I found challenging and uplifting, not depressing and defeatist. You've probably read about it by now, but I encourage you to watch the video.

Environmental optimism

If you've read my blog for a while, you may you wonder: why do I spend so much time talking about environmental issues on a business blog?

The answer is simple: business operates in the environment, and we have no choice in the matter. The environment seems poised to make a few changes right now. That seems fair; it's apparently doing it largely in response to changes we've made. In times of transition, there are usually economic winners and losers. We've seen that building inefficient SUVs is not a winning strategy now (or, presumably, ever again); I want to help you (and me) think about the areas in which we can win.

Which brings me to my main point: optimism. Sometimes I post items that could seem depressing; I think my previous posting fits that description.

There are two steps to change. The first involves becoming motivated, and the second involves doing something. Facing up to the facts, as best we know them, is arguably the first thing we have to do. As we continue to get new data (even as the fundamental message hasn't changed in a while), I think it's important to keep looking at the science so we base our actions on the best insights we have.

I happened to see Great Read! Important Read! in Tom Peters' dispatches from the new world of work. While I haven't read Amanda Ripley's The Unthinkable: Who Survives When Disaster Strikes - and Why, the subject of his post, yet, I think the concept meshes well with my idea that we are the ones who can make a difference. We can do it through business, we can do it personally, and we can do it through our governments. I think it's important to push forward on all three dimensions and not to let difficulties in one of those three areas prevent us from making progress in the remaining ones.

Is that a call to become dour prophets of doom? I sincerely hope not. While I think we have to make changes soon, I think we can and should do it with cheer, energy, and a spirit of optimistic entrepreneurialism. That's one of the things I liked about teaching at Bainbridge Graduate Institute: everyone there had an upbeat, infectious approach to life, to business, to social justice, and to the environment. That's one of the things I like about Bernie DeKoven's Junkyard Sports: he takes trash that no one wants and turns it into the stuff of play. That's one of the things I like about the growing interest in wind power, photovoltaic arrays, and high-efficiency transportation: the business system is responding to a real need. I'll let you have fun and success finding (or, better, creating) more examples.

What do you think?

Alternative energy: not as easy as it sounds?

Five and a half years ago, Pegasus Communications published my Out of Gas: A Systems Perspective on Potential Petroleum-Fuel Depletion. If you try out the downloadable model (see the column for instructions), you will discover my concern that we wouldn't start soon enough or be able to move fast enough to replace petroleum. Such delays could have a significant, perhaps massive, impact on society and on our economies.

Yesterday Forbes published America's Best Places For Alternative Energy and noted SRI's estimates that we need "[r]oughly 4.2 billion solar rooftops, 3 million wind turbines, 2,500 nuclear power plants or 200 Three Gorges Dams" to replace the amount of oil we use annually and that "no single category of renewable energy is growing anywhere near the speed it needs to bear the full brunt of displacing carbon-emitting fossil fuels anytime soon."

So my simple concept model identified a problem that's substantiated by more research at SRI (and by our daily experience, for if alternative energy sources were fully replacing petroleum, would we see overall energy price increases?).

That's part of the message of Is predicting the future really worthwhile?. My simple model didn't predict the future.

• It did identify past patterns of action that could credibly lead to a problem.
• It did use information that's known reasonably well (quantities of petroleum, even admitting that we don't know reserves as well as we'd like, as well as something about the dynamics of petroleum discovery and use) and apply simulation to explore what ramifications those factors might have over time.
  
• It did allow one to try different scenarios to see whether one's conclusions were sensitive to assumptions. For example, does it make a fundamental difference if petroleum reserves are 25% higher than assumed? (No, it just changes the timing of the problem.)
  
• It did provide a test bed for exploring strategies to see which might be more effective.
  

More research (in this case, in the form of the SRI study) substantiates the nature of the problem and helps us understand its magnitude and timing.

What systems are at work in your organization, your business, or your part of the world that might lead to consequences you don't want? How might you test your ideas? What can you change that might lead to better results? How might you test those ideas?

Is predicting the future really worthwhile?

Predicting the future, also called forecasting, is a popular business activity. Some managers want to know what the future holds so they can plan to accommodate it.

Yet I'm reminded by The Oil Drum: Europe's The Fantasy World of the UK Government that our record in forecasting isn't so great.

In that report, the U.K. government published a prediction on May 7, 2008 that gave four oil price scenarios. In the highest of the four, the "high high scenario," the price of oil hits $107 per barrel in 2010 and stabilizes at $150 per barrel by 2015.

As of my writing this, upstreamonline.com shows crude oil spot prices ranging from $138.96 to $152.58.

In 58 days, we've hit the prices they forecast for 7 years in the future.

Instead of predicting the future and then designing a business system to work well if the prediction is true, wouldn't it be better to design a business system that responds appropriately to whatever the future brings?

Isn't that hard? Yes, but so, apparently, is prediction.

That's one of the goals of system dynamics: to give us models which we can test against multiple futures to see if our modeled business systems work as well as we'd like independently of the outside environment. Once we are satisfied with the insights we've gained from modeling, we can implement our real business system with higher confidence it will work as we expect no matter what the future throws at it.

If you'd like to talk about such adaptive business systems, give me a call.

Washington Small Business Fair

You live in Washington State, and you own or are thinking about starting a small business. You've got questions, and you'd like to get some of those answered for free.

In that case, put the free Washington Small Business Fair in Renton on your calendar for Saturday, September 6. I went years ago, and I found it well worth my time.

Music, leadership, and effective presentations

I've written about music before, I've written about Benjamin Zander and his presentation style before, and I've written about leadership before.

Now you can see all three topics together in Not aloof and detached, but deeply, deeply human, courtesy of TED and Andrew Taylor's The Artful Manager. It takes about 20 minutes, but stay with it; there are good messages all the way to the end.

Hiring is hard: do it well

Patrick Gray said it well in The IT talent crunch and why it’s the CIO’s fault: hire for the ability to learn for the future, not for the certifications of the past.

Higher oil prices help business

Last year, I made a rash generalization: "Riches can be made off the transitions from one status quo to the other." Now the Wall Street Journal has posted Green Products Gain From New Price Equation, listing a number of products that are gaining a significant price advantage over their competitors by virtue of being green in a time of rising oil-related prices.

Thanks to Grist for the tip.

Sustainable Energy Solutions

Recently, I wrote about a non-credit course called Sustainable Energy Solutions to be offered this summer by Bainbridge Graduate Institute, where I'm teaching this spring.

Some of you may have been interested but wished for a bit less expensive course, and BGI seems to have heard you: they've reduced the price of this course to $1,500. If you're interested, hurry and sign up; the class starts soon. Tell Jim Stretch that you read about it here.

The Toyota Communications System and sliduments

Presentation Zen says it all.

Is Linus Torvalds lazy?

You've read about lazy employees before. Now I read from Jason Stamper that Linus Torvalds has said, “Intelligence is the ability to avoid doing work, yet getting the work done.” Is he lazy—or simply effective?

Making a big difference

Business Week just published John Hagel and John Seely Brown's Changing the World from the Edge describing how University of California, Berkeley students are making a real difference in the world, this time in issues such as "energy efficiency, Third World poverty and disease, and sustainable housing, among others." By the end, they summarize lessons those of us in business might find useful. I like all three of their three lessons, and I'm looking for ways to apply them, too. If you have suggestions, comment here, or get in touch.

That's related to my recent posting called It's a new world in business education. In all these cases, strong change leadership is again coming out of universities and focused on making the world a better place.

Thanks again to the TP! Wire service for the link.

More on workweeks

I've written before about the lazy worker (a very popular posting), an ethical advantage to shorter work weeks, and how managers' jobs, done well, can make their employees' (and their) workweeks shorter.

In All In A Days Work on the Fast Company site, Dave Roberts writes of evidence that shorter workweeks and higher productivity may go together. What do you think?

Thanks to the TP! Wire Service for the tip.

It's a new world in business education

I began to notice that last winter, as I taught in the highly-rated Information School at the University of Washington, for they seemed very focused on the intersection of information, technology, and people issues, not just one or the other. I like that; it reminds us that people are closer to the goal than technology and that technology is (or should be) in service to people.

I'm noticing it even more this spring, as I co-teach at the also highly-rated Bainbridge Graduate Institute. BGI, too, is about intersection and synergy—in this case, the intersection of business and sustainability—as they integrate sustainability and business in every course they offer.

You can read more of the details on their Web site; I'll content myself to say it really seems true: people there have made and are making a difference both in business and in sustainability, they have a passion for what they do, and they like to have fun both as part of making a difference and as part of living. Associating with the faculty, the administration, and perhaps especially the students gives me hope for the future.

If you're interested in BGI, there are at least three ways that you can partake. They offer an MBA in Sustainable Business, which may fit some of you quite well. Others of you may find one of their two certificate programs to be more suitable.

This summer, they're starting a third option: a non-credit course called Sustainable Energy Solutions. In these times of seemingly never-ending increases in the price of petroleum and petroleum products, this course may be very timely for some of you.

The price of oil

I've written before that history provides another form of simulation: while it includes many confounding factors, it does offer important lessons for us.

Now Ugo Bardi has explored what might happen to the price of oil, based on what happened to a prior generation's non-renewable resource.

What do you think of his ideas? What impact might this have on the way you do business? On the way you should do business?

What is progress?

It's easy to think progress is measured by GDP, trade balances, or the number of things we have; that's what we read and hear about in the news. Yet there's an undercurrent that suggests such views have it all backwards.

The Glaser Progress Foundation has a program area devoted to measuring progress. Go there to see a video or hear an audio of a 1968 speech by Robert Kennedy suggesting that GDP measures all the unimportant things or to research articles they've assembled.

Thanks to Joost Bonsen's Maximizing Progress for the link. Thanks, too, to Cliff Havener and his Meaning : The Secret of Being Alive. I read that years ago, and I'm pretty certain he makes the point that Lord Kelvin was wrong: all the important things—love, peace, faith, art, ...—share the attribute that they can't be measured by numbers. I've looked, though, and can't find the reference; if anyone can provide me the page number, I'd appreciate it.

Food and fuel in the news

DrumBeat: April 25, 2008 offered two particularly interesting links.

First, Time offered How to End the Global Food Shortage, their suggestion on three actions we can take in the short term. I'm not sure I see a long-term solution there, for I sense that global population is still growing exponentially, while their solutions seem focused on taking current food production to a new level, not creating matching exponential growth in the production and distribution of food. Put in systems terms, I sense population is still driven by a reinforcing loop, while the three Time proposals seem driven by goal-seeking loops. The short-term effects do seem beneficial, as long as we don't forget the longer term.

Second, oil financier Matt Simmons has published more presentations. Check out The 21st Century Energy Crisis Has Arrived. Slides 9-10 should not be a surprise to any who took IMT 586 at the University of Washington last winter or who have worked the challenge on pages 212-213 in John Sterman's Business Dynamics: Systems Thinking and Modeling for a Complex World with CD-ROM.

While you're there, also see his Are We Nearing The Peak Of Fossil Fuel Energy? Has Twilight In The Desert Begun? He does offer optimism, but only if we act well and only after some, um, "transitional" times. If anything, I wonder if his estimate of the rate of decline of production is optimistic, for, with the high raw demand for petroleum these days, I suspect we will deplete available reserves at a rather rapid rate.

Fooled by Randomness: some thoughts

I read and wrote about Nassim Taleb's The Black Swan some time ago; now I'm reading his Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets.

I'm struck by the application of his ideas to environmental and ecological issues. It seems as if we're placing most of our societal bets on growth, a bet that has played well for centuries. Given the current news, though, those seem like some of the investment bets Taleb describes as foolhardy. A prudent "investor" (citizen or business person) at this stage in the Earth's development might place most or all money on bets that can't lose much. Betting on the ability of the planet to absorb more growth, on nonrenewable energy sources to remain plentiful, or on technology to increase efficiencies sufficiently yet again seems like a risky bet, given the news of the day (and year and decade).

That's consistent with the precautionary principle; do check out THE YEAR IN IDEAS: A TO Z.; Precautionary Principle from The New York Times.

What do you think?

For more on Taleb's book, see words by Andrew Gelman, Wikipedia, and James Glassman.

Business, Earth Day, and other thoughts

After teaching at my first Bainbridge Graduate Institute Intensive, I am very impressed. The administration, faculty, and student body seem, in person, even more focused on and effective with both words in "sustainable business" than they say they are. I confess that this MBA program truly excites me, and I am glad to play a small part in its work.

That led me to think about business, business practices, and Earth Day tomorrow (there is another Earth Day that passed last month). A bit of looking turned up Nice Guys Don't Finish Last, a Business Week article that indicates that international executives seem to think being green helps them. You can see more in The Economist's report.

A bit more looking turned up Climate Counts, which promises to help us as consumers and as investors, think about which companies have made more strides than others. If you're in business, see their scorecard to think about various dimensions to climate impact. While we might quibble about the weighting of the various dimensions and the focus on climate alone instead of also including usage of nonrenewable resources, social justice, and other issues of corporate social responsibility, we can probably learn from reviewing their measures. Even though I think my overall footprint as a company is quite small, it's prompting me to make an assessment and to think about additional factors that I think might be important.

If you're looking for other thoughts for Earth Day, check out the Donella Meadows Archive at the Sustainability Institute. After being part of the team that did the research and produced the original Club of Rome report, she wrote the weekly Global Citizen, which you can peruse in that archive. There's plenty of food for thought there.

What suggestions and thoughts do you have?

Grow or die

The title is a rough quotation from an interview I read by a CEO recently. It doesn't matter who it was; it's a common business notion, I sense.

I understand the sentiment, really I do. There is a real fear that, if we don't grow, we'll be overtaken by those who do grow. Or that we'll become stagnant and stale.

Yet I'm mindful that, if we all grow, we'll surely die (or at least suffer), too. Read Limits to Growth, if you're uncertain about my statement. Note that "limits to growth" in that book is not a statement of an environmentalist's hope; it's a statement of fact. We will face limits to growth. We can choose the nature of those limits (or at least we have had the chance), but stop growing we will. You can't exceed the carrying capacity of an environment forever.

So, if it's true that we all (or most all) want to grow (our companies, our houses, ...), and if it's true that we will face (and are already facing) real limits to that growth, what do we do?

I've written about growth a number of times, but I admit that I don't have all or even many of the answers yet. Perhaps I'll find out more in the next few months, for I'm co-teaching a systems thinking course at Bainbridge Graduate Institute.

If you're not familiar with BGI yet, their vision is "To infuse environmentally and socially responsible business innovation into general business practice by transforming business education," and they've got a good reputation in this area.

As I did when I taught system dynamics at the University of Washington, I suspect I'll learn a lot here, this time with a distinct focus on sustainability and business. I'm really looking forward to this experience. (And, as I did last time, I will refrain from telling you anything that goes on in class unless I have explicit permission, but I may tell you a bit about how I grew.)

One way to lose focus

Losing focus can be so easy. I understand. When I was growing up, I used to play the horn and didn't stop until I was well into my twenties. When I focused on making music, I really enjoyed it, but, if I ever paid attention to the presence of an audience or the state of my performance, I would get lost in a mild case of the nerves. Professionals know how to deal with such things; I was not a professional musician.

In Unschlüssigkeit bei Toyota?, Paul Bayer wonders about Toyota's president Katsuaki Watanabe's recent speech at the Detroit auto show. He translates part of Chet Richards' Ford: Faint signs of life, in which Richards wonders if that's a sign that Toyota has taken its focus away from making the best cars to being the biggest company.

My purpose here is not to criticize (or even analyze) Toyota (or Ford or any other company); as Bayer notes, there are other explanations for Watanabe-san's speech that don't bode ill for Toyota. My purpose is to use those comments to note how easy it is to shift one's focus from that which brought success to the trappings of that success and the risk that such a shift might destroy both the success and its trappings.

System dynamics, black swans, and the management of business

I'm currently reading Nassim Nicholas Taleb's The Black Swan: The Impact of the Highly Improbable. While I intend to tell you more of what I think when I'm finished, I have an early impression, based on stories such as what he calls "Hume's problem" (or the turkey problem). That's a problem in which everything seems to be getting better and better, only to change direction suddenly and drastically for the worse. In his example, the turkey sees life as a daily succession of friendly humans offering food, only to have it cut short in a manner seemingly quite out of character for life as the turkey has perceived it. (As Taleb points out, it all makes eminent sense to the butcher.)

I think that's part of the reason for system dynamics as yet another tool for thinking and working. As Geoff Coyle points out in his System Dynamics Modelling: A Practical Approach, top management is concerned about things such as the consequences of actions, the likely future, and robustness against uncertainty (p. 15). One of the basic parts of the system dynamics approach is to challenge preconceived notions of the extent of the system causing the current situation: are we looking over a broad enough time span, are we including enough of the actors and actions, and are we paying attention to feedback effects (what Taleb calls recursive effects on p. xxii), where something we do today might come back and affect the situation we face tomorrow?

While there are no guarantees, that unfortunate turkey, had she had good training in system dynamics (or a competent system dynamicist at her side), might have been inspired to look at life over a 5-10 year time span, not just the few months she had experienced. That might have surfaced the fate that led to her demise as part of a regular pattern (albeit one that occurred rarely compared to her lifespan). Had she looked not only at the friendly human feeding her and the other turkeys eating with her, she might have noticed the butcher looking eagerly over the fence from time to time and asked about his role in her life. Had she realized the implications of those observations, she might have decided not to become quite so friendly with her "caretaker," she might have decided not to eat nearly as much (if she were scrawny, might her fate have been different?), and she might even have encouraged the other turkeys to join her in an escape attempt.

Now I don't think that the use of system dynamics conveys infallibility; in fact, that's why I'm reading Taleb's work, to figure out more places my insights may be fallible so that I can make them more robust.

Taleb advocates tinkering as a way to make progress; I see system dynamics as a way to tinker faster and think more effectively in support of your (and my) goal of more effective action.

While my comments may be out of the main focus of Taleb's thesis (system dynamicists tend to focus on the deterministic, not the random, even as they seek to help you be able to respond better in the presence of the random), I don't yet see them in contradiction. I offer them to you in the hopes they are of use to you. Now it's my (and your) task to try to disconfirm them; the longer we can't, the greater the likelihood there's something worth attending to!

If you want to tinker faster with the situation you find yourself in but don't want to risk your business each time you tinker, let's talk.

Thanks to Andrew Gelman for his posts that led me to Taleb's work.

Looking from the outside in...in English

Realizing that the majority of those reading this blog may not read German, I put together a quick summary of Henrik Müller's arguments to which I pointed last Friday.

In his most recent article, he claims that, in a somewhat healthy economy, we have three feedback loops that would stabilize our economy and dampen out our current problems:

• People and the government would spend more to stabilize consumption.
  
  
• Government would borrow more in order to support its temporarily increased spending.
  
  
• The Fed would lower rates to encourage consumption (and, presumably, investment).

He claims all three are at their limits here. He quotes an OECD number that says our savings rate is -1.0%, and housing values are dropping, so we have nothing left to spend.

He says our Federal budget deficit is only 3% of the GDP, and our debt, at 60% of the GDP, is 60% beneath the norm in Europe, so we could increase the debt to try to pull us out. Unfortunately, because we save so little, the only people who can buy that debt are foreigners.

Finally, while the Fed has room to lower the rate, he sees banks as ready to absorb any excess cash rather than loan it out, and he worries about inflationary pressures that may present, thanks in part to an ever-weakening dollar.

In the current political scene, he sees candidates pushing protectionist agendas and hope, while he sees our real hope as lying in global product and capital markets. In fact, the only good news he sees is that the devalued dollar has increased exports and that foreign governments seem ready to invest huge sums in US banks, and he's worried that we don't see that for the good news it is.

What do you think? If you read German (especially if you read it natively), what important points do you think I missed from the two articles?