Archive | July 2012

Whatever happened to modern thought?

I decided to refresh my blog appearance, and come forth with my identity.  Therefore, it’s ironically apropos for today’s entry, written by a reader who would like to remain anonymous.

I am delighted that someone wanted to use this space for thoughtful analysis.  I am totally open to anyone who would be interested in providing relevant analysis and stories, in addition to short comments and feedback.  I do reserve the right to edit; however, I will not publish the edited version without consulting with you first.

Here is today’s entry on Modern Thought, by anonymous:


By “modern thought” I mean the commitment to eschew superstition, prejudice, dogma, the “Vulgarly Received Notion of Nature” and other preconceptions, and to review all reports with a calm balance of

(a) skepticism (the report might be wrong, and indeed the more sensational the report or its consequences the greater the probability that it is wrong);

(b) optimism or willingness to suspend disbelief (most actual discoveries were at first reports of something potentially sensational, later proven to be right);

(c)  curiosity and education (an interest in examining the report, and the ability to do so critically to develop an informed opinion as to what constitutes proper proof of it being right or wrong); and

(d) maturity (the acceptance of what is proven right and the self-driven search for educated responses).

Sadly, this commitment was “modern” back in the Age of Enlightenment, and ever since its dawn has been confronted by Mysticism, Romanticism, and countless other Isms spawned in three centuries of counter-enlightenment backlash.  So fast-forward to 2012 and please bear with me as I dive into meditation upon a style of thinking, a “thought-world” perhaps, that I believe is one of the more dangerous manifestations of counter-enlightenment backlash.

Mt. Rushmore, Theodore Roosevelt closeup.

Mt. Rushmore, Theodore Roosevelt closeup. (Photo credit: Wikipedia)

Regulatory thinking.

The role of government and governmental authority in combating, reducing and eventually nearly eliminating the horrific health and safety impact of the industrial age crystallized during the presidency of Theodore Roosevelt, who imposed federal regulation upon, among other interests, the meat packing industry, financial trusts, and monopolies.  (By way of acknowledging Mr. Roosevelt’s monumental accomplishments, a generation after his presidency his likeness was carved onto Mount Rushmore.  Of course, three generations after that his name has ceased being mentioned in American political discourse.)  And over the years since, governmental regulators have evolved from being heroic protectors against massively widespread abuse to being mindless enforcers of abusive masses of microregulations (which may in part explain our present politicians’ eagerness to forget the legacy of Theodore Roosevelt).  But let me switch this train of thought onto the track of what I really wanted to write about:  how modern regulatory thinking diverges from the commitments of what used to be modern thought, to the point where regulatory thinking is now an ugly and unnecessary blight upon our technical and scientific enterprise.  I write here about two particular dimensions of this divergence.

Failing to understand “clustering.”

When bad things of a certain class happen at the rate of, say, 12000 per year, regulators charged with preventing this class of bad things are naturally working on ways to reduce their frequency.  Our preconceived notion is that these bad things should happen at a frequency of about 1000 per month, and if next month 2000 of these bad things were to happen, we and the regulators would be especially concerned, not just with how to reduce the overall frequency but even more urgently with what caused this frightening increase in the frequency; clearly, what was bad before is now suddenly twice as bad.   Such is our prejudice, our preconception; and luckily for us all, this preconception is correct: if proven to be right, the report of a sudden doubling of cases from 1000 per month to 2000 per month is far beyond statistically probable variability and indicates something systematic has changed.

As modern thinkers our maturity requires us to find out what has changed, or at least support those charged with finding out what has changed, and change it back to minimize future harm.  We might even support the use of legal compulsion to find out what has changed.

View 1 (same event, see the following picture): Resources dedicated to accomplishment

But suppose now another category of bad things has been happening at the rate of 1 per month, and next month 2 of these bad things happen.  The most common regulatory thinking views this report as a bad situation suddenly becoming twice as bad, and regulators rush forth to identify what has changed, and feel empowered to use legal compulsion to find it.  As you the reader will have correctly guessed, the doubling of cases from one per month to two, so long as it does not persist for additional months, is well within statistically probable variability, and does not indicate that anything systematic has changed.  Modern thought as I believe in it would commit us to set aside our preconception that “doubling indicates something systematic has changed.” Modern thought would have us use our education to figure out or, for those of us not so nimble with mathematics, to learn from our statisticians’ formulas, that when the average is 1 per month, having only 1 per month is only 37% probable and having 2 in one month is 19% probable. Modern thought would have us exercise due diligence in checking for any systematic change but also to refrain from excessive or abusive measures when it can’t be found, knowing that it is statistically quite likely such systematic change doesn’t exist.

For completeness’ sake, having 0 in any month, or having 3 in any month, are 36% and 6% probable respectively, and by common regulatory thinking might be construed respectively as triumphs and abject failures of regulatory oversight.  I submit that such common regulatory thinking has driven our regulators to ignore and even deny modern thought and the very tenants of Enlightenment.  It is especially ironic, and tragic, that those who regulate aspects of our scientific and technical enterprise are using a mode of thinking that defies the enlightenment hard-won by that very enterprise, and is driving the enterprise to failure (or perhaps even worse, to India and China).

View 2 (same event): Resources dedicated to regulations

It is sadly true that the one bad event per month in 37% of the months, and the two per month in 19% of the months, can have unpleasant or even tragic impact upon the people involved.  I am not opposed to finding effective ways to minimize occurrences of events having tragic consequences.  I am opposed to the bureaucratically abusive refusal to recognize the difference between what is statistical and what is systematic.

Please note also, if three months from now these events are still occurring at a rate of 2 or more per month, then we are indeed outside the usual statistical variability, and the modern thinker would very correctly determine that something systematic has probably changed.  Isolated departures from statistical norms are statistically inevitable.  Prolonged and persistent departures from statistical norms are oxymorons, because by definition the behavior of any system cannot exhibit persistent departures from statistical norms, and believing that a system can is to deny modern thought.  There can be no paradox; something systematic has changed the statistical norm from what it “used to be” and the modern thinker should be looking for what that is.

Section summary:  When the occurrences of events are summed over the same time period that gives them unit probability, they will give the appearance of occasional clustering.  There probably isn’t a guilty participant, and attempts to identify the guilty or to punish all participants as if they were guilty is a Kafkaesque hybrid of the medieval and the insane.  Persistent and prolonged clustering, however, does indicate a systematic change arising from a cause or a potentially guilty participant, and the modern thinker will be curious about who or what it is.

How many on this list warrant regulations?

Denying the Third Law of Thermodynamics.

The Third Law of Thermodynamics is another of the many triumphs of the Age of Enlightenment.  The most common statement of the Third Law is that entropy approaches zero as absolute temperature approaches zero.  What is more relevant here is the corollary:  entropy of a material system is positive whenever absolute temperature is above zero.  What is even more relevant emerges when we replace “entropy” with “imperfections” and “temperature” with “energy,” and restate this corollary as:  Whenever there is enough energy present in a system to accomplish anything, then there are accompanying imperfections in that same system.  So, point 1:  Imperfection inevitably accompanies the ability to accomplish.

Two additional corollaries of the Third Law:  Absolute zero temperature cannot be reached in a finite number of operations, therefore eliminating every imperfection is impossible without expending infinite effort (point 2), and, because reducing entropy is inherently connected with lowering the temperature, attempts to eliminate imperfections will also cut back on the amount of energy available to accomplish anything (point 3).

Taken together, points 1, 2, and 3 drive a message that may be unwelcome to those who think perfection can be achieved by more burdensome regulation or more aggressive enforcement.  Indeed anyone, be (s)he a scientist or a citizen, who thinks that perfection is achievable or that imperfect systems or organizations should be disbanded because perfection has not been achieved, is at best indulging in superstition.

Here again I’ll interject a personal sentiment:  The Third Law dictates that imperfections will exist in any system having the energy to make accomplishments.  It does not dictate that imperfections be deadly, nor even particularly harmful.  We can, and up to a sensible point we should, make our gadgets, our governments, our workplaces, our organizations, our homes, better.  Eliminating deadly imperfections should have our highest priority.  But we need not disband, and probably shouldn’t even punish, an organization for the reason that it has not eliminated all error and has not achieved perfection.  (We should be less tolerant of an organization that has refused to combat outright criminal behavior.)  But every step we take in redirecting energy (tangible or figurative) away from accomplishments toward attempting to eliminate imperfections, takes us further on the path to exhaustion and bankruptcy in futile denial of the Third Law of Thermodynamics.

Section summary: Every organization, every system, has only finite energy (resources) available to it, and while we can invest this energy (these resources) in tangible accomplishments and/or attempts to achieve perfection, the Third Law of Thermodynamics informs us that the organization can only be perfect when resources are exhausted and the organization is no longer doing anything.  When we receive reports that our organizations or systems are imperfect, modern thought calls for us to exercise our curiosity and maturity, and to seek an allocation of resources that is a sensible balance between tangible accomplishment and imperfection minimization.  Today’s regulatory thinking denies that there can be a sensible balance, ignores the Third Law, forces all available resources to be expended on imperfection elimination, renames this expense as “accomplishment,” and proceeds with cynical confidence that modern thought won’t catch on.

Till next time,

Staying Sane and Charging Ahead.

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A Lesson From The Libor Scandal

Here is an interesting twist: “First mover advantage” can be applied to responses to scandalous situations.  Barclays Bank, being the first that was caught in the Libor scandal, was fined only $450 million.  I said “only” because that sum is but a small dent in the bank’s assets, chump change, an operational cost.  And chances are likely that any additional costs from damage control, lawsuits, or temporary revenue loss will be subtly imposed on customers.

First mover advantage

First mover advantage (Photo credit: rennygleeson)

Irony of ironies, the “first mover” advantage also applies here.  WHEN others in this massive scandal are caught and fined/punished, the late-comers are likely to bear heavier burdens.

So here is the lesson to be considered:  When a mistake, big or small, happens, own up quickly.  However reluctant the owner of the mistake might feel, taking ownership will paradoxically allow the entity to move on/forward more quickly, assuming owning up doesn’t lead to criminal prosecution.  Personally, I would like to see criminal prosecutions in the dozens of individuals responsible for this scandal.  For a large organization like Barclays, a quick house-cleaning would allow really hard-working employees to pick up the pieces and regroup.

But this lesson assumes that the people involved have some standards by which to detect the signs when something has gone awry.  What happens more often is “escalation of commitment” in which management digs in and keeps covering up with layers of white lies, manipulations, and downright unethical and illegal activities, while all the time thinking that they are doing the right things! (see previous entry for the logic)

To continue peeling this onion, how then does management ensure integrity and humility, particularly during crises?  Spend less time in closed-door meetings with colleagues of the same rank.  Invite a few people “outside” the top rank to some of these meetings.  Talk to people handling the frontline duties regularly.  Most importantly, when you think you are absolutely sure of your decision – it can’t possibly go wrong – discuss this decision with at least three people whose thinking styles and worldviews are different from yours.  Try it on, you may be pleasantly surprised and learn something new.

In one of the interviews on Moyers & Company, a former CEO said something about the need for regulations for business (paraphrasing):  If our car has no brakes, we’d drive very slowly and carefully.  When the brakes function reliably, we can drive much faster.   Author’s note:  Obviously, you still need to drive carefully, but now you have confidence in the car.

So, do you have good brakes in your organization/system?  What do they look like?

Till next time,

Staying Sane and Charging Ahead.

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The Libor Scandal – Words create reality, or reality produces words?

Yet another scandal in the business world.  Shocking!

The Libor (London interbank offered rate) scandal concerns how Barclays Bank manipulated the benchmark rate.  Google “Libor scandal,” and you’ll get your heart’s content of reading materials.  Most likely, Barclays was only the first to be caught; from the cozy club of financiers, more will fall.


Barclays (Photo credit: bbodien)

Finance is probably the weakest link in my business education, so I am not getting into the financial implications of this latest scandal.  What has fascinated me about this imbroglio is the management’s attitude.  Once again, the top executives have insulated themselves from the everyday lives of people and accorded themselves a different set of ethical standards.  One particular example captured the real “spirit” of these high officials.  An executive from Barclays tried to defend their illegal act as no more problematic than the other banks, “We are clean, but we are dirty-clean, rather than clean-clean.”  They really do live in a different world; they even have their own language code.  Dirty-clean? Said with a straight face?!

Here is my rationalization of how the top executives have created their own world:  From intergroup dynamics, we learn that each group constructs its own set of perimeters within which to form the group identity and rally around their goals.  Over time, the boundaries each group delineates for itself serve as walls; the more they feel threatened, the harder the walls become.  I contend that since the people at the higher ranks belong by definition to a small group size, their group boundaries are much less permeable than the boundaries of larger groups.  The more criticism they sense coming their way, the more they want to protect themselves, usually by blocking input from any different perspectives.  When they find ways to justify and rationalize their decisions, by conferring with each other in the same group circle, they really believe their words.  Hence, they rarely see that they are actually lying, and or behaving inappropriately.

NPR reported a story on psychologists studying why people behave unethically or immorally.  Those who commit such acts are not always “bad” people; most of them are wonderful individuals.  (I have difficulty accepting that about the executive saying the above “dirty-clean” nonsense.  But I am willing to be proven wrong.)  However, once they find themselves in a bind and they frame their situation strictly and narrowly in “business transaction” terms, their rationality/rationale takes on a different tone.  The first “small” unethical and borderline-illegal act becomes the thread that unspools the following yarn of developments.  Until they are caught, they may still delude themselves that what they are doing is never selfish.

Oh, by the way, Mr. Diamond, the CEO of Barclays who stepped down from this fiasco, will not receive his $31 million bonus.  I don’t know if I should cry or just sigh.

Diamond lattice

Diamond lattice (Photo credit: vitroid)

So, the question in the title is essentially the chicken and egg metaphor.  How do you ensure that your socially constructed reality is in congruence with the moral and ethical standards of society at large?

Till next time,

Staying Sane and Charging Ahead.

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A Dual Between Sherlock & Sheldon

I think Sherlock could dance rings around Sheldon, all the time.

I have never been enthusiastic about personality tests or typing.  However, much as I dislike being boxed in, or categorized, I do value the information and knowledge some of these tests offer. Myers-Briggs is one of the more common and, I think, one of the more useful. Myers-Briggs addresses four dimensions of personality types: Introversion-Extroversion; Sensing-Intuition; Thinking-Feeling; and Judging-Perceiving (J-P).  Today I want to focus on J-P aspect.

Cast of characters in The Big Bang Theory. Fro...

Cast of characters in The Big Bang Theory. From left: Howard Wolowitz, Leonard Hofstadter, Penny, Sheldon Cooper and Rajesh Koothrappali. (Photo credit: Wikipedia)

Let me start with two popular fictitious figures, one well-known and the other, a  modern figure of lesser reputation:  Sherlock Holmes and Sheldon Cooper. Arthur Conan Doyle’s Holmes is the ultimate embodiment of “perceiving;” Sherlock sees a great deal that eludes the majority of people, including the police.  The Sheldon Cooper character is one of the four scientists portrayed in a currently popular comedy TV show, “The Big Bang Theory.”  Sheldon is the genius – confirmed by test! – physicist whose world, both scientific and social, has to be in perfect order (his order) for him to function comfortably.  Part of the premise of some comedic moments is based on Sheldon’s social ineptitude as he is driven by total and pure logic, which is constantly incongruent with the irrational human behaviors and interactions.

Why should we care about fictitious characters?  Because they provide us with some baseline examples, their popularity makes it easier to compare and contrast, and they can’t hire lawyers to sue for defamation.

Judging–Perceiving (J-P) concerns our preferences in decision-making process, and ways in which we live our lives. Do we prefer a more spontaneous and flexible approach to allow additional information to modify our perspectives?  Or, do we favor planned, decided and orderly manners of running business or social life?  Most of us would say, “Well, it depends.” However, we do have tendency to seek, or at least prefer, certain approaches.  Hence, the Myers-Briggs test emphasizes preferences rather than a fixed state.

Sherlock Holmes

Sherlock Holmes (Photo credit: Wikipedia)

In Sherlock Holmes stories, Mr. Holmes’ investigative realm touches on many human interactions; where scientific data is called for, there is much less mystery, although elusive to most other eyes.  He perceives and updates his data constantly.  Where he himself has to interact with others, it’s usually curt and downright rude at times.  Yet, when Mr. Holmes needs to be, he is charming and engaging.  So, one can deduce that his predilection may be anti-social because he chooses to be “rude” at times.  Mr. Holmes is impatient with social interactions because he’s always onto something.  But Sherlock doesn’t insist that others should all behave and operate like he does.  (Indeed his very livelihood depends upon his uniqueness.)

Not so with Sheldon Cooper; he insists on everyone behaving in accordance with his principles and worldviews.  His roommate has little say over how their shared living arrangement should be; Sheldon actually draws a multi-page document/contract on this matter.  And because everything Cooper insists upon is based on (his) logic, he sees little need to have others’ perspectives.  Like Mr. Holmes, Mr. Cooper is also impatient with the “useless” social conversations, but he doesn’t see any need to update his worldview which, of course, is superior to everyone else’s.  Sheldon considers his roommate to be his “friend,” and two other scientists in their circle to be his “tertiary” friends.  These friends usually go out of their way to accommodate Sheldon, not necessarily because they like him but mostly because they are exhausted with attempting to argue with him and can just barely stand to listen to his pontifications.  To me, this is tantamount to intellectual bullying.  The only saving grace is that Mr. Cooper doesn’t intend to harm people around him; he just wants them to do what he thinks is right and then to get out of his way.  Not terribly amusing.

What is it? Need more data?
It’s a quilt made with bandanas.

Now, how does this tie to the management issues?  Look around, most managers fall heavily on the “J” side.  Many managers have in mind how their direct reports “should” behave; what level their performance should be; what their work should be focused on; when they should be reporting project milestones; etc.  This is not at all to criticize that these expectations are unfair.  We need boundaries in any system and clarifying expectations is an important key to delineate these boundaries.  However, how to work with the unexpected differentiates between a “judging” type of manager and a “perceiving” type.  For example, a manager more comfortable with “P” may regard sympathetically Susan’s needs to attend to a sick child or suspend her work to pick up her son because the principal’s office called.  This manger’s consideration of the lost time when evaluating Susan’s work is this:  As long as Susan gets the job done and done well, she still gets allotted evaluation rank.  At the same time, this “P” manager may assign more favorable points to Susan’s colleagues who demonstrated their support during the time of needs.

A “J” type of manager may let Fred take time to attend to Fred’s grandfather’s medical appointments and emergency trips.  But after four such requests in three weeks, Fred’s manager might say, “Hey, I understand your dilemma, but we have work to do here.  You are managing to get things done, but I am afraid that I have to dock some points in your evaluation.  When you are out, sometimes others have to cover for you, or wait for your return and input before they can continue.”

Sherlock vs Moriarty

Sherlock vs Moriarty (Photo credit: Ivan Čukić)

So, why would Sherlock have advantages over Sheldon?  Because Sherlock could adapt easily, and his ability to keenly perceive his surroundings would allow him to manipulate Sheldon into a tight corner if necessary.  Mr. Holmes would never be above some manipulations, for a cause.

Is one type better than the other?  Of course not.  Besides, this is but one of many dimensions on which to assess people.  However, in my perception (yes, pun intended), when there is a clash between two different styles, of thinking, decision-making, or assigning values, one style usually prevails while the other tends to adapt or accommodate.  Such is the case between judging types and perceiving types:  Judgment, and judging types, dominate the foreground, perception and perceiving types recede to background.  There are many other seemingly incompatible dual/dichotomous types resulting in lop-sided outcomes; for example, extroversion prevails whereas introversion accommodates.  Do you have additional examples?

The conventional diversity categories focus largely on our visible differences.  I personally find the invisible differences much more thorny, challenging, and therefore more fascinating.

Till 7/15,

Staying Sane and Charging Ahead.

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Introversion Is Not Taught In Business Schools

In fact, introversion is deliberately marginalized at business schools.  One Harvard Business School (HBS) professor once said, “If a student talks often and forcefully, then he’s a player; if he doesn’t, he’s on the margin.”  At HBS, the culture is all about pursuing the extrovert dream: being forthright, being vocal, being a team player (or at least seen as such until seizing the opportunity to dominate the team), being outgoing, and acting confidently at all costs, or at least, seemingly so.  Extroverts thrive in such an environment.  The majority of introverts have managed to adapt to extroverts’ world, but at the end of the day, they are exhausted.

we are SO NOT alike, but we’ve managed to get along fine

Here are a few other tips for HBS students – and most likely for students at other B schools: (from Susan Cain’s Quiet)

“If you are preparing alone for class, then you’re doing it wrong.  Nothing at HBS is intended to be done alone.”

“Speak with conviction.  Even if you believe something only fifty-five percent, say it as if you believe it a hundred percent.”

“Don’t think about the perfect answer.  It’s better to get out there and say something than to never get your voice in.”

What’s your reaction upon reading these points?  Regardless whether they are for extroverts or introverts, I find both the tenor and the substance disturbing.  While there isn’t a “perfect” answer in social world –reality, after all, is socially constructed – saying something as if it’s 100% factual/right is tantamount to espousing ideology.  Not only there is no trace of humility in the above tips, it’s frowned upon if one doesn’t voice something, anything.

As for working alone?  The bulk of great inventions and innovations has been done by individuals working alone.  Imagine Newton wrestling with the newly discovered laws of “gravity” with three other scientists over tea!  Or Cavendish, who in 1797 used apparatus so exquisitely sensitive it could measure the force of gravity between small objects – including himself, so he used telescopes to read the forces remotely.  Exchanging ideas through publications or over the internet is a profoundly different experience from sitting in the same room with ten other people vying to come up with brilliant breakthroughs.

There is a fine line for leaders to act and speak confidently when facing uncertainty and to behave as if they have the ultimate answers to everything.  In the former, a wise leader with humility would listen to others’ points of views and ideas.  In the latter, the presumptuous leader thinks he cannot be wrong and therefore has little need for others’ input.

naturally diverse…and so beautiful

In this culture, we tend to attribute vocal people as having better ideas.  The louder they speak, the more attention they command.  One of Cain’s observations resonates with me strongly:  Assuming vocal people have the same number of ideas, both good and bad, as quiet ones, by giving more attention to the vocal people’s ideas, by definition, we bias our choices of ideas to execute with the bad ideas of the vocal contributors, at the expense of the good ideas that could have come from the quieter contributors had we the wit to listen.

In a simulation exercise at HBS, teams (of course) have to prioritize items in a survival kit after a crash landing in order to get through the days in the wilderness.   In one class, one of the teams actually had a member who had extensive training and experience in backcountry travel.  It turned out that what he recommended was exactly what the answers called for.  Did his team value this member’s expertise?  Of course not.  Why?  Because his voice was too soft!

Given our repeated history of financial meltdowns, accounting frauds, housing debacles, downright management disasters – largely engineered by supposedly stellar B schools grads – it’s maddening that we are still enamored with MABs from top tiered schools.  What’s that definition of insanity?  “Doing the same thing over and over again and expecting different results.” (And here we thought, hoped, our business schools were teaching our future leaders how to be right, while instead they were taught that being right doesn’t matter.  Enron 2, here we come.)

We can’t afford to wait for the business schools to wake up and teach the core of true leadership, that being, how to distinguish between the right answer from the loudest one.  So, if you have the power to do something differently and to honor a true diversity of different minds, what would you do?

Happy 4th of July. Till next time,

Staying Sane and Charging Ahead.

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