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jerryking : short-sightedness   11

The best way to solve a problem is to wait a while
May 25, 2018 | Financial Times Tim Harford YESTERDAY.

The world is full of risks. Can anyone guarantee that over the next 300 years both the UK trust fund and country will survive asteroid strikes, thermonuclear war or a deliberately engineered pandemic?

Perhaps we are getting ahead of ourselves. The imminent threat to the trust fund is the British government itself, which has decided that a tiny advantage is worth seizing now, since the costs will fall to someone else. (You may supply your own analogy at this point.)

All democratically elected governments struggle to see past the next election, but this one struggles to see past next Tuesday. In fairness, it often feels as if the next election may come sooner than that. And it is hard to take a truly long-term perspective, whether contemplating the future of human life or the prospect of cheesecake.

As long as the [UK] debt stays roughly in proportion to national income — not an outrageous assumption — then the trust fund would be sufficient to pay off the debt a mere four centuries after the original bequest

The Astronomer Royal Sir Martin Rees wrote a book titled Our Final Century, warning of the existential threats arising from complex, interconnected modern systems. The book was renamed Our Final Hour in the US, perhaps because a century seemed like too much time to kill.

Economists and moral philosophers argue among themselves over how to account for the interests of future generations. The answer is far from obvious. It turns out to be crucial in pondering a rational response to slow-burning disasters such as climate change — assuming that anyone cares about a rational response, which seems a forlorn hope.
problem_solving  Tim_Harford  long-term  books  disasters  slowly_moving  short-sightedness  imperceptible_threats  existential  interconnections 
may 2018 by jerryking
What the Tax Bill Fails to Address: Technology’s Tsunami -
DEC. 20, 2017 | The New York Times | Farhad Manjoo.

Manjoo posits that the Republican tax bill is the wrong fix for the wrong problem, given how tech is altering society and the economy....The bill (the parachute) does little to address the tech-abetted wave of economic displacement (the tsunami) that may be looming just off the horizon. And it also seems to intensify some of the structural problems in the tech business, including its increasing domination by five giants — Apple, Amazon, Microsoft, Facebook and Alphabet, Google’s parent company — which own some of the world’s most important economic platforms.....some in Silicon Valley think the giants misplayed their hand in the legislation. In pursuing short-term tax advantages, they missed a chance to advocate policies that might have more broadly benefited many of their customers — and improved their images, too......This gets back to that looming tsunami. Though many of the economy’s structural problems predate the last decade’s rise of the tech behemoths, the innovations that Silicon Valley has been working on — things like e-commerce, cloud storage, artificial intelligence and the general digitization of everything and everyone around you — are some of the central protagonists in the economic story of our age.

Among other economic concerns, these innovations are implicated in the rise of inequality; the expanding premium on education and skills; the decimation and dislocation of retail jobs; the rising urban-rural divide, and spiking housing costs in cities; and the rise of the “gig” economy of contract workers who drive Ubers and rent out their spare bedrooms on Airbnb....technology is changing work in a few ways. First, it’s altering the type of work that people do — for instance, creating a boom in e-commerce warehouse jobs in large metro areas while reducing opportunities for retail workers in rural areas. Technology has also created more uncertainty around when people work and how much they’ll get paid.
Farhad_Manjoo  preparation  job_loss  job_displacement  Silicon_Valley  tax_codes  corporate_concentration  platforms  income_inequality  short-sightedness  e-commerce  cloud_computing  artificial_intelligence  gig_economy  precarious  automation  uncertainty  universal_basic_income  digitalization  Apple  Amazon  Netflix  Microsoft  Facebook  Alphabet  Google  inconsistent_incomes  Big_Tech  FAANG 
december 2017 by jerryking
Mental bias leaves us unprepared for disaster
August 14, 2017 | Financial Times | Tim Harford.

Even if we could clearly see a crisis coming, would it have made a difference?

The 2004 storm, Hurricane Ivan, weakened and turned aside before striking New Orleans. The city was thus given almost a full year's warning of the gaps in its defences. The near miss led to much discussion but little action.

When Hurricane Katrina hit the city, evacuation proved as impractical and the Superdome as inadequate as had been expected. The levees broke in more than 50 places, and about 1,500 people died. New Orleans was gutted. It was an awful failure but surely not a failure of forecasting.

Robert Meyer and Howard Kunreuther in The Ostrich Paradox argue that it is common for institutions and ordinary citizens to make poor decisions in the face of foreseeable natural disasters, sometimes with tragic results.

There are many reasons for this, including corruption, perverse incentives or political expediency. But the authors focus on psychological explanations. They identify cognitive rules of thumb that normally work well but serve us poorly in preparing for extreme events.

One such mental shortcut is what the authors term the “amnesia bias”, a tendency to focus on recent experience (i.e. "disaster myopia" the human tendency to dismiss long-ago events as irrelevant, to believe This Time is Different and ignore what is not under one’s nose). We remember more distant catastrophes but we do not feel them viscerally. For example, many people bought flood insurance after watching the tragedy of Hurricane Katrina unfold, but within three years demand for flood insurance had fallen back to pre-Katrina levels.

We cut the same cognitive corners in finance. There are many historical examples of manias and panics but, while most of us know something about the great crash of 1929, or the tulip mania of 1637, those events have no emotional heft. Even the dotcom bubble of 1999-2001, which should at least have reminded everyone that financial markets do not always give sensible price signals, failed to make much impact on how regulators and market participants behaved. Six years was long enough for the lesson to lose its sting.

Another rule of thumb is “optimism bias”. We are often too optimistic, at least about our personal situation, even in the midst of a more generalized pessimism. In 1980, the psychologist Neil Weinstein published a study showing that people did not dwell on risks such as cancer or divorce. Yes, these things happen, Professor Weinstein’s subjects told him: they just won’t happen to me.

The same tendency was on display as Hurricane Sandy closed in on New Jersey in 2012. Robert Meyer found that residents of Atlantic City reckoned that the chance of being hit was more than 80 per cent. That was too gloomy: the National Hurricane Center put it at 32 per cent. Yet few people had plans to evacuate, and even those who had storm shutters often had no intention of installing them.

Surely even an optimist should have taken the precautions of installing the storm shutters? Why buy storm shutters if you do not erect them when a storm is coming? Messrs Meyer and Kunreuther point to “single action bias”: confronted with a worrying situation, taking one or two positive steps often feels enough. If you have already bought extra groceries and refuelled the family car, surely putting up cumbersome storm shutters is unnecessary?

Reading the psychological literature on heuristics and bias sometimes makes one feel too pessimistic. We do not always blunder. Individuals can make smart decisions, whether confronted with a hurricane or a retirement savings account. Financial markets do not often lose their minds. If they did, active investment managers might find it a little easier to outperform the tracker funds. Governments, too, can learn lessons and erect barriers against future trouble.

Still, because things often do work well, we forget. The old hands retire; bad memories lose their jolt; we grow cynical about false alarms. Yesterday’s prudence is today’s health-and-safety-gone-mad. Small wonder that, 10 years on, senior Federal Reserve official Stanley Fischer is having to warn against “extremely dangerous and extremely short-sighted” efforts to dismantle financial regulations. All of us, from time to time, prefer to stick our heads in the sand.
amnesia_bias  biases  books  complacency  disasters  disaster_myopia  dotcom  emotional_connections  evacuations  financial_markets  historical_amnesia  lessons_learned  manias  natural_calamities  optimism_bias  outperformance  overoptimism  panics  paradoxes  perverse_incentives  precaution  recency_bias  short-sightedness  single_action_bias  Tim_Harford  unforeseen  unprepared 
august 2017 by jerryking
Why growth hacking is a foreign concept to many business owners - The Globe and Mail
MIA PEARSON
Special to The Globe and Mail
Published Thursday, May. 21 2015,

Quite simply, growth hacking is about focusing your energy in the right areas, being creative and using a combination of analytical thinking, social metrics and long-term thinking to power low-cost innovation....“The most successful businesses are always trying to find scalable and repeatable methods for growth, and their marketing strategies and tactics are rooted in data and technology,”...Use data analytics Markus Frind, CEO of PlentyOfFish and a speaker at Traction Conf, describes growth hacking for him as “applying data to marketing to achieve growth, via virality.”

Mr. Frind started his company in 2003 and grew it into one of the largest online dating sites in the world. With more than 100 million users and $100-million in revenue, he knows what he’s talking about. And luckily, Google Analytics is available to everyone.

For Mr. Frind, growth hacking boils down to a combination of “SEO, split-testing and understanding the virality of the users.” He believes understanding that made it “easy to see what was working and what wasn’t.”

By understanding where traffic is coming from and why people are seeking you out, you have a stronger understanding of your consumer – and you’re incredibly short-sighted if you don’t think your consumer defines your brand. This is a significant piece of the puzzle for growing a business.
analytics  customer_insights  effectiveness  growth_hacking  innovation  long-term  marketing  repeatability  SEO  short-sightedness  small_business  virality 
june 2015 by jerryking
Capital Markets 'Impediment' to Innovation - The CFO Report - WSJ
June 20, 2011, 10:05 PM ET

By MICHAEL HICKINS

Glenn Hutchins, the co-founder and co-CEO of private equity firm Silver Lake, believes the expectations of shareholders and analysts often prevent companies from investing in new businesses or technologies. “One of the largest impediments to getting all of this done is in fact the capital markets,” he said during the opening panel discussion of The Wall Street Journal’s CFO Network Conference.
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CFOs often find it tough to make aggressive, long-term investments because explaining the reason for “making a short-term diminution for the purpose of a long-term gain [to the equity markets] is very difficult to do.”

Still, companies need to be willing to overhaul their entire businesses, if necessary, to avoid being overtaken by aggressive innovators...He lauded Apple for being willing to promote something like the iPad despite the fact that the tablet may in fact destroy the computer maker’s iMac franchise. “Business model innovation is underrated,”.....Also speaking on the panel, HBS professor Clayton Christensen blamed a corporate culture born, ironically, of business school formulas that separate strategy and finance. “The business schools decided to teach strategy and finance [separately] and this got carried over into companies. [But] a lot of things that make sense financially make no sense strategically.”
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With the finance function certainly in mind, Christensen wrote that, “Managing innovation is the complexity of managing the resource allocation process.”
Silver_Lake  Clayton_Christensen  innovation  strategy  finance  CFOs  long-term  impediments  capital_markets  business_models  Glenn_Hutchins  resource_allocation  expectations  new_businesses  new_products  investors'_expectations  short-sightedness  short-term_thinking 
february 2015 by jerryking
2014’s lessons for leaders: Don’t make assumptions, do make hard decisions - The Globe and Mail
BOB RAE
Special to The Globe and Mail
Published Friday, Dec. 26 2014,

Life has a way of lifting you by the lapels and giving you a good shake. Stuff happens, and when it does, it can throw all the steady paths predicted by pundits, pollsters and economic forecasters into the trash heap....Canadians are fixated on who the winners and losers of the "where will oil prices head" game ...but we need to lift our heads a bit. Russia’s falling ruble and the debt crisis of its elites and their companies have rightly grabbed headlines. But a couple of countries, notably Nigeria and Venezuela, are now in political crisis, and their very stability is at risk in the days ahead.

One of the implications of the 2008 world economic crisis is that regional and world institutions have much less room to manoeuvre and help sort things out. it will be harder for those agencies (EU, IMF) to do as much as is required. Stability doesn’t come cheap....a healthy dose of reality and skepticism is always a good idea. In a useful piece of advice, Rudyard Kipling reminded us that triumph and disaster are both imposters. People draw too many conclusions from current trends. They fail to understand that those trends can change. And that above all, they forget that events can get in the way....One clear lesson is for leaders everywhere to learn the importance of listening and engagement. The path to resolution of even the thorniest of problems...involves less rhetoric and bluster and a greater capacity to understand underlying interests and grievances. ... Engagement should never mean appeasement.
Bob_Rae  pundits  decision_making  leaders  unintended_consequences  predictions  WWI  humility  Toronto  traffic_congestion  crisis  instability  listening  engagement  unpredictability  Rudyard_Kipling  petro-politics  imposters  short-sightedness  amnesia_bias  interests  grievances  appeasement  hard_choices 
december 2014 by jerryking
Are book publishers blockbustering themselves into oblivion? - The Globe and Mail
RUSSELL SMITH
Special to The Globe and Mail
Published Friday, Nov. 28 2014

Whatever they mean, they certainly cannot mean a shrinking talent pool.

So they must mean that they are not, in fact, interested in the real talent pool, or in a wide variety of literature. What they are looking for are bestsellers, which tend to be particularly narrow kinds of books. Most of the gargantuan advances that have made headlines in the U.S. recently are for science-fiction and fantasy books. Every publisher is looking for exactly the same book – basically, they are looking for The Hunger Games again and again. When they say “quality,” they mean “mass appeal.”...But in concentrating on bestsellers to the detriment of other literature, the publishers are simply following the model of all the entertainment industries. Providing an eclectic variety of entertainments to please a diverse audience, as the free Internet can do, just hasn’t been lucrative for the conglomerates that own film studios and recording labels. They are in constant search of blockbusters.

As they grow larger and concentrate their efforts and investments on massive, sure-fire hits – the next Marvel movie, the next Taylor Swift album – the cultural landscape seems paradoxically smaller. It becomes even more difficult to get an indie film made – the huge projects suck the oxygen (financing, distribution, media coverage) out of the biosphere.

In following this larger trend, book publishers are shortsighted. By reducing their involvement in original and challenging art, they relinquish literary fiction to the tiny presses and online magazines, and so become artistically irrelevant and, in the long run, uninteresting even as suppliers of entertainment. Pursuing mainstream popularity with ever-larger sums of money is ultimately self-destructive....Yes, such high-mindedness is all very well for someone who doesn’t have to keep a money-losing, employment-providing company afloat. And Le Guin’s vague rejection of capitalism is not a solution to the immediate problems facing publishers. But her point about taking the long view – about concentrating on valuable literature for the sake of the industry’s general health – is surely a practical one as well.
books  publishing  Russell_Smith  literature  blockbusters  art  short-sightedness  conglomerates  indie  winner-take-all  Amazon  writers  long-term  self-destructive  talent_pools 
november 2014 by jerryking
Also Stalking the Fund Industry: Obsolescence - WSJ.com
Dec. 10, 2003 | WSJ | Holman W. Jenkins.

Quiz for economists: Suppose you have a competitive, transparent industry that one day begins acting in a more short-sighted, exploitative way towards its customers. What's really going on?

Here's a hint: Think of the gradual slide toward sleazier marketing by the traditional long-distance companies. When your business has a future, you invest in customer relationships. When you see your future going away, you milk them like the wasting assets they are. Big swaths of the fund management business are behaving exactly like an industry in decline...Mutual funds exploded in the 1990s, growing from less than $2 trillion in assets to $7 trillion. A long bull market helped to conceal the fact many of these entrants brought no value to the table. Their managers were, on average, merely as lucky as everyone else to be standing in the right place at the right time.
mutual_funds  Holman_Jenkins  Eliot_Spitzer  industry_analysis  obsolescence  customer_satisfaction  financial_services  luck  short-sightedness  sleaze  customer_relationships  exploitation  bull_markets  imposters  decline  '90s  cash_cows 
december 2013 by jerryking
Why can’t today’s graduates get hired? -
Dec. 05 2013 | The Globe and Mail | by Margaret Wente.

“Everywhere, employers are looking to recruit young people with a strong complement of soft skills, such as the ability to communicate, think critically and work in teams,” John Manley, president of the Canadian Council of Chief Executives, said in a recent speech.

The real skills gap, business leaders say, is not the shortage of oil-field engineers and the glut of history BAs. It’s about the shortage of young people who are good at problem-solving, communication, teamwork, time management, persistence, loyalty and dedication. Survey after survey reports that businesses can’t find enough workers who are motivated, flexible and organized. As a recent piece in Time magazine declared, “The entry-level candidates who are on tap to join the ranks of full-time work are clueless about the fundamentals of office life. ”...“As recently as 10 years ago, organizations would hire for potential,” Ms. Moses told me. “But now they want people who can hit the ground running.” Employers have also become extremely risk-averse about new hires – another factor that stacks the deck against the twentysomethings. It’s hard to prove that you can do the job if nobody will give you the first one. As for the soft-skills gap, she thinks it’s overblown. For starters, today’s young adults have collaborated and worked in teams all their lives.

The trouble is that few companies do training any more, even the kind of informal short-term training that can break in someone new.
Barbara_Moses  Communicating_&_Connecting  critical_thinking  grit  hiring  job_search  John_Manley  loyalty  millennials  Margaret_Wente  new_graduates  persistence  problem_solving  skills  short-sightedness  skills_gap  teams  time-management  young_people 
december 2013 by jerryking
Viterra another example of Canadian short-sightedness - The Globe and Mail
ERIC REGULY | Columnist profile | E-mail
ROME— From Saturday's Globe and Mail
Published Friday, Mar. 23, 2012

The point is that Viterra is irreplaceable, certainly within our lifetime. Glencore is nabbing 63 grain elevators and seven port terminals in Canada that could not magically be built overnight should another group of investors decide to clone Viterra.

This industry has massive barriers to entry and that’s why Glencore, led by the ever-savvy Ivan Glasenberg, pounced. For him, it was a once in a lifetime opportunity (and pocket change compared to Glencore’s $45-billion market value). If he didn’t nail Viterra, he knew it would have disappeared into the maw of Archer-Daniel-Midlands, Cargill, Bunge, Louis Dreyfus or any of the other agribusiness heavyweights who know that food isn’t going out of style and that feeding another 2 billion people by 2050 just might translate into compelling growth story....If there is one industry that had a bright future, it was global agriculture and Canada had all the components: Land, water, fertilizer, technology, schools, expertise, infrastructure, agri-business companies. What it lacked was ambition.

Viterra could have been the foundation of a Canadian Glencore or Cargill. Now it’s a piece of someone else’s global vision.
Eric_Reguly  agriculture  agribusiness  barriers_to_entry  Viterra  M&A  mergers_&_acquisitions  farming  sellout_culture  short-sightedness  one-of-a-kind  Glencore  ADM  Cargill  Bunge  Louis_Dreyfus  vision  ambitions  uniqueness 
march 2012 by jerryking
Marketing Myopia
July-August 2004 (Reprint from 1960) | Harvard Business Review | by Theodore Levitt.

Marketing Myopia suggests that businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products......

Fundamental idea
The Myopic cultures, Levitt postulated, would pave the way for a business to fall, due to the short-sighted mindset and illusion that a firm is in a so-called 'growth industry'. This belief leads to complacency and a loss of sight of what customers want. It is said that these people focus more on the original product and refuse to adapt directly to the needs and wants of the consumer.

To continue growing, companies must ascertain and act on their customers’ needs and desires, not bank on the presumptive longevity of their products. In every case the reason growth is threatened, slowed or stopped is not because the market is saturated. It is because there has been a failure of management.

Some commentators have suggested that its publication marked the beginning of the modern marketing movement.[2] Its theme is that the vision of most organizations is too constricted by a narrow understanding of what business they are in. .....Organizations found that they had been missing opportunities which were plain to see once they adopted the wider view. ....There is no such a thing as a growth industry. There are only companies organized and operated to create and capitalize on growth opportunities.......There is a greater scope of opportunities as the industry changes. It trains managers to look beyond their current business activities and think "outside the box". . If a buggy whip manufacturer in 1910 defined its business as the "transportation starter business," they might have been able to make the creative leap necessary to move into the automobile business when technological change demanded it.....People who focus on marketing strategy, various predictive techniques, and the customer's lifetime value can rise above myopia to a certain extent.
HBR  marketing  management  filetype:pdf  media:document  Theodore_Levitt  myopic  out-of-the-box  short-sightedness 
february 2010 by jerryking

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