This website covers topics on knowledge management, personal effectiveness, theory of constraints, amongst other topics. Opinions expressed here are strictly those of the owner, Jack Vinson, and those of the commenters.

Costs-free present and the future

I don't usually quote the same article for different reasons, but Clay Shirky has done it.  In Social Facts, Expertise, Citizendium, and Carr, he hits on the interesting subject of change - how people change, why they might not want to.

Earlier,... I said “We need a phrase for the class of comparisons that assumes that the status quo is cost-free.” We still need that; I propose “Cost-free Present” — when people believe in we live in a cost-free present, they also believe that any value they see in the world is absolute, not relative. A related assumption is that any new system that has disadvantages relative to the present one is therefore inferior; if the current system creates no costs, then any proposed change that creates new bad outcomes, whatever the potential new good outcomes, is worse than maintaining the status quo.

I find this idea important beyond the discussion that Shirky is having in this article.  We construct systems around both the facts of the world and the assumptions about how we need to interact with those facts.  Once a system settles into operation, it is quite easy to forget the assumptions upon which we built the system.  In fact, the one reason for having systems is so that we don't have to revisit the facts and assumptions every time we want to take some action.

However, when the facts begin to change -- or new facts enter the environment -- it is important to reevaluate the assumptions upon which the systems were built.  Otherwise, we are in danger of sticking to the old way of doing things which produces sub-optimal results (at the best) or results antithetical to where we really want to be. 

Example.  An organization is trying to dramatically increase profits.  It is clear that cost-cutting is not sufficient to achieve the desired change, so the focus is on increasing sales.  But past sales have been hampered by unreliability of supply.  (This is a very common dilemma.)  How do they decide how much to make?  They ask sales for forecasts.  (Again, very common.)  How does the sales force create forecasts?  They ask their customers, look at past sales, etc. to come up with an estimate.  So what is the problem?  They must be over-selling every year if they are getting stock-outs.  This is a good thing, right?  That's where the fun comes.  Suggest that production exceed the forecast, and what happens?  The production manager calls you crazy.  Don't you know that there is a policy that we cannot scrap our products.  (The products expire quickly.)  He gets a severe penalty on his bonus if his scrap rate is too high.  Okay, check with sales: Can you provide higher forecasts -- clearly you usually sell more than you forecast?  Another "are you crazy?"  The sales force is penalized if they do not sell to their forecast, and they are given a bonus if they over-sell their forecast.  Guess what needs to change.  Now that the policies (assumptions) are in the open, it is much easier for the organization to articulate the value or damage that the policies create.  And from there, the decision of whether to change becomes easier.

Giving thanks

Clay Shirky on expertise (again)