Overproduction and recession

A recession is when the economy shrinks. In my terms, it means that sales is lesser than the previous period.There are many reasons for sales to reduce including (and not limited to):

1. Lack of demand - where the item is no longer desirable.

2. Competitors - where someone else can meet the demand with better conditions (better item, cheaper prices, etc).

3. Oversupply - where there is too much of the item, and all those that want it already have it.

4. Overpriced - where the item is too much to expensive relative to the value derived from it.

5. Many others that you can continue with.

Given that many countries are facing (or going, or have gone) into recession (technical or otherwise), maybe we should also think of the reasons.

We were fine 2 years ago. We were fine 18 months ago, and we were still ok 12 months ago. Suddenly, when the sub-prime mortgage mess hit, everyone is affected.

Why?

So how is it that (relative to the total number of workers) some workers losing their jobs can create such a huge impact? The initial ones losing the jobs were probably overpaid non-producing people in the financial industry, involved mainly in "investment banking", "fund management", and similar important sounding businesses.

(By non-producing people, I refer to jobs that doesnt really produce a real thing, facilitate trade in a real thing, or provide service to a real need. By all means disagree if you want, it is and remains my term for those people, until someone can show me what real value these people provide to man on the street.)

I am no economist or any -ist for that matter. But it seemed to me that we cannot be growing and growing and growing. Is it reasonable to continuously have growth forever? Where will it stop? Perhaps an analogy:

1. There are people who buys houses.

2. There are developers who develops and build houses (together with the construction people).

3. More and more people go to cities to work and live, which also means less and less people in the smaller towns.

4. Developers are expected to grow every year (every year they must build and sell more houses).

5. In order to grow, developers build more houses every year.

6. Because more and more (a growing number) people are moving to the cities, more houses are required in the cities. So sales in cities grow.

7. As long as the number of people moving to cities continue to grow, there will be a growth in sales of houses.

8. As more and more people arrive, it becomes less and less attractive for new comers.

9. When the number of people moving to slows down, there should be a corresponding slow down in sales.

10. Developers panic when the growth slows in the cities,

See the problem?

A1. A developer wants to be seen as strong and NOT perceived to be in trouble.
A2. A developer that is not growing is perceived to be in trouble.
A3. In order to be seen as strong, developers must continue growing and therefore developers must build more houses.

B1. People move to cities to work and stay and will need to buy a house.
B2. Previosly the number of people moving to cities continue to increase and there were growth in sales.
B3. There are less people moving to cities now than previously and sales start to slow down.

Did we just create an economic disaster for the developer by not buying extra houses? Or did he create the disaster himself by building too many?

Of course real life is not so simple. It is further complicated by promotions, lower interest rates, speculators, etc. But the gist of it does not change. If you produce too many, it will not be sold. Of course too many means different things to different people and industries, but nontheless, there is a 'too many' for anything and anyone.

Can the unsold items be hidden? Yes. Some are perhaps not offered for sale yet, others remain uncompleted.

Can the unsold items be perceived to be "sold"? Yes. Speculators and investors that have bought but can't sell it off nor rent it out.

Can the unsold items be otherwise held? Maybe the banks own some due to loan default by developers, some are stuck in the middle of processing a loan, etc?

And of course there are those with the "For Sale/To Let" sign hanging for the past 6 months.

Let's take this to a broader context.
1. Are there brand new cars sitting around waiting for a purchaser? More than a few months worth of sales?

2. What about TV sets, washing machines, appliances?

3. Food items? Corn, wheat, apples, poultry, other meats?

4. Have we truly been so efficient that we have produced more than we can consume?

If we did, what would have been the impact?

Well, eventually, the loan taken by the developer (to build the houses) have to be paid. And the developer was hoping that the purchaser would pay him, so that he can pay the loan.

Now that the house purchaser is not there, the developer can't pay the loan, and shuts down. This means all the workers are out of a job. And these workers will not buy the new TV that they wanted. So the TV manufacturer is affected, and therefore will not buy a house, and so on.

Now that the negative cycle has started, perhaps it is time that we wake up and ask this:

Can continuous growth in production, efficiency and productivity be sustained indefinitely? Doesn't sound real, does it? Who is going to buy if you keep producing?

If not, what was it that has promoted this fallacy of permanently sustainable growth? Investors? Greed? Bad measurements from bad assumptions?

In essence, what was the measure that promoted this fantasy? Is it 'growth'?

Should we then be as engrossed, infatuated and obessed with "growth"?

Should we perhaps learn to accept that slowdowns and recessions are reasonable parts of a cycle?

Politics - enemies or opponents

1. In our democratic country, the citizens elect representatives from political parties into parliment. The citizens elect these people because they think that these people will REPRESENT the majority's opinion to the government.

2. As an extension of democracy, office bearers of political parties are also elected by its members into something akin to a management committee, often called supreme councils, executive committee, etc. Again, these committee members are elected because the members think that the elected will best REPRESENT the majority.

3. Because it is politics, there will be differences in opinion of different political parties. These differences in opinion should be because of differing views on what is the best way for the COUNTRY to go forward. That is the differences is on a subject and not mindless hatred of another human being.

To simplify, I'll use members to mean both members and citizens (members of country).

Do you think that the 3 points are or should be reasonably true? That we have elected people who we think best represent us. Best, not necessarily good, just the best of the available ones.
If the above points are true, then the opinion of the elected should be the opinion of the members or at the very least, one to protect the members. So when an elected official is elected, should he be more of a member of the country or a member of the party? Perhaps depends on the context of the opinion he is to express?

So can a member of a political party be friendly with a member of an opponent party? If not, would you have do disassociate with friends, family, business partners, etc? I remember reading somewhere that there was two siblings that are on different sides. Which I thought was very commendable.

Just to digress, I disagree with the term opposition. Opposition is to oppose, that is to do the opposite. That means if I go north, my opposition will go south. If I go east, opposition must go west. (Perhaps that is why we have some problems.) Opponent, on the other hand, does not do the opposite. They go according to where is best. If I go north, the opponent can go east, south, west, and north too! Whatever is best.

When 2 people are from different political parties, do they be enemies?

Unlike competing commercial organisations, where they fight for business, politicians must work together for the good of the country. Anything detrimental to the country must be avoided.
Is it good for the country when leaders treat a member, who attend functions of an opponent party, as an enemy?

It used to be that many love stories where told where the girl and the boy came from feuding families, families from different classes/nationalities/race/religions/etc. And these families would violently object to the relationship based on the said difference.

Well, it seems that some of us have elected more than a few representatives that feel that attending functions of an opponent party is unforgiveable disloyalty. Is that how the majority feel? If it is, then it is very scary.

Think of it. If there are 2 groups of people who are REPRESENTING the MAJORITY's opinion in Parliment, it means that what they say may be the opinion of the MAJORITY of the people.
Now, if the leaders of one of these groups (probably both) are treating the other group as enemies, would that imply that they are representing their members?

Even if their actions are not representative of the people's will, these are the perceived leaders of the country. And they are treating the opponent political party as enemies. What will their followers do? Will they follow?

Now if there are two groups of enemies representing the people, and then there may be two groups of citizen-enemies?....

Scary.

Not good university

A group of former graduates from a not-good university (NGU) runs NGU, which by the name, we can guess is not too good.

In order to maintain their pride (and delusion) of being a good university, they hire the own NGU graduates as teachers and administrators. But because they are not-good, NGU produces not-good graduates and these same graduates are now administrating and teaching. In a sense, NGU recognises this, and therefore gets the government to tell parents to send their children to NGU, and give incentives to companies to hire NGU grads.

Whenever anyone (including NGU grads) states the obvious and tell them that NGU must improve, NGU attacks with emotional statements accusing others of trying endangering their unity, loyalty and pride in NGU and tells all NGU graduates that their must protect themselves against all others. And because the good grads from NGU (and there are some) see the problem as it is, they avoid working in NGU, leaving only the not-good graduates to work there. So as the school gets worse, it will just... errm.. get worse.

1. Why do people in NGU think that they are best suited to run NGU (the process of converting students to graduates) when obviously they need help at both the source (getting the students) and the end-result(getting the graduates hired)?

2. Wouldn't it be more effective if NGU just hire people that are best suited for the job of running NGU?

3. What is unity, loyalty and pride when it gets in the way of unity? When people unite, they should unite for a common purpose.

Why do people behave like this? What were their assumptions? And what is wrong with these assumptions?

What happens when people group together not towards a good purpose, but against everybody that is different, is that unity or bigotry?

Of course, NGU does not exist in real life as a university. But think of this:

1. The automotive players in the US are having problems.

2. They are requesting that the US government give them money to continue.

3. Failing which they will have to close and many many thousands (possibly millions) of jobs will be lost.

4. The japanese car makers have factories in the US employing americans.

5. These japanese car makers are profitable.

And if you are the government, what will you do?

a) give them the money - assume that they can change and become profitable,

b) close them down - assume that the economy wont be adversely affected significantly,

c) sell the companies to someone with money - assume that the buyer can change them and become profitable.

d) get the japanese companies (for a fee, of course) to run the american factories - assume that pride is not a relevant issue

e) hire the american managers from the japanese companies to run the troubled american companies - assume that the new management can rectify the current problems fast enough.

These are merely reactive options. It shouldn't have been allowed to happen in the first place. The financial crisis is not the reason for the collapse, it is a spark that ignited the gunpowder that was collected over the years. More on this another time.

And of course, NGU can represent many things, not just the automotive industry in the US. Take the example and think of other things, including education, politics, economics, etc.

The oldest professions in the world

Why is it that most of us accept that prostitution is the oldest profession? Perhaps let's put some definititions in place. Prostitution in this context refers to the performing sexual fulfillment services for a fee, and profession means work.

Let's take a walk to the time where the early professions were started. We'll start at the most basic of basics - for any organism to survive, there must be nutrition. For any organism to continue its species, there must be propagation or reproduction. These two requirements must have defined the actions of the early humans. And because reproduction was never a "profession" until the late 20th century (sometimes known as surrogate mothers and sperm donors), it could not have been an early profession.

Thus the first profession would have been related to nutrition and must have been that of the hunter-gatherer. These were the first humans who hunted animals, and gathered parts of plants (leaves, roots, fruits, etc) for food (nutrition).

Then some of these hunter-gatherers found that they could cultivate land and produce food instead of hunting-gathering. The second profession is thus farming.

Because farming produces more food per working-person than hunting-gathering, it enabled the better farmers to barter their produce with the hunter-gatherers. Thus, trading started as the third.

Now, to facilitate trade, markets had to be established in fixed locations, and some humans started moving to live nearer to areas where trading was done. Society started, and the organisation of people and land, resolution of disputes, etc became necessary. Thus the profession of the politician came to being.

Where politics could not resolve a disagreement, violence would have been the normal means then. And thus the profession of fighters (or deliverers of violence) probably was the fifth.
And so, the rich (probably through farming, trading, or both) got richer (through the ability to engage the best politicians to win disputes and fighters for difficult disputes), there came extra wealth that could be used for purposes of pleasure instead of survival.

There are many other possible professions after the 4th (politician), which I will leave you to think about. But for sure, prostitution could not have been the first.

So why do so many of us accept the statement that prostitution is the first (and therefore oldest) profession? Is it because we want to justify that it is acceptable? Is it because we want to explain that this vice is more common than we like to accept?

- What other commonly accepted "facts" are false? Why are they accepted so commonly?
- Some are merely trivial info (such as the example above), others may have harmed society more than we think. Any examples from your own experience?

- In the early days of society, the highly respected people were the scholars, the thinkers, the philosophers. Today, all these people take a back seat to the rich. Why do we find it normal for the rich to be respected? What have they done for other people to deserve the respect?
- Don't you think that teachers, writers and others who works to spread exiting knowledge deserve more respect?- Don't you think that thinkers, researchers, scholars who create new knowledge are a class above those that are monetarily more profitable more than others?

- Before the USA developed and became the epitome of capitalism, who were the respected? Who are the people mentioned in our history books? the rich? In fact, I doubt if there were much mention of wealthy people in the history of the world. Why?
- Who were the rich in the rich history of Greece, Egypt, China and other ancient civilisations?

- Why have we, in the last hundred years or so, turn our backs on a few thousand years of humanity and history, and why do we choose to measure everyone with the simplistic ruler of dollars and cents?

Assumptions and vicious cycles

Many months ago, I had a discussion with an IT consultant that we were about to engage to work on a project for a client. At one stage, after establishing the costs of engaging his team to do the project, I asked how long will it take to put together the system for a client.

I was surprised at his reply that it would take 4 months. I felt that it can be done in 3 and with good reasons. So I continued to ask, what is it that has to be done and how he intends to do it. As he explained, I could see that he was very confident about what has to be done and how he intends to do it, while being less and less sure about the 4 month time-frame. And me, I was beginning to be convinced that he knows his stuff and also more convinced that it can be done in less than 4 months. So what has this to do with assumptions?

Well, after all the explainations of the project activities, I continue to query the 4 month duration, "Knowing what we know now, do you still think it will take 4 months?", "Sure? four months?", "This activity, it takes 2 weeks?", etc. To which his replies really began to be less and less confident.

Thinking that I was so I smart, that I managed to ask enough questions to show him how the schedule can be further shortened, I kept quiet for him to gather his thoughts and think through what the new time frame is.

Which he did. He thought through the new time-frame required to do the project. And said, "You are right, it's not 4 months." Hah, even as the knowing smile start across my face, it was stuck at midpoint when he continued, "We'll need at least 6 months."

Apparently, all along the discussion, whenever I asked about the 4 months duration, he thought that I felt it was too short and unrealistic, so he was trying to convince me how smart he is and how good his execution is that he needs only 4 months. In my mind, 4 months was too long and can be cut to 3 months without extra effort or expenses.

(Just to digress, never negotiate timeframe and fees at the same time. It puts the consultants in a conflict because if he agrees to a shorter timeframe, his fees are also reduced. So they'll never agree to a shorter timeframe unless the fees is already fixed and agreed upon. And once you start a nego on time and fees together, it is difficult to separate them later. More on these if anyone indicates an interest in such)

So, we were discussing the same thing with different assumptions. I assumed that he was looking at how to cut from the 4 months, and he was looking at whether the 4 months was enough.

Funny how these things happen.

Many years ago, I had this friend who told me that he and his girlfriend (both from Ipoh) was going back to Ipoh over the weekend because his girlfriend wanted to go back to visit her parents. And a while later, the girlfriend was telling me how he was worried about his parents and so they are going back to see his parents. And I happen to know that neither really wanted to go back to Ipoh for the weekend. So the puzzle begs to be solved.

Apparently, she thought that he was worried about his parents and therefore asked him whether he wanted to go to Ipoh. He thought that she wanted to go visit her parents, so he said yes. And because he said yes, she agreed too. If I didn't bring the 2 of them together and asked them a few questions, the two of them would have reluctantly gone to Ipoh because of the other.

So many examples of such happening. Is it the assumptions? Why do we make assumptions if it is really so misleading. Maybe we should classify the assumptions, and in many cases, it is the ambiguity of a situation that misleads. Perhaps we should just state our intentions clearly, instead of trying to be nice.

I am sure you too can recall cases where a group of friends supposedly arranging for an enjoyable dinner gathering end up having lunch in an inconvenient location or food that no one likes or on a date where only 4 of the 7 are available or all the above, because everyone wants to be nice and accomodating. If you don't, I'll introduce you to some of my friends.

Anyway, so do you have similar experiences?

While the examples above are trivial, some have serious consequences, imagine the following:
* Country X was accused of being in the final stages of developing nuclear weapons and the neighbours (Y and Z) threaten to attack them in order to disable the nuclear capabilities. X thinks that Y and Z will be afraid of a nuclear war, so X declares that it has nuclear warheads pointed at Y and Z. Because Y and Z is now threatened, Y and Z wants to attack. And because Y and Z wants to attack, X starts shooting missiles without warheads ... and so on...

* A wife suspects that the husband is having an affair and accuses him, so a fight starts. Because there are always arguments at home, the husband is reluctant to go home until late at night. Because he goes home late at night, the wife now believes that he is having an affair and the fighting intensify. Which means he is even more reluctant to return home, which then confirms the wife's belief....

What simple mechanisms can we put in place to reduce being mislead by assumptions of these sort?

Money Politics - finding the bigger culprits

There has been many accusations by politicians and public about vote-buying (aka money politics) in the current (and past) elections within a political party. So far, only a few cases have been proven and the guilty have been punished with suspension. (I wonder if the money paid was returned?)

There are only 3 in competition for Deputy President and about 8 for Vice President, making a total of 11 people involved.

So all we do is ask a question, let them dwell on the question before we collect answer.

Now, all we have to do is ask them if they paid anyone to vote for them. Ah... everyone of them will deny it. So we separate them and ask them individually again the same question. I am quite sure that they will also deny. So we trust them? Well, lets continue with the questions.
We next ask, "Who used money to pay for votes?" Some will accuse others, some will declare ignorance. Let's analyse the answers.

Those that accuse someone else will probably come from 3 groups:
1. He did not pay, and therefore is unhappy that someone else "cheats"
2. He paid, and is unhappy that someone else paid (more?) too.
3. He paid, but wants to use an accusation (to show that he is against money politics) as alibi.

Those that did not accuse someone else will come from these groups:
1. He did not pay and is not aware.
2. He paid and hope that no one else has paid.
3. He paid but doesnt want to accuse others for fear of an investigation that will show him up too.

The 1s are the honest people. The 2s are small-time cheats and the 3s are the crooks.

Which brings us to the next question (number 3).
Tell the candidate, "You have been accused of money politics by 3 other candidates and we have recorded statements from them. We are investigating both you and them. I can't tell you who the 3 are. If they are found clean, then we know they speak the truth about you paying for votes. What do you say about this?"

1. Denial because he is clean.
2. Denial because he doesnt know how to answer yet.
3. Denial with his own accusations of others.

Again the same groupings of 1s, 2s, and 3s.
Should there be a person that was not accused at all after these 3 questions, he is likely to be not involved in money politics. And we should have a decent idea of who are involved in such practices.

Now, for question number 4.
Group the 3s together with a list of accusations against them including the accuser. Let the 1s and 2s watch the discussion/debate/argument. Ensure that the conversations of both groups (the 1s and the 2s/3s) are clearly recorded. Whenever the 3s bring up the names of any of the 2s, the 2s will probably add on to the accusations of the 3s. Record it down!

Now with all the gathered accusations. Put all of them together and give them the list of all their accusers and accusations. Tell them this: "Obviously, most or all people here are involved in money politics. And because we want to be seen to be fair and clean, we must be seen to clean house. So we will suspend 3 of you if we have evidence. So far we only have accusations. Whichever 3 we can gather the most evidence on, we will suspend. If we dont have evidence at all, we'll suspend 2 DP candidates and 5 VP candidates with the most accusations. Can you provide any further information for our investigation?"

Let them have 15 minutes (or until the discussion threatens to be violent, whichever comes earlier) to discuss and then separate them into different rooms with interviewers to record the statements.

This should be conducted over 1 full day (starting at 8am to 5pm when the last question is asked, and last until 11pm when all are released separately).

Oh yes, all the above must be conducted by foreigners from respected professions and academia, something like an engineering professor from Singapore, a lawyer from Australian, a doctor of medicine from Thailand, etc. Overseeing these interviews should be 3 audit firms from Malaysia.

Fees to Malaysian Audit firms - RM80,000 (3 firms x 1 mgr + 11 staff, 1 day of work)
Fees to foreign interviewers - RM88,000 (11 interviewers, fees, food, travel, lodging)
Fees to Hotel for facilities - RM10,000
Fees to equipment rental (microphones, video cams) - RM10,000
Fees to Misc Expenses - RM12,000

Summary:
Total expenses: RM200,000 (1sen per malaysian, worth it?)
Question 1: Are you paying people to vote for you? 15min
Question 2: Who used money to buy votes? 30min
Question 3: Others have accused you of buying votes. What do you say? 1 hr
Question 4: (not asked) Put the highly accused together, give them the list of accusations against themselves and let them argue it out. Let the lesser accused watch. Record all mutterings, ramblings, shoutings, etc. 2 hr
Question 5. Explain that if we gather enough evidence, 3 of them will be suspended. If we dont have evidence, we'll suspend 2 DP and 5 VP candidates, thus making it a non-election. 4 hr

Result:
* A cleaner (or perhaps "not-so-dirty" is more apt?) list of candidates.
* And some work done to help the ACA too.
* A good practice in the skill of asking questions.

Any other ideas that are simple (not necessary easy) and not-too-expensive to try out?

Thinking: Good Questions vs Good Answers?

My view is that many of us do not think properly. What do I mean?

Before we delve into the details, we should clarify what we mean by thinking properly. To do that, let's have our own definition of thinking. And let's also define what we mean by thinking properly in this context.
i. Here we define thinking as a process to Develop an Answer a Question.
ii. Thinking properly means putting the effort to arrive at real answers to the right questions.

I have to emphasize here that I have little disagreements with most of the answers people have. I have a a disagreement with a more fundamental part of thinking, at the source - the question.
Often, in our hurry, we address an issue very quickly for we want to have the answer in order to act. If we dont have the answer immediately, then we are helpless and a sitting duck, and we are accused of being lazy, burying our heads in the sand, slow-witted, ignoring the problem, etc. In some specific cases, these may be true of really indecisive individuals, but most of us are not like that.

We value decisiveness, we value quick action. All our heroes in the movies think on their feet, and react immediately to any form of challenge or danger. So we try to emulate the idols on the silverscreen (or the plasma/LCD screen nowadays). So we decide and act quickly. No time to waste, let's move.

If all these fast decisions, quick actions have been so effective, then we should have lesser and lesser challenges and problems in families, companies, relationships, countries, etc. But we have more than ever. In fact, there are so much "problems", that we value problem solving skills as much as we value basic mathematical abilities.

And thus we have forgotten and lost the art of think properly and deliberately. If it is lost, perhaps we should elaborate on what it is that is lost. Let's start at the beginning. In order to develop an answer to a question, we must have a question.

Oil price hike
Let's take an example. When oil prices went up (Aug 07 - Jul 08), most of the car drivers thought, how to I use less petrol, how do I make more money to pay for the higher prices? Perhaps the more relevant question then should have been, are there alternative ways that I can do what I want to do? Do you even have to travel?


Ask for an increment
Let's take another example of someone asking for an increment. He is making 3000 now and wants a 500 increment. So Employee goes to Boss and ask, a) "I've been working here for x years and been performing very well, etc, etc. Can I have a raise?"b) "I am paid 3000 now. I'll like to be paid 3500. What do I have to do to justify you paying me 3500?"

What is the right question here? in a, he asked for exactly what he thought he wanted. But that is not really what he wanted to ask. His real question was, What has to be done to so that the Boss wants to pay me more? And b, addresses this properly.

In both cases, if you deserve the increment, you will get it, maybe a little bit faster in a, and a month later for b. If (in the perception of the Boss) you dont deserve an increment yet, then the difference between the 2 questions is glaring.

In a, you ask only after you (perceive yourself of having) performed beyond expectations. In b, you can ask almost anytime. In a, the Boss becomes defensive. In b, the Boss becomes constructive. In a, if rejected, you can't ask again until at least a few months later. In b, you can ask about your progress after 1 month.

Which one will you use the next time you ask for a raise?

New Job
One more example, "Should I take take on this new job?"

Perhaps the question is, "Because work will constitute a large portion of my life, what kind of work do I want to take on?"

My life and the way I live is important to me. Work is only a part of that, and therefore my work should be inline with the rest of my life. Without defining my life's goals, then how do I know if I am going in that direction? So let's bring it to a even higher perspective, "What do I want my life to be?"

The Question or The Answer
So before you answer an important question the next time, think carefully about the question. What is the right question? Answering the wrong question is often worse than getting the wrong answer to the right question.

It is easier to correct the wrong answer, because the question is already correct. With the wrong question, you may continue answering correctly, and yet not achieve the objectives.

Last question for you, "Why am I reading this guy's blog?"
Perhaps we should also ask, what are my objectives for reading blogs? Entertainment?
Looking for people who share the same views?
Looking for new perspectives? Learning? or just surfing to kill time?

Are you achieving your objectives so far?

Management and 5 year plans

I just saw some of the videos on MSNBC regarding the US economy, including the much-respected Alan Greenspan admitting to a mistake in a model that he had where banks can be trusted to look after themselves and how companies are now facing not just a credit crunch (lack of cash) but insolvency (debts more than assets). Actually, the hard truth is that bankers look after themselves.

Most businesses work out rather detailed 5 year plans. Well, at least most executives have to do a detailed 5 year projection every year. The economy in Sep 2007 last year was starting to realise the effect of the subprime mortgage problem.

With the current economy, it just destroyed all the hardwork all these executives have put in while working out the 5 year projections. All destroyed because the economy is different from what we thought it would be.

My point - most detailed 5 year plans are quite a waste of time and energy. Yes, they may show some indication of the direction when introducing a new product or service, but it is with too many assumptions on your product, technology, economic, consumer demand, etc.

Assuming that the plan is realistic, the only way to make it useful for more than 3 months is to have:
a. regular (at a frequency that the assumptions can change) reviews to check, verify and adjust the assumptions.
b. management that are realistic enough to adjust the projected results accordingly.
c. shareholders who can accept that as the assumptions change, the results of the company is expected to change. For better or for worst.

Unless a, b and c are made true, 5 year plans are just an feel-good exercise in the name of management responsiblity.

1. Should we maintain the act of doing 5 year plans when it is relatively useless if not reviewed? Or should we use it properly and do the reviews?
2a. For those few that are already doing the reviews, are we realistic in adjusting the assumptions we make about the market, product, demand, technology, etc?
2b. For those that dont believe in 5 year plans, what are the alternative models can the board use to evaluate and review?
3. Do you have a top management team or board that can accept a reduction revenues and profits? Or will they tell you to work harder to achieve what is not-too-realistic?
4. Do you think that in some (other people's) cases, the messenger will be shot?

Open your mind - food

For some reason, we humans can be rather closed minded in many ways. Of course there are also other human traits (such as determination) that can be mistaken for close-mindedness. However, I am refering to the simpler things such as food.

I like to eat and enjoy the food. And in my mind, each dish can be done in many different ways. And the variety that I am happy for the varieties I can get from a single dish. I am Asian Chinese, living in Asia, where I enjoy a huge variety of totally different styles of cooking. So a plate of fried noodles can be so different from one location to another, and even from one stall to another.

That being the case, some of my more food-oriented friends, have found for themselves the "best" of many dishes. And this is good. At least until they start to measure every other dish by the same name against the "ruler" based on the "best".

What puzzles me is this: if we acknowledge that each serving of fried rice from a different stall or restuarant is different (different ingredients, frying method, etc), how do we can we then judge other similar but not-the-same fried rice based on the previous "best"?

So when they eat at a new place, the dish they eat is then compared to the current "best" and naturally, found lacking. Not because the current dish is bland, but because the "best" was measured using a different ruler. But what if there is no "best", then how wil this dish fair? Is it nice?

Some fried rice include big prawns, some have extra roasted meats, others have very little ingredients but taste and smell absolutely delicious. Some are served with freshly cut chilli, others are served with sambal, and yet others with all kinds of condiments. The friend rice can be yellowish, light brown and even dark brown. With all the varieties, how then should we judge?

To me, each of the variation is a dish by itself and not to be compared to another offering although they share the same name. (Of course they could use different names but then it would be totally confusing for the consumer - imagine having to know 20 different names for fried rice alone.) And if each is unique, how then should we judge what is good or not good?

Before we go into the criteria for judging, I'll like to point out some other oddities of my friends. There is those who would highly recommend a particular dish at a particular stall, and when asked to elaborate on the exact reason (especially after we have tried the dish at that stall and found it unimpressive), the answers will be along the lines that the chilli-sauce is fantastic. Others would have great bias for big size or large quantities of ingredients such as prawns, crab meat, etc.

I think that we should have a slightly more definitive way to judge and recommend food. While each of the "measures" may be subjective, the structure of the measurements should not be. And for food, I think, the measurements should cover taste, colour, fragrance, texture, and ingredients (and some will include presentation, which I intentionally left out so that we will remain unbias against the hawker stalls).

If we open our minds, we may find many more acceptable varieties. This in turn will allow us to enjoy more of the varieties available and also learn to appreciate the differences of each. The challenge is whether you can open your mind and experience the new. I believe that this may prove more rewarding by far than seeking only the "best".

1. Do we people have to judge everything according to a single measurement such as the "best"? Think of cases that you use the "best" as your ruler or weighing machine. Are we guilty of measuring everything with a ruler because our minds are closed to other forms of measurements, such as weight or volume?

2. Can we open our mind and explore each taste as its own and not try to compare it with others (even though they share the same name)?

3. Can we appreciate each for its own goodness? in it's similarities as well as differences?

4. Do we treat the people around us like the way we treat food? That we dislike someone because he isnt like someoneelse or because he is like someone we already dont like?

5. Do we stereotype people around us without even learning whether they fit into our stereotype? Do we think "he is xxx and all xxx are yyyy, so he is yyyy"?

6. Do we wish to be judged using the single measurement of the "best"? No? because we are complex? Do we judge other people this way?

Our fundamentals are strong?

Chinese saying: - Lips perish, teeth cold. Meaning - if your lips are destroyed, there are no longer any protection for the teeth.

We live too close to each other. No, not just my neighbouring unit, but the neighbouring countries, and their neighbours, and the neighbours of those neighbours. (What is shortest number of borders one has to pass to go where you are to the furthest country? 3? 4? Other than the landlock ones, most places are just 1 border away by ship) So close in fact, that what they do, affects me, especially when the subject in question is shared, such as food, oil and money.

And so because some people in some far distant neighbourhood got caught playing with money they didnt have (domino numero uno), other neighbourhoods found that they too may be guilty of such, at the very least, in the form of lending to those playing. Now the second (and third and so on) giant domino connected. And the rest is not far away. Well, not all the neighbours are like that. Some are not.

Here, we dont do that kind of playing or lending. And so some people says that we should not be affected. But when some neighbours start losing confidence, retirement benefits, real purchasing power and jobs, they often stop buying new things. When they stop buying things, we have a hard time selling the stuff we produce. If we can sell the stuff we make, we need more warehouses. So the warehouse construction industry is going to save us. No?

We can improve productivity (learn from toyota), ensure high quality, manage the supply chain, cut costs, etc. And see, the bottom line improves because we are now producing more high quality goods at lower costs. After all, our finished goods inventory and other assets are valuable. No? We have to sell it before it becomes real value? Ok, so sell it.

We cant sell? What do you mean we cant sell? They used to buy everything we could make. No one is buying? Why? How can they stop buying? That cant be real! Our fundamentals are strong, our economy is good, we are still growing... They used to buy so many every month. Tell them to continue buying like previously. What do you mean they cant buy?

What do you mean the factory is closing? We are producing very efficiently, high productivity, low costs. What do you mean the employees are retrenched (VSSed or fired, or whatever)? They are working well, just last month the production was record high. We should pay them bonuses for the productivity. What do you mean we have no money? After you sell the products, there will be money. What do you mean there are no buyers?

What do you mean our suppliers are at our doors? Explain to them, this is a temporary situation, come back next week. Did already? Two weeks ago? Go and sell some of the stuff in the warehouse and pay them. What do you mean no one is buying?

What do you mean the banks want to foreclose? We have strong fundamentals, see the factory is so big, so efficient. See the goods in the warehouse? when we sell all of those we can pay the loans plus interest. What do you mean we cant sell?

Perhaps we should rethink what we mean when we say that "our fundamentals are strong". Fundamentals should reflect what is happening at the ground. Taking the manufacturer as an example, let's ask a few naive questions.

1. What does Price and Costs really mean to the bottom line if nothing is sold?

2. Reserves or Cash on hand can only last for so long if you have overheads and expenses. What happens if the prices go up? what is the common way to reduce overheads and expenses? By retrenching, do we improve or reduce our chances for survival?

3. If many are retrenched, how will they buy things? If they dont buy, how do we sell?

4. This one is off-topic - If finished goods consumes raw materials and manpower to produce, shouldnt Finished goods be treated as expenses until someone buys it. If you have finished goods that you think will not be sold and it remains in your balance sheet, is that honest? I know that is what is being practiced. But is it Honest?

I have to say this for the record so that I may be proven right or wrong in the next few months. The whole thing is not going to explode. It has exploded. We are over-reacting in the way typical of the west, by thinking that the explosion is still going on and going to get worse and worse.

Just like the price of oil has no limits from Jan-June 2008, and now (Oct 2008) it is at half the price from July 2008. What I mean is that the worst has happened, it is the aftershocks that we must prepare for. But it aftershocks, not a continuous series explosions.

So we will be down a little, maybe many countries will have recessions. Nevertheless, the world will be all right, perhaps even better because of the cooling down of the overheated economies (especially those driven by trades in non-existent commodities or services).

Cannot and Don't Want

Life is full of choices. In fact, it is so important to us that we fight or work hard to have those choices. Even the choice of whether we want to work to have those choices is a decision one must make.

But we are frustrated because of choices too. Families in the big towns will choose from national schools, private schools, popular schools, neighbourhood schools, etc. And many are frustrated because they cant get a place for their child in a particular school. I know of a small town where there is only 1 school. Every parent is happy that the child is going to school. No choice.

Back to the idea of Cannot and DontWant. Because we have choices, many times our choices are guided or limited by Cannot and Dontwant. What's the difference?
Cannot refers to something that I dont really have a choice about because someone, some book, some principle or something states that I cannot do. With a height of 1.60 metres, you cannot play basketball professionally. With serious colour blindness, you cannot become a graphic design artist for magazines. I am married, so I cannot have sex with other people. I am a respected member of an organisation so I cannot take part in "wrongful" activities.

Dontwant refers to something you can choose and you choose not to. I can eat hamburgers or sleep at 10pm or have extramarital sex, steal a stack of paper from the office but I dontwant. You get the idea.

So what's so interesting about the Cannot and DontWant? Well, Cannot is often bent when it is convenient. Convenient may mean nobody is watching, it is too small to matter, or the alternative is too troublesome. Because Cannot is imposed, and not "natural" to the individual.

DontWant normally stands most of the time. Because it is a true choice of the individual.

Where am I going with this? Because society makes us behave with more Cannots than DontWants, we practice our lives in a make-belief world of restrictions. These restrictions are often thrown aside once we are out of reach of the "whatever" that is imposing the restrictions.

I have asked many female friends of mine whether they will sunbathe topless on a beach, and the answer is always "No!". But when the location is extended to a beach in a foriegn country that allows toplessness, and that there are people around but none that knows them, the answer almost always comes back as "Yes". (I didnt ask the conservative ones, since something like this should not be even discussed with them.)

So I dont know what is the ratio of topless sunbathers to covered sunbathers, but I know the ratio increases drastically once they are in a foriegn land. So Cannot locally, Can elsewhere. Of course the conservative ones who will say no even if they have a private backyard with 20 feet walls. But those are not Cannot, they are DontWant. See what I mean?

So we become different when we are in a place that no one recognises us. (Just like how someone described that you are your true self only when no one is watching.) In Malaysia, almost all drivers ignore many traffic signs especially "NO U-TURN". These same drivers obey the same sign when in Singapore. Cannot is at work again. (For readers who may not be aware, in Singapore, cannot means cannot, while in Malaysia, cannot means can if there are no cops around)

Given that we are mostly governed by Cannot, what are we like when the restrictions are removed? Do we start physical relationships with everyone we like? Do we park our cars anywhere that is convenient for us without considering other drivers? (perhaps we already do?)

If Cannot is truly strong, then there will be little vice, affairs or crimes. Of course, Cannot is weak and limited, and therefore we have the choice again.
So, dont believe people when they tell you they are XXX and therefore they do not YYY. Check if it is a case of Cannot or DontWant. If it is a case of Cannot, it can be easily changed. And seldom do you meet a real DontWant.

What about you? Are you guided (or limited) by Cannots that are externally imposed? How many truly DontWants do you have?

A System and its measurements - 01

When a system has measurements that quantifiable, applied and monitored, the participants in the system will behave exactly the way they are measured.

A friend of mine has a sister whose husband has a cousin which works for this company. And this cousin during regular Happy Hours in a pub near his office met this guy who came with his secretary. She then spends a lot of time with him after work (dont ask me how the time was spent), because her husband stays out late all the time, spending most of his evenings with his office mates and managers.

Apparently, when he started working in this company, he had to go drinking with his managers because all the managers go drinking regularly 3 to 4 times a week. And the unwritten guideline is that only drinkers will be considered for promotion.

Actually, it is not true.

The managers and their managers will promote anyone who does good work. And good work is when you do things they tell you to, the way they tell you, have initiative and drive, and bring good results. Not all of us are talented enough to know what initiatives are good, and what are a waste of time. Some efforts that bring results are seen to be unnecessary because the results are irrelevant, other efforts are seen to have failed, or have brought about bad side-effects. Besides, good results are results that the managers want, not necessarily good for the company.

So a good way to find out is to seek advice, or if you are lucky and well-liked, the managers will give unsolicited advice to you on how to (and they may even help you) get the results. And to be well-liked, you need to know them after-hours, and to be lucky, you have to spend more time with them. So you will get tips, and warnings, and advice and help, over a glass of beer, whisky, brandy, vodka, etc. Since the group deciding on promotions are drinkers, they will only know you well if you drink with them.

And then he got himself promoted. He thought that once he becomes a manager, he doesnt have to join the drinkers anymore, or at least, water it down to once a week. But it wasnt to be. The managers and their senior managers have an unwritten rule. Since the company allows entertainment claims, the managers passes on the drinking expenses to the company. (Initially, the owner was aware and allowed this minor "abuse" for his own reasons, which if you think carefully, you will also let it be as long as it remained reasonable.)

And the managers are not stupid. Knowing very well that if one submits entertainment claims 20 times a month for his 5 customers, questions will be raised. So they cooperate and coordinate. I claim Monday, you Tuesday, he Wednesday, so-and-so Thursday and someoneelse Friday. Switch places next week. Sometimes the client is even there.Now that he is a manager, he has to be part of the group. Else he is seen to be unreliable, untrustworthy, and there is constant fear that the group may be exposed by him.

When he reduced his drinking sessions, the other managers (who supported and promoted him previously) constantly complained about him, that he is difficult to work with, has altitude problems, etc. Bad enough that the senior managers had to have a chat with him about this. So he returned to the frequent drinking. And all these complaints vanished when he re-joined the group 4 times a week.

Because of his efficiency and effectiveness at work and reputation among his peers, the senior managers soon spotted the rising star and took him under their wings. Less bars and pubs with the managers, and more golf-courses and karaokes with the bosses. And the senior managers too, have a similar practice, including using each other as alibis, as well as approving each other's claims.

As the results of the company suffer (afterall, promotions were based on drinking time and not profitability), and grew fatter (while the revenues and profits drop, the managers demand more staff and more managers were needed in order to service the clients to maintain revenues and profits). Seeing that this continuous trend of small losses may be getting out of hand, the owner hired a CEO.

To gain acceptance to the existing management, the CEO, (well, what else could he do?) join the managers and senior managers in the drinks and karaokes. He soon found that his suggestions made in the pubs and karoakes worked better than those in the boardroom. Soon, the CEO became part of the gang.

The owner gave up and decided to sell off the company. And the new owner immediately replaced the CEO. This new CEO was very strict, and the claims were questioned, many were rejected, time spent was monitored carefully, but the business became terrible. Deliveries became very late, collections even later, loyal customers stopped buying, payments were overdue, suppliers raised prices and demanded cash on delivery. The owners sensed that the CEO messed up the company, fired him in anger, without a ready replacement.

Surprisingly, while the owner search for a new CEO, the company started improving and things were getting back to normal (a small loss every month). So the owner decided not to have a CEO (and save some money), and hey, everything went back to normal. The previous CEO really did a bad job was his conclusion.

And so the company went on, losing a bit of money every month, and the owner had to put in some money every month to cover the deficit. Until one day, the owner just gave up and shut it down.

That's how organisations collapse, slowly, slowly, slowly, and then very fast. From our perspective, it takes almost 12 hours for the Sun to move from the east to the west. When the bottom part of the Sun touches the horizon, it will be a mere 2 minutes before it disappears. Slowly, slowly, slowly, then very fast.

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Does this apply to an organisation you know, be it a company, a club, a group of friends, a family or a country? Replace drinking to other vices such as sex, drugs, money or corruption, and you may see it around you. Are we part of a system perpetuating a practice in order to protect system?

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What about practices that are "acceptable"? Replace drinking with a particular management belief or culture. Some companies want control over everything, and only people who prove themselves as controllers will be promoted, some view increasing revenues as the priority, yet others value creativity, customer services, etc. Are these any better than the drinking gang?

How about personal practices such as "keeping up with the Joneses" on house, cars, parties, children's abilities, hobbies, sports, and so on?

Are there similar concepts applied to a country? If so, why are they good or bad?

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What if the owner can not shutdown the operation? You cant really shutdown a family, or a country. Can you replace everyone? with people who have no experience with your clients or products? with people who know little about running a company or country?

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What if the practice extends beyond the borders of a company or country? Friends from different companies can "work" together to get themselves entertained at the costs of their companies. How much can it go sideways along the supply chain?

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How high up can it go? What are the motivations to support such practices at the higher levels of CxOs and owners? Fear, greed, lust, ego, power?

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What do we change? What do we change it to?

Before you enter outsight - An Introduction

Firstly, I am somewhat a person who likes to learn and think about what I learned. Reading, watching, doing and experiencing are great ways to learn externally. Thinking gives you the opportunity to learn and create from inside, from what you already know, to learn from yourself, taking your knowledge to a new level. I feel that the most important lesson in life is to learn how to learn. Nothing is beyond you after that...

2ndly, this is more of an attempt to document my learning and thoughts rather than to spread my message or views. I do not profess that I have a message. I only have some thoughts derived from lessons that I learned from others and my own experience. My intention (which is not really intentional) is that if anyone reads this, it should raise some questions in the reader's head. That would have been sufficient reward for my effort of typing out my thoughts here.

3rdly, my views are not necessary right or wrong, they are just my views from where I am, what I know (or dont know) and how I think. Views are typically clouded by conclusions that a person deduces. How the person comes to his conclusion depends on 2 things - a) the logic he uses, and b) the knowledge that is with him. Sometimes, the logic may be flawed, more often the knowledge is lacking or even wrong, other times, both.

4thly, the essence of the content of the articles (that I will compose later) are not originally mine. Before I am accused of plagiarising, I wish to state that everything here is typed by me using my hands (finger-tips to be technically/anatomically correct) from thoughts coming from my head (although I dont know how to prove this), with no cut-and-paste stuff. While many of the ideas explained here have been discussed at great detail by others including the originators, I wanted to document my "implementation" of these ideas onto examples around me. Much like a photographer taking a picture of the Eiffel Tower from a specific angle - the picture is his, the tower remains where it is, and others are free to take more pictures from any angle, including the one he used.

Lastly, if this blog offends your thinking, I am sorry, that your thinking may be too narrow...

Why outsight? Because the word "insight" already covers the deep and penetrative understanding of a situation and the ability to grasp the hidden nature of things. That is deeply profound. I am much simpler than that, and therefore I think "outsight" is better suited. I see from the outside, without knowing, without pre-conceived notions or ideas.

Oh... a phrase (that was the title of a book I read in my teens) that I simply have to quote or paraphrase here -

"Try thinking. You may like the new experience."


Disclaimer:
This blog is a work mixing fiction and truth, unless otherwise stated. All characters mentioned may or may not exist in some form or another in our world, although the names may have been changed to protect(or chide) the guilty. Any resemblances between the discussions here and the real life me is purely coincidental and unintentional. When I use the words "he/his/him", it is not sexist or chauvinistic, it is just less trouble (and less typing) than using he/she, his/hers and him/her. I thought of using "it" to be politically neutral (or neuter), but decided against "it".