Irrational actions

People persist in trying to explain their own and the actions of others in rational, logical, terms. Sometimes, they are so clearly nonsensical that we ascribe them to psychological or characterological disorders. People may have thinking which is so distorted by psychoses, neuroses, or character issues, that that are incapable of thinking and reacting logically. However, on a lesser level, most of us behave in ways which are the result of past experiences. Just as the burnt child fears the flames, so we may associate some rational act with something which turned out badly, and so we avoid performing it.

This carries over to interpersonal relations as well as business decisions. Knowing yourself objectively is the only way to avoid this.

Why is a 175 year old soap company in Cincinnati, Ohio, the most consistently innovative company on earth?

In each year, business magazines publish lists of the top companies in each field of excellence. Books, dating from In Search of Excellence to Built to Last, extol the virtues of this company or that. Yet over its 175 year history, Procter & Gamble has demonstrated an ongoing eagerness to challenge the accepted wisdom and reinvent itself. From organizational innovation, such as the creation of the Marketing function and invention of the Brand Manager. It has created new tools of business, from mundane promotional tools to moving close to WalMart in a new defintion of supply chsin efficiency, or creation of the Tremor process to harness word-of-mouth to build businesses. It has a record of innovation in new products, from new potato chips to the spinbrush, which is unequalled in business.

The fundamental reason for this is the company's eagerness to challenge all that has gone before. It assumes that if something has been done for a number of years, it can probably be done in a better way. This is rare in any organization, and while other companies try to copy Procter & Gamble, the very thought process of "copying" means it starts off on the wrong footing.

Walmart's Remedial action

Today, the company announced that it would divert advertising to tell people about its low prices. On August 19th, I pointed out that the attacks on the company for not treating people well merely reinforced its image for low prices. However, WalMart put a lot of effort into telling the world how much it spends on the social good such as education, healthcare, and training. As one might expect, this effort has backfired, and the company has to shift the balance yet again.

Beware of unintended consequences. The results of an action are rarely exactly what you predict.

Things change all around us and we do not see it.

We are creatures of three dimensions, and all spacial ones. Although we move through time, we live in the present. We rarely have the ability to step back and see the sweep of time. a very few humans have the ability. H.G. Wells was one. Olaf Stapledon in his 1930 novel "last and First Men" covered the future history of mankind over 2 million years! In his later novel, written in 1937, "Starmaker," he covered the history of mankind in a couple of paragraphs!

So we forget thst the top ten discount retailers of 1962, the year of WalMart's foundation are none of them in existence. We find it difficult to imagine the sweep of time so that even the most imaginative prognosticators are wildly wrong. The future of the computer, the phone, film and even distribution channels and book publishing have been poorly predicted. Yet while this realization may not make us better forecasters, it does not even make us more wary about the predictions of others.

Of course, if anyone could predict the future their dreams would be dismissed as signs of insanity.

Too old or too young?

It sometimes feels that the world is biased against people who either are too young, or too old. Particularly if you are very young you see all the older people getting all the key positions and if you are older, you see all the young people getting all the opportunities. In fact, we may have a bifurcated system , where the average person at either end of the spectrum is thought of as either immature, or in case of older people, rigid and out of date. However, we do not have to look far to see Donald Rumsfeld, Alan Greenspan, Rupert Murdoch and others you are well beyond the "normal" retiring age and performing with vigor and effectiveness, whether or not you agree with what they do. So perhaps the key is to be a lifelong learner who advances rapidly when young and continues to learn when older. The key to this is to accept that there is always something to learn and to challenge oneself all the time. We do nothing as well as we could!

Assume that and spend time on how to improve all which we do.

A changing world - in unexpected ways!

The past is a poor predictor of the future. In 1972, the Club of Rome published a book, "The Limits to Growth." The book predicted that if the world continued as it was, resources would run out within a century. The book sold 12 million copies in 37 languages. During the 1950 and '60s, the world could not feed itself. However, now we worry about global warming, and since the Green Revolution (started by the Rockefeller foundation in 1944), the world can produce more food than it needs. Countires in which many people starved to death became food exporters. The West now worries about an epidemic of obesity and diabetes, while in less developed countiries wars are the only barrier to distribution of food. It is fair to say that most long-term predictions by experts are wrong. No-one fifty years ago foresaw genetic engineering, or laseer surgery, nor did anyone seventy-five years ago predict antibiotics.

Yet companies fail because they rely on predictions by experts. Railroads did, airlines are doing so now. Electronics companies and car companies persist in extrapolating the past. It will be interesting to see if we ever get away from this.