“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.”
~F. Scott Fitzgerald
The book “Built to Last,” by James Collins and Scott Porras explores trends of business approaches and strategies that have been historically undertaken by eighteen “highly visionary companies.” It discusses the “Tyranny of the OR” and describes it as a restrictive approach to decision-making that dictates a solitary choice between one of two seemingly contradictory strategies or outcomes — facilitating the necessary exclusion of the other. While frequently embraced by even billion-dollar corporations, this confining, restrictive approach is a tyrannical method of decision-making that can be avoided by individuals and companies alike.
It seems that the energy industry is struggling with this on almost all fronts, especially when it comes to engaging today’s energy customers.
The next time someone offers you or your management team a choice with the word “or” in it, stop and substitute the word “and” and see if it doesn’t indeed improve the choice. After all, why bet on one horse in a race? Why have only one power plant design in your portfolio?
And, for those of you with statistical training on portfolio management, remember that the advantage of portfolios ONLY exists when the members are negatively correlated to each other. They have to be contrary to offer risk envelope benefits. If they are positively correlated, you get no protection at all!
Portfolio theory is not something easily explained in a blog, but those of you familiar with it are all nodding your heads here in agreement.
You also might enjoy Jim Collins’ latest book as well … “Why the Mighty Fall.” Pretty chilling.
It would be fun to go out on the street and ask the average person what pushing the envelope means.
I expect many would say something like this: Because the average person thinks of an envelope as something a bill comes in, pushing the envelope would be kind of like pushing the check to the other person when you are at dinner and you want them to pay. Wouldn’t it be fun to ask people this?
Well, you probably know that’s not the intended meaning, but you might not know this: The idiom comes from aviation where the “envelope” defines the limits of a plane’s performance. There are precise limits of speed, stress, pilot physical limits, etc. that all go into defining the limits that a plane can and should be flown. Some of you probably know that without a flight suit keeping the blood flow to the brain, pilots would black out in some maneuvers. Even so, most pilots “gray out” in these extreme events.
Top Gun pilots tend to fly routinely at this edge, in part because it is tactically superior during dogfights. They literally have to forget about their own safety or that of the aircraft. Unfortunately, this can lead to disaster. These individuals are then often selected as test pilots for new aircraft designs because they are so skilled they can make up for flaws in the controls and performance of the new planes.
According to Wikipedia, a test pilot must be able to:
1. Understand a test plan; stick to a test plan, flying a plane in a highly specific way;
2. Carefully document the results of each test;
3. Have an excellent feel for the aircraft, and sense exactly how it is behaving oddly if it is doing so;
4. Solve problems quickly if anything goes wrong with the aircraft during a test;
5. Cope with many different things going wrong at once.
6. Effectively communicate flight test observations to engineers and relate engineering results to the pilot community, thus bridging the gap between those who design and build aircraft with those who employ the aircraft to accomplish a mission.
Seems like a very well thought out idea for energy companies to follow as they are confronted with the equivalent of a new plane operating in a new environment.
I still remember the first time I saw the movie, the “Wizard of Oz,” staring Judy Garland. About five minutes into the film, Dorothy sings “Somewhere Over the Rainbow” after failing to get her aunt and uncle to listen to her relate an unpleasant incident involving her dog, Toto, and the town spinster, Miss Gulch. Dorothy’s Aunt Em tells her to “find yourself a place where you won’t get into any trouble.” Doesn’t that sound and feel like the corporate agenda for the utility industry today?
This prompts Dorothy to walk off by herself, musing to Toto, “‘Some place where there isn’t any trouble.’ Do you suppose there is such a place, Toto? There must be. It’s not a place you can get to by a boat, or a train. It’s far, far away. Behind the moon, beyond the rain…” at which point she begins singing the title song. Seems like the wish many in the utility industry seek these days.
Rainbows form a significant part of human culture. They occur frequently in mythology, and have been used in the arts. One of the earliest literary occurrences of a rainbow is in Genesis 9, as part of the Noah flood story, where it is a sign of God’s covenant to never again destroy life on earth with a global flood. The Irish leprechaun’s secret hiding place for his pot of gold is usually said to be at the end of the rainbow. It is interesting to read the litany of scientists and others who have tried since earliest times to explain the phenomenon.
This place is impossible to reach, because the rainbow is an optical effect which depends on the location of the viewer. When walking towards the end of a rainbow, it will appear to “move” farther away.
So, if your organization is still looking for the gold at the end of the rainbow, perhaps the ending of the movie sums it up best. It is right here, now and all around you. You just haven’t noticed.
While it may seem counterintuitive, training wheels don’t teach a sense of balance. They may make you feel you are riding a bicycle but, in fact, they fail to build the muscle memory needed to ride the bike correctly without them. That is why we as parents may feel good watching our children ride around with training wheels, but they simply do not work. We shouldn’t use them … ever.
It is interesting to see how quickly children or adults can learn to ride a bike if you take the pedals off and just let them learn to coast for a few feet at a time. They will learn to ride within minutes. That is how fast your body learns balance … but you have to take the pedals off or they get in the way of learning. I think this has many applications in other areas where we need to learn balance.
We have many other training wheels we use in life. We start children out with simple ideas that for a time seem to be helpful … until they backfire later in life. We do this in religious training, math, science, and the list goes on. We think we are building skills when in fact we are simply conditioning children to “spit back” what they have memorized rather than what they have truly learned. Worse yet, we may poison the well of reasoning and learning in life as children become disappointed with just how poorly their training wheels prepared them for life.
As a result, we raise a population that has probably been fed inadequate and unhealthy bits of information that people cling to as if they were absolute truth. Then, as we face the really tough adult choices we must make as a society, we are lost in a seemingly irreconcilable battle of ideologies, dogmas, doctrines, and politics riddled with soundbite answers to truly deep questions.
When are we going to stop the nonsense and correct all this? I think we need to heed Albert Einstein’s famous line: “Things should be made as simple as possible, but not any simpler.” Unfortunately, we are living with the consequence of Henry Louis Mencken quotes: “For every complex problem, there is a solution that is simple, neat, and wrong.”
I became aware of this Latin phrase when the movie Dead Poet’s Society came out. It is attributed to a poem by Horace in 23 BC. In the 1989 movie, English teacher John Keating, played by Robin Williams, famously says, “Carpe Diem. Seize the day, boys. Make your lives extraordinary.”
I don’t need to write another word in this week’s blog, now do I? Why do so many go through life just happy to get through another day? Is it that we really don’t think we are candidates for extraordinary things? Maybe there is a bit more to think about when you look further into the meaning.
In the poem by Horace, the phrase is part of the longer “carpe diem, quam minimum credula postero,” which can be translated as “Seize the day, put very little trust in tomorrow (the future).” The ode says that the future is unforeseen and that one should not leave to chance future happenings, but rather one should do all one can today to make one’s future better. I also like the related phrase in Hebrew ואם לא עכשיו, אימתי “And if not now, then when?”
Perhaps Steve Jobs had it right with Apple’s phrase that “the future is only limited by the size of your ideas and the degree of your dedication.” Perhaps Steven Covey is profoundly correct with his admonition in the Seven Habits of Highly Effective People that “we should begin with the end in mind.”
To that end … Carpe Diem …