November 6, 2013
Dear Friends and Colleagues,
As I'm writing this month's newsletter, there are several
interesting "things" going on in our business environment.
First, it seems as though our elected officials have once
again managed to do the impossible and lower their ratings
in the public polls. Who would have guessed that could
Continuing in the same vein, the Affordable Care Act (ACA) act rolled out while
all the shenanigans were happening with shutting down our
economy. Because of the shutdown, there was little to
nothing said about the difficulty of the roll out. When
finally things got back on track and people started paying
attention to the ACA roll out, they were "astonished" to
find out it didn't work out of the chute. <sarcasm>
Imagine that! What "astonished" me was that all of
them ("them" would be politicians and talking head
newscasters) had become overnight experts in how to roll
out a hugely complicated information technology system.
Right. They couldn't pass a budget or come to agreement on
paying our bills but they know how to criticize others
rolling out a complex system. Does any of that strike you
as odd? </sarcasm>
All of which brings me to the first article in this issue
of our newsletter. I think that we often get ourselves in
trouble because we oversimplify our complex economy,
business systems, market data, etc. and think that we can
make one change and assume ceteris paribus (all things
being equal.) Well, it just isn't so and to assume that it
is just gets us in trouble. And I was so vexed by all the
chatter and recriminations that I found myself writing a
second blog post that will publish after this newsletter
goes to press.
Let's change topics. This month I share a review of the
excellent book naked
statistics by Charles Wheelan. In this
interesting treatise Wheelan explains how we misinterpret
and misuse statistics in our everyday lives as well as our
businesses. Some of that misuse is truly ignorance, but
one can easily see how much of the misuse of polls and
surveys is purposeful obfuscation.
I was having an interesting conversation with a colleague
about our economy and how I thought jobs were just never
going to come back or this recovery be like any others in
terms of job creation. He made the statement, rather
heatedly, that he simply refused to give up. As the
conversation continued, I began to realize that what he
was really saying was that he wouldn't give up on the
model of business and the economy that he believed was in
play prior to the recession. Yet things cannot possibly
remain the same. Between an ever increasing need for
improved skills and automation, our workforce is hard
pressed to keep up. In addition, there is a continuing
trend toward using contingent workers to keep overhead
down. I refuse to give up too. But what I refuse to give
up on is finding ways to help people re-train, finding new
ways to provide for their families (entrepreneurship) and
bringing as much manufacturing back on shore as makes sense
for our economy. I refuse to give up finding new business
models. I've long ago given up on the "old" model. I
explore this some more in the third article below.
And then, there are those who would take advantage of the
unsuspecting public whenever they can. I ran afoul of a
large and well known company when I used an image which
they claim is their copyrighted image. Of course, I have
no way for knowing if that is true or not. Since I never
intended to use their image, I found another "free" image
to use that was even better and immediately took the image
they claimed as theirs down from the site and used the new
one in its place. However, they insisted that I pay usage
fees and penalties. Since this is a family newsletter, I
won't put in writing what I shouted out loud when I
received their obnoxious letter. You can read more, if you
like, in the Nullius en verba column.
And speaking of our economy, I came across Ray Dalio, of Bridgewater Associates, who has an engaging 30 minute video that explains our complex economic machine in simple terms: Economic Principles. It's a unique perspective worth watching and sharing.
As Associate Justice Oliver Wendell Holmes said, "I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity." Dalio has given us simplicity on the other side of complexity.
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We often assume "all things being
equal," but they never are!
Here’s the challenge. We live in a complex world. Things
are getting more complex every day. We try to figure out
how to interact with that world; how to manipulate it. We
build big complex systems in an attempt to model that
world and make predictions based on the results. We
analyze the data, and then, make a bold statement such as
– Our new drug will be a hit in the oncology space,
ceteris paribus (all things being equal.)
Therein lie the seeds of disaster – ceteris paribus is
almost never applicable in our world. All things “never”
stay the same while we manipulate one particular
the full post . . .
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naked statistics by Charles
striping the dread from the data
How many times have you wondered how two
different people looking at the same report managed to
draw totally opposite conclusions? How many times have you
looked at a set of data yourself and decided that the data
must be wrong because it doesn’t show what you “know” to
be true? Well, I suspect that you aren’t alone. I suspect
that you also have an aversion to “doing the math”
necessary to convince yourself that the data is actually
Wheelan claims that “Statistics is like a high-caliber
weapon: helpful when used correctly and potentially
disastrous in the wrong hands.”
the full blog post . . .
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I refuse to give up
But what do you refuse to give up?
I have heard that statement many times in
the last couple of years. Our economy, institutions,
companies, families and individuals have been through some
tough times. Many folks have become resigned to a fate not
of their choosing. They want to work, can’t find work and
so struggle to make ends meet as best they can. In general
I find there are two groups of people – those who are
resigned and those who refuse to give up. The latter group
is broken into two parts. One part will survive; the other
will not and join the ranks of the resigned.
I refuse to give up! The group that will survive is the one
that means: “I refuse
to give up. I will continue to try new things, change my
business and evolve new products and service(s) until I
find what is going to work in this new marketplace.”
full blog post . . .
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Trolls are Trolls and Bullies are Bullies - some
companies are both.
Recently I received a very official letter from a company
I can only describe as a troll. Before I go any further
with this bit of a <rant>, I should make it clear
that I am all for protecting creative works. I certainly
want to protect my own writing, pictures, etc. Anyway,
this very legal looking document claimed I was using a
copyrighted image on my website and it demanded payment
right away. I’m willing to stipulate that I made a mistake
and that I somehow – I know it was inadvertent –
managed to use an image that needed to be licensed.
However, I have no real way to prove that such is the
case. And even if I agree, the penalty they demanded is
absurd. A take-down notice and knowing that “they” are
watching should be sufficient for a first offense. I’m not
the only one that “hates” trolls.
the full post . . .
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