Experience Is A Risk

If you think of culture as the set of rules that work in a given place at a given time, then today, we are all changing cultures and doing so rather quickly. Sometimes the old way work better, but you cannot be sure. You cannot apply experience when the reality is different from the reality in which the experience was developed.

In Northern Canada, the environment is such that some of the things that are obvious, and which work in the south, are not applicable.

About 20 years ago, I happened to be in a village on James Bay at the same time as a person from the Quebec Ministry of Natural Resources. This person had graduated from university a few months earlier, and was there to explain to the locals how to fish. You might wonder what a 22-year-old university graduate from Montreal knew about fishing in the north that the natives did not know, but that is a question for another day.

His version of reality was that nets with large holes should be used. That way the little fish and the middle sized fish could swim through and the large fish would be caught. Over time the middle sized fish would become large and the small fish would be come middle sized. A perfect natural flow.

It seemed that the natives did it differently. Their holes were smaller and as a result neither the large fish nor the small fish were caught. According to the Chief, “We work the same way as the government. Create a method that harvests the middle-class.”

In the north, with fish, things are a little different. The natives take a great many fish from a lake and then leave it alone for a while. The big fish can repopulate the lake in 3 years or so. The middle sized fish take much longer. If your experience is in different world, then experience can be wrong.

One of the things they fail to explain clearly when advising that experience is the best teacher is that experience is strictly contextual. Experience is only useful if it was earned in a reality that has underlying principles the same as the reality in which it is being applied. In the north, a place where summer lasts from 10:30 in the morning until 2:15 in the afternoon of July 9th, some of the growth and development rules are different from where it is warmer.

Each of us has a set of experiential facts. No two are the same. A large share of our communication problems arise because we believe that everyone shares our facts. They do not. Worse, our fact set gradually becomes obsolete.

In tech industries, experience is likely 90% useless in 5 years. In marketing, maybe it lasts a little longer. If you led the Harvard MBA class in marketing in 1990, what would the facts you knew then be worth today? Not zero, but certainly less.

What is the half-life of experience? How long until half of its value has disappeared? Can you tell which half has gone away?

There are two points here.

Point 1. Experience has two forms. One is durable and one is transient. The durable part is the underlying principles of markets, human behavior, motivation, relationships and the self-development skills like discipline, integrity, selflessness and commitment. They may not last forever but they change more slowly than the transient part that involves fashion, technology, methods and techniques.

The transient part may not be useful for long but the durable part will grow if you pay attention to it. The problem we have is that it is easier to pay attention to the transient.

Point 2. Obsolete experience is dangerous. If you hold onto ideas that have passed, you will be lead to behave in ways that are no longer workable in the world in which you live.

“In times of great change, experience will be your worst enemy.” J.Paul Getty

To succeed, as either adviser or advised, you will need to examine your experience and see how that is connected to what you are attempting to accomplish. You will discover that a good deal of what you think to be true has changed enough that it is now harming you.

When your adviser wants to do an annual or maybe bi-annual review, the review should have two parts. What is the progress towards your objective and what new things have come along that may have value?

Many advisers communicate regularly but, it will be unwise for you to wait for your adviser to bring opportunities to you. It is your plan and you need to participate. Learn what you can and bring questions to the review.

If your adviser does not have a regular review process, find another.

Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. don.s@protectorsgroup.com

4 Comments on “Experience Is A Risk

  1. I love this fish story. We really do need to learn from the natives who’ve been around longer than the experts.
    We also need to learn more from our own “durable” experiences. I’ve been finding that religion, psychology, and even the practitioners of poetry have a lot to contribute to our economic understanding on this front. Maybe that’s all the more important in terms of the rapid changes you also mention.

    • Thank you for your thoughtful response. I have been concerned for a while about some of the durable experiences. Things like community and family and political leadership and religion are among the biggest of these concerns. Each of these provides a grouping that is important – others with similar objectives and commitments and sharing of wisdom and experience. People who are grouped are stronger because of it. In our world there seems to be a tendency to fragment rather than group. That may be a response to “Future Shock” that I talked about a few weeks ago. I don’t know, but I think the experience of community and family and religion and country may be an experiential idea that has passed its best before date. I/Me/My entitlements, is unlikely to be a fulfilling substitute. I do not believe, as a people, we can go back, but I do think we can choose a functional path to the future. It will depend on what we incentivise. Pax

  2. Pingback: Why, Why Not, And Because | moneyFYI

  3. Pingback: EXPERIENCE IS A RISK – moneyFYI

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