Do you have a problem or a task? There is a difference. A problem is something you do not know how to do. It is a serious matter to assume you have a task when you have a problem.
Problem solving is the technique with things that matter.
In problem solving, you will be required to draw meaning from you surroundings and match it to your purpose in such a way that you achieve what you want. Start with understanding what you are trying to do. It is an old idea, but still valuable, that a well-defined problem is nearly solved.
Know what you want, when and what you will use to get whatever it is. It is not enough to know you want a new car. You must know the make, model, options and the price. Knowing that you want an S550 Mercedes sedan in silver grey, with the upgraded stereo and 20 inch wheels, by the end of August is different from wanting a Mercedes. Will the family support this choice? Specifics drive problem definition.
As with any problem, once the what, when and what with, are clear, the “How” part appears. Most people underestimate this part. They address it, but often get sub-optimal answers because they don’t fully understand how complicated it is. Buying a car is relatively simple. Pay cash, finance, or lease? From a dealer or pick up a repo or lease bailout? What is the total cost of ownership? Insurance and maintenance adds considerably to the cost of some cars. How predictable is the income I have to support the lease?
In bigger problems, there are more troubles.
The serious ones include:
- Incomplete, possibly unknowable information
- Faulty information
- Good information that is missing connections to other pieces
- Information that looks promising but is not
- Importance changes with new circumstances
- Losing track of what is the purpose
- Loss of control over the problem solvers
Think about curing cancer or finding terrorists. You have a gigantic data set and hundreds of workers. Data becomes valid information in rather random ways. Information tries to become knowledge, but that is an ideal and seldom a fact. Meaning of all the information is illusive, yet meaning is all that matters.
Too much information and too many analysts can reduce efficiency. Not all the information is equally valuable and not all analysts have the same view of what they work with.
Elite teams of analysts had millions of pieces of data about Bin Laden. It took more than a decade to find him.
Most complex problems share a result. When they are eventually solved, people realize they had the information they needed for years prior. But no one put the right pieces together in the right order. Even relatively simple problems have many ways to put data together.
Suppose you have 100 pieces of seemingly relevant information and the eventual solution uses only five. There are 75,000,000 ways to choose the five. If just one of those must happen before the other four, but you don’t know which one, there are nearly 400,000,000 possible answers. Analysts try to cut that down to something solvable, but having too much data with weak links, makes it difficult.
When people eventually solve the cancer riddle, some poorly thinking journalist will point out that the solution was there 20 years ago. He will be right and wrong both. Information is not an answer. Putting it together is the answer. Learning what doesn’t matter is the key to that.
And that is why it helps to have a financial advisor who knows how the tools work, when they don’t, and can find a way to attach them to your complicated personal situation.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
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