What Should You Do When A New Problem Comes Along?

Decision making with incomplete data is trying under the best of circumstances. When the information itself has been made up, the problem quickly becomes insurmountable.

The normal approach

When you don’t know enough to be comfortable with a decision, you try to learn more. The first step in that is assessing what you don’t know and then how to get that information.

Businesses tend to hire experts in the field, try A/B testing to see what works better, keep assessing new information and see how it fits with what they think they know. That fitting together step frequently opens eyes to more of what they don’t know and sometimes identifies errors in what they think they do know.

From the outside, it looks like governments don’t use that method.

What do they do?

Judging by their approach to the pandemic and climate change it seems like they approach it like this:

  1. Decide without objective evidence that there is a problem only they can solve.
  2. Identify a single variable in that problem
  3. Look for technologies that seem to address the single factor
  4. Assume the technologies can scale to solve the apparent problem
  5. Spend vast amounts of money addressing their problem.
  6. Establish goals that match their problem narrative and their wisdom in solving it.
  7. Fail to meet their goals
  8. Spend even more on the same solutions
  9. Repeat as necessary from step 3 onward

What is a better description of their process?

It is like a science fiction novel in progress. The outline of their novel looks like this:

  • Find an attractive problem
  • Assume a solution that doesn’t exist.
  • Assume the solution can be implemented at scale.
  • The problem solves and the heroes accept their rightful accolades.

Watch California apply the science fiction outline to their energy problem. Watch governments everywhere try to address “Covid-Zero.” Watch people leaving California.

It is a problem for them because the likelihood of success is close to zero. The problem for us is it diverts resources from what might have worked to those that are near-certain to fail.

This is not so rare with people who are academics. In their world, you define a problem, go to a conference room with a few graduate students, discuss options, settle on a solution, declare victory and retreat to Starbucks for a latte.

If it doesn’t work do they suffer consequences? Of course not. Because they don’t learn from practical events, they learn few of those skills.

The world is a messy place and theory is nice but seldom complete. Applying theory without practical considerations is error prone

Slow Moving Problems

We are presently looking at climate change with an 80 year future harm. 80-year projections are fiction. All of them. Any business person who allocates resources would be happy to do so successfully on a 5-year time frame.

Why? There are elements that will appear in the future that do not yet exist. That’s where all the solution will come from. It is a serious mistake to underestimate how resourceful humans can be when given the time to evolve a solution. Look through the 20th century and examine once serious problems that disappeared.

Antibiotics, vaccines for smallpox, polio, measles, and more. Containing HIV,  Television. Have you noticed how telephones haver changed? Your smart phone is more capable than the most advanced computer in the world 30 years ago. Social problems have evolved. There are a thousand examples. At least.

Suppose you decided to solve one of them, how about television in 1927. Suppose you demanded an 80″ Hi-def screen in 10 years. Given that transistors didn’t exist until 1947, and integrated circuits until the 70s, I don’t like the chances. Yet, there it is. Just not in 10 years.

It is always a mistake to assume that the only valid solutions are the ones you know about today.

Politicians don’t like slow moving solutions because it is impossible to get credit for eventual success.

The bits to take away

Never assign a problem to someone who cannot get credit for solving it. They cannot be motivated to do anything other than follow their science fiction novel outline.

Solutions are found when you use theory as a guide and practical steps for the details.

Help me please. If you have found this useful, please subscribe and forward it to others.

I build strategy and fact-based estate and income plans. The plans identify alternate ways and alternate timing to achieve both spending and estate distribution goals. In the past I have been a planner with a large insurance, employee benefits, and investment agency, 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. I have appeared on more than 100 television shows on financial planning, have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, Banks – from CIBC to the Business Development Bank.

Be in touch at 705-927-4770 or by email to don@moneyfyi.com

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