moneyFYI
Financial Freedom Is Merely Organized Common Sense
Seek Optimized Instead Of Perfect
Many people have the errant view that you can improve the whole by improving the pieces that make it up. In business and society, the total is not the sum of its parts. It is possible to improve one of the parts and make the whole worse.
I knew one of the sons of the Reese family of Reese’s Peanut Butter Cup fame. He told me of the beginning when the whole family worked on a rudimentary assembly line where children had stools of different heights to stand on while working. As their success grew, the line became machines instead of people and eventually, the parents retired and left management to the older sons.
Father returned to the factory one day and was intrigued by the machinery. He asked a worker how fast the machine was working compared to capacity. The worker told him about 30%. “How do you control it?” You change the setting here was the reply. At that point, father sped the machine up by double. Inefficient to have the machinery working at 30%, right?
As it turns out, it is not better at 60% unless everything else on the line changes too. You end up with peanut butter cups in a pile because the packaging is still running at 30%.
Assembly lines are optimized for the circumstances; they are not perfected.
Perfection is a weak goal
There are several reasons to avoid perfection.
- Perfection requires a narrow set of circumstances and fails catastrophically if the conditions experienced don’t match those assumed.
- Perfection is rigid and harder to maintain as circumstances change.
- Perfection is needlessly expensive.
- Every process has exceptions that cannot be easily programmed, even if they are known. Addressing anomalies outside an optimized but imperfect process requires judgment. When he left university, Steve Jobs applied for a job with Hewltt-Packard and was rejected because he had no degree. They would have rejected Bill Gates and Mark Zuckerberg for the same reason. Wise?
- Perfection is rule-based and aims at efficiency and not at optimizing the task.
Work at efficiency in areas that are narrowly defined. Work at optimizing performance for everything else.
How do you optimize society?
In society, interest groups are anti-optimizing. Improving the result for one group harms others by reducing the available resources. Each leader of an interest group wants priority for their concerns and does not consider the effect it will have on the other parts of the whole. Optimizing society requires all plusses and minuses to be considered at once.
Ask yourself a simple question. Do interest groups exist to benefit the aggrieved, to benefit society as a whole, or to provide enrichment and aggrandizement for the leaders? What does history tell us?
moneyFYI 