{"id":134,"date":"2009-02-19T21:46:48","date_gmt":"2009-02-20T04:46:48","guid":{"rendered":"http:\/\/chasingeden.com\/?p=134"},"modified":"2009-03-03T18:16:01","modified_gmt":"2009-03-04T01:16:01","slug":"holistic-thinking-and-inflation","status":"publish","type":"post","link":"http:\/\/chasingeden.com\/?p=134","title":{"rendered":"Holistic thinking, Complexity and Inflation"},"content":{"rendered":"\t

Ok…really its two different topics, so I’ll take holistic thinking first.<\/p>\n\t

So I do HR consulting, and we are always talking about the big picture…creating a holistic transformation, etc, etc.\u00a0 Let’s think about holistic.\u00a0 Its means whole.\u00a0 You’re thinking about the whole<\/strong> thing.<\/p>\n\t

Why is this is pipe dream?\u00a0 Two reasons:<\/p>\n\t

    \n\t
  1. Employees, no matter how high up in an organization (other than the CEO\/COO) only have a certain purview<\/strong>.\u00a0 The Executive VP of Compensation….deals with compensation.\u00a0 If s\/he were to think about the effect of compensation, it is just one piece of what keeps an employee at a company and motivated to perform (there is also benefits, manager competence, even the comfort of the chair s\/he sits in at work).\u00a0 In short, the VP of Comp can’t afford to think holistically about “total rewards” or “employment brand”….their purview is too limited.<\/li>\n\t
  2. Some companies now have “total rewards” managers, or some other role, trying to get around this paradox.\u00a0 Its a good idea, and likely works better than roles with more limited scope.\u00a0 2 issues here:\n\t
      \n\t
    1. Its hard to find someone that knows a fair amount about everything related to Total Rewards or Employment Brand (It was hard enough to know just about Compensation).\u00a0 Competence at this level will be difficult to come by….by definition.<\/li>\n\t
    2. Here is the main issue<\/strong>, and my main issue with Holistic thinking….even in the best case scenario:\u00a0 Complexity is hard to sort out<\/strong>.<\/li>\n\t<\/ol>\n\t<\/li>\n\t<\/ol>\n\t

      People are not smart enough to deal with real complexity.\u00a0 No one is.\u00a0 The human brain cannot deal with an unlimited number of variables.\u00a0 If you make a manager’s scope too limited, they are not holistic.\u00a0 If you make the scope larger, they run into the issue of complexity.\u00a0 Ok….what’s the real issue?<\/p>\n\t

      They call it the Butterfly Effect<\/a> or perhaps more accurately the Law of Unintended Consequences<\/a>.\u00a0 Bottom line, we are unable to predict the outcome of systems that get too complicated.\u00a0 The weather is an example.\u00a0 Businesses are another…at least currently.<\/p>\n\t

      I think business\/management will eventually become more scientific.\u00a0 The human brain often fails at modeling complex systems (no person can predict the weather), but science can do a little better given time.\u00a0 Of course, we still can’t very accurately predict the weather…even with science.<\/p>\n\t

      Any advice for businesses?\u00a0 Yeah, I do have some.\u00a0 Its a vote for the next-best, iterative solution.\u00a0 The great Holistic strategy is not forthcoming, and if it were…..it would be too complicated to implement.\u00a0 Be willing to start something today that you know is a step, and isn’t perfect, and is full of holes<\/strong>.<\/p>\n\t

      Companies already do this.\u00a0 They’re good at it.\u00a0 Where then do they fail?<\/p>\n\t

      Short-sightedness.\u00a0 They start on a step 1…by the time step 2 is supposed to happen, they’ve had turnover (the original planners are now gone), the business environment has changed….they’ve already come up with another plan.\u00a0 Plan 1 isn’t anywhere near done, and they’re already on Plan 3<\/strong>.<\/p>\n\t

      There is an abundance of strategy in corporate America.\u00a0 There is not a ton of execution\/follow through.\u00a0 Even I recognize this.\u00a0 By the time I’m good enough at my current job to have real effect….I’m off to something else.\u00a0 Sustained effort is gold<\/strong>.<\/p>\n\t

      ____________________________________________<\/p>\n\t

      And then there is inflation.\u00a0 I explained here<\/a> what the US is doing with its monetary policy (printing money), and how we might bail ourselves out of this mess (other countries will finance our ir-responsibility).\u00a0 It seems the Chinese know it too<\/a>.<\/p>\n\t

      Another short bit on inflation:\u00a0 I’ve heard the business press say wage pressure causes inflation (if people get paid more, then prices go up).\u00a0 That’s shit.\u00a0 Inflation is primarily caused by a change in the money supply.\u00a0 The money supply is controlled by the Federal Reserve.\u00a0 The Fed causes inflation.<\/p>\n\t

      What the Fed tries to do is even out the business cycle, to prevent inflation, to prevent boom and bust by slightly rigging the system all the time to ensure even growth and stable prices.\u00a0 We get back to Complexity though (and weather prediction).\u00a0 No one can predict economics.\u00a0 The Fed gets it wrong….and thus causes<\/strong> our business cycles, not prevents them.<\/p>\n\t

      I’m not down on the Fed….I’m sure Ben is one of the greatest economists ever to live….but that don’t mean shit.\u00a0 The greatest weatherman is still just some clown pointing at clouds on a map…..failing against Complexity.\n<\/p>\n","protected":false},"excerpt":{"rendered":"

      Ok…really its two different topics, so I’ll take holistic thinking first. So I do HR consulting, and we are always talking about the big picture…creating a holistic transformation, etc, etc.\u00a0 Let’s think about holistic.\u00a0 Its means whole.\u00a0 You’re thinking about the whole thing. Why is this is pipe dream?\u00a0 Two reasons: Employees, no matter how […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0},"categories":[1],"tags":[28,52,42],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p3IMYj-2a","jetpack-related-posts":[{"id":441,"url":"http:\/\/chasingeden.com\/?p=441","url_meta":{"origin":134,"position":0},"title":"Only the government can save us now……. from the government.","author":"kellio","date":"May 14, 2011","format":false,"excerpt":"It is sometimes said that the cure is worse than the disease; however, sometimes the cure IS the disease. 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