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May 09

The Answer to Organizational Failure: Complexity Science

by Chris Billows in Business Beller 0 comments tags: Comprehensive Analysis, Corporations Don't Think, Defining Life, Foolishness, Institutional Learning, Summarizing a Business Organization
I can’t recall how I stumbled onto this concept and websites, but a while ago I found this riveting theory which I believe explains why most modern organizations are so inadequate at times and spend far too much time chasing the wrong priorities. I have touched on parts of this in previous blogs such as Driven to Distraction and Even the Best Systems Fall Victim and A List of Guidance. The reason why this happens is they fail to embrace Complexity Science. Basically, it is because our social institutions continue to operate like machines, believing that events can be tracked in a linear fashion and have measurable inputs that neatly match known outputs. While there is no denying that some institutions do operate like machines (take most factories), the fact that humans end up doing most of the work leaves the model sorely lacking. What is more accurate is to realize that all human based organizations are non-linear and complex. It is common for these systems to exhibit the following characteristics: Small inputs can lead to dramatically large consequences. Very slight differences in initial conditions produce very different outcomes. Global properties flow from aggregate behavior of individuals. Emergence (of order) […]

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Apr 09

Are Pension Plans a Type of Ponzi Scheme?

by Chris Billows in Business Beller 0 comments tags: Corporate Corruption, Foolishness, Human Condition
I was reading about Bernie Madoff’s investment scandal and it suddenly struck me that defined-benefit pension plans (public and private) operate on the same principal as Madoff’s Ponzi plan. Bernie Madoff defrauded his investors of $65 billion dollars with a massive ponzi scheme. Madoff was smart by never offering suspicious high returns to everyone, but did guarantee a steady and modest return regardless of the state of the stock market. This latter point should be suspicious to any intelligent investor. Yet that is exactly what our public and private defined benefit plans are doing. They guarantee a return or benefit rate. Yet how can they do this? Just like Madoff did, by using new money brought in from new investors (or pension contributors) to help meet the payout obligations. As long as new citizens grow up and are forced to contribute to the pension plans, the plan remains viable. But, perhaps we would all be better served by a defined-contribution plan, where the return is based on how well one’s money is managed, instead of compelling citizens to make pension contributions to maintain unsustainable payouts.

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Mar 26

Book Review: Nature via Nurture by Matt Ridley

by Chris Billows in Spirit Speculations 0 comments tags: Comprehensive Analysis, Defining Life, Foolishness, Human Condition, Human History
Being intrigued by the title, I picked up this book to learn finally once and for all which side was right – Are humans a product of biology of genes or social environment? Spoiler Alert: Its both. As a society we have witnessed a longstanding feud between two camps – one set of people believes that genes and nature determines our destiny while their opponents insist that socialization and nurture is our sole determinant. Like the title suggests and as Ridley states almost immediately, it is both nature and nurture that affects human development. The two sides may have valid contributions to understanding human development, but neither side gets it completely right because of sectarian/institutional thinking. The problem is that we are all victim of a media that thrives on reporting the controversial and extremist positions of the Naturists and Nurturist camps. That debate has been an ivory tower battle that has spilled over into Pop-psychology books that teach parents how to parent, how to find a partner, etc. This book proves the level of inanity that academics can resort to. Ridley demonstrate how neither side got it right and how humans are both genes and social mores wrapped together […]

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Jan 22

The Fairy Tale of Obama’s Inauguration

by Chris Billows in Political Ponderings 0 comments tags: Foolishness, Political Opinion
When Barack Obama became the 44th president of the United States yesterday, I was and still am amazed over all the pomp, circumstance, and glitter that accompanies the presidential rite of passage. It’s a spectacle that stands in stark contrast to Canada’s celebration of a new political leader. New prime ministers are simply sworn into office with little more than a low-key ceremony with the Governor General at Rideau Hall, attended by a handful of dignitaries and family members. Inauguration day of the U.S. President is a grand affair, with the swearing-in at the majestic Capitol, an inspirational speech to kick off the new presidency, a packed parade to the White House along Pennsylvania Avenue and then a series of star-studded dusk-to-dawn balls. With such a grand, awe-inspiring celebration, I would expect to see a king being crowned. Yet the United States went to war with Britain to dispose of the monarchy and the entitlement of royalty. It is just pure irony that Americans celebrate and treat their President and the First Family like fairy tale royalty. And just like the fairy tale kings of old, Obama’s rise to the top is a real fairy tale in the making. For […]

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Jan 05

Book Review: Small is Beautiful by E.F.Schumacher

by Chris Billows in Political Ponderings 0 comments tags: Foolishness, Free Enterprise, Human Condition
It remains painfully obvious that this book is written by a crank. Only a crank would tell us that we need to rethink our consumption patterns, how we manage our economy, and our relationship with our environment. Going against conventional thinking is pretty fashionable today, but to do so in 1973 and still be so relevant is testimony of a crank who knew what he was talking about. E.F. Schumacher wrote this book in response to what he saw as the quickening and centralizing nature of modern society. He saw governments and businesses getting bigger and losing their essential and natural sense of scale, which is human friendly or simply “small”. Thus prompting the title of the book. It was through this book that Schumacher is credited with influencing green economic thinking from the 70s and afterward. He articulated the fundamental question about growth: “How much further growth will be possible, since infinite growth in a fine environment is an obvious impossibility”. Such thinking was radical, yet not socialist. Instead his thinking was the basis of humanistic, or human-centred economics. This book helped shift the tired and largely irrelevant debate of Left wing vs Right wing economic politics or big […]

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Dec 23

Ideology: Scourge of the Modern World

by Chris Billows in Political Ponderings 0 comments tags: Foolishness, Human Condition, Human History
The Economist posted an article, Why Wars Happen, explaining that the cause of most conflicts in the world during 2008 is due to ideological differences. This reinforces my conviction and past blog posts, Ideology vs Philosophy and Confessions of a Recovering Ideologue. that ideology in all of its forms is the scourge of the modern world. The research about world conflict was conducted by the Heidelberg Institute for International Conflict Research, and has some pretty amazing information there. Does my criticism of ideology mean I am anti-thinking? No, I would instead argue that ideological thinking is an oxymoron. Ideology is a mental disorder that afflicts politics, religion, culture (political correctness), and business. To be ideological means to not think and to abdicate one’s rational powers. To truly be a thinking person one must be philosophical and open to new information.
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