Month: February 2021

Can’t Decide? What if You Didn’t Have a Choice?

I’m sure you’ve experienced this at some point. You’re deciding between two choices, they both have their own pros and cons, and you just can’t seem to decide between them. So you spent hours overthinking things, asking others for their opinion, and trying to find that one decisive factor to help you decide.

Well, what if you didn’t have a choice? Instead of having the freedom to choose between A and B, what if only option A was available. Would you be okay with that? And what if only option B was available, would you be happy if you were forced to choose B? If you answered yes to both questions, that means both A and B are equally acceptable. So, just go flip a coin or something.

Sometimes, the luxury of choice feels more like a curse. When you can’t decide what to choose, it’s helpful to consider a hypothetical situation where you don’t have a choice. Would you be okay if the decision was forced upon you? If so, why not do exactly that?

The Risks You Can’t Foresee

An interesting article from Harvard Business Review on risk management.

Take the case of a small fire in a Philips semiconductor plant in Albuquerque, New Mexico, in March 2000. Triggered by a lightning strike, it was extinguished by the local fire department within minutes. The plant manager dutifully reported the fire to the plant’s customers, telling them that it had caused only minor damage and that production would resume in a week. The purchasing manager at Ericsson, a major customer, checked that his on-hand inventory of the plant’s semiconductors would meet production needs over the next couple of weeks and didn’t escalate the issue.

Unfortunately, the fire’s smoke and soot and the extensive hosing of the facility had contaminated the clean rooms where highly sensitive electronic wafers were fabricated, and production didn’t restart for several months. By the time the Ericsson purchasing manager learned about the delay, all alternative suppliers of several of the plant’s wafers had already been committed to other companies. The component shortages cost Ericsson $400 million in lost revenues from the delayed launch of its next-generation mobile phone and contributed to its exit from this market the following year.

[…]

At Nokia, another large customer of the Philips Albuquerque semiconductor plant, information about any unusual event in a supply chain had to be reported to a senior vice president of operations, logistics, and sourcing. This executive, who had few day-to-day operational responsibilities, served as the company’s top troubleshooter, or—as we like to say—its “chief worry officer.”

This role differs from that of a traditional chief risk officer, whose priorities are to improve the management of known routine risks and to identify new risks that can then be transformed into manageable routine risks. By contrast, the worry officer has to quickly recognize the emergence of any novel risk and mobilize a process for addressing it in real time.

When Nokia’s purchasing manager received the call about the plant fire, he checked that existing inventory levels were adequate and logged it as a routine event, just as his Ericsson counterpart had done. But following protocol, he reported it to the senior VP as a supply chain anomaly. The VP investigated further and learned that parts shortages from the plant could potentially disrupt more than 5% of the company’s annual production.

The VP mobilized a 30-person multifunction team to manage the potential threat. Engineers redesigned some chips so that they could be obtained from alternative sources, and the team quickly purchased most of the remaining chips from other suppliers. But there were two types of chips for which Philips was the only supplier. The VP called the Nokia CEO, reaching him on the corporate plane, briefed him about the situation, and got him to reroute the plane to land in the Netherlands and go meet with Philips’s CEO at Philips headquarters.

After the meeting the two companies agreed that “Philips and Nokia would operate as one company regarding those components,” according to an interview the troubleshooter gave the Wall Street Journal. In effect, Nokia could now use Philips as its captive supplier for the two scarce chips. The relationship allowed Nokia to maintain production of existing phones, launch its next generation of phones on time, and benefit when Ericsson exited the mobile phone market.

https://hbr.org/2020/11/the-risks-you-cant-foresee

Tackling potential threats is something not many people would bother doing. If you were a customer of Philips and heard they had to stop production for a week due to a minor fire incident, you would probably just check your inventory and make sure there’s enough at hand. Aren’t you lucky that it was only a minor fire and it’ll only take Philips a week to get back into production? Suppose there’s a parallel universe where the plant manager at Philips reported a major fire incident and it will take them half a year to resume production. What would you do then?

And here’s the thing, have you ever considered the possibility of Philips stopping production and the impact it will have? Probably not, and there’s probably no one in your team or organization who is supposed to look into it either. It might only be a week but what if it happened again next year? Why isn’t there a strategy for addressing it when it happens next time?

Take Nokia, for example, they have a “chief worry officer” who is supposed to look into exactly these types of risks. In this case, the “chief worry officer” launched an investigation and found out that if there was a parts shortage issue, it could potentially disrupt more than 5% of their company’s annual production. So they addressed the risk, and sure enough, it paid off handsomely.

As we are currently in the middle of a pandemic, have we ever considered what we will do when the next pandemic hits? Think of Covid as the minor fire incident that was supposed to be fixed in a week but ended up taking months due to the unforeseen risk where the fire’s smoke contaminating the clean rooms containing highly sensitive equipment. Aren’t we lucky that Covid had such a low death rate compared to the Spanish flu? Suppose there’s a parallel universe where Covid is a lot deadlier and kills half or a third of everyone who contacted it. What would we do then?

What the world needs are more “chief worry officers,” people who will look seriously into these risks and plan accordingly so that we will be better prepared the next time these risks occur. A pandemic isn’t a one-time event, it is something that happens every few years or decades throughout history. After the 2014 Ebola outbreak, Bill Gates has already been warning us that we’re not ready for the next pandemic. And sure enough, we’re not ready for Covid. Do we really want to repeat this again when the next pandemic hits?

Forget Your Personal Best, Focus on Your Personal Average

Just because Usain Bolt can run 100 meters in 9.58 seconds, it doesn’t mean he can run 100 meters in 9.58 seconds all the time.

It’s a lot more meaningful, and impactful, to look at your personal average instead of your personal best. Nobody can perform at their best all the time, that’s what it means to have a personal best.

But everybody can perform better than their personal average at least half of the time, mainly because that’s the definition of average. If you can consistently beat your average, or beat it more than half the time, your average will improve. And that is a lot more impactful than simply breaking your personal best.

The next time you measure your performance, take some time to create a rolling average for your last 10 or 100 or 1000 attempts. It will give you a much clearer sense of how you are improving.

Lessons on Learning How to Kick a Ball

You might be a bit embarrassed to search “how to kick a ball” on the internet. I mean, surely, you know how to kick a ball. How hard can it be, right? Well, you know what’s more embarrassing than letting others know you searched “how to kick a ball” on the internet? Actually trying to kick a ball and missed.

Picture this, a group of kids is playing football (soccer) nearby and one of them accidentally kicks the ball towards you. Of course, you want to return the ball, so as the ball approaches you, you walk forward to meet it and kick. Except, you miss and the ball rolls past you. Well, that was embarrassing! How hard can it be trying to kick a ball that’s rolling towards you? Don’t you have basic hand-eye (foot-eye) coordination?

It turns out, kicking a ball is actually pretty complicated. Think about it, how exactly do you kick a ball? If you kick with your right foot, where should your left foot be standing so your right foot can hit the ball? Which part of your foot is supposed to hit which part of the ball? Assuming you managed to kick it, how do you control where the ball actually goes? Imagine the same scene as before, but instead of missing, you managed to kick it. Except now, the ball flies to your left and hits a bystander in the face. Well, isn’t that embarrassing?

Everything is harder than it seems, especially if you’ve never done it before. Driving is hard, remember when you just got your driver’s permit and struggling with parallel parking? Riding a bike is hard, remember when you had to use training wheels? Walking is hard, remember when you were still one year old and kept falling?

One of the best things about the internet is that there are tutorials out there on how to do virtually everything. How to brush your teeth, how to socialize and make friends, how to drink water, and so on. While it isn’t enough to solely rely on those tutorials (you still need to practice and internalize it), at the very least, you would know better the next time you try to kick a ball.

No Often Means They Don’t Know

This is something I’ve learned a while ago from Zig Ziglar’s Secrets of Closing the Sale. Most people will instinctively say ‘no,’ especially when you’re trying to sell them something. And once they’ve said ‘no,’ it can be very difficult for them to voluntarily change their mind, even if they want to, because doing so would mean admitting they were wrong. So what can you do? Give them an excuse to change their mind, they will be delighted to make a new decision based on new information.

No, the prospect won’t change his mind, but he will be delighted to make a new decision, based on new information. Example: “Why didn’t you tell me the property was outside the city limits and I won’t have to pay city taxes?” He’s in the process of making a new decision based on new information. “Why didn’t you tell me we could print on both sides of the paper? Even though it’s a little more expensive per sheet, it saves us money because we double the usage.” He’s making a new decision based on new information. “You should have explained that this model comes with ‘four on the floor.’ My teenager would not want any other model.” He’s making that new decision based on new information. Since prospects will make new decisions based on new information, the sales process demands that you try for the close as soon as you have established value or aroused desire for ownership, but before you give all the information.

If you wait until you’ve given all the information before you try to close, that would be an even more serious mistake. Some prospects automatically say no on the first attempt to close so that they won’t feel they were “easy”—and that they didn’t carefully investigate before they bought. More importantly, they fear they will look foolish if they make a fast decision which turns out to be wrong. Many times these prospects who initially say no are actually saying, “Tell me more. Give me more information. Make me feel secure that a yes decision is the right decision. In short, make it easier for me to buy.” Your job as a salesperson is to do exactly that—make it easier for the prospect to buy.

Zig Ziglar

Your Online Privacy

I value my online privacy, I don’t like it when websites track my behavior or browsing pattern, which is why I use a privacy-focused browser that blocks ads and trackers by default. So now that I’m building my own blog, I’m faced with a decision. Do I install google analytics and track my visitors? Or do I stick with my values and create the most privacy-friendly blog ever?

To be honest, it wasn’t a particularly difficult decision. Since I’m using WordPress, the hard part is in understanding what WordPress and all its plugins are doing. For example, I don’t actually know whether this blog uses cookies or not, or how it’s being used. Fortunately, a quick search online tells me that yes, WordPress does use cookies, but it’s mainly for logged in users and commenters.

Other than that, I’ve made sure that there are no ads, no trackers, and no visitor statistics on this blog! The only thing WordPress tracks are the IP address of anyone who leaves a comment, uses the contact form, or tries to log into the admin account, which is reasonable since it’s mostly to fight against spam and prevent illicit login attempts. But don’t take my word for it, verify it yourself with this cool privacy inspector tool called Blacklight. It lets you scan websites and tells you just how privacy-friendly/hostile they are.

Some of the plugins I have installed may or may not collect additional data as well, like my Email Subscribers plugin. By the way, if you want to subscribe to this blog via email, just enter your email in the sidebar (or footer, if you’re on mobile) and follow the instructions. I’ve also written this incredibly short privacy policy for anyone who cares about this type of stuff so do check it out if you’re interested.

What Type of People Do You Want to Attract?

Something you might not think about. When deciding what to do next, instead of focusing on what actions to take, think about the type of people who would take or be attracted to those actions. Let me explain.

Suppose you are deciding whether to pursue a degree in computer science or a degree in medicine. Instead of looking at the pros and cons of each field like the possible jobs or potential earnings, have you considered looking into the type of people who would choose computer science over medicine, or vice versa? And yes, I’m talking about stereotypes. What type of people do you think would be attracted to study computer science? What about medicine? Do you see yourself as one of them? Do you like to be around those types of people? Because chances are, you will be around those types of people a lot in the future.

A simpler example, if you decide to work in a fast-food restaurant, what do you think your coworkers are going to be like? What if you work in a non-profit trying to eradicate malaria instead, what type of people do you think that job attracts? And what if you work as a fitness coach at your local gym, what type of people do you think you’ll be interacting with all day?

Yes, it’s not good to generalize and judge people as stereotypes, but stereotypes exist for a reason and they are a good-enough heuristic to help you make better decisions. Life is all about the people you interact with every day, so what type of people do you want to surround yourself with? When making a decision, are you attracting or repelling the type of people you want to interact with?

On Bitcoin and Cryptocurrencies

Something I’ve been thinking about a lot recently, especially with all the recent headlines on bitcoin reaching all new highs. I mean, just head over here to see how crazy it is! Anyway, I’m not here to tell you why you should or should not invest in cryptocurrencies, or how they may or may not revolutionize our current financial system. Instead, let’s talk about the bigger picture.

I recently asked a friend if he still holds any bitcoin and told him that I’m considering buying some. He replied (slightly paraphrased) “I believe the correct term is HODL… and well, I can’t blame you for the FOMO but I’m not in the position to recommend anything.”

I didn’t realize it until then but FOMO just about sums it up. The reason why I suddenly want to buy bitcoins is that I’m afraid I’ll miss out. I’m afraid that cryptocurrencies might change everything we know and love (and hate) about our current financial system. What if bitcoin goes high and stays high? What if bitcoin becomes the next digital gold? What if cryptocurrencies end up replacing fiat money one day? What if I could make millions if I buy now, HODL forever, and watch its value soar? What if…

But the thing is, no one knows. Go do an online search right now and you’ll find tons of arguments for and against bitcoin. You might choose to believe one side over the other, you might think one side has a better argument than the other, but at the end of the day, no one can say for certain how the future will play out. So what if you miss out on this opportunity to be super-rich? So what if this is a historical turning point that ends up revolutionizing our monetary system? Aren’t you just going to carry on with your life anyway?

I know it’s tempting to just buy bitcoins right now without thinking, especially considering all the FOMO right now. But I think the smarter choice is to revisit your financial goals. Go back to the basics, what’s your current financial situation or portfolio like? How much risk are you willing to take and have you done your homework on how to buy bitcoins?

You don’t need to think too deeply about cryptocurrency as a technology or the potential future it may bring. Just think about yourself and what would make sense for you to do. If you want to buy bitcoins, and you have the financial means, and you don’t mind the potential risk of losing your money, then buy it just like you would any other investment. Otherwise, don’t.

An Insight a Day

The title says it all, this blog is all about discovering the many insights life presents to us every day. I hope to be able to write something interesting every day but we shall see.

But be aware that 50% of my posts are going to be below average, not because it’s hard to find unusual insights or generate thought-provoking ideas every day, but because of statistics. See, the definition of average means half of what you do will always be below average while the other half above average. 🙂