Thursday, December 04, 2008


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Dear Friends:

As a young student of economics, I was taught about the "Law Of Diminishing Returns." As it was explained to me, it was a very pricey version of the old adage "Too Many Cooks Spoil the Broth," or somesuch. Intuitively, this makes complete sense. If you picture a small plot of farmland with a crew of fieldhands (each armed with a rake or hoe) working the crop or the soil, you can see that, generally speaking, a greater number of folks gets the job (whatever the job is) done faster -- to an extent. But after a certain optimal number of workers has been reached, the operation becomes counterproductive due to overcrowding. What started out as farming begins to look more and more like a Lacrosse match, a Black Friday outing at a major retail store, or a session of the U.S. Congress, with an ever-increasing probability of injuries and less and less production.

The quantity of people, money or any other resource "thrown" in the general direction of a problem is not necessarily proportionate to the likelihood of reaching a solution. Bigger commitees, larger financial bailouts and increased information are not necessarily desirable (or even helpful), unless there are several issues addressed first:

  • What is the actual problem to be solved?

  • What is the root cause of the problem? Sometimes merely medicating symptoms just allows the disease to progress.

  • What will the solution look like, assuming we succeed? If we don't have a clear vision of what the changed scenario will look like, if we cannot visualize, or think it through to completion, we are possibly taking a Humvee trip on a bridge that is 98% complete --e.g., the last 2% seems small, until you fall into the ocean.

  • What are the proposed sources and uses of the the personnel, funds or other resources to be deployed in solving the root cause of the problem?

  • How will the proposed steps of the solution be implemented, monitored and corrected, should a change in direction become necessary?

  • How will the resources be accounted for and controlled?

  • Which parties stand to benefit the most by the plan?

  • Which parties stand to incur the greatest burden (i.e., cost) of the plan?

  • Are there incentives for competence and efficiency, and dis-incentives for failure? If we reward failure, we encourage and perpetuate it. Don't give the CEO of a major company (which he or she has driven to the brink of bankrupcy through his or her own misjudgments, negligence or avarice) a major sum to keep his or her organization solvent and let him or her continue to receive the rewards that should be reserved for those who are successful. Worse, don't let that same CEO fire the bulk of his staff in order to conserve his or her own level of inordinate compensation.

  • How will resources be phased in? what will the benchmark achievements be? Let's not build a "bridge to nowhere" or take a meandering drive without a clear destination and a linear path. What are the expected results, incrementally, along the project timeline?

  • Which parties are responsible for which functions?

  • Who will oversee the efforts of the responsible parties to maintain their integrity? (Checks and balances anyone?)

  • In terms of production possibilities and allocations of resources, will our assignment of resources to a particular problem cause another problem to take its place?

  • Are we running the risk of pumping blood (of a rare type) into a patient with an absolutely fatal diagnosis? Are we reacting emotionally and ignoring the analytical notion of sunk costs?

  • We must manage people's expectations with intelligence, realism and sensitivity.

These are considerations crucial to intelligent decisionmaking and sucessful problem-solving. They require several ingredients:

  • A detailed plan;

  • A skilled leader;

  • Well-coordinated teamwork and a sharing of costs, as well as a sharing of benefits.

Thank you for reading me.


Douglas Castle, Internationalist


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