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Views from the Prairie

May 2024

One Mistake Away from Disaster

Just as many families are one mistake away from homelessness, many companies are one mistake away from bankruptcy. The more challenging the environment, the more likely that companies will make that fatal mistake. It is vital to identify mistakes as quickly as possible. We need to learn from both success and failure. The future will not look like the past. It may rhyme, but not repeat.

For a number of years, startup companies were able to get large amounts of capital, spend it wildly, and still get more. Companies made wild claims about how their organization would transform the world around them. They signed luxury leases and spent money paying prospective customers to use their products and services. Recovering from mistakes is easy when you have a lot of money to spend.

As we enter a period of financial tightness, making mistakes is a lot more dangerous. In these times, it is very important to tighten up management controls and look for the flags that a mistake is being made.

Many organizations do not learn from both successes and mistakes. We need to learn from both. We do well to learn "red flags" that might indicate a coming mistake. "Red flags" can include things like constantly going over budget, high turnover, divisions falling far behind their competitors, etc. A budget process that consistently gets expense estimates wrong is a mistake waiting to happen.

Successes need to be examined to see if they are due to luck, good timing, or competent management. Managers, like everyone else, like to believe that their success is due to their abilities. It is important to recognize how much luck came in. Nearly everybody repeats what brought success in the past. When we succeed mostly on luck, then the actions we took are highly unlikely to get the same results if we do them again. Luck rarely repeats. There can be a long time between lucky "rhymes."

We also need to examine mistakes. People learn from mistakes far more than from successes. Yet, most people want to "sweep the mistake under the rug" and move on. People will accept termination and go on to repeat the same mistake at a new company.

The hardest part of examining mistakes is accepting management errors. As human beings, we don't like to accept our own mistakes. Yet, management errors are prevalent, cause far outsized results, and are the hardest to fix.

Most managers don't get enough training. Sales skills are not management skills. Sales optimism can paper over many a mistake till the whole mess comes crumbling down.

A corporate practice of examining mistakes and successes helps the company learn. Such learning can help the company find a way to survive mistakes, changing market conditions, and radically changing financial conditions.

Imbalance of Power

Ever since the first cities were built, there have been imbalances of power and knowledge. No matter how much a culture wants to have equality, inequality will develop. And there will always be those who take advantage of any imbalance of knowledge. The only long-term solution is to spread knowledge and have multiple ways to verify knowledge.

Today, because of the speed of change, there is a huge imbalance of knowledge and access to power. A person at a communications company can cut off nearly a whole country. Someone at a social media company can turn off access. And with our very limited ability to contact a person who knows what they are doing at the company, we can be at their mercy.

For example, the Kansas Reflector newspaper saw every link it had ever posted on Facebook disappear for a number of hours after it published a report criticizing that social media platform. Other people attempted to post the same report and had their posts flagged as "malicious content."

When watches and clocks were not common, unscrupulous factory managers would get more hours of work out of workers by moving the clocks forward in the morning and back at night. Workers would have to work until the clock said it was time to leave, not what the time actually was. Today, everyone has access to their own clocks and this doesn't work anymore.

Right now, it is possible to create so much noise with false statements, claims, and half-truths that people don't know where to turn. Our society needs those who can present knowledge and to have multiple ways of verifying knowledge. Instead of accepting what people state as "truth," look to what they do to see if they are truth tellers.

Risky World

Governments and spy agencies have been pumping a lot of money into quantum computers because of the belief that these machines will allow them to crack any encryption. Unfortunately, due to the quantum nature, the machines have a lot of errors. Recently, researchers discovered that 17% of the errors were due to cosmic rays hitting the machines. Those will be hard to prevent.


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