How Economic Thinking Can Benefit Consumers, Managers, and Entrepreneurs (Part 1)
By Barry L. Linetsky
We live in a culture that would be better served by a more comprehensive understanding of the interrelationship between good ideas and good living.
We want to pursue good outcomes for ourselves and others and support the efforts of others in activities that purport to – and that we imagine and expect will – produce such desirable outcomes.
Yet too often we fail to achieve what we want because we give too little thought to whether the second or third-order longer-term effects will actually produce the outcomes we desire and expect to be delivered as a consequence of the immediate actions taken. As a result, plans are well intentioned and begin well, but often fall far short of original expectations.
Doing something that feels to be right and appropriate in addressing a problem or opportunity and which may also be effective in the short-term is no guarantee of its actual effectiveness by our own standards when seen in hindsight from some point in the future. In hindsight, the costs of initiating a project and sustaining it may significantly exceed the benefits. If the gap between expectations and outcomes is too large – if the actions we initiate fail to achieve the positive results we desired – we may come to regret having taken action in the first place.
What started out to be seen as a profitable endeavour may, as further implications (both foreseeable and unforeseen) directly related to our actions become apparent over time, turn out to be unprofitable and unfortunate, leading to the necessity to incur further compounding losses before we can extract ourselves.
At some point, we may reassess our commitment to a losing path and try to manage a new set of challenges that will minimize the losses caused by our initial actions. Or we may decide to cut bait completely and just abandon the whirlwind we created, leaving our mess to be absorbed into, and resolved by, the wider social environment.
In many cases our work falls far short of the rationale and expectations for making plans and taking actions. Too frequently people just carry on with the projects they have started or work they’ve been tasked to do, seemingly oblivious to the increasing gap between their original vision and goals or purpose for the project undertaken and expected outcomes, and the actual impact or lack thereof of the work being done.
In many contexts beyond the simplest of tasks with short target-completion times, where there is a higher degree of complexity in achieving the outcomes we desire, we necessarily lack full knowledge regarding the myriad events and circumstances that will affect the longer-term outcomes we desire and pursue. Hope is a powerful motivator.
Getting things done effectively almost always requires limiting the scope of what we take into consideration so as not to be overwhelmed. But we have to be careful when considering the context and scope of our limitations. When thinking about how to solve the problems we face, we must refrain from being too narrow by ensuring we identify aspects of the wider realm and the things that are most likely to get in the way of successful action. We must as part of our method include in our plans ways to pre-consider contingencies and overcome obstacles we may foreseeably encounter along the way, if we want to increase the chances of success.
© 2019, Barry L. Linetsky. All Rights Reserved.
Barry Linetsky is a Partner with The Strategic Planning Group in Toronto, Canada, where he and his colleagues have been helping executives and owners align their business purpose with customer values since 1994. Barry is the author of the acclaimed book The Business of Walt Disney and the Nine Principles of His Success (Theme Park Press), and an Honorary Disney History Institute Historian. Barry is also a writer, photographer, researcher, and business strategy enabler. Read his blog and learn more at barrylinetsky.com. Follow him on Twitter @BizPhilosopher.