Success or Failure is just a Ratio

Today’s post explores a perspective on success and failure (S&F) that is a bit different. How is it different? We often think of S&F as the achievement or lack of achievement of some goal, value, objective, etc. Today we will explore the utility of thinking of these two outcomes from the perspective that they are fundamentally ratios and whether we achieve the “S” or the “F”is a matter of the denominator versus the numerator or vice versa.

I am inspired to think of S&F from this perspective from an article by Jason Clemens and Brian Lee Crowley titled “Solutions for an aging Society” in 2 March 2012 National Post page A11.

Clemens and Crowley examine a recent report by The Macdonald-Laurier Institute which explores How we might best deal with the demographic shifts on our economic and social well being. Interestingly, the report stresses the importance of focusing more on growth and productivity than relying on changing the rules for social entitlement qualifications. The report suggests that improving efficiency and effectiveness in areas as inter-provincial trade (make trade easier and cheaper), private investment in transportation infrastructure (offset the burden on taxation), Employment Insurance (improve labour modality towards better work and ensuring those firms who place the greatest burden on the system pay to support it), taxation policies (especially credits that distort labour and investment behaviours to meet special interest concerns), and immigration (be more work friendly less family re-unification friendly).

All of these examples struck me as situations where we make policy and strategy choices that result in some form of effort/investment and along with the hoped for anticpated outcomes/benefits. Conceptually this a ratio: effort versus outcome. We can think of the numerator as the outcome and the denominator as the effort. We can achieve and even maximize our benefits concurrently using two realtime approaches: look for ways to reduce our efforts (for a given outcome); look for ways to increase our outcomes(with a given effort); and do both. Also we can consider the absolute value of the outcome from a more classical accounting perspective: outcome less effort equals net value.

Why is a ratio perspective useful? Because it prompts us to consider: are we getting enough value for our efforts. If the actual ratio is inadequate for any reason we can ask where is the major source of the disappointment: in the effort or in the outcome? We can consider how best to respond by looking to improve both sides of the ratio, even when the major concern is on one side or the other.

The other value for me in thinking about S&F as ratio issues is we can easily embody the notion of “unintended consequences” into our considerations. Almost all human action results in unintended consequences. This is due our inability to often consider “All that may follow from the larger environment/system.” Social policies such as the ones examined by the above mentioned reports are rife with unintended consequences. I am sure that the the policy  makers for Employment Insurance did not envisage the impacts on labour mobility over time and the resulting systemic impoverished economic areas in some parts of the country. How do we consider unintended consequences? We treat these as a constant that detracts from our efforts/outcomes or even promotes it.

The other value to me in thinking of S&F as a ratio is it enables me to better stay critical of simple (perhaps simplistic is a better notion) solutions. These might include cries for “belt tightening” (denominator fiddling) or “lets borrow and invest our way into prosperity” (unintended consequence is the burden of making payments on children and grandchildren). The notion that there is a “constant” called unintended consequences enables me to consider in any proposed solution (simplistic or otherwise) what can we expect to go wrong? Go wrong? It is often helpful to remember that when we try and make something “fool proof” we forget just how creative and smart these “fools can be about “gaming” our clever policies, programs and strategies.

The last value for me in thinking of S&F as a ratiois helps me to remember that we live in a a universe of systems where things we do can interact with the broader environment in curious and surprising ways.

Your thoughts?

Postscript 15 March, 2012.

A ratio perspective makes it very easy to envisage asituation where we achieve a goal, that is, we achieve success (using a more classical notion of success) but still failing. How? Well we achieved the goal at too great a price. The ratio between effort and benefit was too small, or even inverse. “We won, but the price was too high!”


About 123stilllearning456

As a management consultant I am passionately interested in talent management and risk/uncertainty issues. In the area of talent management I propose that we seek strategies that look beyond the staffing/employee centric frames of reference. I have been frustrated at the "closing down on possibilities" by these more conventional staffing/employee centric approaches. I have been impressed where people have found systematic solutions to their talent management issues by going beyond the conventional approaches. In the area of risk and uncertainty, I am interested in making this topic relevant to more normal decision making situations. My conceptual foundation is to use the micro-economist's fixed/variable cost theme. I also think it is important to look at these issues for people through their emotional and psychological lens. As a premise I think risk and uncertainty only exist where there is a person who cares about possible events and its consequences. Hence, risk and uncertainty are social based concepts (no sentience, no risk and uncertainty). A major influence on my thinking in this area is Nassim Taleb of "Black Swan" fame. This BLOG provides me with an opportunity to express my thoughts on topics that interest me. As this is an online diary, content is more important to me than polish. I apologize if this distracts from readers' enjoyment and learning. Still I find this a useful way to live up to my namesake, learn more from others and hopefully provoke creative thoughts and ideas in others.
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