Mr. Niall Ferguson (2010APR23 Wall Street Journal) sums up the U.S. post-crisis financial regulation as a “trilemma” that could optimize to any two of three, but never all three: (a) efficient capital markets; (b) no bailouts to big banks; or (c) a depression-free economy.  ( Mr. Ferguson further  warns against a delusional proposition that bigger government could give us all three.)  Pick two, any two, but not all three.

Other than the interestingly complex content ( the continuing economic debate),  we can learn from that exercise of attempting to identify the core factors of a situation.  Project managers know the classical trilemma of scope, schedules, and budget.  Or, as the sign says at mechanic shop: good, fast, or cheap: pick two, any two.

The past months have seen earthquakes and volcanic activity. It’s easy in our human conceit to forget that this ancient earth’s mantle is shifting ever so slowly but continuously, and with an occasional tectonic shudder.  In a free market, we will see discontinuous corrections, as occasionally hidden faults surface in a precipitous cataclysm.  It was too naive to think that a few bailouts could have eliminated serious structural issues.

A financial institution can be so complex and large that one part of the house touts risky instruments, and another bets against it with hedging derivatives.

Can free market enterprise regulate itself, whose fundamental premise is efficient profitability, as the incessant sea flows in and around to find advantageous crevices? No doubt better regulation is needed, and will come. But could we trust it to come from bigger government, especially one driven by polls and earmarks?

There are parallel problems as well in how national economies are managed. Economic disparities within a common currency are fracturing the European union. Greece, as it turned out, was entirely too creative in disguising its liabilities.  And as it scrambles to keep its economy together, it must do so without control over monetary policy. Unfortunately, sadly, the best Greek drachmas, uh, dramas invariably are still tragedies.

Or take current US foreign policy.  As a culture, Americans often confuse rhetoric and realpolitik. We want our oil, but, in a lack of forthrightness about our petropolitical agenda, trip on our own preachy rhetoric.  We want to curry favorable world opinion and world peace awards.   We must appease the domestic distaste for prolonged wars, and therefore the strategically dubious pre-announcement of our exit from Afghanistan and Iraq.  Yet again, those local heroes we exhorted to the fight will find themselves twisting in the post-US vacuum. Is it surprising that Afghanistan is now scrambling to realign with Iran?

No easy solutions. And no doubt some critics might say Mr. Ferguson’s trilemma is simplistic.  But though initial analyses are nuanced in sixty-four shades of grey, the process must ultimately reduce to three, then two, then a decision of one.    And let’s not feign surprise if Israel finally, preemptively confronts the Iranian nuclear program.

And you?

For the quarter of the population who are introverted – unlike the extroverts – their brain, not only keeps open a larger funnel for data, but also processes the data along a longer pathway.  It’s not a consciously controlled gate.  And they can’t help it.  Simple overload.

Are introverts abnormal? Well, mathematically, yes – since the extroverts are the majority. But the point is that’s just a statistical fact, not a disability.

Is it also a process of tossing the data between the pattern-seeking right brain and the linearizing left brain?

Even for me, when I’m exploring a new topic I like listening to cool jazz or Bach’s repetitive, horizontal arabesques; and when the data seem to be emerging into a structure, I like pursuing the endpoint with the more vertical, directional frames of Beethoven or Brahms.

So I tell my son it’s more than ok that he takes breaks from the mindmaps and word processing, and he goes to just play on the piano, or YouTube’s for a jazz piece or some goofy comedy.

And how about we call a truce, and just call it Attention Decompression Dichotomy?

I folded  the Journal, turned off the overhead light, and stared out the dark window, thinking of  Wendell Berry’s plain words,  ”What I stand for is what I stand on” .

MBA analyses make decisions seem like a forensic dissection; but better managers zero in on the key elements of a living, changing situation.   It’s much like athletes using a simple, clear image;  game time is not the time for deconstructing into mechanical elements.

Seat-of-the-pants or so much voodoo? Hardly.  In an earlier post, we reviewed Jonah Lehrer’s book on the neurologic science of how we make rational or intuitive decisions.  But if one approach is rational, does that mean the other is irrational?   Somehow, the book leaves us with only a coy platitude that choosing between “Rational” and “Intuitive” processes depends on the situation.

The purpose of this article is to understand just why the brain would choose one path or the other, and therefore how to use the mechanism to better advantage.  Our premise is that man is a purposeful being.   When we make a decision, then, the process is optimized to three factors: time, familiarity, consequence.

Two books talk about how our right brain ( Jill Bolte Taylor’s Stroke of Insight) and autistics and animals ( Temple Grandin’s Animals in Translation) think in pictures.  These explain why firemen and emergency medical docs might explain their decision-making in a crunch as “telling a story”. What I believe actually happens is the mind quickly grasps the picture, and compares it against its library of other pictures, and connects that with a particular action and its consequence.

The brain might just preemptively say “No”  to paralysis by analysis. The threat might evoke a survival reflex from our reptilian part of the brain. Consider how food poisoning can evoke a strong aversion to a dish or a restaurant for a long time.  Extending that to an even more  local reflex, my hand drops a hot potato long before the brain yelps  “Ow!”.  Or, then again, our emotional amygdala might make us do things in the name of love contrary to all practical logic.

All these are done for a reason – you see it if you look for the intention.

If you think about it, the three factors from the diagram would easily apply to organizational behavior as well as the hierarchy of delegating decisions.  How, then,  do we put this knowledge to practical use?

First off, it’s a good reminder to step back for better clarity.  Projects are understood in the context of their goals.  Conflicting goals can be refereed according to corporate objectives.  Stepping further back for context, we try to grasp the corporate or individual cultures, and values, then purpose.  In the diagram below, we synthesize Stanford’s excellent summation of strategic implementation:

We offer five key insights:
1.    Behavior is purposeful.   It is sometime unreasonable, but it always has its reasons!
2.    Good intuition is based on nonexplicit reasoning, especially when the situation requires quick pre-cognition.
3.    Intuition is trainable.  Mentors and guided experiences are invaluable to the quicker development of good intuition.
4.    Step back for a broader context.    Asking “why”  five times works here, too:  get a deeper understanding of the true purpose.
5.    You determine the culture.  Do people freely question and offer opinions?   Do they feel free to test the edges,  with a reasonable bandwidth for honest mistakes?

First, here’s a pretty cool insight from an article LiveScience:

Toddlers (do) listen, they just store the information for later use, a new study finds.

“I went into this study expecting a completely different set of findings,” said psychology professor Yuko Munakata at the University of Colorado at Boulder. “There is a lot of work in the field of cognitive development that focuses on how kids are basically little versions of adults trying to do the same things adults do, but they’re just not as good at it yet. What we show here is they are doing something completely different.”

“For example, let’s say it’s cold outside and you tell your 3-year-old to go get his jacket out of his bedroom and get ready to go outside,” Chatham explained. “You might expect the child to plan for the future, think ‘OK it’s cold outside so the jacket will keep me warm.’ But what we suggest is that this isn’t what goes on in a 3-year-old’s brain. Rather, they run outside, discover that it is cold, and then retrieve the memory of where their jacket is, and then they go get it.”

But let’s look at that, in the context of other cognitive findings.  I’d highlight ten points:

1) Abstracting the experience: A three year old’s brain is learning to abstract elements of the experience.

2) Associative modeling:   The child compares a new experience to stored models (i.e., generalizations, abstractions) – an associative “this is like / not-like” comparison.

3) Time:  The kid’s temporal sense is still developing:  differentiating now-versus-future.  Think back further to babies enjoying presence-absence -  a.k.a. peek-a-boo play.

[BTW, what  if the English language did not have a future verb tense: consider that the Japanese language doesn't. Try making some future-event statements without using the future-tense verb. Likely it will be a " ...when this, then this..."  -  think of the different sensibility that creates. ]

4) Linear sense of time – To plan, is to arrange objects along a single-line time sequence.   Planning is not an innate skill, and should be learned before the teen years.   Planning and patience both require the deliberative discipline  of “not-now-but-later”.

5) Models - The child’s brain sorts experiences to build models for analyzing and making decisions.    Faced with an unfamiliar situation,  she hesitates. Is it her deliberative mind racing to sort the data into a best-fit with one of her many logic models? Or is it frozen fear?   Try to discern her  natural inclination, as she balances the impulse, the emotion, the hesitation, the caution.

6) Decisions: The kid’s ability to make logical (causal) predictions (and decisions) depends on its yet developing sophistication to decide if the stored model fits the situation.

7) Creativity: The child’s mind wants to explore and learn – i.e., test its models, change the models, create new models, or go out into the cold without that prescribed coat.

8) Our role: We should encourage play and provide an emotionally safe environment for the experimentation – i.e., the child’s intellect to develop.  Feeling emotionally safe, would have to start with  feeling it’s ok to fail.

9) Under the hood: The”chief executive” prefrontal cortex makes decisions referring to a library of logical models: If this, then this.  Assuming the brain’s “early-response team” allows that longer process, that is.

It’s a longer route  for sensory signals to get to and back from the prefrontal cortex. That momentary hesitation could be costly, and this is why all animals do develop and keep profiles of friends or foes –  the “survival instincts” of the reptilian part of our brain.

Jet fighter pilots and emergency responders therefore need practical experiences, (1) to develop a library of ready response models, and (2) with the familiarization, to be able to moderate the reptilian reaction.

Furthermore, to make true shifts – i.e.,  decisions, –  the brain actually needs the cooperation of the amygdala to provide the emotional drivers: how will it impact me?  And think of how  traumatic situations evoke strong feelings that drive a more visceral or instantaneous reaction.

10) “Intuition” is the sophisticated ability to make a decision by quickly retrieving the best-fit model for that situation.

So there you are.  Note, though, that the theories are a more complex and still evolving science , what with our reptilian reactions, our emotions, etc.   Take the right-brain-left-brain chatter:  While the perceptual right-brain lives in the present and looks for patterns as they are,  the left brain, because of its function for language and logic, can be driven to create its own fiction and false memories  - check out  Gazzanga “…the interpretive mechanism of the left hemisphere is always hard at work, seeking the meaning of events. It is constantly looking for order and reason, even when there is none—which leads it continually to make mistakes. It tends to overgeneralize, frequently constructing a potential past as opposed to a true one…

I was approached by  someone there who said, will you come and help  us out, we need help to improve our  analysis. I  said, I will come, but on one condition, and I know  it will not be met. The condition is: if you can get a  workshop where you get  one of the ten top people  in the organization to spend an entire day, I will  come. If you can’t, I won’t. I never heard from them  again…

What you can do is have them organize a  conference where some really important people will  come for three-quarters of an hour and give  a talk  about how important it is to improve the analysis.  But when it comes to,” Are you willing to invest  time in doing this,” the  seriousness just  vanishes. That’s been my experience, and I’m  puzzled by it.

That might sum up  Rodney Brim’s underlying question (see his comment on an earlier post ).  A  good number of organizations clamor for the very software systems-based implementation that Rodney Brim’s company pioneered (strategic project management software).  I’ve watched him for years adding feature after specifically-requested feature, only to see him shake his head at how many CEOs are actually shopping for aspirations when they think they’re buying  application.

This dovetails with a book (sent by friend Rodney Brim):  Charles S. Jacobs’ Management Rewired, which is often misconstrued to say that  feedback does not work.  Rather, it’s how the feedback is surfaced and then communicated.    (In the end, it’s more of whether the feedback and goals are “organic” – reinforcing the point that we should ask questions, rather than simply cram our own answers down the organization line – though, of course, this is premised on having the time and Socratic skills.)

The common denominator? Neural scientists have substantiated that emotion is the driver of decisions, not the mechanical, rational mba process: in order for me to make a true decision, a true shift, first I must own it, then I must feel an emotional need, a pain, really,  to do so.  “Objective” reasons often really come afterwards, to shop for the solution (or, for many of us,  to justify the purchase to the wife).  Emotion is from the latin emovere – to move away from: to relieve the pain, the itch.  Emotion also always involves the “I” – all politics are local.

We need emotion to make fundamental shifts, but we also need to not leak the emotional drive by merely talking about it.

So here we are, September:  a perfect time to pause and look back, cast away, and cast off.

Mr. Niall Ferguson (2010APR23 Wall Street Journal) sums up the U.S. post-crisis financial regulation as a “trilemma” that could optimize to any two of three, but never all three: (a) efficient capital markets; (b) no bailouts to big banks; or (c) a depression-free economy.  ( Mr. Ferguson further  warns against a delusional proposition that bigger government could give us all three.)  Pick two, any two, but not all three.

Other than the interestingly complex content ( the continuing economic debate),  we can learn from that exercise of attempting to identify the core factors of a situation.  Project managers know the classical trilemma of scope, schedules, and budget.  Or, as the sign says at mechanic shop: good, fast, or cheap: pick two, any two.

The past months have seen earthquakes and volcanic activity. It’s easy in our human conceit to forget that this ancient earth’s mantle is shifting ever so slowly but continuously, and with an occasional tectonic shudder.  In a free market, we will see discontinuous corrections, as occasionally hidden faults surface in a precipitous cataclysm.  It was too naive to think that a few bailouts could have eliminated serious structural issues.

A financial institution can be so complex and large that one part of the house touts risky instruments, and another bets against it with hedging derivatives.

Can free market enterprise regulate itself, whose fundamental premise is efficient profitability, as the incessant sea flows in and around to find advantageous crevices? No doubt better regulation is needed, and will come. But could we trust it to come from bigger government, especially one driven by polls and earmarks?

There are parallel problems as well in how national economies are managed. Economic disparities within a common currency are fracturing the European union. Greece, as it turned out, was entirely too creative in disguising its liabilities.  And as it scrambles to keep its economy together, it must do so without control over monetary policy. Unfortunately, sadly, the best Greek drachmas, uh, dramas invariably are still tragedies.

Or take current US foreign policy.  As a culture, Americans often confuse rhetoric and realpolitik. We want our oil, but, in a lack of forthrightness about our petropolitical agenda, trip on our own preachy rhetoric.  We want to curry favorable world opinion and world peace awards.   We must appease the domestic distaste for prolonged wars, and therefore the strategically dubious pre-announcement of our exit from Afghanistan and Iraq.  Yet again, those local heroes we exhorted to the fight will find themselves twisting in the post-US vacuum. Is it surprising that Afghanistan is now scrambling to realign with Iran?

No easy solutions. And no doubt some critics might say Mr. Ferguson’s trilemma is simplistic.  But though initial analyses are nuanced in sixty-four shades of grey, the process must ultimately reduce to three, then two, then a decision of one.    And let’s not feign surprise if Israel finally, preemptively confronts the Iranian nuclear program.