Short-term versus Long-Term Strategic Thinking

Strategic thinking is a major component of business planning that sets the course of action that leads to either business success or business failure. Short-term thinking can be problematic as resources are wasted fixing potholes and gaining immediate results without considering long-term solutions. Executives that focus exclusively on short-term results sometimes leave their organizations in worse shape.

A great portion of our day is engaged in crisis management where new problems arise and we must deal with them immediately before the they spread. This process can be effective in the short run but can damage the company in the long-term when the root of the problem is not addressed. The crisis situations will continue to spread and grow as the underlying issues spread.

A strategy should focus on limiting the damage caused by crisis problems while ensuring the root problem is still being addressed. Executives who think short-term will see immediate results but will often damage long-term organizational performance. Jumping from fire to fire is a reactive strategy.

Long-term thinking can save the company money in the future by increasing competitiveness. When the company doesn’t have the ability to implement a long-term strategy, plenty of resources are wasted on counter-productive activities.

For example, a business many continue facing shut-downs due to dilapidated infrastructure. The production line breaks down frequently and requires heavy maintenance to keep going. It has a poor design and raises per product cost leaving a company slowly but surely less competitive by the year.

A long-term thinking will assess the long-term goals of the company and the strategy to get there to determine how to handle this problem. Instead of hiring new maintenance workers and dumping more money into a poor system the long-term thinker invests in a cutting-edge system that affords more adaptability to the production system.

Short-term and long-term strategy can work together. Short-term strategies can fix or minimize immediate problems through proper crisis management but will not ignore the needs of deeper problems. Short-term goals can build into long-term goals that lead to a stronger competitive stance.

Executives should ensure that short-term solutions do not supplant the long-term needs of the company. Even though solving immediate problems is attractive, it is the resolution of long-term issues that separates the exceptional executives from the rest of the herd. Developing a stronger strategy helps to reduce the frequency of short-term distractions by fixing fundamental competitive problems.

Do You Have an Opinion or a Persuasive Argument?

What makes the difference between an opinion and a persuasive argument? People love their opinions, but are based on thoughts, feelings, and wishes of the individual and don’t always have validity. It doesn’t matter if one is in college, a seasoned manager or running for political office, creating a persuasive argument leads to credibility. Their emotions may drive people, but it is their logic that makes them worthy of your ear.

Persuasive arguments are reinforced by substantial information that is reasonable and logical in its construction of the conclusion. The average person can see the argument as reasonable based on shared knowledge. They can follow the information and make the same conclusion as the speaker.

Opinions based on emotions and quick judgments often lack enough supportive information to be worthy of attention. They can use emotions to draw a crowd into a frenzy but lose their appeal once people start to question the logic. Over time, the emotional appeal fades the speaker's credibility suffers.

A problem with not evaluating what others are saying is that most people simply regurgitate the opinions of others within their social networks or people with authority without critical thought. This leads  to the spreading of false information among a broad group of persons.  They didn't look into the details of the information or whether or not it is true before spreading it.

The inability to truly think about issues and come to an independent conclusion is based in mental laziness and lack of self-confidence. We can see that destructive nature at work on the path to war, bullying behavior, or any other situation where emotions are stirred, but critical thinking is missing. Those who are least likely to think about issues or stand up for their beliefs are open to manipulation.

Leaders who want to create credibility and develop a justifiable argument should state their main proposition and then support that proposition with reliable information. Their argument should have enough supporting facts to justify that position and lead to a reasonable conclusion. Well thought-out arguments gain more support than flimsy opinions.

The justification for arguments should be from credible sources that have facts to support their claims. For example, a generic search for a term on the Internet will return lots of opinions but it is up to the reader to seek out credible information to formulate their  opinions. Perusing government websites, research, studies, polls, and industry knowledge is better than relying on the abundance of unsubstantiated fluff on the web.

The ability to see logical holes in other’s arguments allows for a more critical view of presented information. People are always seeking adherents to their cause and regularly manipulate information to justify their main points. Being able to question that information and where that information comes from makes a big difference in creating persuasive arguments.

It has been said that no one truly owns themselves until they can create an independent opinion. That opinion should be based in fact, information, experience, logic, and knowledge versus social considerations. Stating the main points and supporting those points with factual information is likely to raise credibility and differentiate a substantiated argument from unsubstantiated opinion. When people speak with  knowledge, they can gain long term followers to their cause.

The Benefits of Big Data and Forecasting in Today's Economy

Forecasting is a prediction of some future event. It is used as a mechanism for strategic planning in most industries but is pronounced in marketing, economics, human resources and investing that rely on future predictions to determine the best courses of actions. Forecasting affords the ability to understand market risks as companies seek to stay ahead of changes and adjust their processes to meet market challenges.

Forecasting can be simple or it can be complex. Typically methodologies use formulas and strict processes to ensure they are giving fair weight and evaluation to the necessary factors used in making that prediction. The process is so important that people have made their living simply off of analyzing information and making usable intelligence for others.

Predictions are as much likely to be wrong as they are to be correct. The problem with predictions is that no one can truly know the exact possibility of the future or all of the outlier events that can change a course of action. However, it is possible that people can determine within a range the most likely events based upon today's influencing factors.

 How and what we see in big data makes a big difference on the quality of the prediction. Some methodologies funnel certain information into the prediction model leaving out clues that may also have relevance. Other times big data can confuse practitioners and they are unable to find any meaningful patterns in the information.

San Diego is getting up to speed on using big data to not only solve problems and make better scientific predictions. According to an article in UT San Diego biomedical community is hiring big data and software gurus to work on problems that range from cancer to Alzheimer. The collection and analysis of information can find statistical significant among events leading to better prevention of future health problems. 

Forecasting and predictions rely on the analysis of big data. Without the ability to understand past data and put it within an appropriate mental framework the patterns of past behavior cannot be used to predict future behavior. Ensuring that you have the capacity to collect information, analyze that information, and put it to good use is furthered through scientific thinking and better data management systems.

Events in Isolation: One way to evaluate likely actions is to assess the probability of events occurring not in a sequence but as stand alone events. The history of the particular problem doesn't matter as long as you have the data to understand how each factor influences the changes one route will happen over another.

Consider how the flip of a coin will either land on a head or tail regardless of previous spins. We know this is 50%/50%. Other events may be 30%/70% among two possible outcomes or 10%, 40%, 50% among three possible outcomes. Each possible outcome has an associated probability of it occurring and can be used in the prediction model.

The problem is that many people do not always see all of the outcomes or know the possible probable outcomes. Their mind and perspective skips over important data that is useful in the analysis. For example, one person may see two possible outcomes and another three. If you cannot see all the possible outcomes then your percentages are likely to be skewed making an assessment incorrect.

Events Based on History: Events don't always work in isolation and have historical outcomes. Understanding history and they way in which things turned out in the past helps to determine your current probabilities. Those probabilities are used to make an evaluation of the current situation to determine whether or not a particular outcome is likely.

For example, if we looked back at the history of a dog sniffing the grass in front of your house you may need to watch what other dogs, as well as that dog, have done over the course of a period of time. If the dog sniffs the same place 70% of the time it walks past the chances are it will do it again. This determination would not be possible without a historical evaluation.

Events Based on Trends and Momentum: Sometimes events are already in a sequence of actions and simply taking a snap shop of it like that used in a Markov chain will not produce an accurate forecast. Evaluating the trend of an action will help determine what influences are likely to either maintain its current trajectory or influence a changes in that trajectory. A ball in motion may stay in motion.

Finding trends means looking at information not only from its current place but also its longitudinal history. This often requires multiple methods of making measurements to see how things are changing. For example, over the past two years unemployment is dropping and assuming nothing in substantial in the market is changing then that trajectory will continue to move forward until other economic factors slow it down.

Events Based on Human Goal Directed Behavior: Humans have animal spirits that are led by logic, emotion, and social expectations to come to conclusion about certain events. Their natural selection and backgrounds will determine what they see in their environment and how they will evaluate that information. Their behaviors are a result of their conclusions and choices will likely be directed toward their goals.

Understanding the history of the person, what type of information they have, the medium they received it in, and the messages create a better interpretation of the individual and their likely conclusions. Such behavior is often calculated through polls, sociological/psychological studies, focus groups and marketing analysis.

Robbins, G. (2015). UCSD hiring 'big data' stars. UT San Diego. Retrieved
http://www.utsandiego.com/news/2015/apr/15/bigdata-stars-ucsd/

Is There a Shortage of Online Faculty in Traditional Schools?

Traditional universities are inconspicuously eying online education as a potential way to balance budgets but sometimes find themselves short on faculty that have the skills and abilities to teach in this modality. As traditional universities continue to move courses online they have increasing needs for virtually trained faculty to step into these roles. Online universities are blazing trails in this venue and may provide guidance to brick-and-mortar institutions. 

The online market is big and getting bigger each year. In the fall of 2010 approximately 6.1 million students that comprise 31.3% of all students enrolled in an online course (Allen & Seaman, 2011). This is an increase of 6% in just two years making online education a remarkably fast growing modality. Universities don't have enough qualified faculty to fill this need. 

According to a study in the Journal of Online Learning and Teaching there are four reasons why universities don’t have enough online faculty to meet demand (Lloyd, Byrne, & McCoy, 2012):

-Interpersonal barriers,
-Institutions barriers,
-Training and technology barriers,
-Cost/benefit analysis barriers.

Barriers come in many different forms. Faculty in traditional universities are not excited about online education which seems to dwindle their perceived roles in a university. Universities themselves may not be fully open to online education and grudgingly are accepting its benefits. 

As online education grows and begins to match traditional face-to-face modalities they will need to develop their faculty to take over new rolls. With resistance to change among established universities they will find themselves running against the market putting more pressure on their operations. Training faculty, cooling the rhetoric, and looking toward successful online models will make all the difference.

Allen, I., & Seaman, J. (2011). Going the distance: Online education in the United States, 2011. Babson Park, MA: Babson Survey Research Group and Quahog Research Group. Retrieved from http://www.onlinelearningsurvey.com/reports/goingthedistance.pdf

Lloyd, S. Byrne, M. & McCoy, T. (2012). Faculty-perceived barriers of online education. Journal of Online Learning and Teaching, 8 (1).

Why Industry Experts Won't Turn Their Back on Online Education?

Professionals wont turn their back on online doctorates because it provides them one of the only feasible ways to obtain a terminal degree. People with decades of experience don’t often go back to get a doctorate because of the years of time and investment that would pull them away from their business duties. Online doctoral education can marry professional experience and theory in ways that would be difficult for traditional schools to fulfill.

Online doctoral education has four purposes (Radda & Mandernach, 2013).:

1.      Prepare the doctoral community to develop knowledge and skills for the 21^st century.

2.      Capture the collective intelligences and knowledge of individuals.

3.      Deepen scholarship and practical application of that scholarship.

4.      To further the interests of scholar-practitioners.

Online education has come a long way over the past 20 years and research has shown that the modality is growing in terms of benefits and effectiveness. One of the reasons why traditional colleges are adopting the model is because of cost and reach. With online education they can draw in additional learners that would previously been unable to go back to school.

We should think about all the experience out there hidden in the boardrooms and office. Many of these people would offer valuable knowledge to both academic and fellow industry stakeholders. Getting them into a doctoral program not only helps to grow their businesses but also ensure that their knowledge can be applied by others.

One of the main purposes of higher education is to grow and expand knowledge in a way that furthers the interest of societal stakeholders. Sometimes theory is developed that is difficult to implement for practical use in business. People with knowledge from industry have a better shot at developing theory that has immediate application to industry stakeholders that furthers economic growth.

Developing useful theory has a wider benefit to the business community and society. As better theory is produced and more quickly implemented into business practices the economic fundamentals of society strengthen leading to higher levels of adaptation and development. Seasoned business executives won’t turn their back on online education because they understand that quality of learning and usefulness of solutions are more important than the name of the school.

Radda, H. & Mandernach, B. (2013). Doctoral education online: challenging the paradigm. Journal of Education Technology, 9 (3).

The New Economy Requires More of an “Einsteinian” Approach

Einstein would feel at home in today’s world.  His creative genius in solving problems would be of great demand in today’s world. Gone are the industrial days where following simple instructions from start to finish guaranteed success in life. Today’s employment opportunities have a greater need for creative thinking, STEM, and unique approaches to solving problems.  The world is changing and society will need to catch up. 

A great many things in our society are still built off of the Industrial Era mentality. Our educational system, government offices, law enforcement, etc. continue to use a sequential pattern to process people and information in an inefficient and often ineffective manner. Contrary to institutional sluggishness, most businesses have already moved into the Information Era where they focus on competitive advantages to solve problems and reduce costs. 

According to the U.S. Bureau of Statistics between 1998-2004 30% of new jobs created were algorithmic while 70% involved complex heuristic work (Bradford, Manyika, & Yee, 2005). In other words, most jobs today don’t involve simple A to Z processing and require thinking at a higher level to effectively process information in a way the can generate new ideas. The use of creativity and intuition are not foreign in this environment. 

A paper in Educational Leadership highlights how creative thinking is more rewarded in today’s society than sequential thinking (Goodwin & Miller, 2013). The global economy requires new ways of educating people to use those skills and abilities that were second nature to geniuses. Education has the responsibility to meet the needs of preparing people for more complex work environments.

Einstein was considered “dim witted”, Thomas Edison had a “confused mind”, and Darwin was a “little slow”. They were characterized by “experts” in this manner because a healthy human mind was one that could easily follow instructions. Line up and take your number was the main criteria for success-not a whole lot of creative thinking needed. People were stuck where they were born regardless of their abilities.

Luckily things have changed for the better in most sectors of society. According to the paper divergent thinking, heuristic problem solving, and right brain thinking are needed in today’s world and should be taught, not thwarted, in education. There will be an increasing need for graduates to think beyond what is front of them and move into more complex thought patterns to overcome market challenges.  

When a person can think about problems from multiple vantage points they can be more creative. Likewise, it is necessary to try and understand problems as much as possible and make an intellectual leap when all of the information isn’t available. The right brain will need to be employed to tackle issues emotionally, intuitively, creatively, globally and analytically.

For those developing new products and solving complex problems they will need to come up with answers to very complex problems. They cannot solve problems simply by following pre-made steps but must move forward, upward, backwards, sideways and downwards to understand problems. The use of multidirectional perception is needed to tackle problems effectively. 

We can see this process occur in software creation, product development, consulting, science, and other fields that require heavy intellectual labor. As the economic output speeds up and relies less on physical attributes mental faculty will help in developing businesses to push the envelope of their industries. The educational process will need to adjust their processes to ensure that the brightest minds, not only the ones that can follow instructions, can move forward to meet the intellectual needs of employers. I’m sure that Einstein will find his employment options today much more to his liking than sitting on an assembly line.  

Bradford, C., Manyika, J., & Yee,L. (2005). The next revolution in interactions. McKinsey Quarterly, 4,25–26.

Goodwin, B. & Miller, K. (2013). Creativity requires a mix of skills. Educational Leadership, 70 (5).

Will China Experience a Prolonged Period of Slower Growth?

China's greatest asset to growth was its cheap manufacturing base that drew investment and interest in low cost alternatives. Globalization is stripping China of this advantage as other nations find their own competitive ground. China will need to adjust its economic strategy to help it find sustainable growth that doesn't rely heavily on foreign capital accumulation. Changing their investment policies and encouraging long-term solutions will be more helpful than short-term strategies in the next phase of China's economic life.

China has been known as a great place to produce products because of a business friendly government, lower labor costs, and less environmental restrictions. This cheaper cost alternatives encouraged foreign companies to outsource simple manufacturing of parts to Chinese companies. This create a net influx of foreign dollars that fuel growth over the past couple of decades.

The country's production capacity was based on its ability to partner with outside companies seeking to shave costs. As Chinese industries learned new skills and abilities they developed many of their own products based upon existing product models. A few industries developed advanced models of products but this is still not the mainstream much of China's manufacturing sector.

Now that countries like the U.S. have achieved cost parity due to high technology and productivity improvements the benefits of outsourcing to China have lessened. Therefore, there is downward investment pressure that limits the amount of capital available to Chinese companies. The percentage of companies that have developed independent income streams has improved.

Without the innovative process that comes from a highly skilled and educated workforce Chinese growth is likely to be muted as nations find alternative places to seek resources. This doesn't mean that there is a wholesale disinterest but that such contracts are not as lucrative as in the past and alternative opportunities such as India, U.S. and Eastern Europe are viable options for production.

Think of how the free market works on a macro scale. China went through major economic reforms in 1978 that liberalized and privatized a number of state businesses. Like a hole in the middle of the ocean the capital rushed in and sparked an era of growth capitalizing on a cheap labor supply. It was a nation hungry and ripe for investment. As that hole filled up and costs increased many of the advantages are muted.

China of tomorrow will not grow as fast as it did in the past as alternative investment locations are found and manufacturing parity occurs with other nations. Chinese labor productivity has gained but is running to its limit without mass educational investment that can improve on innovation and technological production. Poor policies that favored pro-Chinese knowledge accumulation at the expense of foreign companies have raised a skeptics eyes to alternative countries with better patent protections.

With an interest rate of around 5% they can reduce that rate to encourage internal growth and development. They may also consider additional infrastructure improvements that connect regions and lower transactional costs. Revamping education to ensure more scientific minds and skilled labor are created can further help in the long run. Changing government policy to open their economy, ensure free and fair transference of knowledge, and focus their investments in high development areas.

The Chinese Tiger has not been netted yet but will need to consider additional reforms that encourage higher levels of growth. Telecommunications, lower shipping costs, and cross-border partnerships are offering cost-quality alternatives to Chinese investment. By reaching out with partners in countries like the U.S. and finding collaborative methods of mutual development with American companies the Chinese companies can further extend their reach.