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Change, For Making A Change

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Tim Harford is the celebrated author of the bestseller, The Undercover Economist. Harford uses the complexity principle of economics to tell the modern man that the art and craft of sophistication has enabled the availability of billions of products and services of varied shapes, sizes, tastes and scales of efficiency. It has, says Harford, redrawn nuances of successful adapting in every sphere of life.

In Adapt, Harford says such sophistication has increased individual reserves of material wealth and boosted competition and the quest for innovation and lasting solutions. But it has only introduced complexity in the society. Each of us has an inflated sense of what leadership can achieve and everyone does not get to enjoy the bounties of material success mainly because of failures to adapt.

Harford takes a leaf out of experiments of enterprising leaders, businessmen, students, scientists, economists, researchers, think tanks and small and big economies. He delves into processes that produce material wealth and tells us these processes in itself are near miraculous, harder than we tend to imagine. To understand which of the schemes (social, political, economic) would work and which would not, the author has given a recipe for successful adaptation by outlining three essential steps: One, variation: to try new things in the expectation that some will fail. Two, survival: to make failure survivable. And three, selection: to make sure that you know when you have failed.

"To produce new ideas, we must overcome our tendency to fall in step with those around us, and overcome those with a vested interest in the status quo," says Harford. Making failure survivable sometimes means taking small steps, but not always: many innovations emerge from highly speculative leaps. "And distinguishing success from failure, oddly, can be the hardest task of all," notes Harford. Most organisations and most forms of politics face similar difficulty in carrying out the simple process of variation and selection because it is grandiosity (not simplicity and objectivity) of a set of policies or schemes that appeals to leaders. In such cases, arrogance culminates in a denial to adapt.

A case in point is the war in Iraq. US Defence Secretary Donald Rumsfeld's denial of reality typified his refusal to take advice from men who understood the ground situation. Just before the war had begun, General Eric Shinseki warned a Senate committee that several hundred thousand troops (two or three times more than the allocation made by Rumsfeld) would be required to deal with the aftermath. His advice was dismissed by Rumsfeld's deputy as "wildly off the mark". Today, the US is still battling insurgency on three fronts, the Shias, the Sunnis and the Al-Qaeda, and the US policy of "de-Baathification" has only left troops confounded.

Next example is that of Peter Palchinsky, an engineer, who was asked to assist Stalin regime (USSR) in launching an ambitious project in Magnitogorsk. The regime wanted this city of steel mills (far to the east of Moscow) to outsmart steel output of the UK. Against Palchinsky's warnings, the project was kickstarted without a study of the area's geology and without any interest in the availability of the coal needed to fire the mills. "The iron ore ran out in the 1970s and both coal and iron had to be shipped to what were the world's largest steel mills over vast distances." Conceived as a garden city, Magnitogorsk became something horrific. When historian Stephen Kotkin went there in 1987, he found "endemic alcoholism, shortage of almost everything, a crumbling infrastructure, unfathomable pollution and a health catastrophe".

Each page of the book has examples of inherent dangers in blindly following leaders who do not want to adapt. Good leaders, he says, may not solve every problem by themselves. They are in the company of experts. But then deep expertise, too, is not enough to solve complex problems. That is where an adapt surfaces.

Author's Details:
Tim Harford is a senior columnist for Financial Times. He has previously worked for Shell and the World Bank, and was a member of The Financial Times editorial board during 2006-09. His books include The Undercover Economist (2007), The Logic of Life (2008) and Dear Undercover Economist (2010). Harford is visiting fellow at Nuffield College, Oxford, and a senior visiting fellow at Cass Business School, London.

(This story was published in Businessworld Issue Dated 13-06-2011)