Tag Archive: change

You get what you focus on – so focus on the positive!

  1. Stated in the positive: What do you want?
  2. Where do you want this outcome?
  3. When do you want this outcome?
  4. With whom do you want this outcome?
  5. What would be the evidence that you had achieved your outcome?
  6. How would you know if you were getting your outcome?
  7. What would you be doing to get it?
  8. What would you be seeing and hearing?
  9. What would you be feeling?
  10. How would your represent this?
  11. What would be a demonstration of it?
  12. What resources can you activate to get this outcome?
  13. What resources can you acquire to get this outcome?
  14. What can you begin to do today?
  15. What can you continue to do?
  16. What would happen if you got this outcome?
  17. How will getting this outcome affect other areas of your life?

“But we must add ‘in a complete life’. For one swallow does not make a summer, nor does one day; and so too one day, or a short time, does not make a man blessed and happy.” [Aristotle, The Nicomachean Ethics, I, 6]

Technological Advance

One of the most famous studies ever conducted in economics was the study done by Edward Denisen. He found that the most important factor accounting for a full 28% of increased productivity, has been technological advance – just as growth theory suggests. And by the way, Denisen’s eighth category (legal-human environment) is a negative number. It estimates the negative impact that legal and regulatory constraints have had on productivity and growth. Which takes us to Ferguson (2012) who states that among the most deadly enemies of the rule of law is bad law (p.77).

  • While some economists and policy makers stress the need to increase capital investment,
  • others advocate measures to stimulate research and development and technological change.
  • Still a third group emphasizes the role of a better educated work force.

The Neoclassical growth model was pioneered by professor Robert Solow of MIT:

  • Major model components in this neoclassical growth model: Capital and technological change.
  • Primary tool: Aggregate Production Function (APF), which relates technology and inputs, like capital and labor, to total potential GDP.
  • Key concept: Capital deepening – the process of increasing the amount of capital per worker, e.g. more farm machinery and irrigation systems in farming, more railroads and highways in transportation, and more computers and communication systems in banking. In each of these industries societies have invested heavily in capital goods. And as a result, the output per worker has grown enormously.

The first major insight of the model is that in the absence of technological change, capital deepening does not lead to a proportional increase in output.

Reason: The law of diminishing returns – the basic idea is that as you add more and more capital to a fixed supply of labor, eventually the marginal product of capital must fall as the law of diminishing returns kicks in.

The second major insight of the neoclassical growth model is that while capital deepening can dramatically increase the productive output of an economy, it will eventually lead to economic stagnation in the absence of technological change.

At this point, the economy enters a steady state in which, without technological change, both capital incomes and wages end up stagnating.
In the long run, equilibrium of the neoclassical growth model makes it clear that if economic growth consists only of accumulating capital through replicating factories with existing methods of production, then people’s standard of living will eventually stop rising. And that’s why we must come to understand the importance of technological change in averting this fate, as modern economies in this century have so obviously done.

This leads to the third major insight of the neoclassical growth model. It is ultimately only through technological change that we can avoid the trap of economic stagnation.

Technological change represents both advances in production processes, and the introduction of new and improved goods and services. It also includes new managerial techniques, as well as new forms of business organisation.

Common Sense

  • “We always did it this way!”

Storey and Salaman found that:

“[…] there is a tension between existing organisational strengths and innovation. […] In some cases, senior managers […] made a virtue out of the ways in which established structures limited innovation and argued that such control was necessary and desirable. In these cases, if innovation was to be tolerated and even encouraged, this was only so within the parameters of existing assumptions, structures and systems.”

(Storey and Salaman, 2005, p. 219)

Cultures consist of complex webs of interrelated factors. People may not see the need for change. This was described as the resilience of existing cultures (Hendry and Hope, 1994).

  • “We never did it this way!”

Many established organisations find it difficult to innovate. Some of the reasons for this are

“[… ] structural and cultural inertia, internal politics, complacency, fear of cannibalising existing products, fear of destroying existing competencies, satisfaction with the status quo, and a general lack of incentive to abandon a certain present (which is profitable) for an uncertain future.”

(Markides, 2002, pp. 246–7)

Hendry and Hope (1994) found that mismatches between individual and organisational values hinder organisational change. If individuals are to accept change, they need to trust their organisation and the behaviour of their managers.

  • “No one has done this before!”

Storey and Salaman sought to understand why managers have resisted innovation:

“The answer appears to be that they hold deep, emotionally-based attitudes which inure them to the intellectual arguments. These managers regard themselves as guardians of the integrity and traditions of the organisations. They explained their stance on innovation as justified by the need to curtail the ‘risks’ of innovation. It was, they said, underpinned by the need to ensure that valuable resources were not ‘squandered’ on ‘self-indulgent’ initiatives. Far from seeing this attitude as a negative, they converted it into a claimed strength.”

(Storey and Salaman, 2005, pp. 157–8)

Hendry and Hope (1994) found that contradictions in the desired culture can represent strong barriers to change and innovation. Change may represent management’s quest for control, yet what they proclaim is autonomy and innovation.