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First A*Star, then Shin Corp and now EDB – IMHO What Really Went Wrong?

Posted by intellisg on May 28, 2007

whatwentwrong.jpgNOW I warn you all. I may be very obscure this time! That’s because I am terribly confused by the spate of failures that has recently dogged agencies like EDB and A*Star and their parent ministry MTI (I am sure I don’t need to elaborate on the sordid details? They’re everywhere these days). Along with residues of the Shin Corp debacle.

Are these failures just isolated cases? Or do they suggest there’s an underlying reason why these fiascos are regularly churned out these days? I am not suggesting that something like the curse of the Mummies has befallen our red pimple of a country. Or that it’s time for whole cabinet to take a giant flower bath to cast aside evil – but what’s happening here?

Till now most pundits in the MSM and blogosphere have done quite a good job of examining; who-was-responsible? – who- pulled- the- plug? Others contend each of these failures are no more than isolated incidences, each with its own extenuating circumstances?

Then there are those who have wax lyrical these recent spate of failures are simply the necessary cost of pursuing a pro-active policy of expansionism. The damage control rhetoric would probably read, “no risk, no gain la! Didn’t you mama tell you that dummy!” Besides we are told the financial losses suffered by Shin Corp, the pull out of John Hopkins and UNSW’s, “no show,” hardly amounts to a hill of beans to de-rail Singapore Inc from carving out a competitive advantage. It’s “business as usual.” How could we disagree? After all we all know the business environment is a feral hit and miss domain where all types of risk abound and if we play it safe, it profits us none – right?

(1) It’s time to take a closer look…..

I really don’t think so. Let me just try to account for what has happened in a few simple words – the world is very complicated these days and that naturally means, we may no longer have the means to even predict outcomes accurately. That in a nutshell is why things don’t pan out the way they should.

If you thinking this could be another one of crackbrained theories – that’s probably because you never had to put yourself through university by playing pool. Yes, it revelation time: and I have to share with you an excerpt of one of my numerous yarns about my misspent youth. Some of you are probably wondering why I didn’t just get a job as a janitor in McDonalds or Burger King. Well, it’s simple really. It all boils down to combination of simple economics and my flawed character. The pay out of being a pool shark is significant higher, roughly twenty times on the takings as compared to a regular job. Though admittedly, the risk of getting stabbed or beaten up is about a hundred times higher. Besides I have always found it impossible to hold down anything like a regular job, it’s a vampire thing so I am sworn to secrecy and cannot elaborate further. However, I will say this, during my forays into seedy pool halls throughout the length and breadth of London. I realized that the game of pool isn’t exclusively a game of skill. I am not discounting that if you played ten games with me, I would probably bag you, but from time to time, one comes across the crazy events which throw a spanner in the works of predictability. For example, I once had three spoilers in three consecutive breaks that’s to say I dunked the eight ball 3 times after a break! On another occasion, I was beaten 6 times in a row by a blind man (but that’s a long story). That prompted me to examine the deeper and underlying theorem of why crazy events like that were happening all the time? And that after those crazy events had happened, people still acted as if they were predictable. Eventually I realized that one can find endless narratives to fit the game of pool to even successfully adapt it as a management tool from car maintenance to even running a multinational corporation.

If you think, I am just being flippant. I am not. Granted I could be still obscure but do bear with me as I begin to share with you why; I believe these days its impossible to even do business in the traditional way and instead recognize how our limits of predicting outcomes usually militate against us.

(2) The Small Picture Stuff

Now if you consider what happens on a daily basis and it doesn’t really matter whether it’s something as mundane as turning the great wheel of life; for an individual, family, group of people, firm, institution or bureaucracy – 90% of the stuff that typically gets successfully done operates very much in a routine fashion where we still encounter randomness i.e number of calories consumed a day, number of reports wordsmith, number of clients visited, number of molars extracted etc.

In the small picture domain all this stuff is relatively predictable, because at the end of the month, although there may still be peaks and valleys on isolated days, it all manages to average out quite happily. That’s to say the randomness is smooth out by the law of averages and equilibrium. I can express this in mathematical notations, but let’s keep it simple. For example: if you had that illicit KFC twice a month instead of only once. According to the exponential smoothing law of averages, it hardly translates into significant weight difference at the end of the month. Get the drift?

Life in the small picture is pretty forgiving and even predictable – in this conditional environment, it’s perfectly alright to use traditional tools to predict outcomes.

(3) The Problem with the Big Picture Stuff.

However in the big picture domain like buying a life long insurance policy, signing up for a pension plan, purchasing a house or car along with the rest of the big ticket items. The aperture of predictability diminishes dramatically. Generally the longer the period, the higher the incidences of random variability encountered and this has the effect of skewering the accuracy of predictability. That’s where we usually get into trouble when we attempt to use traditional predictive tools to make sense of socioeconomic variables that can impact the total in disproportionate ways.

Mathematicians have long documented this phenomenon which they often refer to as “chaos theory.” George Soros calls it “reflexivity,” and argues that it even operates to undermine standard economic theories. Alvin Toffler just called it, “the phantom in statistics.” Whatever they dress it up to be. It just means predicting the outcome of the big picture is fraught with a certain degree of uncertainty. As Soros states:

“When we act on a theory about how society will react and behave. We always risk altering the reality to which the theory refers too.”

As a result, the condition of behavioral constants in lets say economic models of equilibrium, which rest on an assumption of perfect knowledge, is not even a theoretical possibility – in short what this dictum says is very little these days can be predicted with any measure of accuracy and what constitutes success and failure is ultimately a game of chance.

Now if you wondering whether this is mumbo jumbo repackage as veritas consider a few examples. The internet was designed as a military communications network, not for chatting or even less was provisioned for blogging. When electricity was first invented, it was widely sold as a party ice breaker where guest would be subjected to mild shocks, the incandescent light bulb emerged only much later. The person who first invented the computer didn’t know that he could sell more than one unit.

What this demonstrates time and again is our track record of predicting outcomes in the long term is at best dire bordering what we all call “agak-ration” – that’s to say your guess about the future is really as valid as mine. What the history of humans and technology has consistently demonstrated time and again is the limits of forecasting especially when it comes to dealing with the big picture stuff. Or even how; these forecast will ultimately change and affect us in way which we never thought possible – revolutions, wars, epidemic, political changes, economic meltdowns and even the something as household tagged as terrorism will continue to confound us all no end.

This bring us to the main topic of discussion; was the UNSW pull out predictable? After all those financial projections were made by experts who have over 50 years of experiential knowledge in marketing education as a business? Could Temasek have predicted a coup de’tat in Thailand following their equity uptake in Shin Corp? Could A*Star have predicted that John Hopkins would pull out of Singapore because the latter believed the prospects of collaboration wouldn’t yield the desired outcome?

Do you see a pattern forming? Can we perhaps even say that much of the failures experiences by these institutions lie very much in the traditional way in which they have concocted empirically flawed narratives to explain how the future would unfold? Did they perhaps overestimate the causal link between past performance and extrapolated much of it to only see the winners and not the losers? Perhaps and maybe, but it still doesn’t answer the question why do we still use traditional predictive tools to make sense of the architecture of the future, if they don’t work? More importantly what’s the way forward when the architecture of our desired future continues to elude us against the random landscape of anything that lies before us?

(4) Why do we continue to rain dance? If it doesn’t produce rain!

One clue lies in dwelling deeper into the whole idea of the science of predictability – this body of knowledge is commonly referred to strategic planning and leverages of on a host of mathematical theorems. Without getting into a semantic quagmire, its all roughly based on probability – you know like what’s the chances of head and tails when you throw a coin up? It’s 50/50 of course. But the science or art of predicting possible permutations gets infinitely more complicated when you are asked what’s the chances of a new start up succeeding with a new invention?

Here even the experts get it woefully wrong most of the time, though they continue to insist otherwise. The inventor who first developed Velcro saw no possible application for his invention except being used to stop knick knacks from floating in zero gravity atmosphere of a space capsule. Today it’s used in everything ranging from hold down tennis shoes to co-axial cables! The problem associated with long term prediction appears to be this: The finding of absence and an absence of findings typically gets muddled up! By this I mean while predicting anything ranging from cooking a curry to running a successful enterprise remains a very skeptical and hard nosed endeavor. The problem is the people who manage these enterprises aren’t necessarily so! It’s a reflection of the inner workings of financial markets. They can be extremely rational while dominated by entirely irrational individuals. It’s a condition that can lead to misplaced exuberance and overconfidence. Essentially much of what typically goes on in the big picture market of Nasdaq, NYSE and even the SGX has everything to do with sentiment and even less to do with the hard and cold calculations of value!

What are the consequences of this overconfidence? It’s dangerous. Every pool shark knows that you don’t simply walk into a pool hall and start separating the men from the boys, unless you want to end up in back alley with a 6 inch knife stuck in your back. They feel their way through: lose a few games win only by the narrowness margin, that sort of thing. Till one is has sufficiently certain the coast is clear then one goes for the lightning kill. The problem with over confident people who deal with the big picture stuff is they don’t see the wisdom of going through these sorts of calculations.

That just means 9 out of 10 times overconfidence leads to lousy decision making –specifically bad forecasting like the one either UNSW or EDB or both of them jointly made – where they predicted a student up take of over 300 in the first semester, but fell short by over 100%! Now that’s scary because if anyone falls short of their forecast by such a large margin, wouldn’t they at least have the cow sense to realize something is seriously wrong with their business plan?

My point is when the error rate is exceeded by a set of sobering results that suggest these forecast were delusional. I can only conclude those decision makers had either absolutely no idea what they were doing or were so over optimistic, they simply lost all sense of reality.

Don’t look so surprise, it’s happened before and will happen again. If only you care to sieve through the carnage of economic history – the helium filled days of the dot.com era, the boom & bust days of the property market and now the stock market frenzy. In every case, the bubble is inflated by misplaced and unrealistic expectations fueled by the same irrational exuberance of over confidence.

That in summary is the anatomy what really went wrong.

(5) If it’s all Snake & Ladders. Where do we go from here?

We cannot help being blind sided by randomness any more than we can attempt to control life only to be eventually accidents. Having said that, it doesn’t mean we should sell off everything in ebay and check into the nearest monastery. All I saying is, it pays to hedge one’s bets when individuals, firms and policy makers are embarking on mythically grandiose projects. Doesn’t really matter whether it’s buying a house or starting a billion dollar enterprise – the risk management strategy remains one of the same reality.

The key is to settle for a measured approach, one that’s small and achievable. I am often reminded in the business world, how “small is beautiful,” and is it such wonder that the vast majority of Fortune 500 firms once started either in obscure garages, sheds or in messy rooms of teens where clothes go to die. It should serve to remind us all, against a business environment where events and circumstances frequently change at the blink of an eye – very little is truly predictable these days. The key is not to try to stop being a fool, but to be aware of when it matters not to be a fool.

So next time, when you find yourself in a smoke filled bar riding high on a winning streak on the pool table, just be mindful when the mysterious figure you’ve been whopping the whole evening turns to you and expresses with a sigh of resignation.

“Let’s cut to the chase! Here’s my Rolex submariner, Mont Blanc diamond and the keys to my Beemer. What you say, we play a real game now?”

It could just be me.

(By Darkness – Socio /political – EP 9923889 – 2007 – The Brotherhood Press 2007)

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24 Responses to “First A*Star, then Shin Corp and now EDB – IMHO What Really Went Wrong?”

  1. techme said

    Why only the brotherhood is involved ? Where’s the sisterhood ? Isn’t sister be responsible for speaking out against the gahmen too ? Are sister really sissy ? Aren’t sister also Singaporean ?

  2. Lassie said

    Hello

    I really dont think those spaceboys are anti-anyone :)Sorry.

    I know. I have followed them for yrs.

    Bambi just likes to postulate on possibilities thats all.

    Nice proposal makes alot of common sense. Start small and grow the business.

    Time to start my shift now in TTS.

    Dont drink so much, tis bad for your liver and remember to take your vitamins always.

  3. scb said

    There are many playing(acting) gods out there but as day goes the believers get to be more unbelieving!

  4. koalabear said

    I see Bambi has even incorporated his trade mark of bad spelling and grammar! To lend an air of authenticity to the article. Some things never ever seem to change do they?

  5. wbg said

    Need me to spell out everything?

    Women are usually too emotional to handle matters of high logic. And this is the reason why there are so few of them as leaders.

    Just look at Kitana and Gayle Goh. Both blog quitters because of their own immature pettiness.

    They made too much petty noise and ruin their own efforts and others. Waste of time nonsense.

  6. wbg said

    Oh wait some men bloggers are like that too. Don’t need me to spell out who they are. But these men bloggers belong to the whiny kind as opposed to women bloggers who are whiny on the majority.

  7. scb said

    They make their guessings(forecasts) virtual!

  8. montburan said

    Hi all,

    I know, I shouldn’t really compare, but why doesn’t the local rag write like this? It’s informative and very educational.

    I don’t really think much of Bambi Bad Boy’s usage of bad spelling and grammar to enhance whatever. I just feel it spoils a very mature article and diminishes much of the verve.

    A pity, but I have said it so many times only to fall on deaf ears. Just a very small matter to consider when writing your next article. Do pay more care to diction and sentencing construction. Do make the effort please. Brilliant article nonetheless.

  9. super cat said

    Lassie:

    Dont drink so much, tis bad for your liver and remember to take your vitamins always.

    As long as it gets him somewhere, I don’t see why you should care!

    It’s only when he’s not gonna go anywhere, then there’ll be a BIG problem!

  10. wbg said

    A reader giving diction!

  11. What Mr Wang Says.... said

    Mr Wang Says So said…

    “I really don’t know much about who these “Brotherhood” people are, and the way they write, I don’t think I will find out.

    They talk very obscurely and half the time, they’re basically talking among themselves.

    I don’t care …. Don’t have time to find out.”

    May 3, 2007 1:27 PM

    I hope u dont mind if I quote you. Cannot be more impersonal. Right.

    I haven’t forgotten.

    Nacramanga

    130th

  12. scholarboy said

    I dont think Nacramanga or the 130th is being personal Mr Wang.

    I just call it accounting, that’s to say, they are squaring off the numbers. After all one good turn deserves another.

    Once they have finished with you. Then they will go for the others.

    Just FYI, there is no such thing as forgive and forget for the 130th – they always get their men.

    Even if you the hide in the furthest reaches of the uncharted universe.

    Do have a nice day and remember the world is round -what goes around will come around in the virtual and the real world, of course.

  13. prima delli said

    SB,

    You r such a decent bloke. Why do you want to get mixed up with a mad dog like Nacramango? We all know that whenever Bambi wants to rub off someone in the internet, he always uses him! Only because he has the option to deny all knowledge of it. I really think Bambi should just come out from his perpetual darkness and clarify the position to the rest of you.

    Bambi Bad Boy Darkness Baby,

    I would just like to draw yr attention to the Forum section in the ST today. Mr Ko the MD of EDB has clarified his position. I wonder is it possible for you to write a follow up article on the clarification? And elaborate further on your post. That would be nice.

    I would really consider it a personal favor to me and my read club.

    Bye and have a very nice day.

  14. Trap said

    Bait. Fishing. Beware of the trap.
    I am sure you know. Just a reminder.

  15. Trap said

    By the way, darkness, great work.
    Always find something new from you.
    Very grateful, always.

  16. darkness said

    Bait. Fishing. Beware of the trap.
    I am sure you know. Just a reminder.

    Thanks for the reminder, we will all have to be more careful.

    Tell mother everything is going according to plan.

    By your command.

    Darkness (2007)

  17. inspir3d said

    Hi Boys,

    I think Darkness has really set the standard with his last few essays.

    They all

    a. are topically relevant to the Singaporean audience
    b. are in touch with current affairs
    c. are insightful and entertaining.
    d. have eye-catching titles.

    Needless to say, the statcounter traffic has reflected this.

    I hope the rest of the team will follow his lead when writing on similar issues.

    cheers.
    InSp.

  18. Clarence said

    righto, even with the MD’s “clarification” on the UNSW issue, there are fundamental questions unanswered.

    I quote from my blog:

    “How is it that the UNSW officials rushed through the proposal? Was it because EDB was pushing them too hard? Why is it that Warwick University, the second to be wooed as part of Singapore’s dreams to form an educational hub, decided that it was not feasible to set up a campus here? Academic freedom was cited as the reason, but what exactly was behind it? More specifically, we need to break out of the vagaries – what in the name of “no academic freedom” was Warwick and UNSW against?”

  19. jeannie yu said

    bambi darkness just knows how to move his hips – the boy is so bad – most of us are here bc he is writing.

    It doesnt happen very often.

  20. astroboy said

    No one can beat darkness. The father of the game is just way ahead of us all and anyone else in blogosphere.

    You may click but that doesnt mean you read. It just means you need to prove a point. And we understand LOL. We do. But it changes absolutely nothing.

    But everyone who clicks on the bro tag is a genuine reader.

    You know how we know? We have our own stat counter.

    You have a nice evening darkness.

  21. astroboy said

    And our stat counter is a abt a hundred million times more accurate than the one here. That’s why none of us, not even harphoon bothers with the stat counter here.

    Its just statistics. Dont believe me go and ask darkness. Both he and chandra invented it.

  22. Trajan said

    I just dont think its possible to write like darkness / for one he is a natural / second: he is too fast, probably took him less than 30 min to start and end an article / three: he has a loyal following that none of us have / four: creative wise. I think he is way ahead of anyone else. The rest dont even come anywhere close.

    Very tough act to follow.

  23. nacramanga said

    – Since the forum days we already know the stat counter is unreliable. Let me give you an e.g let us say there are A / B / C writers, each posting on the same site.

    Writer A scores 3 times more hits than B and C. But why does the total number of visitors by over 50% when only B and C doesnt appear?

    When writer B appears, he scores the lowest number of individual hits, but the cummulative number of visitors shots up to over 400%.

    When writer A, B and C writes – both A and B have 3 times the number of hits as C and the visitor counter goes up 400%.

    Q; Who is the most popular writer?

    A: C. Only darkness and chandra knows abt this phenomenon – and they know it inside out – the call it the time parallax – it is mentioned in the book of ages.

    ———————–

    I really do not think anyone can beat darkness / he is after all an author who successfully wrote and sold 7 internet books / each with a readership of over 30,000.

    As for what others may what to say abt him or us – I have known darkness for a long time, he says:

    “if you are good, you dont need someone to tell you that. And even if they did, it wouldn’t really matter bc you will still be good. In the same way, if you are good and someone says you are average or lousy, it wouldn’t really matter either bc you will still be good.

    I both case your sense of worth and identity isn’t dependent on what others think or regard you. It comes from deep within.”

    darkness 2003.

    ————————

  24. nacramanga said

    You just dont become the leader of the brotherhood for nothing. Our system is too ruthless and primitive, hardly so different from monkeys who once lived in a cave millions of years ago. If you dont have the “right stuff” it will just chew and spit you out in 5 minutes flat.

    Through the years, I have learnt alot from darkness.

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