The Forgiveness Process

When you truly forgive (box 1) you let go of the bad memories that feed your hurt (box 1a), which was simply kept alive by Box 1c because you remember them, perhaps even nurse them! Time can cause your bad memories (box 1a) to fade but only if you do not indulge it by keep on reminding yourself about them (box 1c).

If you can really forgive (box 1), then you will eventually open yourself to rebuilding and begin to have a new view of the future (box 1f). This will help you to have new memories (box 1g) that will replace the bad old ones (box 1a). Finally you can really "forget".

You see what they say about forgiving and forgetting is not completely correct. It is more like forgiveness paving the way for new pleasant memories (box 1g) to take the place of old bad memories (box 1a). This will help you remember the old hurts differently because new memories replace bad old ones. This then is the true meaning of forgetting after you have learned to forgive.

The Dubai Real Estate Bubble

I just visited Dubai and made some observations about its property market. There is a bubble being inflated right now and it can probably get bigger before it pops. Why?

Let's begin with how all bubbles begin. There need to be a trigger otherwise higher property prices will moderate demand and there is no financial bubble.

Financial bubbles always come about because buyers believe that prices will go up. The Dubai government has been very successful at selling their city as the key business and life-style location of the Middle East, fashioning it as the Singapore or their region See Box 1 (black box). This led to rising property values as buyers rushed in to bet on the promise and success (box 2). The first wave of buyers provided the indispensable vote of confidence. This creates subsequent waves of higher expectations of property price (box 3), feeding towards even more demand for Dubai properties (box 4).

Eventually prices become so high that demand begins to wane (blue box 2). If this happen, the property bubble is ready to pop. Nobody can anticipate how and when this stage is reached and therefore to prevent a crash the Dubai government has to prepare and always be ready with a set of liberalization initiatives to support greater demand and higher prices (blue box 1). As long as Dubai is willing to keep making foreign ownership more attractive, this bubble can inflate quite a bit more. Of course, as the bubble gets bigger the risk of a crash also become more significant. The wish of any government is to engineer a soft landing but this is not easy to achieve. As of now, this property bubble has more life left in it. So I wouldn't bet for a crash yet, but stay vigilant and use this NaviMap to help you organize your data and understand what is happening in this market.

A Tug of War: The Design Economy Vs Existing Practice

Most of us are not highly paid CEOs, and for a long time, a secure job (Box 1) is one that we perceived as "indispensable" to the organization, and it was easiest to see that it was so if it has a fair amount of routine (Box 2). It was a time when people who drift from project to project without a precise job description were thought to be at risk of losing their jobs. Read: More routine (Box 2) more job security (Box 1). It is a reinforcing loop.

As firms lose control to set prices and determine what to produce and persuade customers to buy, have you noticed that there is more fire-fighting activities in the office these days (Box 3)? It just seemed that the routine processes were just not good enough to supply what the customer wanted. See Box 3, it is an enemy of Box 2.

Then came a generational change. The rise of China and other offshore manufacturing and service centers force developed economies to move up the ladder into more design work (Box 4), which can only be successful by trying out new ideas and daring to fail (Box 5). Box 4 and Box 5 is a reinforcing loop and its objective is to produce goods and services that wow the customer by making those dreams that they haven’t been able to articulate successfully come true. A by product of the reinforcing loop of Box 4 and Box 5 is to create more firefighting situations for those who are "doing the routine work".

There is a tug of war situation between the reinforcing loop of Box 1 and Box 2 and that between Box 4 and Box 5. A conservative business leadership would hold tightly to the old order and see it slip away but a courageous leadership will try to lead as many people to the new world and logic defined by the reinforcing loop of Box 4 and Box 5. It is an uncertain and difficult world because the speed at which the lower rung countries are climbing up the ladder give you pretty little breathing space.

Why use NaviMap?

NaviMap is a response to our age of information overload because our human brains are not designed for handling so much information simultaneously. Think of it like the handheld electronic calculator that we routinely use for doing sums or better still, the abacus. Not for numbers but ideas.

I have found research (this is one of many) providing evidence that most humans cannot cope with more than four variables at one time. See the findings of the psychologist from the University of Queensland: How much information is too much information?

Fading Microsoft and Ascendant Google

Microsoft owns the world of PC computing. The reinforcing loop between Box 1 and Box 2 underscores that fact. Microsoft pays their geeks especially well to write software (Box 1) and Microsoft’s success (Box 2) in turn attracts more geeks to their ranks. But Microsoft eventually loose their "cool factor" (Box 3) when they fail to continue to be the "happening place". No more sexy products to build or world class problems with world class impact to solve. The virtuous cycle between Box 1 and Box 2 slows when Box 3 appears for Microsoft.

Therefore Microsoft’s stock begins to under perform. It becomes more like a utility than a growth stock. The market however is always looking for growth opportunities. That opportunity is now filled by the likes of Google and Yahoo (Box 4). The virtuous cycle that Microsoft is enjoying is fading and shifting right to a growing virtuous cycle between Box 1 and Box 4. The search engine leaders has the toughest technical problems that attracts the best people with the greatest potential impact on how we use the Internet.

An ascending Google will steal the wind from Microsoft’s sails (see dashed arrow from Box 4 to Box 2) unless Microsoft is able to snatch the wind from someone else. It is trying with its Xbox to usurp Sony’s Playstation, which is perhaps the only other cool place it might have a chance to win.

The best days for Micrososft could be over. A company that expends extraordinary resources on product and service security to raise reliablity fits to a t, a description of what a utility company is. Nowadays you buy Microsoft for the dividends. Look elsewhere if you want growth.

The Life Cycle of a Meritocracy

For many years we saw that Meritocracy was good for any society that practiced it. It is a reinforcing loop and a virtuous cycle as shown in the relationship between Box 1 and Box 2. Meritocracy helps to identify and groom the able and make them successful (Box 2).

Unfortunately all good things will eventually decline and come to an end, Meritocracy notwithstanding. It seemed that when a huge numbers of able individuals have been identified and groomed (Box 3), Meritocracy seem to only suggest that the offspring of the successful parents are the most meritorious – See the dashed arrow from Box 3 to Box 1. E.g., The elite schools used to receive students from families with mixed backgrounds, now those who come from humbler families are an increasingly small minority. What are the consequences?


Meritocracy will eventually breeds a new elite that mostly reproduce the next generation of elite. This is the new reinforcing loop between Box 2 and Box 4. The logic of the reinforcing loop between Box 1 and Box 2 becomes yesterday’s logic because Box 3 has appeared to slow the virtuous cycle. At the same time, a new under class will emerge (Box 5).

Eventually the environment will change and the new elite (Box 4) will become the old ossifying elite and get supplanted as they finally fail to adapt to an changed environment. The society might then return to the former logic of Box 1 and Box 2 that will eventually produce the next elite, which is more compatible with the changed external environment. However there is no guarantee that this will happen. The society might enter into a dark age instead of clearing the ground to create the next golden age.

Globalization: Who Wins

Under normal circumstances the relationship between Box 1 and Box 2 should be a counterbalancing loop rather than a reinforcing one. But if competition is very intense, what results is reinforcing loop. This is the current reality.

Box 2 inevitably leads to laying off workers (Box 3). Also the relationship between Box 2 and Box 3 this should be a counterbalancing loop instead of a reinforcing one. The more workers are laid off, the less willing society is able to tolerate more job cuts. So the arrow from Box 3 to Box 2 should be a dashed arrow. But if a society have forged a very strong social compact (Box 1a), we will see a reinforcing loop instead. And all this is driven by a very powerful Box 1 created by a globalizing environment.

Box 2 is unsustainable unless it yields an expanding economy (Box 5) that is a net creator of jobs, and eventually higher quality jobs. It will soak up the surplus labour (Box 4). If Box 5 accelerates too quickly, then wages will begin to inflate. It is a counterbalancing loop between Box 5 and Box 4.

This NaviMap is similar to the previous case except that Box 1a – the social compact, is absent. In most societies, no matter how intense competition (Box 1) is at pressurizing for restructuring (Box 2), the pace of restructuring is paced by how much that society accepts massive lay offs of workers. The relationship between Box 2 and Box 3 is usually a counterbalancing one. As a result, Box 5 for this scenario is an economy that is expanding more slowly than the previous example. Fewer people are laid off and it is also harder for them to find new jobs compared to the first case. This society will achieve lower economic growth and eventually lower family incomes than the former case.

The MP3 Gadget Wars (Apple, Creative and Others)

Apple’s ability to stay ahead in the personal digital technology market is their special ability to tell consumers what is cool (something which Sony used to be able to do), i.e., Box 1 in Map 1. Their products, in this instance the iPods are not asking consumers what they want but surprising them with WOW designs in an MP3 player such that they become lifestyle items.

Apple endeavors to bring on products that enjoys the virtuous cycle shown in Map 1 between Box 2 (WOW you emotionall products) and Box 3 (Consumers vote for their products). This virtuous cycle is supported by their Box 1.

Creative Techology wants to occupy the pole position in MP3 players. Its strategy is to provide superior performance and features at a price point that is better than Apple (Box 4). They hope to own a virtuous cycle as shown between Box 3 and Box 4. Were they successful, the market would have signaled that consumers prefer performance and features (Box 4) over emotional appeal (Box 2). Sales data of the two companies products show that the virtuous cycle between Box 3 and Box 4 for Creative Technology is not as strong at the virtuous cycle between Box 3 and Box 2 that is owned by Apple.

As the market for MP3 players grow and mature, the virtuous cycle between Box 3 and Box 4 should become stronger than Apple’s controlled Box 2 and Box 3. By then Apple would have moved on to something else (Box 1) after Steve Jobs has divined where consumers want to be.

In the meantime, Creative Technology risks being sandwiched by cut throat priced products from the bottom e.g., Samsung, and the iPods from the top – See Box 5. Therefore the window for the virtuous cycle of Box 3 and Box 4 could be so small that Creative’s performance could really suffer. In this game that Creative has entered, they had no choice but to oust Apple or be prepared to move down market and valiantly defend their territory against all comers.

Creative never had Apple’s "Box 1" advantage. The market for MP3 players though growing rapidly, wasn’t fast enough for enough consumers to be part of Creative virtuous cycle (i.e., Box 3 and Box 4). When the market becomes much larger, it will also be the time when it is crowded with many competing suppliers. Prices for MP3 players can only head south. Another round of severe cost cutting at Creative looks inevitable as it fights for survival and fashions a comeback strategy.

End of the smarter sales strategy

This continues from yesterday’s post. No reinforcing loop last forever. In the above diagram, there are two such reinforcing loops between Box 1 and Box 2, Box 1 and Box 3. One possibility is that Box 1 might at some point in time innovate (Box 4) on what it offers to Box 2. Well that might keep Box 2 happy by anticipating your coustomer’s needs, it is likely to disrupt the reinforcing or virtuous cy cle between Box 1 and Box 3 (see dashed arrow). If Box 3 fail to respond successfully, the virtuous cycle between Box 1 and Box 3 slows or ends.



In an alternative scenario as shown above, Box 2 instead Box 1 could be the innovator (Box 5). If Box 1 fails to respond successfully to Box 2 changing requirements then the virtuous cycle between Box 2 and Box 1 will be negatively impacted. This will als be to the detriment of Box 3.

There are other possibilities to these two scenarios but the important point to take away is that no virtuous cycle or reinforcing loop lasts forever. So if you have worked your way to a sweet spot, do not be complacent.