Archive of ‘#USEFULTHINGS’ category

WHAT: The Good Life (it’s all about relationships)

A fascinating TED talk given by Robert Waldiner, the fourth Director of a 75 year study on adult development and happiness by Harvard (the longest study of its kind).

Over a period of 75 years, the lives and adult development of 724 men (and their partners & over 2000 children) has been studied, including work, home lives and health.
Interestingly, the original study group was formed from two different demographics – the first group being Harvard sophomores & the second group from one of the poorest neighbourhoods in Boston but so far the study has shown that at the end of the day it doesn’t come down to wealth, fame or how hard you work – it’s relationships that make the difference.

 

WHAT: Exactly how long is “In the long run”?

Have you ever found yourself ambiguously using the phrase “in the long run” or “in the short term” without giving much thought to exactly how long either are?

Interestingly enough, Managerial Economics provides definitions for both “short run” and “long run” and although they are in reference to specific economic calculations I thought it was interesting even when you think of it terms of day to day life.

Short run: Is defined as the time frame in which there are fixed factors of production. To illustrate, suppose capital (money) and labor are the only two inputs in production and that the level of capital is fixed in the short term (e.g you have a fixed budget and don’t have any further money to invest in extra production machinery). In this case the only short-run input decision to be made by the manager is how much labor to utilise to produce the desired outcome.

Long run: is defined as the horizon over which the manager can adjust ALL factors of production. If it takes the company three years to acquire additional capital (money) to purchase more machines (labour), the long run for its management is three years and the short run is less than three years.

So for the purpose of managerial economics, short run is the time frame in which there is one variable that is fixed and you can still make decisions regarding the other variable.

Long term is the time it will take to adjust ALL FACTORS regarding your decisions.

Therefore in life, “in the short run” is the period of time you are dealing with where you don’t have control over ALL the aspects however you can make a decision regarding ONE or more factors that can determine outcome.

“In the long run” therefore is the time it takes until you can adjust ALL FACTORS that determine the outcome.

Pretty sure there is some life-lesson in there to be learnt. Thanks economics.

 

HOW: To Think Like An Entrepreneur aka Use Effectual Thinking #USEFULTHINGS

At uni I had a special love for “Entrepreneurship & Innovation”. Having already been invovled in business for over 12 years prior, it was encouraging to learn there were business life-cycles, frameworks and ways of thinking that I had not even realised were universal and experienced by most businesses. I lost track of the amount of times I would think to myself “Oh wow! You too?!”

One of the frameworks we covered in class which I found fascinating is the difference between causal thinking vs. effectual thinking* and the role it plays in traditional management vs. an entrepreneurial approach to business.

Casual vs. Effectual Reasoning

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