Industry 5.0 from 4.0, Are we there yet?

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The decisions of our past are the architects of our present. – Dan Brown (Inferno)

We see 2012 to 2015 as the period when Industry 4.0, where IoT is the major push, was at the Peak of Inflated Expectations. At that time, a major IoT surge yielded a lot of investor money for consumer-focused companies like Nest, and every tech publication was buzzing. Followed by 2015, the consumer IoT industry hit the Trough of Disillusionment when we all realized that a lot of consumer products didn’t really need to be connected. At the time, there just wasn’t enough value in connectivity for most of the products on the market. Since 2018, industrial and business-to-business use cases have represented IoT’s big comeback. We’re seeing companies in “unsexy” industries like HVAC, industrial monitoring, energy production, etc., starting to adopt IoT for a variety of use cases—not to mention a rise in relatively new industries like micromobility that only exist because of IoT. Overall, it is believed that IoT is early on the Slope of Enlightenment. Excitement around IoT reached its peak prior to the 5G marketing boom, and in many ways, has receded into the background since—even as many industries continue to adopt the technology. Some reference.

Industry 4.0 are we there yet? 🫏

It’s been a while since this question came up. The switch to Industry 4.0 has been slower than expected, especially in developing countries. These countries tend to adopt Industry 4.0 technologies at a lower rate than developed nations because of some main challenges. Developed countries, especially those with strong industries like Germany and the United States, have made great progress in using digital technologies, automation, and advanced data analysis in their manufacturing processes. This success is helped by good infrastructure, access to funding, and a skilled workforce that understands high-tech operations.

What are the hurdles for adaption of Industry 4.0?

No doubt, we see huge advantage of adapting to Industry 4.0 to Corporate as well as SMEs, then what is the hurdle? I think the hurdle are multiple, and one can compartmalize them in few buckets namely

  1. Infrastructure
  2. Awareness
  3. Inertia

Infrastructure

Last mile connectivity for Industry 4.0 is a major concern. It’s a technological issue as well. Typically to connect a big equipment to Internet, the internet ready hardware has Ethernet port, and some one has to lay cable till the machine, establish a small local server to fetch and push data to cloud. Given human nature, these activities falls under ‘unproductive’ work, or ‘too much of work for the benefit’ and the machine never gets connected to Server. From infrastructure point of view, accessibility of high speed network, both wired and wireless is still a question in most part of country. You may get big hoarding on 5G connectivity, however call drops and low internet speed is the fact of the day. The dual issue of OEM not making machines ready with low hurdle options (WiFi ready or Bluetooth ready machines) and lack of Infra to give high speed access to data both becoming a challenge for the adaption.

Awareness

It’s important that the consumer and OEM both see the ‘value of this new technology’. I came across this article https://elischragenheim.com/2018/10/01/the-big-slogan-and-the-potential-real-value-of-industry-4-0/, and the article asks six questions, to enable user get the awareness of the technology and find the value.

  1. Question 1: What is the power of the new technology?
  2. Question 2: What current limitation or barrier does the new technology eliminate or vastly reduce?
  3. Question 3: What are the current usage rules, patterns and behaviors that bypass the limitation?
  4. Question 4: What rules, patterns and behaviors need to be changed to get the benefits of the new technology?
  5. Question 5: What is the application of the new technology that will enable the above change without causing resistance?
  6. Question 6: How to build, capitalize and sustain the business?

here in the sixth question, we need to look at the global aspects of using a specific new technology. When considering multiple applications of new technologies, question 6 should be applied to all of them together. So, when examining the different parts of Industry 4.0, the first step is to pick a few for closer study. The last step is to evaluate the overall strategy and decide which ones to implement, if any, and what other actions are needed to achieve the expected value as quickly as possible.

Inertia

Inertia, especially in the context of Original Equipment Manufacturers (OEMs) supplying machines aimed at enhancing the last mile of connectivity, presents significant challenges. This resistance to change does not originate from a lack of interest among end users or industries; rather, it stems from a comfort with the current state of affairs—often referred to as the ‘As-is’ state. Many individuals and organizations find solace in familiar routines and established practices, which naturally leads to reluctance when faced with the prospect of change.

The underlying reasons for this resistance are often tied to concerns about potential negative consequences that could arise from adopting new technologies or processes. Change, by its very nature, is an unsettling force, and the anticipation of negative outcomes can evoke fear and skepticism. For instance, the introduction of new medical drugs, while aimed at curing an illness, frequently comes with side effects that can be severe or even counterproductive. This analogy is not confined to the pharmaceutical realm but extends into all areas of innovation and transformation.

In industries where established practices have yielded satisfactory results, any proposed changes may be perceived as a threat to the status quo. The examples of disruptions in various commercial sectors often illustrate a pattern where innovation, despite its potential benefits, is met with resistance due to fears of failure or unforeseen impacts. This caution is not inherently negative, as it reflects a desire to protect existing investments and avoid potential risks. Nonetheless, it highlights the intricate balancing act organizations face when striving for progress while managing the inertia of their current operations.

Thus, fostering an environment that promotes openness to change requires not only a clear communication of the benefits but also addressing the fears associated with potential drawbacks. Educating stakeholders about the supportive measures in place to mitigate risks and enhance their experience can pave the way for smoother adaptation, ultimately leading to a dynamic evolution in processes and technologies that serve to enhance the last mile of connectivity and beyond.

Industry 4.0, what next?

Industry 4.0, slowly but surely showing its advantage to public at large, many governments are also adding new packages, to help adapt to these technologies. Also Infrastructure are upgrading and with penetration of mobile network and miniaturising electronics boards, the technology is becoming more accessible to all. Specially from Industry perspective, young entrepreneurs are quick to adapt the technologies, and giving access to Industry 4.0, we see quick adaptation rate, and more demanding customer base to harness true power of Industry 4.0! Power of visualising data, identifying patterns, itself gives huge productivity boost. On my personal account, I’ve seen improvement of OEE from 10-15% just by visualising data and trends.

COVID-19 has rapidly sped up Industry 4.0 transformations for many companies. By embracing digitization and artificial intelligence, organizations are strengthening their resilience in these difficult times. Companies seizing this opportunity now will gain a significant advantage in the future.

With long term quality data harnessing, which is happening in process industry for long, and they are on the cusp of making a breakthrough, Machines and plants are still in process of aggregating data and streamlining data in more quality and quantitative way. Once the data is harnessed and aggregated, the hyped ‘predictive’ and ‘preventive’ analytic will be making Total cost of ownership lower, and increase the adaption in return.

With burst of AI technologies, the adaptation curve will be faster, however the spike will come only once we harness the data. Machines, which are less of timeseries data unlike process industries, will take a bit longer to come up with practical applications of AI based predictive and preventive maintenance model or Just in Time spare inventory. I’m sure this is happening in Countries like Germany and USA, but again not to the scale, which was anticipated. The struggle is same across the domain.

So what’s Industry 5.0🤔

As we talked about before, we are not yet fully at Industry 5.0. Many companies are still focusing on Industry 4.0 or are changing their plans to follow this trend. Industry 4.0 includes important elements like automation, robotics, big data, smart systems, virtualization, artificial intelligence, machine learning, and the Internet of Things. While businesses are still working through this fourth stage, Industry 5.0 is just starting to take shape. Before you feel rushed to make decisions, let’s take a quick look at what Industry 5.0 means and how it might impact your business plans in the future.

Industry 5.0 is an emerging concept that shifts focus from mere efficiency and productivity to the wellbeing of workers and societal contributions. The European Union describes it as a movement that utilizes new technologies to ensure prosperity while respecting environmental limits. It builds upon Industry 4.0 by prioritizing research and innovation for creating a sustainable, human-centric industry. This approach marks a significant change in prioritising people and the planet over profits, contrasting with historical concepts like Corporate Social Responsibility and ESG.

Summary 🔖

Industry 5.0 is still a new idea, with most businesses focused on Industry 4.0 or earlier stages. Sustainability is also a growing concern. However, the EU’s push towards Industry 5.0, built on human-centricity, resilience, and sustainability, offers a vision for future progress.

Whether this vision is exciting or overwhelming depends on the company and individual. The level of adoption will vary widely. Yet, given today’s challenges, Industry 5.0 seems like a future promising path. By prioritizing people, adaptability, and environmental responsibility, organizations and societies can find solutions to current problems.

Feedback, Art of listening 👂

GoodRead, ,

“If someone chooses to share feedback, listen to understand the person, not the work. People will tell you more about themselves than about the art when giving feedback. We each see a unique world.”
–  Rick Rubin

The quote by one of the #goodread I had in past, “The Creative Act : a Way of being”, Rick Rubin emphasizes the importance of empathy and understanding in the feedback process. When someone offers feedback, it’s easy to focus solely on the work at hand—be it a piece of art, music, or writing. However, Rubin suggests that the real value lies in understanding the individual behind the feedback. Each person’s perspective is shaped by their personal experiences, emotions, and beliefs, which means they reveal more about themselves than the work itself when sharing their thoughts.

Me and Listening 🦻

Many years ago, as part of internal assessment I have been rated 3/5 on listening skills, its a feedback, which I took with a shock. Till that point I was under impression that I know what “Listening” means, however, nodding my head, paraphrasing what some one just told me, mirroring body language is not what actual ‘Listening’ means. It means “I’m trying to listening, and proving he same”. This is not the intent. Intent is to know the other party better. This is how I started on journey of knowing me better before I learn to know other better. In this process I came across many deep understanding on this subject.

crop faceless female counselor talking to client
Photo by Alex Green on Pexels.com

By listening with the intent to understand the person, rather than just evaluating their critique, we open ourselves up to a deeper connection and insight into different viewpoints. This approach not only enriches our own understanding but can also foster a more supportive and collaborative environment. It encourages constructive dialogue and promotes artistic growth, as individuals feel valued and heard. Ultimately, recognizing that everyone perceives the world uniquely allows for a more inclusive and reflective creative process.

Feedback and Listening … 👂

You can’t step into the same stream twice because it’s always moving. Everything is changing.

After finishing a project or activity, it’s helpful to get feedback from others. This can give us valuable insights and help us improve. For example, a 360-degree feedback after one year in a job is a good way to check how we’re doing and can make our journey more successful. The key is how we handle that feedback. The goal isn’t just to get comments or opinions from others. This is your work, and your feelings about it matter most. The aim is for you to see your work in a new light. Sometimes, a comment will really connect with you and reveal areas for growth. Other times, a negative remark may upset you, leading to a defensive reaction or doubt in your work. In such cases, it’s helpful to take a break, clear your mind, and come back with a fresh perspective. Criticism lets us look at our work from a different angle. We can choose to agree or stick to our original ideas.

How to listen thou self? 💁

Look around you: there are so many remarkable accomplishments to appreciate. Each of these is humanity being true to itself, as a hummingbird is true to itself by building a nest, a mango trees by bearing fruit, and a nimbus cloud by producing rain. We look for something new, and we find the newness. The effort for ‘look for something new’ itself brings the mind to ‘listening’ mode. When we intently look for something new, we hear better, we see better, we not only see the obvious, but we also see the reason behind the obvious. The fruit bearing tree is not there on his own, some one, some how planted it for some reason, and now the fruits are for us to enjoy! It’s a true rabbit hole to go into!

This is how we listen to self, In process improve the listening skill. The gift of awareness allows us to notice what’s going on around and inside ourselves in the present moment. And to do so without attachment or involvement. We may observe bodily sensations, passing thoughts and feelings, sounds or visual cues, smells and tastes. And this is the moment where we are really actively listening to the person.

Fall in love with the person. ❤️

To listen to someone effectively, you need to fall in love with him/her! 💕 Really!

While reading the book “Unsold Mindset,” I discovered an interesting idea about connections. It’s not just about romantic love; it’s about the meaningful friendships that arise from truly caring about someone. We’ve all felt that spark when talking to a stranger—maybe while sitting next to them on a flight or in line at the store. These moments can feel almost magical, especially when the person inspires us. As we share more of these small connections with others, whether they are clients or casual acquaintances, our trust and interest in them grow, leading to deeper understanding and compassion. Such perspective brings the mindset of making the conversation more effective and actionable more impactful

Summary 🔖

Listening is an ongoing process. I never came across someone yet, who has really ‘listens to me’ to my expectations , this could be due to my high expectations and confusion with ‘Thought reading’ expectations.

Nevertheless, I came across many successful leaders, who has shown admiringly well Listening Skills, and which shows very positive and high co-relation of listening skills with a successful leader. Leaders with these skills has not only impacted their own life by climbing the ladder of success , but also impacted the community at large, making difference to their lives and creating the lasting impact.

I’ll keep exploring the topic, and keep learning to be better at skill, and my wife will be the litmus test, nevertheless, its encouraging to be part of this journey!

Handling Complex Problems 👊

Productivity,

Applying complicated solutions to complex problems is an understandable approach, but flawed.”
–  Donald Sull

Is it really complex?
Complexity is what gives one an opportunity to exploit his expertise, really?

Recall the first and only apollo mission who has put man on moon, was operating on hardware had 32 KB of RAM, a 72 KB hard drive (ROM), and a processor that ran at 43 kHz. By comparison, the latest Apple watch, sports 32 GB of RAM (1 million times the RAM of the AGC) and a 64-bit dual processor in a thin rectangle as small as 40 mm high. Today’s cell phones have more computer power than all of NASA did in 1969, as do our smart toasters.

Evolution leads to complexity, we being born from single cell organisms and grown to become billion cell person, it self shows how nature loves complexity.

Complexity didn’t mean it can’t be simplified. The simplification comes from perspective and approach. Imagine that tight knot which sometime we come across, only when, we take deep breath and look closely we find that one thread, which unravels the full stock! 😊

How to look for simplicity 👀

I believe the easiest way to adopt a mindset that seeks simple solutions is to start by believing that a simple solution exists and that it’s only a matter of time before we discover it. By acknowledging the possibility of such a solution, we open ourselves to finding it.

Simple solutions found when we ask the fundamental questions. “The 5 whys” could be one easiest way to find the root of the problems and then an easy solution.

Golden circle which was made famous by Simon Sinek, puts Why at the centre, followed by how and what. again approach is once we know why, we can find out how and what part of it.

Some mental models comes handy to find the simple solutions to complex problem, I love the model first principle thinking. The approach is to break down the problem in fundamental elements, variables and then ask, “what happens if I remove one variable at a time?” This is a strong model, keep one variable change and other constant, and see the change or behaviour, look for pattern and recognising those patterns helps find the root cause. This works when we are focusing on finding solution for complex problem.

How to approach complex customer problem?

No customer, including us, wants a complex solution, need to have educated guess or training to solve his problem. How many our us reads manual when we bought anything which is not manual 😊

One of the key bias one needs to be aware of is status quo bias a preference for the current state of affairs, where the current baseline is taken as a reference point, and any change from that baseline is perceived as a loss, and one avoids looking for change or finding better and easy solutions.

The solution has to be intuitive, and anything of this nature has to be simple. Just note 5 degree inclination of refrigerator, which helps closes the door automatically, not set properly, how many of us find those door getting half close or banging them each time. Simple solution like this needs to be institutionalised in product design. The approach is “design thinking”, one more framework helping us find simple solution.

Design thinking in nutshell 🌰

Many, many resources are available online, the soul of this approach is diverge and converge while finding the solution, and keep the end goal common, a simple solution. Empathy toward customer help avoid complex solutions.

Design thinking is a customer-centered, iterative approach to problem-solving that emphasizes empathy, creativity, and experimentation. It involves understanding the needs of users, defining the problem, generating a wide range of ideas, prototyping, and testing solutions. This process encourages collaboration across disciplines and focuses on creating innovative solutions that address real user needs. By embracing feedback and learning from failures, design thinking helps teams refine ideas and ultimately deliver more effective, simple, user-friendly products and services.

Do google and find some good reads on this topic.

Constrains are good 👍

Other way to find simple solution to complex problem is acknowledging constraints on resources or adding artificial constraints, to avoid excessive use. Common sense says, more resources, more complex outcome. Also more variables makes solution unsustainable or unreliable in long run. Hence constraints always good and help innovate solutions.

The most depressing part is not the product flaws themselves, but customers’ willingness to accept complicated interfaces as inevitable.

Take example of MP3 player in early years, customer took for granted the complexity in the player, for being MP3 player, and iPOD took them by storm.

A good read 📚

Came across this book, as name suggest it’s on Simple Rules for managing complex problems. The book talks about few such approaches.

Simple rules impose a threshold level of structure while avoiding the rigidity that results from too many restrictions. The resulting flexibility makes it easier to adapt to changing circumstances and seize fleeting opportunities. Simple rules can also produce better decisions than more complicated models can, particularly when time and information are limited.

Why simple solutions hard to find by? 🧐

  • Failure to accept the change, change is good, nevertheless finding good in a change is always challenging and human always tries to avoid change.
  • Cognitive dissonance, the moment we face the issue with implementation of simple solution, we fall back to usuals complex solution and struggle either with its implementation or go back to original state.
  • Surrounding. We are surrounded by complex solutions, we pay for them, and they get paid to get our attention, and we get distracted and fail to find that simple solution.

Summary 😏

Does this awareness helps? Sometime, and most of the time, depending upon how we prioritise finding simple solutions over applying existing complex solutions. It needs practice and awareness of our actions.

From Change to Clarity: My 2023 Reading Journey

GoodRead,

As 2023 draws to a close, I can’t help but reflect on the incredible journey this year has been—a tapestry woven with challenges, opportunities, and, above all, the profound impact of the books that accompanied me through it all.

In the realm of managing change, “The Leader’s Handbook,” “Amazon Unbound,” “Catalyst,” “The Upside of Uncertainty,” and “The Coaching Habit” stood out as guiding lights. Each page turned felt like a step toward mastering the art of navigating uncertainty and embracing change.

In the pursuit of personal and professional excellence, I found solace in “Build,” courage in “Skin in the Game,” clarity in “Clarity,” emotional mastery in “Master Your Emotions,” and a guide to staying focused in an ever-distracting world with “Indistractable.” Also “The First 90 days” helped me navigate my professional change!.

To stay ahead of the curve and catch the elusive trends, “How Data Happened,” “Power of Prediction,” and “Game Theory” became my trusty companions, offering insights that proved invaluable in both my personal and professional spheres.

The motivational force of “The Code Breaker,” “Educated,” “Lesson in Chemistry,” “Katha,” and “The Lego Story” fueled my spirit, reminding me that the human experience is a rich tapestry of stories waiting to be explored.

And in the realm of fiction, “Contact” and “Station Eleven” etched themselves into my all-time favorites, transporting me to worlds that stretched the boundaries of imagination.

As I bid farewell to 2023, I eagerly anticipate the surprises and discoveries that 2024 holds. May this new year be filled with joy, growth, and a plethora of captivating reads. Wishing you all a delightful holiday season, a Happy New Year, and countless adventures within the pages of wonderful books! 📚✨

Ethics 101 : Beginner’s guide in Ethics

GoodRead, ,

“Ethics 101: From Altruism and Utilitarianism to Bioethics and Political Ethics, an Exploration of the Concepts of Right and Wrong” by Brian Boone is a beginner-friendly guide that explores various ethical theories and concepts. The book covers a range of ethical perspectives, from historical theories like utilitarianism and deontology to contemporary issues in bioethics and political ethics. Boone provides a concise overview of each concept, breaking down complex ideas into easily understandable terms. The book is designed to introduce readers to the fundamental principles of ethics, making it accessible to those who may be new to the subject. It serves as a primer for individuals interested in understanding different ethical frameworks and their applications in various aspects of life

Major topics covered

  1. Introduction to Ethics: Basic definitions and the importance of ethical considerations.
  2. Historical Ethical Theories:
    • Utilitarianism: The idea that actions should maximize overall happiness or utility.
    • Deontology: Emphasizing the importance of following moral rules and duties.
  3. Virtue Ethics: Exploring the development of good character traits as the foundation for ethical behaviour.
  4. Applied Ethics:
    • Bioethics: Ethical considerations in the field of biology and medicine.
    • Environmental Ethics: Ethics related to the environment and our impact on it.
    • Business Ethics: Moral considerations in the business world.
  5. Political Ethics: Examining ethical principles in the context of politics and governance.
  6. Social Justice: Addressing issues of fairness and justice in society.
  7. Metaethics: Exploring the nature of ethics, including questions about objectivity and subjectivity.
  8. Religious Ethics: Considering how various religious traditions approach ethical questions.
  9. Current Ethical Issues: Examining contemporary ethical challenges and debates.

What do I like in this book most?

The book is designed to be a primer, providing a concise introduction to key ethical concepts without overwhelming me with unnecessary details. It explores how ethical theories can be applied to real-life situations, making it relevant to everyday decision-making. The book also covers a wide range of topics within ethics, from historical theories to contemporary issues.

Summary:

I made small timelines on various philosophers and ethicists which are mentioned in this book.

This book also recognizes a potential avenue for my further exploration. The primary discussion and renowned theories originate from the Western perspective. Even though the Eastern tradition has a longer history of engaging in ethical discourse, particularly from the perspective of virtues, it is an area that I find intriguing and may delve into as my next in-depth study.

A 200+ page, easy read book is a good leisure read, but be prepared to learn new insights on Ethics.

Have a good read!

Join my reading challenge Sumit’s 2023 reading challenge | Goodreads

Book Review : The Upside of Uncertainty

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The Upside of Uncertainty: A Guide to Finding Possibility in the Unknown, The book is about framing uncertainty as a possibility. This involves shifting the mindset to see uncertainty as a potential source of positive outcomes and personal growth. Great Read!

The book backs up its strategies based on research from psychology, neuroscience, and behavioural economics. The book is not a guide to “success”, but more of “questioning” the anxiety of the uncertainty.

The book is divided in three parts,

  • Part 1: Understanding Uncertainty: This section explores the nature of uncertainty and how it affects us. The authors discuss the different types of uncertainty, the brain’s response to uncertainty, and the psychological biases that can lead us to make poor decisions in uncertain situations.
  • Part 2: Thriving in Uncertainty: This section provides tools and strategies for navigating uncertainty effectively. The authors discuss how to develop a healthy relationship with uncertainty, increase your possibility quotient, and build resilience in the face of unexpected challenges.
  • Part 3: Living in Possibility: This section explores the benefits of living in a world of uncertainty. The authors discuss how uncertainty can lead to more creativity, innovation, and connection.

Key strategies listed in the book:

  1. Embrace change: Accept that uncertainty often accompanies change, and change can lead to personal and professional growth. Embrace change as an opportunity to learn and adapt.
  2. Focus on what you can control: While you can’t control all aspects of uncertainty, concentrate on the factors you can influence and take actions that are within your control.
  3. Develop a growth mindset: Cultivate a mindset that sees challenges and uncertainty as opportunities for learning and improvement. Embrace failures as valuable lessons.
  4. Set clear goals: Define your objectives and aspirations, even in uncertain situations. Having clear goals can provide a sense of direction and purpose.
  5. Experiment and innovate: Use uncertainty as a chance to experiment, try new things, and innovate. This can lead to discoveries and breakthroughs.
  6. Seek diverse perspectives: Engage with people who have different viewpoints and experiences to gain new insights and ideas when facing uncertainty.
  7. Build resilience: Strengthen your ability to bounce back from setbacks and adapt to changing circumstances. Resilience can help you thrive in uncertain situations.
  8. Practice mindfulness: Mindfulness techniques can help you stay grounded in the present moment and reduce anxiety related to uncertainty.
  9. Maintain a positive attitude: Cultivate optimism and focus on the potential positive outcomes that uncertainty can bring. A positive attitude can be a powerful asset.
  10. Continuously learn and grow: View uncertainty as an ongoing opportunity for personal and professional development. Keep acquiring new skills and knowledge to stay adaptable.

By reframing uncertainty in this way, you can turn it into a catalyst for growth and possibility, rather than a source of anxiety and fear.

The key takeaways from this book are :

  • Uncertainty is inevitable. It is a part of life.
  • Uncertainty is not something to be feared, but rather embraced.
  • Uncertainty can lead to innovation, creativity, and personal growth.
  • There are tools and strategies that can help us navigate uncertainty effectively.
  • Living in a world of uncertainty can lead to a more fulfilling and impactful life.

Join my reading challenge Sumit’s 2023 reading challenge | Goodreads

Book Review : Power & Prediction

DataAnalytics, GoodRead

Summary

“Power and Prediction” discusses the potential of artificial intelligence (AI) to transform decision-making through improved prediction. The authors argue that AI can change the balance between rules and decisions, and that better predictions can give businesses a competitive advantage. However, the adoption of AI requires a systems mindset, as the entire system of decision-making and its processes may need to adjust. The authors also explore the potential for AI to change who holds power, as well as the challenges in building judgment associated with AI prediction.

Key Questions answered in this book

  1. How does AI prediction change the traditional decision-making process?
    AI prediction changes the traditional decision-making process by reducing the cost and increasing the accuracy of prediction, which is a key input for any decision. Decision-making can be broken down into three components:
    1. data,
    2. prediction, and
    3. judgment.
    Data is the raw information that is available for the decision, prediction is the process of using data to forecast what will happen under different scenarios, and judgment is the process of determining the value or utility of different outcomes.
    Traditionally, prediction was expensive and inaccurate, so humans relied more on their intuition and heuristics to make decisions. However, with the advent of AI, prediction becomes cheap and precise, so humans can use more data and scenarios to make better-informed decisions. AI also enables new types of decisions that were not possible before, such as personalized recommendations, dynamic pricing, and real-time optimization.
    However, AI does not replace human judgment, which is still needed to evaluate the predictions and choose the best course of action. Human judgment also involves ethical, moral, and social considerations that AI cannot capture. Therefore, the optimal decision-making process in the age of AI is a combination of human and machine intelligence, where humans delegate prediction tasks to AI and focus on judgment tasks that require creativity, empathy, and wisdom.
  2. What are some potential benefits and drawbacks of decoupling prediction and judgment through AI adoption?
    • Benefits:
      • AI can improve the accuracy and efficiency of prediction tasks, which are essential for decision-making in various domains.
      • AI can enable new types of decisions that were not possible before, such as personalized recommendations, dynamic pricing, and real-time optimization.
      • AI can reduce the cognitive load and bias of human decision-makers, who can focus on judgment tasks that require creativity, empathy, and wisdom.
      • AI can enhance the value of human judgment, which is needed to evaluate the predictions and choose the best course of action based on ethical, moral, and social considerations.
    • Drawbacks:
      • AI can increase the complexity and uncertainty of decision-making environments, which may require more data and judgment than available or feasible.
      • AI can create new challenges and risks for data quality, security, and privacy, which may affect the reliability and validity of predictions.
      • AI can shift the power and profits among decision-makers, intermediaries, and stakeholders, which may create conflicts and inequalities.
      • AI can undermine the accountability and transparency of decision-making processes, which may erode trust and legitimacy.
  3. How can AI reduce bias and change power dynamics in organizations?
    • AI can reduce bias by identifying and correcting the human biases that affect decision-making, such as affinity bias, confirmation bias, attribution bias, and the halo effect. AI can also help to diversify the data sources and algorithms that are used to generate predictions, and to monitor and report the potential issues and impacts of AI applications.
    • AI can change power dynamics by enabling new types of decisions that were not possible before, such as personalized recommendations, dynamic pricing, and real-time optimization. AI can also shift the power and profits among decision-makers, intermediaries, and stakeholders, by creating new value propositions, business models, and competitive advantages.

Key Focus

  • AI is a prediction technology that enhances decision-making by reducing uncertainty and increasing accuracy
  • AI can transform industries by enabling new decisions, redesigning systems, and shifting power and profits.
  • AI poses challenges and opportunities for innovation, regulation, ethics, and geopolitics
  • A framework for understanding the economics of AI and its implications for the future of work, competition, and society.
  • Helps to understand about the potential and pitfalls of AI, and how to leverage or protect their position in the coming AI disruptions

Key highlights

  • We have entered a unique moment in history—The Between Times—after witnessing the power of this technology and before its widespread.
  • Google CEO Sundar Pichai said that “AI is probably the most important thing humanity has ever worked on. I think of it as something more profound than electricity.” Google has already seen a benefit from AI. Many companies haven’t. A 2020 study by MIT’s Sloan Management Review and BCG, a global consultancy, found that just 11 percent of organizations reported significant financial benefits from AI.This wasn’t for lack of trying. Fifty-nine percent said they had an AI strategy. Fifty-seven percent had deployed or piloted AI solutions.
  • AI Soluton Types
    • AI POINT SOLUTION: A prediction is valuable as a point solution if it improves an existing decision and that decision can be made independently.
    • AI APPLICATION SOLUTION: A prediction is valuable as an application solution if it enables a new decision or changes how a decision is made and that decision can be made independently.
    • AI SYSTEM SOLUTION: A prediction is valuable as a system solution if it improves existing decisions or enables new decisions, but only if changes to how other decisions are made are implemented.
  • The biggest increase in the adoption of AI is, if history is any guide, going to come from changes in systems. But such change will also be disruptive. By disruptive, we mean that it changes the roles of many people and companies within industries and, alongside those changes, causes shifts in power. That is, there are likely to be economic winners and losers, especially if system change occurs relatively quickly.
  • System solutions are typically harder to implement than point solutions or application solutions because the AI-enhanced decision impacts other decisions in the system, However, in many cases, system solutions are likely to generate the greatest overall return to investments in AI
  • When people think about AI, they think about the intelligent machines littered throughout popular culture. They think of helpful robots such as R2-D2 or WALL-E. They think of brilliant teammates such as Data from Star Trek or J.A.R.V.I.S. from Iron Man. They also think of those that turned rogue like HAL 9000 from 2001 or Ultron from The Avengers. Whatever their quirks or intentions, these representations of AI have one thing in common: no one disputes that they can think, reason, and have agency, just as we do.

Book Review: “Skin in the Game” by Nassim Nicholas Taleb and “Basic Economics” by Thomas Sowell

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I read somewhere that the technology keeps on changing, but the economics do not. However, I recently encountered two books with thought-provoking and belief-conflicting theories. Both Nassim (writer of the famous book Black Swan & Antifragile) and Thomas Sowell (Known capitalistic economist) are subject-matter expert, and both are working in economies of scales.

The challenge was for me to read these books together, in order to gain a greater perspective on risk management and how economies work. The books are on different topics, but the genre is the same… how the environment manages/appreciates/supports risks.

Nassim’s writing is complex, and sometimes you may feel highly biased, but don’t fall for it, what he does is ask questions, and make you dwell deeper in to conflict, as there you may realize the fundamentals. Sowell is straightforward, easy to read, and I can see bias, but the examples given and logic explained make me conflict with my belief system, which gives me better insights on the subject.

I’m unable to make a mind map this time around; however, the following summary will give you some insights.

Both “Skin in the Game” by Nassim Nicholas Taleb and “Basic Economics” by Thomas Sowell are well-regarded books, but they approach the subject from different angles and with different emphases. Here are some potential points of conflict or difference between the two:

1. Approach to Risk and Uncertainty:

• Taleb: In “Skin in the Game,” Taleb stresses the importance of personal risk in decision-making. He argues that systems are more stable and ethical when individuals have a personal stake in the outcomes of their actions. Taleb is also known for his focus on the impact of highly improbable events (“Black Swans”) and how they can disrupt systems.

• Sowell: “Basic Economics” is more of a foundational overview of economic principles. While it touches on risk in terms of costs and benefits, it doesn’t delve deeply into the philosophical or ethical implications of risk in the way Taleb does.

2. Role of Experts:

• Taleb: Taleb is often critical of experts, especially when they don’t have “skin in the game.” He believes many experts can make predictions or decisions without facing the consequences of being wrong.

• Sowell: While Sowell also criticizes some experts, especially when discussing the potential pitfalls of central planning, his approach in “Basic Economics” is more to explain economic principles clearly rather than to critique the role of experts in decision-making.

3. Government Intervention:

• Taleb: Taleb doesn’t necessarily oppose government intervention, but is sceptical of interventions by individuals or entities that don’t bear the risks of their actions.

• Sowell: In “Basic Economics,” Sowell often points out the unintended consequences of government interventions in the market. He leans towards a free-market perspective, emphasizing that many government interventions can lead to inefficiencies or distortions in the market.

4. Nature of Economics:

• Taleb: Taleb’s works, including “Skin in the Game,” tend to be more philosophical and touch upon a wide range of subjects, not just economics. He typically integrates ideas from probability, ethics, and epistemology.

• Sowell: “Basic Economics” is more focused. It’s an introductory text that lays out the foundational principles of economics in a straightforward manner.

5. Writing Style:

• Taleb: Taleb’s writing can be polemical and is frequently interlaced with anecdotes, historical examples, and philosophical musings.

• Sowell: Sowell’s writing in “Basic Economics” is clear, direct, and educational, aiming to explain economic concepts simply.

Both Nassim Nicholas Taleb and Thomas Sowell have expressed political viewpoints, albeit from different angles and frameworks. Here’s a brief summary of their political stances based on their writings and public statements:

1. Thomas Sowell

— Free Market Capitalism: Sowell is a strong proponent of free market capitalism. In “Basic Economics” and other works, he argues that market mechanisms are the most efficient way to allocate resources and that many problems arise from government interventions.

—Conservatism: Sowell is often identified with conservative viewpoints, especially in the American context. He has critiqued various progressive policies, especially those that, in his view, don’t consider the economic consequences.

— Race and Culture: In books like “Race and Culture,” “Black Rednecks and White Liberals,” and “Intellectuals and Race,” Sowell argues against a victimhood narrative and suggests that cultural factors play a significant role in the success or challenges of different groups.

2. Nassim Nicholas Taleb:

— Decentralization: One of Taleb’s recurrent themes is the idea that smaller, decentralized systems are more robust and antifragile. He regularly critiques large-scale top-down interventions and bureaucracies.

— Scepticism of Experts: As mentioned earlier, Taleb is sceptical of experts who don’t bear the consequences of their decisions, which has political implications in terms of policymaking and governance.

— Ethical Framework: Taleb’s “skin in the game” concept is as much an ethical principle as it is a practical one. He believes that decision-makers should bear the risks of their decisions, leading to more ethical and robust systems.

—Political Classification: Taleb has resisted being easily classified under traditional political labels. He often critiques both left and right viewpoints, focusing instead on principles like antifragility and skin in the game.

While both authors might overlap in their scepticism of certain types of top-down interventions, their reasons and frameworks differ. Sowell’s critiques frequently come from an economic efficiency and individual freedom perspective, while Taleb’s come from a risk, ethics, and systemic robustness viewpoint.

In “Skin in the Game” by Nassim Nicholas Taleb, the concept of asymmetry plays a central role. Taleb uses several examples and situations to illustrate the idea that when there’s a misalignment of risks and rewards, or when one party bears more risks than the other, it can lead to systemic problems. Here are some examples of asymmetries discussed in the book:

1. Bankers and Bailouts: One of the most cited examples is the 2008 financial crisis. Bankers had incentives to take large risks because they reaped the rewards when things went well but faced limited consequences when things went wrong, as many banks were bailed out. This is an asymmetry because the risks were effectively transferred to taxpayers.

2. Consultants and Decision-making: Taleb talks about consultants giving advice. If the advice works, they get paid and hailed, but if it goes wrong, it’s the company that suffers. The consultant doesn’t have “skin in the game.”

3. Bureaucrats and Wars: The decision-makers who opt for war might not have personal risks involved (they or their loved ones are not on the frontline). This disconnect can lead to poor decision-making because those making the decisions aren’t bearing the full consequences.

4. Centralization: Larger, centralized entities making decisions for a diverse range of smaller entities can lead to asymmetries. Decisions made centrally might not consider local nuances, and if those decisions are detrimental, it’s the local entities that bear the brunt.

5. Minority Rule: Taleb describes how a small, intransigent minority can dictate the preferences of a more flexible majority. For instance, if a small percentage of the population has a specific dietary restriction and is inflexible about it, food producers might find it easier to cater to that restriction universally, making the minority’s preference the de facto standard.

6. The Bob Rubin Trade: Taleb often cites the example of Robert Rubin, a former U.S. Treasury Secretary and Citigroup executive. Rubin received large bonuses when the risky investments he endorsed did well, but when those same investments later resulted in significant losses, he didn’t face corresponding personal financial consequences.

These examples underscore the central theme of the book: that it’s vital for decision-makers to have “skin in the game” to ensure that risks and rewards are aligned, leading to more ethical, robust, and effective systems.

Have a nice good read

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Book Review : Clarity

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The Book

The #goodreads , Clarity by Jamie Smart, explores the importance of clarity in achieving success and well-being in life. It explains how understanding innate thinking leads to clarity, intuition, and resilience, guiding individuals through uncertainty and change. The book helps catch an understanding that is aligned with how our mind and life work, resulting in symptoms of increasing clarity, resilience, and peace of mind. The author shares reflections and resources to deepen readers’ understanding of innate thinking and clarify their perception of life’s challenges.

Key Concepts

The key concept is looking from inside out than outside in. Not setting goals to make feel need to achieve something to move forward, to get the happiness. The inside out thinking help us to understand from where the feeling of ‘need’ or ‘anxiety’ is coming, and distinguish between what really matters.

Principle Thought, Mind and Consciousness

The book focuses of three principles as 1. Thought (Understand its origin, accept all feelings are result of mere thoughts and not situation), 2. Consciousness (Bring the awareness of surrounding, being aware of the surrounding help avoid blaming the situation, and get focused on Thoughts ) and 3. Mind (Mind is power source behind life)

4T Principle

While doing distinction between Information vs Implementation, I liked the key concept of 4T Principle.
Typically, we fall pray to get more insights and information before taking any decision, this is mainly due to fear of failure, again this is outside in thinking, to see from inside, its important to focus on Implementation. The implementation will only occur if we get more clarity. the clarity will come when we follow the 4Ts.

  • Taking responsibility,
  • Taking decisions,
  • Taking risks and
  • Taking action.
    These can often bring up superstitious thinking. When you can see through the mirage of that thinking, implementation is relatively straightforward. When you can’t see through it, more information can look like an attractive proposition.

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Book Review : The Coaching Habit

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Coaching is one of the most important tools a leader can use to make his team more efficient, productive, and interested in achieving the common goal. However, knowing this fact, we typically struggle to ask the right question to coach one. Some time, coaching becomes mentoring and loses its focus. The focus of Coaching is to make one more productive and help him achieve his short-term goals. It’s significant to note that coaching is a collaborative process, where the coach and coachee work together towards the cochiee’s goals. The coach provides guidance, support, and expertise, while the coachee actively participates, takes ownership of their development, and implements the recommended strategies.

The process necessitates a focus on short-term objectives, thereby necessitating the coachee’s efficacy in assisting the coachee in attaining their desired outcomes and enhancing their effectiveness. This goal makes this book a useful guidebook for a leader to be a better mentor.

The book is about seven questions, which a leader can ask to be a more effective coach. These questions are:

  1. Whats on your mind?
    • It is a question that says, ‘let’s talk about the thing that matters most., it is a kick-start question.
  2. And What Else?
    • You create more opportunity to create more insight on the topic.
  3. What is the real challenge here for you?
    • This makes you pay attention to the things that immediately need scrutiny.
  4. What do you want?
    • Is the listener aligned to coachee? This helps bring the trust between coach and coachee.
  5. What was most useful for you?
    • People don’t learn while seeing or doing things, but rather when they recall and reflect on something
  6. If You Are Saying ‘Yes’ To This, What Are You Saying No to?
    • It’s a strategic question. It asks people to be clear and committed.
  7. How Can I Help?
    • It’s a lazy question, this is a clear and direct question.

Each question, is an open-ended question, few are enticing to give an alternate to the proposed solution, few are challenging one to explore further, few are helping in finding the other side of the story.

Each question is powerful, but they need additional information to be more effective. Based on situation, requires, these questions can be tweaked and sequence can be changed, or a few questions out of seven can be asked.

Our job as manager/ leader is to help create the space for people to have those learning moments. And to achieve that, we need to ask questions which will make them die deeper to find solution and learn in the process.

Get this #goodreads as one tool in your toolbox. And following mind map for more insights.

Quick Book Summary

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