Jeremie Averous's Blog, page 95

Commodity Projects: Why it’s Not About Risk Transfer, but about Sustainable Lower Cost

In the current days of low commodity prices, operators and contractors are suffering – be it in Oil & Gas, mining, and energy in general. I hear a lot about the need to redefine the contractual setup, and the wish for operators to transfer more risk to the contractors.

Let’s be clear. Risk transfer is tactical. It’s not a sustainable solution. You can transfer more risk to the other party, but if that’s systematic and if it’s not priced in, this solution will sooner or later lead to the disappearance of that party.

Transferring risks sustainably to another party only makes sense if the other party is better geared to manage that risk, in terms of competencies or capability.

What operators in the commodity markets need right now:

projects that cost less,
and which outcome is more reliable in terms of cost and schedule.

Lowering excessive specifications and being more clever in terms of standardization to seek gains from series effects are key for the first point. More effective project execution practices and less complexity in execution are the levers for the second point – and there is a lot of knowledge now in the industry to make it successful, because project governance and management practices are still sometimes poor.

The contractual setup between operator and contractor is essential, but on the long term it should be geared towards these two objectives rather on the short term tactical risk transfer. This also means that operators need to have an industrial policy where they develop contractors that can meet their expectations in terms of capabilities and develop long term relationships that allow to fully deploy series effects over several large projects.

Risk transfer is short term and tactical. Lowering the cost by developing a proper contracting landscape is the sustainable solution to commodity projects’ woes.

What Prevents Us From Asking and How to Overcome it

“Whether it’s in the arts, at work, or in our relationships, we often resist asking not only because we’re afraid of rejection but also because we don’t even think we deserve what we’re asking for” writes Amanda Palmer in her book ‘The Art of Asking‘.

I find this statement very powerful and to the point. This relates to my personal experience as well, how many times I have not asked for something because I thought I did not deserve it.

We underestimate the power of asking others. Asking for help does wonders sometimes. It shows that you are ready to take on board the opinion and the help of others.

We’re often stopped in our tracks when it comes to asking because we fear of appearing inadequate. Yet when we overcome this fear we often find that it was worth asking. And that we sometimes get new possibilities open that we did not even envisage before.

Come on, ask for help and support more often. And if you feel some apprehension, it is another reason to just go for it!

Image from Amanda Palmer’s tumbler account

How Artificial Intelligence is Already Influencing Our Genes

Artificial Intelligence is already reorganizing humans. The statement developed in this post ‘AI will reorganize the human population‘ by Silver Keskküla struck me. But “it is actually difficult to argue. Surely there are thousands of kids born to couples that found each other on internet dating sites and since often the matching algorithms on those sites are based on machine learning and artificial intelligence, then we effectively have AI involved in the matter of whose DNA gets mixed.”

And this is even when speaking only of “Weak AI” (“computational agents that exhibit problem solving abilities in restricted domains that we typically assume require intelligence“), not even of higher levels of artificial intelligence that we fear might maybe sometime try to overcome humankind.

Thinking about it, since our emotions are increasingly influenced by social networks, which are increasingly monitored and facilitated by Artifical Intelligence, AI does indeed progressively enter our lives, and even our intimate lives.

The rest of the post is a bit of an advert for the author’s new startup, but his idea to influence human migration by proposing easier comparison of different cities globally depending on one’s project is quite amazing.

In any case, let’s realize that AI is already influencing our lives probably more than we currently imagine, on a day-to-day basis.

How to Properly Challenge Our Limits

Following on the argument of our previous posts ‘How Acknowledging our Limits is Source of Happiness, but Is That Enough?’ and ‘Why We Need to Challenge Our Limits for Full Happiness‘, while we need to acknowledge most of our limits to be happy, how should we proceed to challenge those limits?

Of course it is a mainstream view nowadays – and that I have quoted in this blog – that “Life Begins at the End of your Comfort Zone“. I fully concur with it, having several times jumped outside my comfort zone.

But should you jump outright? It can be dangerous to jump without a parachute – or at least without the minimum of precautions.

Hence here are some key rules which I believe need to be followed when attempting to reach beyond one’s limits – while still maintaining a sufficient degree of happiness now and in the future:

don’t test all your limits at the same time – narrow the challenge and continue to acknowledge the other limits,
before you depart, make sure that the journey will be enjoyable, do not just focus on the ultimate goal (the journey will necessarily be somewhat uncomfortable but at least make sure it will be fun and interesting!)
be flexible on where the journey will bring you – just choose the general direction, but remain flexible on the circumstances.

Yes, we need to challenge our limits, but let’s do that in a way that brings us satisfaction and builds happiness along the way.

By the way – when do you start?

Why We Need to Challenge Our Limits for Full Happiness

Following on the argument of our previous post ‘How Acknowledging our Limits is Source of Happiness, but Is That Enough?’ – we probably need to respect the limits placed on us in general, but to reach full happiness shouldn’t we at the same time challenge some of those limits ?

Or, as the saying goes, when we respect those limits, are we really happy – or just comfortable?

Staying in the limits set on us or set by us is a good way to be happy now but might give after a while a sour aftertaste of unexploited possibility.

Therefore I believe that it is still a necessity to achieve true happiness in the long term to challenge those limits we have acknowledged – and broaden our perspectives.

Lack of comfort is not necessarily related to unhappiness. The journey beyond our pre-set limits will not be comfortable but can lead to a higher level of happiness – during the journey and when it reaches a new limit.

However, this trespassing of our limits needs to be done in a proper way to maintain sufficient happiness, and that is what we will explore in the next post.

How Acknowledging our Limits is Source of Happiness, but Is That Enough?

Acknowledging in general our limits (physical, social, economical, geographical etc.) is generally required to reach happiness.

This is probably because not acknowledging these limits leads to permanent dissatisfaction, jealousy, to constant craving for more or for something different. This craving troubles the internal piece required for true happiness, and prevents from being sufficiently in the present to appreciate what happens around us right now.

This explains why people suffering from severe disabilities can be happy, when they acknowledge the limits these disabilities place onto them.

Some people also create their own limits to find happiness, even if they are just illusions created by themselves – in particular, in the social environment.

At the same time, many systems exerting social pressure based on the respect of social limits use the same argument to state that happiness is still possible in the context, how harsh the rules might be.

We thus need to acknowledge those limits, but the question remains of how much should be respect them? In an interesting contradiction, we also need to challenge some of them to be truly satisfied.

That happiness paradox is an aspect we will investigate in a series of posts.

Happy New Year 2016 with Fourth Revolution’s Best-Of 2015!

Happy new year to all of you faithful readers of the Fourth Revolution blog! I wish you and your family a lot of happiness, health, prosperity… and change!

For your pleasure, here are some of the most popular posts in 2015:

What is the State of the Fourth Revolution?
Why You Need to Give Yourself Permission for New Ideas
Why Who We Are Is Not What We Post
How Your Attention Determines Your Reality
Why Bureaucratic Processes for Risk and Business Planning Are Suspect
Why Being a True Artist Requires Being a Sales Person As Well
What the Different Maturity Stages of Big Data Analytics Are
Why You Should Respond Slower to Emails To Establish Your Status
How to Embrace Failure, but not too Tight!
Why Mastering the Flinch is Vital in Today’s World

Why Most of Our Problems are Problems of Perception

“Engineers, medical people, scientific people have an obsession with solving the problem. in reality, when actually once you reach a basic level of wealth in society, most problems are actually problems of perception” – says Rory Sutherland.

Rory Sutherland is a name in the advertisement industry and probably knows better than most the power of the frame of perception in which people are. Changing the frame is often the solution – alas it is also often hard and long to do. That’s a tool that coaches are using though when it comes to helping people overcome challenges or situations where they feel loss of control.

The key of Rory’s point, however, is that scientific, objective, mathematical approaches are certain to fail. It is all in the way people look at issues. Therefore even if it is difficult, effort needs to be made to change the frame of perception rather than to try to persuade using objective arguments. It comes down to effecting deep changes in people, and this needs a lot of help and support.

Is your problem a real issue or only a problem of perception? What about changing your frame of reference?

Hat tip to Valeria Maltoni’s always excellent blog, and the post ‘The Power of Reframing Things‘

How Our Attitude to a Problem Might be the Problem

“The problem is not the problem. The problem is your attitude with the problem” – quote from Pirates of the Caribbean, which we all know is a famous Hollywood philosopher (at times).

Still I like this quote because it summarizes very well the issues we all face sometimes. And it is also directly linked to the issue of what to do when we have to face truth (and we don’t want to hear it).

We all face problems, some large and some smaller. And at the end it boils down to our attitude with regard to these problems. Depending on our attitude they can destroy our lives and make us miserable; or build on our problems to find opportunities to transform our lives.

Next time we face a nagging problem, let’s ask ourselves whether it is not our attitude that is the problem.

Why Ever More Large Companies Will Collapse Suddenly

In the next years and decades we will witness more frequent events of collapse of organizations and companies which we thought were almost like institutions in the economic landscape.

A bank run, the typical extreme event where a quasi-institution falls

That’s at least the view of Jeremy Rifkin in his interesting book ‘The Zero Marginal Cost Society‘. He quotes an economist of the XXth century, Oskar Lange, to have said: “The stability of the capitalist system is shaken by the alternation of attempts to stop economic progress in order to protect old investments and tremendous collapses when those attempts fail“. It was true in all times. Today more and more industries struggle to defend their position and their investments as the Fourth Revolution spreads. The more they are in oligopolistic or monopolistic situation, the longer they will resist – and the harder the fall will be. The larger and global they are, the more widespread the consequences will be.

As we move into the Collaborative Age in the next few years and decades we can expect some dramatic collapses to happen as many dominating organizations will resist until the end while their economic model will crumble.