Sometimes moments of comprehension pass by unnoticed.

I had never seen a demand curve before I began taking Managerial Economics for my MBA.  I realized at the end of the first week that I was a bit confused, but thought it wasn’t a big deal until I received a disappointing grade on the Week 1 quiz.  Yet I’m now at the very beginning of the Week 4 and almost have trouble remembering why I was having difficulty.

I used only very basic study skills to make the change, such as redrawing graphs and jotting down key points from the module instead of just reading the information as presented.  There were no aha! moments or times that everything clicked into place, just me looking back and realizing that now I understood.

The topics being covered looked just enough like information I already knew that it threw me off.  I only had to take a slight mental step sideways for it to make sense.  Yet at the time it seemed a much bigger problem.

And those are my two take away points.

- Just because a situation seems familiar doesn’t mean it is.  If it matters, then it may need the same level of attention of something difficult.

- Two people with different backgrounds looking at the exact same thing don’t necessarily SEE the exact same thing.

Yes, I knew these, but my classwork was not a situation I expected to find them illustrated in!

For those of you so inclined, a little more detail….

One example is that I’m used to looking at graphs in which the x-axis is the independant variable, the one which you can control such as percentage or time or distance.  The y-axis is the dependant variable, the one that changes as a result of the value you control, such as strength or viscosity.

Not in economics.  Quantity is on the x-axis and price is on the y-axis.  And they are dependant on each other.  If you change one you change the other.  You move along the line.

Technically speaking, this is true in a graph of strength versus percentage of a filler.  You can pick a strength and say you need this much filler to reach that strength.  And I feel like I should have been able to relate that instantly.  But I didn’t.  Instead I kept trying to use my typical view where y is dependant on x.

Then there was the issue of vocabulary and how that graph was described.  If I say that price varies with quantity, or the other way around, it’s an abstract concept.  But if I say to myself that if there’s a lot of something available I’m willing to pay less for it than if there’s just one left, then I can start comprehending what the demand curve on that graph means. 

The story I was using to describe the data changed how I was able to relate to it, even though it shouldn’t have mattered because the formulas themselves didn’t change.  And this was another common concept - perception is reality - that I just wasn’t expecting to find illustrated in class.

Although now I have to wonder why not…  Why wasn’t I expecting these complexities to apply to course material just like they apply to other real-world situations?

Developing a habit of reading critically seems to be an important component of improving the way I think, but I’ve run into some snags.

When I first decided to try questioning the words on the paper I though I’d start after I completed reading a small stack of relevant magazines.  But when I went back to the first one to begin asking questions I came up with a complete blank.  It was as if the elapsed time let the original information sink into my brain as accepted truth and it was much harder to react to it.

Then I tried to read with a notepad next to me for jottings down.  That was marginally more successful, but I kept getting caught up in what I was reading.  I’ve always been able to get lost in books, and not just fiction ones, either.  It’s difficult to slow down enough to really think about it.

I’m finding more success by reading at my normal pace with a pad of small post-it notes next to me.  When a thought comes to mind I jot it down and stick it in the book or magazine.  Then, when I go back a second time, it serves as a reminder of the questioning state I was in the first time through and I’m able to elaborate more easily.

Now there’s another problem.  I have a backlog of magazines that are directly work related coming across my desk.  I have a list of books I want to get from the library.  I find myself ignoring the post-it notes and just reading, because thinking about what I’m reading is more difficult and more time-consuming.

I’m considering deliberately slowing down for only certain materials, picking just the best to read with critical intent.  The entire process of deciding what I want out of myself and my reading material is evolving.

I thought my question was simple - “What do I do now?”

But I needed to go through 8 people and an evolution in my thinking to get an answer.

The answer was simple, but to answer my original question would have required an overall understanding of the process by one of the individuals I talked to.  Instead the answer was only gained by breaking the simple-sounding question up into many smaller and more basic questions which the employees were trained to answer.

For the last decade I’ve filed my own taxes using Taxcut and every year it’s been pretty simple.  Except this time I received an -INT form I wasn’t expecting, because I reported that income on my 2006 taxes.  Silly me, I thought that because I cashed the bond in 2006 that it was income for 2006.  Nope, the check from the bank said 2007.

So I called the IRS 1-800 number help line trying to figure out what to do.  I told my story to the lady who answered, received a moment of silence, and was forwarded to the area that she best thought could help me.  This happened repeatedly.

Each time my story got shorter, as I figured out the essence that the person on the other end needed to know.

Each time the person on the other end of the line responded to me I learned a new word or piece of terminology so that I could put my story into the language that the IRS used.

And then I reached one particular employee.  She kept trying to make me understand that if I received an -INT form then I needed to pay the taxes.  I’d figured that part out by then.  But she completely didn’t understand what I was trying to ask.  I finally had to stop her and say that she had done her job.  I understood.  Where should I go next?

This was when the concept crystallized about why my question hadn’t been simple.  It required higher level thinking.  Each of the IRS employees I talked to was trained in one specific area.  The rest was irrelevant. 

And then I reached my last worker.  I started telling my story and how I thought I needed to file an amended return and he stopped me.  He said - Let me ask you a series of questions and give me simple yes and no answers.  He ran through a set of special circumstances and confirmed that none of them applied.  Then he told me which form to fill out.

He understood that he knew one part of the tax code and had one specific job.  Even better, he knew how to get me focused on the part that he could help with. 

In the end, my answer was to pay the taxes in 2007 and file a 1040X for a refund of the overpayment in 2006.  The question I should have been asking was how do I get back the money I paid in error?  If I’d framed it that way in the first place I might even have been able to find the answer on the IRS website. 

The whole conversation stood out for me because of the disconnect between my original thinking process and the method that I needed to follow to solve the problem.  There was also a difference between what I thought were important details and what the IRS thought were important details.  The amazing thing was that even with all the people I went through this entire phone call only lasted as long as it took me to fix dinner.

The article Avoid Failure. Succeed. What’s the Difference? by David A. Fields really captures the essence of the shift in perspective that I had noticed and was trying to describe in my last post on low-cost vs. value-added. 

Even better, his word choice and examples made me realize that I should look for this dichotomy outside of work as well.  Too many times I am trying to keep myself from failing in one form or another, such as upsetting a friend, and too few times I am trying to achieve a success, or, more often, looking at the former as a means to the latter.

I found the article by reading Wally Bock’s Three Star Leadership Blog, which often points me towards interesting business related material.

I was working on a low-cost version of one of our products before I went on maternity leave.  The idea was that we would have access to more and different places to sell this product if it cost less.  My R&D manager and I were discussing the project on my return and he said he would much rather see the project change into a value-added project, encompassing many more beneficial options than just a lower cost.

Then he made the comparison that really grabbed my attention, although it was a little more expanded in actual conversation.

Why should we put time and effort into reducing the cost of a product of which we don’t currently sell much and isn’t even significantly differentiated from its better-known competitor when we can put time and effort into a greener, more effective, significantly new product that would open up even more options for marketing in a direction they’re already headed?

In other words, why are we thinking so small?

Marketing had good reasons for proposing and supporting the low-cost project.  But why not think bigger?  Why not try for something more?  In the process we should be able to make some short-term improvements on the current product as well.  We could even end up with a whole product line.

Last year, when we originally set-up the project, it seemed to make so much sense to focus on a specific and probably achievable goal with predictable results.  We had a cross-functional team meeting to identify what characteristics were important to the customer, and which markets were most available to us, and what technological aspects were most feasible to change.  Then we decided on the scope of the project.  It was a very effective and useful collaborative process.  But I don’t remember anyone ever asking something bigger, such as what would be the best version of this product in five years? 

I think that something along those lines is what my manager must have been asking himself.  This is also what I’m trying to achieve.  I want to be the one who thinks to ask that question, at least about my own projects.  The bigger answer may not always be appropriate, and in this case the idea might not be approved at other levels.  But the question should be asked.  

There are some self-serving aspects to R&D promoting the idea since changing the project’s scope would help our divisional R&D meet some metrics which we report up to the national and international levels.  Although those metrics are there in the first place to stimulate and measure innovation…