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Desperately Diving for Pearls of Great Price

Rob Brown 01 Jul 2012 Case studies and applications, Risk and uncertainty

Margaritifera_margaritifera-buiten

You would be shocked to learn how fast you can make it to the bottom of a lake with a cinder block tied to your leg.  I know this rate, by my own empirical investigation, to be thirty feet per second, give or take.  If you’re in the mind to disconfirm this experimentally determined value, I will tell you how to repeat this experiment for yourself.  First, convince yourself there are freshwater pearls in the mussels that live in your grandfather’s lake…

I grew up in a rural area of middle Georgia on my grandfather’s retirement farm.  It wasn’t a big farm - sixteen acres to be exact.  So really it was more like a farmette.  But ten of those acres were under water in the form of a catfish and bass pond.  It was in, around, and on this pond that I spent many of the more Huck-Finn-inspired hours of my youth.

One summer when I was eleven years old, I watched a National Geographic television special (back in the days of three channel broadcast programming, any deviation from our regularly scheduled programming was called a “Special”) about pearl divers in the South Pacific.  Young divers swam sixty to eighty feet deep to capture oysters and discover pearls.  Their work appeared to be a perilous, shark-dodging affair, the kind that inspires adventure in the summer-bored mind of a preteen boy.

Now, I knew that there were no oysters in our pond, but there were fresh water mussels.  I also knew that mussels sometimes contained pearls.  Since the pond was about thirty feet deep at the middle, I figured my job would be easy compared to the free divers I saw on my TV.  I discovered the next day, trying to swim to the bottom, that it’s actually very difficult to swim thirty feet deep, so my eager engineering mind devised a plan.  I would affix a snorkel mouthpiece on the end of a very long garden hose with a hose clamp, and then I would affix the other end of the hose through a snugly fitting hole in a block of Styrofoam such that the open end floated above the water.  By this configuration, I reasoned I could breathe through the hose as I swam leisurely to the bottom of the pond with my Boy Scout knife in one hand and my collection bag for mussels containing pearls in the other.  To this day I remember giggling to myself as I thought about what a brilliant plan I had conceived.  I was going to be the richest boy in the sixth grade!

You know, it is extremely difficult to breathe through a forty-foot hose when you’re underwater.  I mean, it’s impossible.

Three or four attempts later at employing my diving apparatus brought me to the humbling conclusion that my engineering skills were not up to the level of a Renaissance master.  At that point, I had become a desperate man in pursuit of an elusive quarry.  Resolving not to be outdone, I did what any desperate man does when frustrated by the mental image of jeering mollusks greedily concealing their treasure – I abandoned elegance and went straight to brute force.  I retrieved a cinder block and some rope from the barn, paddled out to our floating dock in the middle of the pond, and turned myself into a human torpedo with the cinder block tied to my ankle.  After the initial shock of reaching the bottom of the lake in the aforementioned second wore off, quick use of my Boy Scout knife freed me to swim back to the surface, shaken but safe.

And by the way, the mussels that lived in our lake don’t produce pearls.

Margaritifera, double valved specimen This is a picture of a freshwater pearl mussel* that did not inhabit my grandfather’s pond. Tying a cinder block to my leg to find some quickly didn’t change that fact.

Essentially, I invested in a solution to resolve a problem ("How do I get the pearls?") that didn't really exist.  Fortunately, my actual exposure was minimal: wasted time, a mangled snorkel, and a lost rope and cinder block.  However, you may easily imagine that my outcome could have been much worse.  And yet, I might have avoided the whole fiasco if I had just researched my assumptions about the presence of pearls in the particular variety of mussels in our lake, understood the physics of diving, etc.  The proper analysis and planning at the beginning would have saved me a lot of trouble and avoided risk.

We all know that stuff like that never happens in business.  Well...

A few years ago, my colleagues and I were involved in helping the IT group of a large multinational company resolve a significant issue with the economic justification and strategic architectural design of an Enterprise Resource Planning (ERP) system.  Prior to our involvement, but after their commitment to deploy the system, the client’s financial analysis revealed that the ERP system presented the opportunity to contribute an expected $0 of net present value on a $100 million capital spend.  Needless to say, a lot of weeping, wailing, and gnashing of teeth followed.  In a desperate measure, the client started reducing the capital cost and the training costs in an effort to cost justify the system.  They generated a lot of really complex analyses to support this effort, but it was all wrong.

Fortunately, we were able to help by using the principles of decision analysis, systems engineering, and modeling with Analytica to discover where the value of the system most likely lay and how to create a robust development and rollout plan to capture the value.  We discovered that the areas the client had initially focused their cost cutting efforts on were exactly the areas that directly contributed to the potential value created by the system.  The cruel irony was that removing or reducing these items not only would not create the value they sought, their removal would further destroy the value of the system significantly below $0.  What went wrong?  Essentially the design team…

  • Approved a system before they truly understood the return on investment and the levers on potential for success or failure
  • Solved the wrong problem, framing it primarily in terms of cost reduction (and a simplistic treatment, at that), not system performance and the company’s strategic objectives
  • Performed multiple sensitivity analyses on inconsequential variables, effectively hiding the real opportunity for value improvement and system success
  • Failed to consider the underlying connections between key implementation decisions and the overall system performance and user adoption

My eleventh summer ended well, except for the incident with the yellow jacket hive, but that’s another story.  Fortunately for our client, the summer of their ERP planning efforts ended well, too.  Looking back, though, I now understand my own failure as a pearl diver to be an analogy for a misguided belief that something valuable existed in a place that it could not, coupled with ineffective and risky solutions to find it, driven by desperation.  Essentially, the clients were tying a cinder block to their legs in a frustrated attempt to reach nonexistent pearls.

*Image obtained from http://upload.wikimedia.org/wikipedia/commons/e/ed/Margaritifera_margaritifera-buiten.jpg

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Rob Brown

Robert D. Brown III is the President of Incite! Decision Technologies LLC (http://www.incitedecisiontech.com), a consultancy supporting senior decision-makers facing complex, high-risk opportunities. These opportunities usually include strategic planning, project selection, planning & risk management, and project portfolio analysis & management. Robert’s twenty-plus-year career has been devoted to providing solutions to clients’ complex problems by employing creative thinking and advanced quantitative business, engineering, and systems analysis. His client experience spans diverse industrial and commercial fields including petroleum & chemicals, energy, utilities, supply chain & logistics, pharmaceuticals, electronics manufacturing, telecommunications, IT, commercial real estate, federal agencies, and education. Through Incite!, Robert delivers analysis, decision support tools and systems, and training in decision-making and risk management with the goal to help his clients measure the value and the risk associated with the important decisions they face in order to make informed trade-offs and choices. He has also been a regular Analytica training resource for Lumina for over a decade. Robert graduated from the Georgia Institute of Technology in 1992 with a Bachelors of Mechanical Engineering.

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