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Decreased uncertainty, improved decisions

Global Advisors is a leader in defining quantified strategies, decreasing uncertainty, improving decisions and achieving measureable results.

We specialise in providing highly-analytical data-driven recommendations in the face of significant uncertainty.

We utilise advanced predictive analytics to build robust strategies and enable our clients to make calculated decisions.

We support implementation of adaptive capability and capacity.

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Thoughts

Global Advisors’ Thoughts: Is insecurity behind that dysfunction?

Global Advisors’ Thoughts: Is insecurity behind that dysfunction?

By Marc Wilson
Marc is a partner at Global Advisors and based in Johannesburg, South Africa

Download this article at http://www.globaladvisors.biz/inc-feed/20170907/thoughts-is-insecurity-behind-that-dysfunction

We tend to characterise insecurity as what we see in overtly fragile, shy and awkward people. We think that their insecurity presents as lack of confidence. And often we associate it with under-achievement.

Sometimes we might be aware that insecurities can lie behind the -ias, -isms and the phobias. Body dysmorphia? Insecurity about attractiveness. Racism? Often the need to find security by claiming superiority, belonging to group with power, a group you understand and whose acceptance you want. Homophobia? Often insecurity about one’s own sexuality or masculinity / feminity.

So it is often counter-intuitive when we discover that often behind incredible success lies – insecurity! In fact, an article I once read described the successful elite of strategy consulting firms as typically “insecure over-achievers.”

Insecurity must be one of the most misunderstood drivers of dysfunction. Instead we see its related symptoms and react to those. “That woman is so overbearing. That guy is so aggressive! That girl is so self-absorbed. That guy is so competitive.” Even, “That guy is so arrogant.”

How is it that someone we might perceive as competitive, arrogant or overconfident might be insecure? Sometimes people overcompensate to hide a weakness or insecurity. Sometimes in an effort to avoid feeling defensive of a perceived shortcoming, they might go on the offensive – telling people they are the opposite or even faking security.

Do we even know what insecurity is? The very need to…

Read the rest of “Power, Control and Space” at http://www.globaladvisors.biz/inc-feed/20170907/thoughts-is-insecurity-behind-that-dysfunction

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Strategy Tools

Strategy Tools: Growth, Profit or Returns?

Strategy Tools: Growth, Profit or Returns?

By Stuart Graham and Marc Wilson

Stuart is a manager and Marc is a partner at Global Advisors.
Both are based in Johannesburg, South Africa.

Growth, profit or returns? It’s all three, however we find that the relationship between these and shareholder value creation is poorly understood – if at all.

All three measures become critical to the way forward as companies navigate the Covid-19 crisis.

After ensuring business survival, navigating through the Covid-19 crisis requires returns on invested capital AND growth to deliver shareholder returns. S&P 500 companies averaged 13% RONA and 5% revenue growth (CAGR) through the financial crisis (2008-2012) .

Monolithic survival approaches may starve compensating growth opportunities – a portfolio approach is required.


Key insights

Returns are not enough – companies must also grow to create value.

Profits and cash flows cannot increase indefinitely through cost-reduction, efficiency, business mix, etc – top-line growth is critical.

Returns must be above costs of capital to be value accretive.

S&P 500 companies averaged 13% ROIC and 5% revenue growth (CAGR) through the financial crisis (2008-2012).

Margins and revenue growth, or even profit growth in themselves don’t answer that question of whether shareholder value was created or destroyed. There are many examples of where growth and high margins actually destroy value.

Company valuations reflect an aggregate of their business portfolio – rebalancing segments based on their growth and return profiles can lift company value.

Growth requires investment – at the very least in the working capital required to support revenue growth.

Measuring RONA or ROIC and Revenue growth shows whether business activity is value accretive or destructive.

You can use the Global Advisors Market Cap (valuation) framework to map your business – and agree action to deliver improved shareholder returns.

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Fast Facts

The use of full absorption or average costing in asset-intensive industries with under-utilisation can lead to self-defeating pricing strategies

The use of full absorption or average costing in asset-intensive industries with under-utilisation can lead to self-defeating pricing strategies

Non-conformance costs can distort pricing decisions The use of full absorption or average costing in asset-intensive industries with under-utilisation can lead to self-defeating pricing strategies

  • The use of full absorption or average costing in a manufacturing environment with under-utilisation can lead to self-defeating pricing strategies
  • The increase in price to cover costs results in volume decreases – lowering factory utilisation and increasing unit production costs. This is the start of the utilisation-pricing “death spiral”
  • Costing according to factory utilisation – partial absorption costing – offers the opportunity to be more strategic about costing and utilisation
  • “Unabsorbed” costs can be targeted through OEE and volume improvements. At the same time, the “disadvantage” of having a large factory is normalised and pricing can compete with more fully-utilised factories
  • A recent manufacturing client saw 60% of unit costs arise from factory under-utilisation – sub-optimal OEE levels (non-conformance), low volumes and work-centre bottlenecks contributed to the utilisation gap
  • These principles can apply to any asset-intensive business – for example banking
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Selected News

Quote: Max Planck – Nobel laureate

Quote: Max Planck – Nobel laureate

“I regard consciousness as fundamental. I regard matter as derivative from consciousness. We cannot get behind consciousness. Everything that we talk about, everything that we regard as existing, postulates consciousness.” – Max Planck – Nobel laureate

This striking statement, made by Max Planck in a 1931 interview with The Observer, encapsulates a radical departure from the materialist worldview dominant in physics at the time. Planck, the father of quantum theory, challenges the notion that matter is the foundation of existence, proposing instead that consciousness underpins all reality. Spoken amid the revolutionary upheavals of early quantum mechanics, the quote reflects his lifelong reconciliation of empirical science with metaphysical inquiry.1,2,3

Max Planck: Life, Legacy, and Philosophical Evolution

Born in 1858 in Kiel, Germany, Max Karl Ernst Ludwig Planck rose from a family of scholars to become one of the 20th century’s most influential physicists. He studied at the universities of Munich and Berlin, earning his doctorate in 1879. Initially drawn to thermodynamics, Planck’s pivotal moment came in 1900 when he introduced the concept of energy quanta to resolve the ‘ultraviolet catastrophe’ in black-body radiation-a breakthrough that birthed quantum theory. For this, he received the Nobel Prize in Physics in 1918.3

Planck’s career spanned turbulent times: he served as president of the Kaiser Wilhelm Society (later the Max Planck Society) and navigated the intellectual and political storms of two world wars. A devout Lutheran, he grappled with the implications of his discoveries, often emphasising the limits of scientific materialism. In works like Where Is Science Going? (1932), he argued that science presupposes an external world known only through consciousness, echoing themes in his famous quote.3,5

By 1931, at age 72, Planck was reflecting on quantum mechanics’ philosophical ramifications. The interview in The Observer captured his mature view: matter derives from consciousness, not vice versa. This idealist stance contrasted with contemporaries like Einstein, who favoured a deterministic universe, yet aligned with Planck’s belief in a ‘conscious and intelligent Mind’ as the force binding atomic particles.3,5

The Context of the Quote: Quantum Revolution and Metaphysical Stirrings

The quote emerged during a period of crisis in physics. Quantum mechanics, propelled by Planck’s quanta, Heisenberg’s uncertainty principle, and Schrödinger’s wave equation, shattered classical determinism. Reality at the subatomic level appeared probabilistic, observer-dependent-raising profound questions about observation’s role. Planck, who reluctantly accepted these implications, saw consciousness not as a quantum byproduct but as fundamental.4,5

In the interview, Planck addressed the ‘reality crisis’: if physical laws are mental constructs, what grounds existence? His response prioritised consciousness as the irreducible starting point, influencing later debates in quantum interpretation, such as the Copenhagen interpretation where measurement (tied to observation) collapses the wave function.3

Leading Theorists on Consciousness and Matter

Planck’s views resonate with a lineage of thinkers bridging physics, philosophy, and metaphysics. Here are key figures whose ideas shaped or paralleled his:

  • Immanuel Kant (1724-1804): The German philosopher posited that space, time, and causality are a priori structures of the mind, not properties of things-in-themselves. Planck echoed this by insisting we cannot ‘get behind consciousness’ to access unmediated reality.3
  • Ernst Mach (1838-1916): Planck’s early influence, Mach advocated ‘economical descriptions’ of phenomena, rejecting absolute space and atoms as metaphysical. His positivism nudged Planck towards quantum ideas but clashed with Planck’s later spiritual realism.5
  • Arthur Eddington (1882-1944): The British astrophysicist, like Planck, argued in The Nature of the Physical World (1928) that the mind constructs physical laws. He quipped, ‘We have found a strange footprint on the shores of the unknown,’ mirroring Planck’s consciousness primacy.5
  • Werner Heisenberg (1901-1976): Planck’s successor, Heisenberg’s uncertainty principle highlighted the observer’s role. Though more agnostic, he noted in Physics and Philosophy (1958) that quantum theory demands a ‘sharper formulation of the concept of reality,’ aligning with Planck’s critique.3
  • David Bohm (1917-1992): Later, Bohm developed implicate order theory, positing a holistic reality where consciousness and matter interpenetrate-directly inspired by Planck’s ‘matrix of all matter’ as a conscious mind.5

These theorists, from Kantian idealism to quantum pioneers, form the intellectual backdrop. Planck stands out for wedding rigorous physics with unapologetic metaphysics, suggesting science’s foundations rest on conscious postulate.1,3,5

Enduring Relevance

Planck’s declaration prefigures modern discussions in philosophy of mind, panpsychism, and quantum consciousness theories (e.g., by Roger Penrose and Stuart Hameroff). It invites reflection: if consciousness is fundamental, how does this reshape our understanding of the universe, free will, and even artificial intelligence? As Planck implied, all inquiry begins-and ends-with the mind.4,5

References

1. https://libquotes.com/max-planck/quote/lbm8d8r

2. https://www.quotescosmos.com/quotes/Max-Planck-quote-1.html

3. https://en.wikiquote.org/wiki/Max_Planck

4. https://bigthink.com/words-of-wisdom/max-planck-i-regard-consciousness-as-fundamental/

5. https://www.informationphilosopher.com/solutions/scientists/planck/

6. https://todayinsci.com/P/Planck_Max/PlanckMax-Quotations.htm

"I regard consciousness as fundamental. I regard matter as derivative from consciousness. We cannot get behind consciousness. Everything that we talk about, everything that we regard as existing, postulates consciousness." - Quote: Max Planck - Nobel laureate

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