Search This Blog

Friday, January 8, 2010

Strategy and the Freeway Theory

For years I have beheld the most magnificent of long term strategies. The wealth of Shangri-La lies at the destination. Optimistic projections and financial wizardry carve the path to its doorstep. However, the vast majority of the time these strategies fail to bear the promised harvest. To me the problem lies with the audacity to project future results based on present realities. This also includes the near myth that the past can predict the future. The belief that past and present realities can predict the future must be used with extreme care, if at all.
Let me introduce to you my Freeway Theory. Most of us drive often. Imagine that your strategy is to get to your destination the fastest, safest, way that you can. The first inherent problem is that you are not the only car on the road. Often, you must compete with other vehicles. Second, you are regulated by the same traffic systems. Here, luck has much to do with your ability to hit more green lights than red. Some commuters even cheat and bend the rules by speeding up as the light turns yellow.
Next, your distance to the freeway is different than everyone else. You could be far away, in an area with terrible infrastructure and congestion, or you can be very close to the freeway entrance. This criterion is unique to yourself and your competitors. Others are simply more capable of reaching the freeway faster.
As you drive, and once on the freeway, you have a strategic choice of lanes. You often can only see what is immediately in front of you. Often you may use heuristics to determine what lane to drive. For example, the left most lanes are conventionally known as the fastest, while the right lane is the slowest. You may also have expert knowledge that during this stretch of highway, the larger and slower commercial vehicles all use the center lane. The choice is yours to choose a lane.
I often witness some aggressive drivers that constantly change lanes based on their short vision, as to which lane is the fastest. However, this effort requires them to employ much effort, as well as expose themselves to the most risk. In the end, it is not uncommon for these vehicles to only be a few hundred yards ahead of my position if I stick with a lane the entire time. Often, these drivers end up worse than when they started, because their lack of vision ultimately ended trapping them behind a slow vehicle.
The problem with changing lanes is that you often expect for all vehicles to remain constant. However, the vehicle in front of you may change lanes, and often if there is a break in an open lane, a car in back of you will take it and thus ruin your timed opportunity. Occasionally, another car will merge in front of you, slowing you down.
Picking one lane and sticking with it is predictable, but not the best overall strategy. You will need to change lanes strategically to get to your destination fastest. For this, you need to be prepared to act when a good opportunity presents itself. You also need to be aware of your current location and have knowledge of the road ahead to avoid merges and traditionally slower areas.


To conclude, in place of formulating extravagant strategy, often the best approach is to know the basic path to your destination. Basically, there are too many constantly changing variables for you to be able to always execute your preferred strategy. Your best opportunities will always have a short window of opportunity in which the risk is low, and you must be prepared and aware enough to take them.

No comments:

Post a Comment