Thursday, November 29, 2012

Less is More - in Regulation Too

By Pascal Dennis

Ontario's sad, stagnant energy sector is a good example of what happens when you take the customer out of the equation.


It'd take the Marx Brothers to do justice to the current farce. (Do a brief Google search & you'll see what I mean)

Unscrupulous politicians have exploited the public's suspicion of commerce to erect a stifling web of regulation and special interest.

As a result, among other things, the province is forced to sell highly subsidized power, at a loss, to other jurisdictions. Taxpayers are, of course, stuck with the bill.

Mama mia...and that's not even the worst of it.

Commerce - suppliers & customers interacting in a complex, self-managing web -- is portrayed as a dodgy endeavour, and one requiring oversight by powerful mandarins.

"You need US to protect you from those guys..."

Greece is an extreme example of this syndrome.

To build a hotel in Greece, for example, you need the approval of half a dozen ministries, several unions etc.

You often need a "fakelaki" (small envelopes full of cash) to grease the wheels. Even then it takes years.

That's why the great hotel companies tend to avoid Greece - and why the unemployment rate exceeds 25%.

Things are not as bad in Ontario - yet...

Don't want to be misunderstood.

We need regulation.

Good rules level the playing field, and curb excesses (monopoly, tragedy of the commons, and so on).

But in regulation, as in the business, design and art, less is more.

Here's the corresponding Lean mental model:

We need simple, visual standards for all important things.

Best,

Pascal

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