Strategy or Tactics…What’s the Difference and Why Does it Matter?

Pexels Strategy image

Strategy and tactics are often confused with one another. They are used interchangeably by executives trying to sound smart. And while many leaders believe a new strategy is what they need, it isn’t always the case. Fortunately enough has been written about this “strategy or tactics” debate to inform you organizational leaders effectively.

The point of this guide is to help you determine when your organization needs tactical improvements or a strategic overhaul.

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It is important to note that this article does not address the concept of vision statements and goals. It will be assumed that any strategy will be crafted in order to accomplish an organization’s goals and achieve its vision.

Dilbert Strategy

From a military perspective (because business people like to equate their engagements with war any chance possible), strategy is a term that comes from the Greek “strategia,” meaning “generalship.” It refers to maneuvering troops into position before the enemy is engaged.

Tactics, on the other hand, are what happen once the enemy has been engaged.

So how does this relate to business?

Like an army, your business or nonprofit organization has competitors, marketplaces, partners, and other agents that impact the transactions you execute and the results you achieve.

Coming up with a strategy involves two major components:

1.  Selecting your area to operate; or choosing a market to enter

2.  Anticipating actions of outside agents and forming plans to deal with them accordingly

Tactics are the tools, techniques, and processes used to execute on this strategy. They may be internal operations, valuable personnel, or proprietary technologies. But these, in and of themselves, can never be the same thing as strategy. A competitor can hire your best people away. Your technology’s patent will eventually end. Processes can and will be replicated.

Tactics drive efficiency within your organization, which often help to financially achieve the stated strategy.

Examples of strategy and tactics

Catherine Yochum of ClearPoint Strategy outlines the following examples to help differentiate between strategy and tactics.

Strategy is more concrete and long-term—but your tactics can change based on how successful your strategy is. If your marketing strategy is to improve your influence and performance in social media, then you tactics might be to determine what channel is best for your business and what messages work best for your audiences.

Marketing and Branding Strategy or Tactics

Source: Marketing and Branding

Strategy and tactics work together as means to an end. If your strategy is to climb a mountain, one key component of your strategy might be to decide which side of the mountain you should climb. Your tactics would be the gear you’d buy, who you’d bring with you, your complete trip plan, how long it would take to get there, what season you’d go in, and so on.

Strategy and tactics always have to be in-line with one another. You might be really enamored with a particular project (i.e. a tactic), but it’s only worth pursuing if it aligns with your long-term strategy. Thus, your strategy should inform which tactics your organization will execute or fund.

What’s your problem: strategy or tactics?

How do you know whether it’s strategy or tactics that need to be fixed? While the shortcomings of a bad strategy are usually painfully obvious (at least in retrospect), poor performance on a good strategy is a lot harder to spot.

The first question you should ask yourself is: Do you have a competitive advantage in the market you operate in or is your strategy aimed at creating one?

If the answer is no, the answer almost always is to change your strategy. No competitive advantage means commodity-like competition and the need to execute efficiently to produce viable alternative products to the competition.

But if the answer is yes, you can comfortably assume you might have a workable strategy.

Competitive Advantage PM&J

Source: PM&J

Competitive advantage is the lifeblood of a good strategy. A business needs some sort of edge to ensure returns on capital above the cost of replacement in any industry. And since strategy concerns itself with how your business interacts with all other players in the marketplace, this edge comes from two main areas:

1.    Supply – typically deals with production capabilities; the ability to produce at lower costs due to supplier relationships, proprietary technology or any other factors creates competitive advantage for a company

2.   Demand – typically deals with customer captivity; the natural or strategic ability to keep customers buying your products; this can be due to high switching costs, high costs to learn or adapt to the product, or any other factor that might prohibit customers from buying an alternative product

How to tell if you have a competitive advantage

Bruce Johnson compiled a list of 5 tests that determine whether or not you have a competitive advantage. If you can’t answer all these questions positively, then you probably need to adjust your company’s strategy.

Does This Clearly Position Us As Different From Our Competitors?
If everyone is saying the same thing (“We have great customer service”), that “competitive advantage” can’t be an advantage. Nor can being a little bit better. No customer or prospect can tell the difference between a business/product/service that’s 5% or 10% better. Who cares?
Is This Something Our Prospects Actually Value?
In other words, it’s not unusual to find a business that’s in love with their own ideas. “What do we think our customers would like?” seems like an innocent question. However, it’s usually interpreted as, “What would I like?”As the creator of something, we usually fall in love with the thing we’ve created. Widget X can do 734 different things. It has the latest whiz-bang technology.
It “slices, dices and makes thousands of Julienne fries.” but rarely are those the things that prospects value.In general, prospects value the results or benefits far more than the features. They don’t value complexity, they value simplicity. They just want something that works and solves their problem as painlessly as possible.
Is This Specific/Can it Be Quantified?
If you were listening to a pitch and someone said, “We can save you money?” and another person said, “We can save you 22.4% a year on your office supplies,” which one is more powerful? Obviously, the one that’s more specific. So, if you want to create competitive advantages that will move your prospects to take action, make sure they’re specific and quantifiable (if possible).

Is This a Deal Closer?

This is one of the best decision criteria for a competitive advantage. If you suggest that something is a competitive advantage and it doesn’t close the deal, then it’s not a real competitive advantage. On the other hand, when Zyrtec started using the ad campaign that Zyrtec works two hours faster than Claritin, it was a deal closer.

First, because it caused prospects to doubt Claritin’s efficacy and secondly, because it promised to solve an allergy sufferers most pressing problem faster (by two hours over the market leader). If you’ve ever suffered from an allergy attack you know that two hours matters!

That’s when you know you have a great competitive advantage—when it moves someone to choose you and your products and/or services over others in your market space.

So, when you look at your current list of competitive advantages, does each one move prospects to say, “I choose you!” If not, go back and rework each one so that each advantage you list actually moves your prospects to take action.

Is this Difficult for Our Competitors to Duplicate?
One of the great cries of the competitive advantage movement is, “Is this sustainable?” meaning, is this a competitive advantage that will last for some time vs. something that will be easy for others to replicate. For example, the TD Bank competitive advantage is difficult to replicate. Not because it’s hard to expand hours, but because few banks are willing to spend the money to pay for extended hours and hire additional staff.

The cost related to those extra hours is a strategic choice very few are willing to make—which is why few have even tried to replicate it since TD Banks started doing it years ago.

Competitive Advantage the Mod Media

Source: The Mod Media

To ensure your business is delivering on its competitive advantage it is important to:

–  Develop functional strategies that deliver on this advantage.

–   Maintain cross-functional alignment and communication around the differentiator.

–   Align with the marketplace and constantly validate the strategy.

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” – Sun Tzu

Right strategy, wrong tactics

If you’ve gone through the previous section and believe you have a competitive advantage (or are building toward one), then there should be certain indicators available. There should be favorable operating margin comparisons against competitors, favorable market share, or favorable growth characteristics in a specific market.

If these data seem to support your strategy, but you find them slipping year-over-year, you probably have an execution problem…you need to adjust your tactics.

Tactics Image UNMCOC

Source: UNMCOC

Take an example of a hypothetical company selling a software program. After a large up-front R&D investment it is able to scale its sales due to low marginal variable costs and spread its unit costs over greater and greater sales. This fixed-cost model creates economies of scale while the nature of the software program creates customer captivity due to high learning and switching costs.

Now assume that customer service is a key function performed by the company. Because the learning curve for the software is so high, service reps are invaluable to keeping customers satisfied and buying more.

While the strategy might be solid (participating in a profitable market with substantial competitive advantage with no immediate threats to profitability), profit margins may be sliding due to loosening hold over customers. A thorough analysis of the company’s operations might show customer service levels slipping.

By neglecting to excel in this particular operation, part of the company’s competitive advantage may begin to fade, opening the door for potential competitors who may have the resources to produce its own products, educate the public, and create economies of scale of its own. This would be a tactical adjustment that the company needs to make to improve its customer service operations.

Erica Olsen elaborates on strategy implementation and outlines some of the major pitfalls most companies face who fail to prioritize execution.

The strategic plan addresses the what and why of activities, but implementation addresses the who, where, when, and how. The fact is that both pieces are critical to success. In fact, companies can gain competitive advantage through implementation if done effectively. In the following sections, you’ll discover how to get support for your complete implementation plan and how to avoid some common mistakes.

Because you want your plan to succeed, heed the advice here and stay away from the pitfalls of implementing your strategic plan.

Lean Methods Strategy Model

Source: Lean Methods Group

Here are the most common reasons strategic plans fail:

Lack of ownership: The most common reason a plan fails is lack of ownership. If people don’t have a stake and responsibility in the plan, it’ll be business as usual for all but a frustrated few.

Lack of communication: The plan doesn’t get communicated to employees, and they don’t understand how they contribute.

Getting mired in the day-to-day: Owners and managers, consumed by daily operating problems, lose sight of long-term goals.

Out of the ordinary: The plan is treated as something separate and removed from the management process.

An overwhelming plan: The goals and actions generated in the strategic planning session are too numerous because the team failed to make tough choices to eliminate non-critical actions. Employees don’t know where to begin.

A meaningless plan: The vision, mission, and value statements are viewed as fluff and not supported by actions or don’t have employee buy-in.

Annual strategy: Strategy is only discussed at yearly weekend retreats.

Not considering implementation: Implementation isn’t discussed in the strategic planning process. The planning document is seen as an end in itself.

No progress report: There’s no method to track progress, and the plan only measures what’s easy, not what’s important. No one feels any forward momentum.

No accountability: Accountability and high visibility help drive change. This means that each measure, objective, data source, and initiative must have an owner.

Lack of empowerment: Although accountability may provide strong motivation for improving performance, employees must also have the authority, responsibility, and tools necessary to impact relevant measures. Otherwise, they may resist involvement and ownership.

It’s easier to avoid pitfalls when they’re clearly identified. Now that you know what they are, you’re more likely to jump right over them!

Right tactics, wrong strategy

Now maybe there are instances where your company is executing flawlessly but it is struggling to maintain competitive margins. You are likely not operating with a competitive advantage, so your priority should be refocusing on your strengths and opportunities and recrafting your strategy.

Determine your company’s strengths and opportunities. Enough has been written and said about SWOT analyses. By understanding these big-picture characteristics of your business you have the information you need to make key business decisions now and in the future.

The importance of strengths and opportunities is obvious. Maybe over time, what you thought were your company’s strong traits, have actually slipped over time, creating a competitive environment that doesn’t favor your business. This could be resulting in poor financial performance and lack of competitive advantage.

Or maybe what once was an opportunity—let’s say for example, selling products online—has now become the standard across all industries.

A reassessment of where you company stands today is the first step in adjusting your strategy. Lisa Furgison outlines a series of questions you should ask yourself to find your company’s strengths:

Starter questions:
–  What do you do well?
–  What do you do that your competition can’t?
–  Why do customers come to you?
Financial:
–  What kind of financial resources do you have?
–  Is your revenue diversified?
–  What kind investments do you have for the future?
Physical:
–  What kind of assets do you have?
–  What are the benefits of your company’s space and building?
–  What kind of equipment do you own?
Intellectual:
–  What kind of intellectual property do you have in your business? List trademarks, patents, etc.
Human resources:
–  What kind of human resources do you have?
–  Are there vital players in your company’s hierarchy?
–  What kind of programs do you have that improve your business and employees?
Company workflow:
–  What kind of processes do you have in place that makes your company efficient?
Company culture:
–  What kind of working culture has your company created in the workplace?
Thrive Global Company Culture
Company reputation:
–  How does your clientele or community view your company?
–  How did you achieve your reputation?
Market position:
–  Does your company have an edge in the marketplace that your competitor doesn’t?
–  What plans do you have in place to improve your market position?
Growth potential:
–  What plans do you have for growth?
–  Do you have potential to grow in certain sectors where your competitors don’t?
–  What’s the main reason you’re able to grow?

Understanding your strengths is a good place to start when evaluating where to move next as a business. The main point of a strategy is to understand where you want to operate and how you plan on dealing with external parties.

The first part, knowing where to operate, is partly based on your strengths—obviously it makes more sense to operate in the transportation industry if you have a fleet of trucks than if you don’t.

It’s also based on opportunities. It may not make sense to enter the transportation business if there are already two dominant competitors who have a stranglehold on the market.

Business Opportunities image

Source: Brand Pro Blog

Here are some questions to ask yourself to help find your company’s opportunities:

Economic trends:
–  Is the economy in your area looking up?
–  Will the economy enable your audience to make more purchases?
–  Are economic shifts happening that impact your target audience?
Market trends:
–  How is your market changing?
–  What new trends could your company take advantage of?
–  What kind of timeframe surrounds these new trends? Could it be a long-term opportunity?
Funding changes:
–  Do you expect an increase in grant funding or donations this year?
–  How will funding changes help your business?
Political support:
–  Do you anticipate a shift in political support this year?
–  What opportunities could be created with new political partnerships?
Government regulations:
–  Are any regulations shifting that could lead to a positive change?
Changing relationships:
–  Are there positive changes happening within any of your outside business relationships?
–  Are vendors changing or expanding?
–  Has your partner decided to move on, creating an opportunity to work with someone new?
Target audience shift:
–  How is your demographic shifting?
–  What opportunities can you think of that can move with these changing demographics?
–  Is your audience expanding? If so, how can you capitalize on this increase?

A full SWOT analysis would give you even more insight into decisions your business should make, but this is a good start.

Focus on your company’s strengths and any current opportunities to decide where you want to operate. From there it is critical to have plans in place to deal with potential competitors, market to customers, manage relationships with suppliers, and manage changing environmental and governmental factors.

When you’ve considered all these things, you can come up with a reasonable plan that creates a competitive advantage for your business. Remember, the main ways to capture competitive advantage are through customer captivity (the demand side) and production prowess (the supply side). If your strategy leads you down one of these paths, it’s a great start.

Conclusion

The great military theorist Carl von Clausewitz said: “Tactics is the art of using troops in battle; strategy is the art of using battles to win the war.”

Hopefully this article provided some insight into solving your company’s strategic or tactical problems. By properly understanding which ones to focus on, you either pinpoint improvement areas or completely pivot your strategy altogether.

Never assume your company’s problems are strategic in nature. Follow the advice here and you potentially save yourself from scrapping a completely workable strategy.

Human Energy: 3 Principles for Changing the World

Human energy image

Introduction to human energy

The great scientist and inventor Nikola Tesla coined the term human energy in an essay he wrote in 1900, in which he related all human progress to simple physics.

This idea has largely gone unnoticed amid his myriad other inventions and original thoughts. But it shouldn’t any longer. We are going to re-examine his ideas on human energy and find ways to relate them to actually making a difference in our world. After all, that was what he was aiming for.

Though we may never be able to comprehend human life, we know certainly that it is a movement, of whatever nature it be. The existence of movement unavoidably implies a body which is being moved and a force which is moving it. Hence, wherever there is life, there is a mass moved by a force. All mass possesses inertia, all force tends to persist.

Owing to this universal property and condition, a body, be it at rest or in motion, tends to remain in the same state, and a force, manifesting itself anywhere and through whatever cause, produces an equivalent opposing force, and as an absolute necessity of this it follows that every movement in nature must be rhythmical.

In other words: The human mass is moved forward by an accelerating force and slowed by an impeding force that is both partly negative and partly frictional.

Tesla believed the fundamental goal of all scientists should be to solve the problem of increasing this human energy—something we will explore now.

Click here to read Nikola Tesla’s original essay The Problem of Increasing Human Energy.

A little science

Tesla’s idea was grounded firmly in the principles of thermodynamics. He advised that we should conceive of man as a mass that is urged on by some force. The energy of this mass can be measured by well-known principles.

Energy equation image

Man, however, is not an ordinary mass, consisting of spinning atoms and molecules, and containing merely heat-energy. He is a mass possessed of certain higher qualities by reason of the creative principle of life with which he is endowed. His mass, as the water in an ocean wave, is being continuously exchanged, new taking the place of the old. Not only this, but he grows, propagates, and dies, thus altering his mass independently, both in bulk and density. What is most wonderful of all, he is capable of increasing or diminishing his velocity of movement by the mysterious power he possesses by appropriating more or less energy from other substance, and turning it into motive energy.

But in any given moment we may ignore these slow changes and assume that human energy is measured by half the product of man’s mass with the square of a certain hypothetical velocity. However we may compute this velocity, and whatever we may take as the standard of its measure, we must, in harmony with this conception, come to the conclusion that the great problem of science is, and always will be, to increase the energy thus defined.

What does this mean?

Man, or mass, is pushed forward by some force. This force is resisted by a second force, partly frictional and partly negative, which acts in a direction exactly opposite.

Mechanically, think of a train moving up a hill. Gravity acts as the resisting force. Socially, think of a student moving through the school system. Poor schools act as the resisting force. Making sense?


Human energy image

In this diagram:
M represents the mass
f represents the force acting positively
R represents the resisting force

Tesla describes these variables in physics terms:

In accordance with the preceding, the human energy will then be given by the product: ½ M * V2 = ½ * M * V * V, in which M is the total mass of man in the ordinary interpretation of the term “mass,” and V is a certain hypothetical velocity, which, in the present state of science, we are unable exactly to define and determine.

To increase the human energy is, therefore, equivalent to increasing this product.

There are three ways to increase this human energy:

1. Increase the mass
2. Reduce the resisting force
3. Increase the velocity or impelling force

Each solution involves different degrees of effort and impact, each of which will now be discussed in detail.

1. Increase the mass in human energy

Back to the concept of mass – remember, we equate this to population, in human energy terms.

Viewed generally, there are obviously two ways of increasing the mass of mankind: first, by aiding and maintaining those forces and conditions which tend to increase it; and, second, by opposing and reducing those which tend to diminish it.

In other words: the greater the population, the greater the human energy. Naturally, we need to do our best to preserve this population and increase it. Assuming the same level of production per capita, a greater population on its own will be good for society. Although we know greater populations require more land, resources, jobs, food, etc., if we can assume positive returns in productivity per person, then growing populations are good for the human energy system.


World population image

More workers, more output, more customers, and so on. This is what we want. How do we achieve this?

The mass will be increased by careful attention to health, by substantial food, by moderation, by regularity of habits, by promotion of marriage, by conscientious attention to children, and, generally stated, by the observance of all the many precepts and laws of religion and hygiene. But in adding new mass to the old, three cases again present themselves.

Either the mass added is of the same velocity as the old, or it is of a smaller or of a higher velocity.

Tesla relates this to a train running with 100 locomotives on a track. To increase the energy of this moving mass, you decide to add 4 locomotives.

If the added locomotives are of the same velocity, the total train energy will increase 4%.

If, however, you add 4 locomotives of half the average velocity of the first 100 to this train, then the total energy will increase by 1%. On the other hand, adding 4 locomotives at twice the velocity as average will increase the total train energy by 16%.

While this is a critical piece of the human energy equation, velocity will be examined in the third part of this guide. For now we will focus simply on the addition of compartments to the train.

How do we increase the mass?

Things that harm our bodies and shorten our lifespans can be though to reduce the human mass. A combination of voluntary vices like drugs, alcohol, and harmful activities as well as involuntary events like disease and natural disasters all play a part in reducing the mass.

It makes sense then that reducing the frequency of these activities would be in the best interest here.

While voluntary vices have a significant impact on society, reducing the involuntary things like disease provides a much better long-term return on investment.

For every person who perishes from the effects of a stimulant, at least a thousand die from the consequences of drinking impure water.

This precious fluid, which daily infuses new life into us, is likewise the chief vehicle through which disease and death enter our bodies.

Ensuring people have clean drinking water in sufficient quantities should be a top concern in all areas. Along the same lines, we should concern ourselves with feeding everyone healthy food at reasonable prices.

A person’s health is made up of a combination of internal and external factors. Beyond mere genetics, a person’s choices and environment greatly impact the long-term health he can expect to achieve.


Healthcare components image

Source: Stanford Social Innovation Review

So in addition to minimizing tobacco and alcohol use, a person should focus just as hard on supplying her body sufficient water and food.

How to provide good and plentiful food is, therefore, a most important question of the day. On the general principles the raising of cattle as a means of providing food is objectionable, because, in the sense interpreted above, it must undoubtedly tend to the addition of mass of a “smaller velocity.” It is certainly preferable to raise vegetables, and I think, therefore, that vegetarianism is a commendable departure from the established barbarous habit. That we can subsist on plant food and perform our work even to advantage is not a theory, but a well-demonstrated fact. Many races living almost exclusively on vegetables are of superior physique and strength.

There is no doubt that some plant food, such as oatmeal, is more economical than meat, and superior to it in regard to both mechanical and mental performance. Such food, moreover, taxes our digestive organs decidedly less, and, in making us more contented and sociable, produces an amount of good difficult to estimate. In view of these facts every effort should be made to stop the wanton and cruel slaughter of animals, which must be destructive to our morals. To free ourselves from animal instincts and appetites, which keep us down, we should begin at the very root from which we spring: we should effect a radical reform in the character of the food.

Bottom line: Beyond merely increasing the population, we must ensure the population is of sufficient health. This can be achieved through clean water, healthy food, and reduction in unhealthy activities.

How do we quantify mass?

Mass is the most easily quantified component of human energy. It is basically population. Or more specifically it can be broken out as the number of residents, taxpayers, businesses, and so on. Residents make up the basic population count in any area. In addition to this, they add production value through buying things, working, and paying taxes. Similarly, businesses employ individuals, sell things to people, and pay taxes.

To increase the energy in any given city or state, it therefore makes sense to increase the number of residents who pay taxes and stimulate the economy through working and buying things.

You might also want to count the number of residents who are home- or land-owners, because this aids in property and other tax development.

Types of activities that increase population:

To increase the mass, we must attract people to an area. Rising property values, good schools, safe neighborhoods, and job opportunities are all attractive qualities in an area that wants to attract permanent residents.


Americans move image
Source: Active Rain

Naturally, the degree of each of these characteristics will vary depending on the type of people you want to attract. A bustling city looking to boost its economy will look to improve its infrastructure to attract business investment and property purchases. These will tend to increase job opportunities and the number of people who flock to fill them.

A quiet town, on the other hand, might look to keep its overall mass down, in order to preserve the lower overall costs of running the government and to keep the property values relatively high so as to reduce the number of people moving in.

Any place that wants to increase its mass must focus on improving the qualities that people will most likely move for. On the other hand, a place that’s content with its mass must focus on maintaining the qualities that keep the current people in place.

2. Reduce the resisting force on human energy

The simplest way to increase the human energy in any system is to increase the overall mass. But earlier we explored the priority of adding mass of a higher velocity to increase the energy at a higher rate.

The velocity has to do with both the force moving an object forward and the impeding force applied against it.

As before stated, the force which retards the onward movement of man is partly frictional and partly negative. To illustrate this distinction I may name, for example, ignorance, stupidity, and imbecility as some of the purely frictional forces, or resistances devoid of any directive tendency.

On the other hand, visionariness, insanity, self-destructive tendency, religious fanaticism, and the like, are all forces of a negative character, acting in definite directions. To reduce or entirely overcome these dissimilar retarding forces, radically different methods must be employed.

One knows, for instance, what a fanatic may do, and one can take preventive measures, can enlighten, convince, and, possibly direct him, turn his vice into virtue; but one does not know, and never can know, what a brute or an imbecile may do, and one must deal with him as with a mass, inert, without mind, let loose by the mad elements.

Tesla was clear in distinguishing between frictional and negative forces.

Frictional force acts in an unpredictable manner and cannot be counted on to be reversed or used to increase mass in a positive way. There are certain disabilities that are inherent in man that serve to limit specific individuals’ capacities (whether they be physical, mental, psychological, whatever). These limitations cannot typically be reapplied in a positive way, but their negative impact can certainly be reduced.

Negative force, on the other hand, acts in a directionally opposite way from positive forces. Think of things like hate, violence, and war. These typically surface through ignorance between groups of people. The inability or unwillingness of one group to understand another, often builds tension and conflict that leads to destructive forces in society.

Unlike frictional forces, these can be reversed. The energy is real with hate, it is just misdirected. Opening up a hateful person’s eyes to the other side’s perspective has the power to turn that negative force positive.

A negative force always implies some quality, not infrequently a high one, though badly directed, which it is possible to turn to good advantage; but a directionless, frictional force involves unavoidable loss. Evidently, then, the first and general answer to the above question is: turn all negative force in the right direction and reduce all frictional force.

There can be no doubt that, of all the frictional resistances, the one that most retards human movement is ignorance.

Think of your ordinary, every-day language barrier. You may know some people who speak English as a second language, and you may find it harder to engage with them. Maybe communication is a little choppy. Certain cultural cues are lost in the exchange. This is exaggerated many times over among two people who don’t have any way to speak the same language.


Language barrier image

Without the ability to communicate effectively with another person, the relationship suffers inherent friction.

Now add to the mix differences in religious beliefs, customs, work habits, priorities, and other things. You end up with a situation where it is near impossible for many multiple societies to see each other’s perspectives and deal effectively on a large scale. Even differences in currency have the ability to spark massive economic reforms across countries. Naturally, energy is lost translating meaning between people.

Not without reason said that man of wisdom, Buddha: “Ignorance is the greatest evil in the world.” The friction which results from ignorance, and which is greatly increased owing to the numerous languages and nationalities, can be reduced only by the spread of knowledge and the unification of the heterogeneous elements of humanity. No effort could be better spent.

The ability to see other peoples’ perspectives is the ultimate way to reduce this ignorance, and in turn reduce the friction holding back human energy. Breaking down the ignorance that separates people of different races, nationalities, religions, and anything else, will enable the impelling force behind human energy to face less resistance.

Conflict image

Now, let’s take the example of war. Every prudent country funds a standing army—a line of defense to protect itself in international conflicts. The mere presence of a military implies something bad is going to happen, typically resulting in a loss of population (or mass).

But however ignorance may have retarded the onward movement of man in times past, it is certain that, nowadays, negative forces have become of greater importance. Among these there is one of far greater moment than any other. It is called organized warfare.

When we consider the millions of individuals, often the ablest in mind and body, the flower of humanity, who are compelled to a life of inactivity and unproductiveness, the immense sums of money daily required for the maintenance of armies and war apparatus, representing ever so much of human energy, all the effort uselessly spent in the production of arms and implements of destruction, the loss of life and the fostering of a barbarous spirit, we are appalled at the inestimable loss to mankind which the existence of these deplorable conditions must involve. What can we do to combat best this great evil?

I mean, would we really need armed forces if we actually had complete and total peace worldwide? Of course not. Law and order absolutely require the presence of organized force.

If peace could be attained among societies, or even within our cities and towns, we could re-direct the wasteful energy spent on defense and criminal justice toward something more “velocity-adding” to society.

How do we quantify frictional and negative forces?

This is a much more difficult task than quantifying mass. Examining the activities that work against societal progress requires counting the number of negative events impacting the population.

Things that act in a negative direction against the human mass include crime, fires, natural disasters, and other destructive events. Things that act as friction toward progress include disease (mental, physical, and emotional), poor infrastructure, and anything that stands in the way of clear communication and dealing between different groups of people.

Types of activities that reduce the friction:

According to Adam Smith, governments serve three major purposes:

1. Defense against foreign powers
2. Law, order, and justice among its own people
3. Enabling of commerce through education and infrastructure

Certainly the first two categories address needs related to frictional and negative forces. And a good portion of the third category does as well.

General administration in governments allows for their continuing operation. Thought typically seen as a cost center for taxpayer dollars, it is important that some minimum level of government exist to maintain and enable a certain amount of public services.

Public safety departments help ensure the maintenance of the current population. Fire, police, and emergency medical services all work together to keep people alive, reduce crime rates, and limit destruction from negative events.

Health and welfare departments (including hospitals) also help maintain the mass. By keeping people healthy, governments reduce the friction that ends up surfacing among sick people unable to provide the same level of value to society as before.

Human services are part of a much broader category that typically addresses myriad frictional issues. Think about a homeless shelter. People who use this service are in desperate need of a home, without which, makes it hard for them to engage in value-adding activities in society. When the obstacle of finding a roof to put over their head is removed, they can more proactively find a job and a permanent place to live.

Criminal justice systems also address frictional and negative forces but in a much more balanced way. Whereas hospitals exist to heal people and bring them back to “full value,” oftentimes courts decide that someone is not a value-producing member in society and must be incarcerated. This is a costly decision, as the person cannot earn a wage, pay taxes, and contribute productively to society. However, these decisions have the ultimate value of society in mind, deeming the person more dangerous (a negative force) than productive (a positive force). So the marginal cost of removing this person from society should be a net positive in the long run, if done correctly.


Government purpose quote image

The establishment of permanent peaceful relations between nations would most effectively reduce the force retarding the human mass, and would be the best solution of this great human problem. But will the dream of universal peace ever be realized? Let us hope that it will. When all darkness shall be dissipated by the light of science, when all nations shall be merged into one, and patriotism shall be identical with religion, when there shall be one language, one country, one end, then the dream will have become reality.

3. Increase the velocity affecting human energy

Onto the most important solution to consider for increasing human energy: increasing the velocity.

Of the three possible solutions of the main problem of increasing human energy, this is by far the most important to consider, not only because of its intrinsic significance, but also because of its intimate bearing on all the many elements and conditions which determine the movement of humanity.
When discussing velocity, we should revisit the example presented earlier. Remember, we wanted to increase the overall energy of a train by adding compartments to it. When compartments of higher energy are added to the train, the train’s overall energy is increased, and in turn so is the average energy of each compartment.


Acceleration velocity image

When compartments of lower energy are added, however, the train’s overall energy is increased, but at a much lower rate. And the average energy of each compartment is actually decreased.

Apply this example to society. Naturally we want to increase the mass. But additional mass added (again, additional population) will increase the overall energy of the system at varying rates.

Think of a person being born. Either this person will grow up to be of a “higher” or “lower” velocity than her parents. The overall opportunity of this person can be compared to those offered to her parents. Maybe she will be exposed to a better education. Maybe she won’t be forced to work at a young age. Maybe she will have more technology to aid in her learning and development than her parents.

This simple illustration shows that it is of greatest importance to add mass of a higher velocity. Stated more to the point, if, for example, the children be of the same degree of enlightenment as the parents (that is, mass of the “same velocity”), the energy will simply increase proportionately to the number added. If they are less intelligent or advanced, or mass of “smaller velocity,” there will be a very slight gain in the energy; but if they are further advanced, or mass of “higher velocity,” then the new generation will add very considerably to the sum total of human energy.

How do we add mass of higher velocity?

Society is driven forward by the ability of individuals to work. Since the beginning of time, technological innovations have allowed for economizing of day-to-day tasks. Farming allowed for people to source food in centralized locations instead of hunting and gathering. Marketplaces allowed for people to buy their clothes instead of making their own. Even the concept of a corporation has allowed people to pool their resources in order to provide greater value than any one individual can.


Major inventions image

What we have, as a result, is a collection of resources specializing in individual tasks that contribute to the overall system. One person makes shoes. One person slaughters animals. One person repairs furnaces. And so on.

This specialization has created an economy based on a much more efficient supply chain than one in which every family provided everything for themselves. Anything designed to make providing for oneself easier, can be said to increase the velocity at which mass moves forward.

But looking at all this busy world about us, on all this complex mass as it daily throbs and moves, what is it but an immense clock-work driven by a spring? In the morning, when we rise, we cannot fail to note that all the objects about us are manufactured by machinery: the water we use is lifted by steam-power; the trains bring our breakfast from distant localities; the elevators in our dwelling and our office building, the cars that carry us there, are all driven by power; in all our daily errands, and in our very life-pursuit, we depend upon it; all the objects we see tell us of it; and when we return to our machine-made dwelling at night, lest we should forget it, all the material comforts of our home, our cheering stove and lamp, remind us of how much we depend on power.

And when there is an accidental stoppage of the machinery, when the city is snowbound, or the life sustaining movement otherwise temporarily arrested, we are affrighted to realize how impossible it would be for us to live the life we live without motive power. Motive power means work. To increase the force accelerating human movement means, therefore, to perform more work.

For simplicity, we will assume that the amount of work or output a person contributes to society equals his overall productivity and energy pushed through the system. Technological advances, in any form, tend to increase this amount of work, no matter the field. Farming, industrialization, vaccination, and many others help contribute to more efficiency and higher productivity for people.

In the same way that people can contribute ideas and effort to the overall human energy system, outside sources of energy clearly contribute to its increase as well. Coal, oil, wind, and solar are just a few of the many ways that we harness energy from our environment and use it to make our lives easier and more productive.


Energy sources image

From the very beginning three ways of drawing energy from the sun were open to man. The savage, when he warmed his frozen limbs at a fire kindled in some way, availed himself of the energy of the sun stored in the burning material. When he carried a bundle of branches to his cave and burned them there, he made use of the sun’s stored energy transported from one to another locality. When he set sail to his canoe, he utilized the energy of the sun applied to the atmosphere or the ambient medium.

There can be no doubt that the first is the oldest way. A fire, found accidentally, taught the savage to appreciate its beneficial heat. He then very likely conceived of the idea of carrying the glowing members to his abode. Finally he learned to use the force of a swift current of water or air. It is characteristic of modern development that progress has been effected in the same order. The utilization of the energy stored in wood or coal, or, generally speaking, fuel, led to the steam-engine. Next a great stride in advance was made in energy-transportation by the use of electricity, which permitted the transfer of energy from one locality to another without transporting the material. But as to the utilization of the energy of the ambient medium, no radical step forward has as yet been made known.

Finding ways to harness energy from our environment and use it to enable commerce, education, and overall improvement of society is the easiest way to increase the velocity moving human energy forward.

How do we quantify velocity?

Velocity is probably the most difficult aspect to quantify in the human energy equation. At a high level, it is represented by anything that facilitates increased value or production in society.

We can attempt to quantify this measure by looking at social outcomes related to human achievement. Graduation rates, job attainment, wage growth, purchasing power…they’re all possible indicators.

In their own ways, these kinds of measures indicate efficiency and effectiveness in a society—the higher they go, the better off the people are, and the more able they are to produce and add value for the overall system.

Types of activities that increase velocity:

Several government services exist to improve the capabilities of its individuals.

Schooling is the first thing that comes to mind here. Typically making up over two thirds of a municipal budget, education is the primary spending category among local governments. They exist to teach children and prepare them for the real world, providing real life skills and theoretical knowledge to back them up. The better the schools, the more productive the students should become.


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Other government services exist to facilitate commerce and the ability to do more work.

Public works ensure bridges and roads are in working order.

Transportation departments ensure people can get where the need to go.

Conservation and development agencies invest in programs to increase economic activity and sustainability.

Parks, recreation, and library departments help educate and entertain citizens while increasing property values for those living in a certain area. Again, if property values go up, the human energy equation is bolstered by increase tax receipts and resulting public spending on programs or increased spending power for the property owners.

A Note on Human Energy and Collaboration

Hopefully this type of thinking can help relate the many different components acting in society. Instead of seeing everything as competing agents, we can start to see the interplay of different activities and how certain shared outcomes are typically desired by many overlapping organizations.

A more collaborative business and political environment should help cut through some of the competitive tension that hurts many industries—perhaps none more-so than the nonprofit sector. Like the way businesses compete on the ground level for customers, nonprofits often battle over every little bit of funding they can get, creating waste and misalignment of outcomes.

But how can collaboration help remedy this? Imagine the following scenario:

Five similar nonprofit agencies, that each would produce the same general outcomes, compete for the same government grant. To win this much-needed funding, each organization submits bare-bones proposals in attempts to underbid the competition and win the contract.


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This creates a major problem: agencies have a harder time meeting the original intended outcomes on such stripped-down proposals.

So instead of creating a cohesive strategy to split funding among five complementary agencies, all the money goes to one which is now unable to deliver based on the low costs proposed.

Nonprofits exist to create better outcomes for society in areas where profit-driven enterprises can’t compete—essentially picking up the slack left by public services but, overall, serving the same purpose.

Tying back to the human energy idea, we can see how this works. The most basic element of the energy equation is mass (or population). Mass ties very nicely to financial measures in the form of taxpayers versus tax receivers from a government perspective. So, in a way, to grow the human energy in any given city, it makes sense to calculate the total mass of taxpayers funding the government.

For example, removing people from prison and enabling them to lead productive, taxpaying, value-adding lives obviously benefits the community in which it takes place.

Human energy can quantify these types of outcomes and financial tools like social impacts bonds can be used to fund them.

Human Energy Investment Calculator

Do you need help attracting funding for your nonprofit or social service program?

 

Use this Excel financial model to select from a list of social impact areas and model out investments in your city. Select from the universe of American municipalities, with official social, financial, and economic data from 2017 Census.

 

Choose an investment amount and time horizon and see how your program benefits the city in terms of:

 

1.   Social service spending reductions

2.   Property tax income increases

 

Nothing in this file is locked. Please use it at your convenience and modify, update, change as necessary. I hope this helps you fund ideas, attract investment and improve your community!

 

$7.00
$0.44 (tax)
Total: $7.44

Now, what if the other elements of human energy (which, admittedly, are much more difficult to quantify) could be tied to dollars in the same way that mass is? Outcomes achieved by nonprofits represent either increases in the force accelerating human progress or decreases in forces slowing progress.

Again, nonprofits already know their missions seek to achieve these goals, whether or not financial measures are easily attached to them. But without tangible proof of societal improvement, few governments have incentives to increase current funding without commensurate increases in taxes.

By taking the concept of human energy, we can bring together the many different agents in society to help produce better outcomes and a better life for everyone.