There is an interesting scene in Billions. Axe Capital thought it had inside information on the location of a new casino, so they bought the debt of the town that was to get a new lease on life for pennies on the dollar. When the trade starts to fall apart, Axe Capital is faced with an existential dilemma. Should they enforce austerity on the town to recoup their investment, or should they allow the town to default to prevent the people from suffering?
This was Taylor’s thought process:
It is unfortunate. Offensive, actually, to even be talking about this. That people have to live in near-poverty.
But in many ways, a town is like a business.
And when a business operates beyond its means, when numbers don’t add up, and the people in charge continue on, heedless of that face, sure that some sugar daddy, usually in the form of the Federal Government, will come along and scoop them up and cover the shortfalls, well, that truly offends me.
People might say you hurt this town.
But in my opinion, the town put the hurt on itself.
Corrections are in order.
There’s a way to make this work, and that way is hard, but necessary.
As Taleb says, “Become antifragile, or die.”
Once we do this, the town will face that challenge and come out stronger. Or it will cease being.
Either result absolutely natural, as in, of nature itself.
I’m not interested in what Axe Capital will do. Because either way, the destiny of that town is being decided by someone else. And this is a terrible position to be in.
How did the town get into this situation? Peter Drucker said, “What gets measured gets improved.” The failed town didn’t have the data. They didn’t act on the data. And then they ran out of time.
If the local government treated the town as a business, they would use KPIs (key performance indicators). They would collect metrics that are upstream of the results, set targets, and measure against them regularly. They would have early warning indicators, and time to take action.
Are you using KPI’s? You can keep the Axe Capital’s of the world from deciding your fate.
You can Manage from Metrics.