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Which of these two options would you choose?
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Daniel Kahneman, the author of Thinking, Fast and Slow, did an experiment. He gave two options: Would you accept a gamble that offers a 10% chance to win $95 and a 90% chance to lose $5? Or. Would you pay $5 to participate in a lottery that offers a 10% chance to win $100 and a 90% chance to win nothing? Well… if you studied engineering, you have convinced yourself that the two problems are identical. In both, you are either richer by $95 or poorer by $5. But that’s engineering mindset… No question why we take so long to find someone that can endure us. The reality is that the second option attracts more people. A bad outcome is much more acceptable if it is framed as the cost of a lottery ticket that did not win than if it is simply described as losing a gamble. We should not be surprised: losses evoke stronger negative feelings than costs. If you have no idea what I’m talking about, you should take a look to the book below. It will teach you to avoid gambles and call some costs, investments.
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Vicente Valencia
I talk about Personal Growth, Management, Infrastructure and More | 👇JOIN +2k readers 👇
Everyone loves the construction contractor. Big cranes. Huge concrete pours. Drone videos. Beautiful. But in a PPP project… Construction lasts 3 years, maybe 4… except in NZ… around 8 years – don’t ask me why. Operations last 30. And yet, people spend 90% of their time talking about construction. Very clever. And I understand… it’s the place of the big bucks; the ministers’ visit and the Public Relationship paradise. Question 72 of the course below answers a simple question: What is a good...
You hear this word a lot in PPP meetings. Bankable. “This contract must be bankable.” Everyone nods. No one asks the obvious question. What does bankable actually mean? Let me translate. A PPP contract is bankable when a bank can look at it and say: “Fine. If everything goes wrong… we still get our money back.” That’s it. Not innovation. Not sustainability. Not beautiful PowerPoints. Money back. In Question 50 of the course below, I explain what really makes a PPP contract bankable. Because...
Innovation is one of the biggest fallacies in construction and PPP contracts. Governments love the word. It appears in every PowerPoint presented to ministers, investors and journalists. Innovation. Innovation. Innovation. But what exactly is innovation? A toilet that cleans your as$ with a water jet and eliminates toilet paper. Innovation? Maybe. Maybe not. It depends. In Question 28 of the course below, I explain how “innovation” actually works in PPP bids. How to win points if you are...