From the blog: In the mid-1960s, Dr Eric Berne wrote a groundbreaking book, Games People Play, in which he introduced 'transactional analysis', a powerful study of human behaviour.
After 15 years spent close up and personal with countless pension schemes, I have concluded that some play games that Berne might have described.
For instance, 'games of epic procrastination'involve postponing an important strategic decision until sometime in the future, by which time it is too late.
After 15 years spent close up and personal with countless pension schemes, I have concluded that some play games that Berne might have described.
For instance, 'games of epic procrastination'involve postponing an important strategic decision until sometime in the future, by which time it is too late.
‘Not today, tomorrow better!’ is one of these games. In the game, the players discuss the pros and cons of taking some specific action but decide that, on balance, 'this is not the right time'.
Perhaps the finest example of 'Not Today, Tomorrow Better!' is found observing pension schemes discussing whether or not to hedge against a falling real yield
The discussions are lengthy and protracted; several perspectives are debated but the outcome is invariably the same: 'Now is not the right time to take this action – we should wait until there is a better opportunity.'
The rules of the game are simple. Player One suggests a particular course of action (The Suggestion). Player One then explains his or her thinking in terms of some negative consequence that may materialise if The Suggestion is not followed.
Player Two immediately advances several reasons why The Suggestion is a bad idea. Player Two’s objections may, or may not, be based on personal prejudice, willful ignorance or plain obstinacy.
In 'Not Today, Tomorrow Better!', it is only important that Player Two objects.
Player One defends The Suggestion but is shouted down by Players Two and Three. Player Four may play the role of Neutral Undecided.
Eventually, Players Two, Three and Four vote to postpone the decision to another day when, they agree, The Suggestion should be discussed again.
This is a critical outcome in 'Not Today, Tomorrow Better!' – that under no circumstances should the group actually decide to take action.
The discussion around The Suggestion may rage for an entire afternoon and be followed by a fair and democratic vote. Provided no decision is taken, and procrastination is agreed, the game concludes.
But 'winners' can lose...
Source: Redington
For the past decade, many pension funds have played this game. And perhaps the finest example of 'Not Today, Tomorrow Better!' is found observing pension schemes discussing whether or not to hedge against a falling real yield.
Unfortunately, every time they played the game, they lost. The real yield fell further, and it became clear that yesterday would indeed have been a good time to hedge.
Dawid Konotey-Ahulu is co-CEO at Redington
