Tuesday, June 28, 2005

Patterns * Patterns * Patterns

Heavy stuff falls when you drop from a height, the sun rises every morning, the sun sets every evening, the moon rises every evening and sets every morning, the seasons they repeat every 12 months, the El-niño, La-niña, the “J” curve … Aren’t these all patterns? So what is the big deal about pattern recognition? We recognize patterns all the time, then we endevour to explain those patterns. Hypotheses are established to explain the patterns.

Often these hypotheses hold for a long time until we invent tools and devices to measure them carefully that confirms or refutes these hypothesis into principles and facts! The dropping of heavy stuff is gravity, the rising and setting to the sun and the moon is the orbital motion of the earth and the moon, that then causes the seasons, the over heating and over cooling of the Pacific ocean leads to the El-niño and La-niña. The resurgence in value of the currency after devaluation, that looks like the “J” curve.

So why are businesses are obsessed with patterns? I have wondered why has pattern recognition failed to gain a strong foot hold. It works well in some situation and does not in others? Couple years ago I started dating my girl friend when we waited for dinner at restaurants she drew me a couple doodles, my task was to recognize them. It dawned on me we have always been looking at a part of it not the whole.

I obviously did not recognize any of those doodles but in the absence of context, lack of theory, knowledge of the right measures, and limited understanding of the non-linear multiplier effects between all the different things (variables) that were visible, some of which I knew and tracked and other I didn’t? I could have spent a couple days thought over, gotten some guidance, built some models, to figure it out.

So when people say “there is a pattern”, but what that really means is “within the unknown boundary conditions that I don’t know anything about there exists a behavior that repeats itself and I am going to try and chase it down”. Isn’t that what the deer in the desert runs after? The Mirage?