Liam Dann: Godwits, herons and the art of strategic change

OPINION:

Somewhere around 2100 kilometres into his flight across the Pacific Ocean, godwit 4BRWB made a decision.

The wind was too strong, he was getting tired, he wasn’t going to make it to New Zealand.

After 57 hours of flying, he turned back to Alaska.

It’s that time of year when godwits start arriving on our shores.

It’s an epic migration, a marvel of nature. But it’s the decision-making of godwit 4BRWB that blew my mind this week.

What was going through his head? Angst? Self-doubt? How did he know it wasn’t going to make it?

Cutting your losses is never easy. Humans are famously bad at it.

We succumb to emotions or we over-think.

We continue with behaviour that’s no longer advantageous because we’re committed by the energy we have already invested in it.

That’s a common business and investment mistake, described as the sunk cost fallacy.

Godwit 4BRWB didn’t fall for it.

“He’s a bird who knows how to survive by adjusting his behaviour when he has to,” said zoologist and godwit expert Phil Battley.

News about 4BRWB’s big decision coincided with Cabinet’s alert level decision on Monday, providing an obvious avian metaphor.

That metaphor remains open to interpretation, of course.

Did we change strategy? Have we abandoned elimination? Has elimination failed?

The language has become politicised.

One side sees any strategic shift as a backdown or failure, the other clings to the idea thatour elimination strategy must somehow be carved in stone.

Both extremes cloud our judgement.

In my opinion, whatever happens from here, New Zealand’s elimination policy has succeeded.

We did not allow Covid-19 to sweep through our unvaccinated population causing mass deaths.

That’s now an irreversible fact and one we should celebrate.

But we should also recognise that strategies that cannot change as circumstances change are doomed to failure.

Animals have a deep wisdom, an intuition built-in at species level by evolutionary forces.

They have maths that is hard-wired, like the cicadas that cycle their emergence above ground on a system of prime-numbered seasons.

Or seagulls that calculate the exact height from which to drop clams onto rocks. They have to be precise because flying too high expends more energy than is gained from eating the clam … too low and it doesn’t crack.

Or rats that out-perform humans in assessing probability.

I’ve written before about the experiment where a light was set up to flash either red or green.

The subjects were rewarded for predicting the next colour in the sequence. The trick was that the green light was set to flash 75 per cent of the time.

The rats quickly worked this out and started picking green every time – ensuring a 75 per cent success rate and bountiful sugary treats.

Humans, embarrassingly, had a success rate of only 60 per cent.

Speaking of animal instincts, how about – as our Reserve Bank noted this week – the white heron (kōtuku)?

It’s been a good week for bird metaphors.

In a speech on Tuesday, Reserve Bank assistant governor Christian Hawkesby used an analogy about the white heron to shift market pricing for interest rates back into line with where the Reserve Bank wanted it.

It was a masterful piece of story telling, weaving Māori proverbs into the already bird-themed language of central banking.

When it comes to dealing with inflation – raising or dropping interest rates – central bankers are described as either hawks or doves.

Last year our central bank was a dove – prepared to slash interest rates and print money to prop up the economy and head off unemployment, despite the inflation risk.

But a shift in tone this year has had markets deciding the Bank is now a hawk – ready to hike rates hard and fast.

I noted last week that market pricing for a double (0.50 point) rate hike next month was hard to fathom with the nation still in the grip of this Delta outbreak.

It presumably bothered the RBNZ too, with Hawkesby seeking to moderate those expectations.

He noted that in Māori culture there are two whakataukī (proverbs) involving the kōtuku that allude to the need to respond to the environment around you.

The saying, “He kōtuku rerenga tahi” loosely translates to “A white heron’s flight is seen but once”, he said.

It expresses an idea that “once ready, open your wings and commit to flight”.

In contrast, the saying “Tapuwae kōtuku” translates roughly to “Considered steps” as you assess the environment around you.

The RBNZ, under Governor Adrian Orr, has a reputation for being unafraid of making bold moves – as in the first proverb.

The heron story was a way to acknowledge this, but also remind the market that the Bank will still tread softly when it needs to.

It was the articulation of an extremely subtle strategic shift.

And it worked, markets understood and adjusted accordingly.

The next few months look likely to be some of the toughest faced by New Zealand policy makers in living memory.

There may be times where we need to follow the lead of godwit 4BRWB and make big bold, life-changing calls.

We will also need to keep following the careful path of the heron through the swamp of uncertainty.

What is crucial is that we will need strategies that are flexible.

We are going to need to stay open to change.

We should never view strategic change as failure.

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