Over-Ruled

The people and agencies responding to Hurricane Rita's ominous approach to Texas and Louisiana appear to be fast learners.

Preparations for this latest weather onslaught, while hardly perfect, went better than they did a month ago in New Orleans. People evacuated earlier. There were more shelters awaiting their arrival. Food and water were stockpiled in great quantities; troops and surveillance helicopters were ready to help those who stayed behind; an improved system of post-storm communication was in place.

But preparation -- even when it hews closely to the "game plan" -- only gets you so far. In the coming days, people with varying levels of authority all along the Gulf Coast will likely have to make many decisions. Often they'll have to make them quickly, alone, and without experience to guide them. Let's hope they have learned one more thing from Katrina: Sometimes you need to break the rules to avert greater disaster.

Ethics and Morality | Acts and omissions | Authority | Decision-making | Leadership | Management science | Sociology | Energy

Putting crowd wisdom to work

At Google, we're constantly trying to find new ways to organize the world's information, including information relevant to our business. Building on the ideas of Friedrich Hayek and the Iowa Electronic Markets, a few Googlers (Doug Banks, Patri Friedman, Ilya Kirnos, Piaw Na and me, with some help from Hal Varian), set up a predictive market system inside the company.

The markets were designed to forecast product launch dates, new office openings, and many other things of strategic importance to Google. So far, more than a thousand Googlers have bid on 146 events in 43 different subject areas (no payment is required to play).

We designed the market so that the price of an event should, in theory, reflect a consensus probability that the event will occur. To determine accuracy of the market, we looked at the connection between prices of events and the frequency with which they actually occurred. If prices are correct, events priced at 10 cents should occur about 10 percent of the time.

In the graph below, the X-axis indicates the price ranges for the group. The orange line represents the average price, which is how often outcomes in that group should actually happen according to market prices. The purple line is how often they did happen. Ideally these would be equal, and as you can see they're pretty close. So our prices really do represent probabilities - very exciting!

Collective intelligence | Economics | Forecasting | Intelligence amplification | Management science

Dream teams thrive on mix of old and new blood

When the Boston Red Sox won their first World Series title since 1918 last year, the team had some new blood, including key players Curt Schilling, Orlando Cabrera and Doug Mientkiewicz, to mix with the old and help the team achieve the pinnacle of baseball success.

In a paper to be published April 29 in the journal Science, Northwestern University researchers turned to a different type of team -- creative teams in the arts and sciences -- to determine a team's recipe for success. They discovered that the composition of a great team is the same whether you are working on Broadway or in economics.

The researchers studied data on Broadway musicals since 1877 as well as thousands of journal publications in four fields of science and found that successful teams had a diverse membership -- not of race and gender but of old blood and new. New team members clearly added creative spark and critical links to the experience of the entire industry. Unsuccessful teams were isolated from each other whereas the members of successful teams were interconnected, much like the Kevin Bacon game, across a giant cluster of artists or scientists.

Cooperation, competition, conflict | Creativity | Diversity | Groupware | Innovation | Interdependence | Management science | Principles of cooperation | Problem-solving | Specialization | Efficiency

More Than Human

Transhumanism—the practice of enhancing people through technology—sounds like science fiction. But when it arrives (and it will), it will create unique problems for CIOs.

This fall, the editors of a leading public policy magazine, Foreign Policy, asked eight prominent intellectuals to identify the single idea they felt was currently posing the greatest threat to humanity. Most of the suggestions were merely old demons: various economic myths, the idea that you can fight "a war on evil," Americaphobia and so on. Only Francis Fukuyama, a member of the President's Council on Bioethics, came up with a new candidate: transhumanism.

Transhumanism might be described as the technology of advanced individual enhancement. While it includes physical modifications (diamondoid teeth, self-styling hair, autocleaning ears, nanotube bones, lipid metabolizers, polymer muscles), most of the interest in the technology focuses on the integration of brains and computers—especially brains and networks. Sample transhumanist apps could include cell phone implants (which would allow virtual telepathy), memory backups and augmenters, thought recorders, reflex accelerators, collaborative consciousness (whiteboarding in the brain), and a very long list of thought-controlled actuators. Ultimately, the technology could extend to the uploading and downloading of entire minds in and out of host bodies, providing a self-consciousness that, theoretically, would have no definitive nor necessary end. That is, immortality, of a sort.

While some of these abilities are clearly quite far off, others are already attracting researchers (see "Brain Gain"), and none are known (at the moment at least) to be impossible to achieve. Fukuyama obviously felt the technology was close enough at hand to write a book about it, Our Posthuman Future: Consequences of the Biotechnology Revolution, the thrust of which is that society should give the whole idea a miss. His main concern was that transhumanism would place an impossible burden on the idea of equal rights, since it would multiply the number of ways of being human well past our powers of tolerance. (If we have all this trouble with something simple like skin color, just wait until some people have wings, augmented memory and reflex accelerators.)

Management science | Productivity | Technology and Society | Transhumanism

The End Of Management?

With experimental markets, workers are betting on their company's future — and moving in on the boss's domain.

The end of management just might look something like this. You show up for work, boot up your computer and log onto your company's Intranet to make a few trades before getting down to work. You see how your stocks did the day before and then execute a few new orders. You think your company should step up production next month, and you trade on that thought. You sell stock for the production of 20,000 units and buy stock that represents an order for 30,000 instead. All around you, as co-workers arrive at their cubicles, they too flick on their computers and trade.

Together, you are buyers and sellers of your company's future. Through your trades, you determine what is going to happen and then decide how your company should respond. With employees in the trading pits betting on the future, who needs the manager in the corner office?

Collective intelligence | Cooperation, competition, conflict | Decision-making | Management science

The Future of Business Intelligence

We asked some industry leaders for their boldest predictions about the future of business intelligence tools, and here's our collection of the most interesting ideas.

Management science

Hierarchical Complexity Scoring System

The Model of Hierarchical Complexity presents a framework for scoring reasoning stages in any domain as well as in any cross cultural setting. The scoring is based not upon the content or the subject material, but instead on the mathematical complexity of hierarchical organization of information. The subject’s performance on a task of a given complexity represents the stage of developmental complexity.

AI | Children | Cognitive science | Decision-making | Intelligence | Intelligence amplification | Intuition | Leadership | Learning | Management science | Mental enhancement | Problem-solving | The Arrow of Morality | The Importance of Context | Empathy

Can't We All Just Get Along?

Teamwork is in and collaboration at every level of an organization is viewed as key for executives and managers to be successful both today and in the future.

In a survey over a base of 2,000 senior executives and managers nationwide conducted by NFI Research, three-quarters of respondents said collaborating with others was the skill most important to be successful today and tomorrow.

The skill of collaboration was rated more important by twice the number of executives and managers than was managing others or being personable. Working with others is becoming more important today because of the increasing complexity of work itself. With the economic pressures of the last few years, companies have been seeking ways to increase productivity by increasing efficiency. This can translate into a more integrated approach to solving problems.

Cooperation, competition, conflict | Groupware | Management science

Can't Hide Your Prying Eyes

Every Police officer's nightmare is to be wounded on the streets -- alone. So when the Orlando Police Department pilot-tested new Global Positioning System (GPS) units, which let the central office track officers' locations, you'd think the officers would have been grateful.

Gratitude, however, wasn't much in evidence during the pilot program, according to Conrad Cross, CIO of the city of Orlando. "The officers felt it was intrusive to be monitored 24/7 and didn't see much benefit in their day-to-day work," he says. The unions "raised a lot of noise" and the project was canceled, Cross says.

Many companies monitor employee e-mail and Internet usage, and Web-based security cameras are commonplace fixtures in office buildings. However, technologies such as GPS and employee badges with radio frequency identification (RFID) tags promise to take employee monitoring to an entirely new level. Today's tracking systems can record, display and archive the exact location of any employee, both inside and outside the office, at any time, offering managers the unprecedented ability to monitor employee behavior.

Management science | Technology and Society | Transparency and Privacy

Co-founders release Google 'owner's manual'

Google founders Larry Page and Sergey Brin have always done it their own way.

Nowhere is this attitude reflected more vividly than the opening letter included in Google's regulatory filing for its initial public offering. Dubbed "'An Owner's Manual' for Google's Shareholders," the seven-page letter is an organizational manifesto crafted by the co-founders to map out Google's credo as a public company that goes against most principles for operating a public company.

Management science

Big Man on Campus Reform

William Ouchi, friend and advisor to state education chief Richard Riordan, is determined to bring entrepreneurial methods to schools.

He has never been elected to public office and he holds no official title in state government.

But UCLA management professor William G. Ouchi is emerging as a pivotal figure in the future of California public education.

Ouchi has teamed up with his golfing buddy and former City Hall boss, state Education Secretary Richard Riordan, in a quest to reinvent the state's 8,000 schools.

Riordan is the official face of this two-man offensive, the connection to Gov. Arnold Schwarzenegger. Ouchi, the author of popular books about teamwork in corporate America, is the behind-the-scenes idea man who argues for turning principals into entrepreneurs, giving campuses new control over their budgets and prodding schools to compete for students.

Learning | Management science

Does IT matter?

ONE year ago, Nicholas Carr was just another 40-something junior editor at the Harvard Business Review—interested in information technology (IT), sometimes contributing as a writer, but otherwise as unknown to the outside world as such editors tend to be. Then, last May, he published a simple, jargon-free, eight-page article in the HBR, called “IT doesn't matter”. “I figured I'd ruffle a few feathers for a week or two,” he recalls.

What happened instead remains puzzling to this day, not least to Mr Carr himself. The entire trillion-dollar IT industry, it seemed, took offence and started to attack Mr Carr's argument. Chief information officers (CIOs), the people in charge of computer systems at large companies, heard the noise and told their secretaries to dig out the article and put it on their desks. Analysts chimed in. Rebuttals were rebutted. Suddenly, Mr Carr was the hottest number for anyone organising a techie conference. Within months, he was expanding the original article into a book, “Does IT matter?”, which is coming off the presses this month. Already its detractors and supporters are lining up for round two of the controversy.

Part of Mr Carr's trick, it seems, is simply choosing great titles. “IT doesn't matter” is viscerally threatening to people such as Scott McNealy, the chief executive of Sun Microsystems, a maker of fancy and expensive computers. Like other tech bosses, Mr McNealy basked in gee-whiz celebrity status during the dotcom bubble but has been spending the past three years defending Sun's relevance to suddenly sceptical customers and investors. A confident showman, he challenged Mr Carr to a debate, on stage and on webcast. It was a debacle. “Sun does matter,” Mr McNealy seemed to be arguing, or even “I still matter.” Even Mr Carr's critics in the audience wondered whether Mr McNealy had actually bothered to read the article.

And this is the other explanation for Mr Carr's great impact. His argument is simple, powerful and yet also subtle. He is not, in fact, denying that IT has the potential to transform entire societies and economies. On the contrary, his argument is based on the assumption that IT resembles the steam engine, the railway, the electricity grid, the telegraph, the telephone, the highway system and other technologies that proved revolutionary in the past. For commerce as a whole, Mr Carr is insistent, IT matters very much indeed.

Management science | Productivity

Talent leak drains AT&T think tank

When AT&T Labs was carved from Bell Labs in the 1995 breakup of AT&T , the telecom giant set lofty goals for its new research arm.

"Our mission, in my view, is to invent the future of communications," proclaimed Alexander "Sandy" Fraser, who pushed to create AT&T Labs.

Today, many of AT&T's top scientists still chase that dream -- somewhere else. They strive to invent the future in the shiniest ivory towers and hottest tech companies, from MIT to Microsoft, from the Pentagon to Google.

Some 200 scientists -- nearly half the core research staff -- were let go from AT&T Labs in Florham Park in January 2002 amid sweeping corporate cuts throughout AT&T. Since then an all-star collection of researchers has bolted from the labs.

The fate of AT&T Labs mirrors changing fortunes at AT&T, an American icon squeezed by bad investments and bad timing. More importantly, some scientists say, it raises tough questions about the direction of industrial research and America's future as an innovator.

Innovation | Management science | Efficiency

The costs and benefits of knowledge within a company

There is a point at which the benefits of corporate knowledge sharing exceed the costs. This point varies with the nature of the company and its business.

Costs:
Risk of theft of data,
Risk of destruction of data,
Risk of misuse of data,
Risk of violation of customer confidentiality,
Risk of violation of intellectual property rules,
...

Benefits:
Higher quality decision-making,
Greater adaptability to changing environment,
Broader base of knowledge sources,
...

Knowledge management | Management science

Google's Algorithmic Oath

With Google Inc. likely to file for an initial public offering in 2004, industry watchers are rushing to sort out what this means -- both for the lackluster IPO market and, more important, for Web users.

Google has remained a true good guy among Web businesses, hanging on to the magical aura that the early Netscape browser and Yahoo directory had, but lost. There has been no misdirection, no jerking users around, no coerced "stickiness." It hasn't tried to fool users into thinking ads were agnostic results, or junked up its services by selling whole sections, at bubble-inflated prices, to the highest bidder. Along with Overture, now a unit of Yahoo, it proved Web advertising could work for buyer, seller and consumer.

Ethics and Morality | Cooperation, competition, conflict | Idealism | Knowledge management | Management science
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