Category Archives: The thoughtful manager

Science fiction and the future

I am on the editorial board of ACM Ubiquity – and we are in the middle of a discussion of whether science fiction authors get things right or not, and whether science fiction is a useful predictor of the future. I must admit I am not a huge fan of science fiction – definitely not films, which tend to contain way too many scenes of people in tights staring at screens. But I do have some affinity for the more intellectual variety which tries to say something about our time by taking a single element of it and magnifying it.

So herewith, a list of technology-based science fiction short stories available on the web, a bit of fantasy in a world where worrying about the future impact of technology is becoming a public sport:

  • The machine stops by E. M. Forster is a classic about what happens when we make ourselves completely dependent on a (largely invisible) technology. Something to think about when you sit surfing and video conferencing  in your home office. First published in 1909, which is more than impressive.
  • The second variety by Philip K. Dick is about what happens when we develop self-organizing weapons systems – a future where warrior drones take over. Written as an extension of the cold war, but in a time where you can deliver a hand grenade with a drone bought for almost nothing at Amazon and remote-controlled wars initially may seem bloodless it behooves us to think ahead.
  • Jipi and the paranoid chip is a brilliant short story by Neal Stephenson – the only science-fiction author I read regularly (though much of what he writes is more historic/technothrillers than science fiction per se). The Jipi story is about what happens when technologies develop a sense of self and self preservation.
  • Captive audience by Ann Warren Griffith is perhaps not as well written as the others, but still: It is a about a society where we are not allowed not to watch commercials. And that should be scary enough for anyone bone tired of alle the intrusive ads popping up everywhere we go.

There is another one I would have liked to have on the list, but I can’t remember the title or the author. It is about a man living in a world where durable products are not allowed – everything breaks down after a certain time so that the economy is maintained because everyone has to buy new things all the time. The man is trying to smuggle home a wooden stool made for his wife, but has trouble with a crumbling infrastructure and the wrapping paper dissolving unless he gets home soon enough…

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Big Data and analytics – briefly

DFDDODData and data analytics is becoming more and more important for companies and organizations. Are you wondering what data and data science might do for your company? Welcome to a three-day ESP (Executive Short Program) called Decisions from Data: Driving an Organization with Analytics. It will take place at BI Norwegian Business School from December 5-7 this year. The short course is an offshoot from our very popular executive programs Analytics for Strategic Management, which are fully booked. (Check this list (Norwegian) for a sense of what those students are doing.)

Decisions from Data is aimed at managers who are curious about Big Data and data science and wants an introduction and an overview, without having to take a full course. We will talk about and show various forms of data analysis, discuss the most important obstacles to becoming a data driven organization and how to deal with data scientists, and, of course, give lots of examples of how to compete with analytics. The course will not be tech heavy, but we will look at and touch a few tools, just to get an idea of what we are asking those data scientists to do.

The whole thing will be in English, because, well, the (in my humble opinion) best people we have on this (Chandler Johnson og Alessandra Luzzi) are from the USA and Italy, respectively. As for myself, I tag along as best I can…

Welcome to the data revolution – it start’s here!

Singularity redux

From Danny Hillis: The Pattern on the Stone, which I am currently reading hunting for simple explanations of technological things:

Because computers can do some things that seem very much like human thinking, people often worry that they are threatening our unique position as rational beings, and there are some who seek reassurance in mathematical proofs of the limits of computers. There have been analogous controversies in human history. It was once considered important that the Earth be at the center of the universe, and our imagined position at the center was emblematic of our worth. The discovery that we occupied no central position – that  our planet was just one of a number of planets in orbit around the Sun – was deeply disturbing to many people at the time, and the philosophical implications of astronomy became a topic of heated debate. A similar controversy arose over evolutionary theory, which also appeared as a threat to humankind’s uniqueness. At the root of these earlier philosophical rises was a misplaced judgment of the source of human worth. I am convinced that most of the current philosophical discussions about the limits of computers are based on a similar misjudgment.

And that, I think, is one way to think about the future and intelligence, natural and artificial. Works for me, for now. No idea, of course, whether this still is Danny’s position, but I rather think it is.

Sapiens unite!

Sapiens: A Brief History of HumankindSapiens: A Brief History of Humankind by Yuval Noah Harari

My rating: 4 of 5 stars

This book (recommended by Grady Booch in his recent talk) attempts to give a brief history of mankind – specifically, Homo Sapiens, as opposed to Neanderthals and other hominids – in one book (a bit reminicent of Geoffrey Blainey’s A Short History of the World.) As such it is interesting, especially the early parts about the transition from hominids to collaborating humans and the cognitive revolution 70000 years ago. It is very clearly written – for instance, the chapter on capitalism and the importance of credit and creditworthiness is something I could hand out to my students directly as a brief explanation of what the fuzz is all about.) The book has been a success, and deservedly so – very rationalist, well informed, if a bit narrow in perspective here and there. The author seems to have a soft spot for hunter-gatherer societies (leading him to describe the agricultural revolution as a step backward for individuals, if not for the human race) and a digression on whether humans are more or less happy now (has historical progress done anything to our serotonine levels (answer: no, it hasn’t, which sort of renders the argument about agrarianism mot) veers towards ranting.

The best part is the way the author describes how much of history and out place in it now is based on inter-subjective fantasies – such as money, religion and states, which exist purely in our minds, because we agree between ourselves that they do.

And easy read, entertaining, and with quite a few very quotable passages here and there, for instance these on our bioengineered future:

Biologists the world over are locked in battle with the intelligent-design movement, which opposes the teaching of Darwinian evolution in schools and claims that biological complexity proves there must be a creator who thought out all biological details in advance. The biologists are right about the past, but the proponents of intelligent design might, ironically, be right about the future.

Most of the organisms now being engineered are those with the weakest political lobbies – plants, fungi, bacteria and insects.

Recommended.

View all my reviews

The disrupted history professor

Jill Lepore, Harvard HistorianProfessor Jill Lepore, chair of Harvard’s History and Literature program, has published an essay in the New Yorker, sharply critical of Clayton Christensen and his theory of disruptive innovations. The essay has generated quite some stir, including a rather head-shaking analysis by Will Oremus in Slate.

I find Lepore’s essay rather puzzling, and, quite frankly, unworthy of a professor of history, Harvard or not. At this point, I should say that I am not an unbiased observer here – clayClay is a personal friend of mine, we went through the doctoral program at Harvard Business School together (he started a year before me), he was on my thesis committee (having graduated three years ahead of me) and we have kept in touch, including him coming to Norway for a few visits and one family vacation including a great trip on Hurtigruten. Clay is commonly known as the “gentle giant” and one of the most considerate, open and thoughtful people I know, and seeing him subjected to vituperating commentary from morons quite frankly pains me.

Professor Lepore’s essay has one very valid point: Like any management idea, disruptive innovation is overapplied, with every technology company or web startup claiming that their offering is disruptive and therefore investment-worthy. As I previously have written: If a product is described as disruptive, it probably isn’t. A disruptive product is something your customers don’t care about, with worse performance than what you have, and with lower profit expectations. Why in the world would you want to describe your offering as disruptive?

That being said, professor Lepore’s (I will not call her Jill, because that seems to be a big issue for some people. But since I have met Clay (most recently last week, actually), I will refer to him as Clay)  essay shows some remarkable jumps to non-conclusions: She starts out with a very fine summary of what the theory of disruption says:

Christensen was interested in why companies fail. In his 1997 book, “The Innovator’s Dilemma,” he argued that, very often, it isn’t because their executives made bad decisions but because they made good decisions, the same kind of good decisions that had made those companies successful for decades. (The “innovator’s dilemma” is that “doing the right thing is the wrong thing.”) As Christensen saw it, the problem was the velocity of history, and it wasn’t so much a problem as a missed opportunity, like a plane that takes off without you, except that you didn’t even know there was a plane, and had wandered onto the airfield, which you thought was a meadow, and the plane ran you over during takeoff. Manufacturers of mainframe computers made good decisions about making and selling mainframe computers and devising important refinements to them in their R. & D. departments—“sustaining innovations,” Christensen called them—but, busy pleasing their mainframe customers, one tinker at a time, they missed what an entirely untapped customer wanted, personal computers, the market for which was created by what Christensen called “disruptive innovation”: the selling of a cheaper, poorer-quality product that initially reaches less profitable customers but eventually takes over and devours an entire industry.

She then goes on to say that the theory is mis- and overapplied, and I (and certainly Clay) couldn’t agree more. Everyone and their brother is on an innovation bandwagon and way too many consulting companies are peddling disruption just like they were peddling business process reengineering back in the nineties (I worked for CSC Index and caught the tail end of that mania. Following this, she points out that Clay’s work is based on cases (it is), is theory-building rather than theory-confirming (yep) and that you can find plenty of cases of things that were meant to be disruptive that weren’t, or companies that were disruptive but still didn’t succeed. All very well, though, I should say, much of this is addressed in Clay’s later books and various publications, including a special issue of Journal of Product Innovation Management.

(Curiously, she mentions that she has worked as an assistant to Michael Porter‘s assistant, apparently having a good time and seeing him as a real professor. She then goes on to criticise the theory of disruptive innovation as having no predictive power – but the framework that Porter is most famous for, the five forces, has no predictive power either: It is a very good way to describe the competitive situation in an industry by offers zero guidance as to what you actually should do if you are, say, in the airline industry, which scores very badly on all five dimensions. There is a current controversy between Clay and Michael Porter on where the Harvard Business School (and, by implication, business education in general) should go. The controversy is, according to Clay, mostly “ginned up” in order to make the Times article interesting, but I do wonder what professor Lepore’s stakes are here.)

The trouble with management ideas is that while they can be easily dismissed when commoditized and overapplied, most of them actually start out as very good ideas within their bounds. Lepore feels threatened by innovation, especially the disruptive kind, because it shows up both in her journalistic (she is a staff writer with the New Yorker) and academic career. I happen to think that the framework fits rather well in the newspaper industry, but then again, I have spent a lot of time with Schibsted, the only media company in the world that has managed to make it through the digital transition with top- and bottom-line growth, largely by applying Clay’s ideas. But for Lepore, innovation is a problem because it is a) unopposed by intellectuals, b) happening too fast, without giving said intellectuals time to think, and c) done by the wrong kind of people (that is, youngsters slouching on sofas, doing little work since most of their attention is spent on their insanely complicated coffee machines, which “look like dollhouse-size factories”.) I am reminded of “In the beginning…was the command line.”, Neal Stephenson‘s beautiful essay about technology and culture, where he points out that in

… the heyday of Communism and Socialism, [the] bourgeoisie were hated from both ends: by the proles, because they had all the money, and by the intelligentsia, because of their tendency to spend it on lawn ornaments.

And then Lepore turns bizarre, saying that disruptive innovation does not apply in journalism (and, by extention, academia) because “that doesn’t make them industries, which turn things into commodities and sell them for gain.” Apparently, newspapers and academia should be exempt from economic laws because, well, because they should. (I have had quite a few discussions with Norwegian publishing executives, who seem to think so for their industry, too.)

I think newspapers and academic institutions are industries – knowledge industries, operating in a knowledge economy, where things are very much turned into commodities these days, by rapidly advancing technology for generating, storing, finding and communicating information. The increased productivity of knowledge generation will mean that we will need fewer, but better, knowledge institutions. Some of the old ones will survive, even prosper. Some will be disrupted. Treating disruptive innovation as a myth certainly is one option, but I wish professor Lepore would base that decision on something more than what appears to be rhetorical comments, a not very careful reading of the real literature, and, quite frankly, wishful thinking.

But I guess time – if not the Times – will show us what happens in the future. As for disruption, I would rather be the disruptor than the disruptee. I would have less money and honor, but more fun. And I would get to write the epitaph.

But then again, I have an insanely complicated coffee machine. And now it is time to go and clean it.

Interview by Peter Lorange


Peter Lorange has posted an interview (in German) with me on his blog. (Trust me, I don’t speak much German beyond “Bitte, bitte Kellner, noch ein Bier.” I can sort of read it, though.) I will be teaching a class (with Margherita Pagani) at his institute in a couple weeks.

I am posting the English version of the interview below – good questions, and I am happy with the answers, too.

1. There is no single business which is not affected by information technology in whatsoever way. Is there a general rule of thumb to follow in the e-commerce?

No – except, possibly, don’t ignore it or treat it as an afterthought to your regular business. E-commerce is increasingly the “normal” way to do things, and companies that are successful devote much time and resource to making sure that their value proposition online is as well thought out and delivered as anything else they do.

A persistent problem in many businesses is that, faced with new, Internet-enabled competition, they try to preserve their existing distribution channels and business models by mimicking them online. In some instances, this is the right thing to do, but surprisingly often, doing so leaves you open to competitors that have no existing business to defend. Competition online is often subject to strong network effects, meaning that it can be extremely important to establish a dominant position early – before the economics of the market financially justifies it.

2. Some businesses are quite successful although they are not working with the newest, latest technology. Why, to quote the title of one of your papers, does the best technology not always win?

My point about the best technology not always winning is more directed at technologists – who often things that the technology that is “best” in a technical sense (most advanced, say, or most adherent to the principles of technology the technologist believes in) deserves to win. If it doesn’t, the technologist concludes that this is due to a conspiracy, most commonly arranged by whoever ended up winning the market – be it Microsoft, Google, Facebook, or whoever.

For every new technology that comes along, you will always find a number of initiatives and companies that didn’t quite cut it, even though their ideas were right and the implementation beautiful. Perhaps their timing was wrong. Perhaps they chose the wrong initial market. Perhaps they were part of a larger company that didn’t understand the importance of the new technology or were fearful of its consequences. Or perhaps they just had bad luck.

3. Conversion is a keyword in today’s e-commerce. How can a merchant convert visits on his website into sales?

To a large extent, what makes you successful online no different from what makes you successful in any business: Offering a good product or service at a price the customer is willing to pay. Being online, however, allows plenty of opportunities to surround your existing product or service with electronically enabled experiences and extensions.

A big problem with many online offerings, in addition, is that they impose complicated procedures for the customer, especially around payment. Sometimes these complications are deliberate – to make sure online sales do not harm traditional sales, for instance. Sometimes they are a result of thinking too much about security. Sometimes they come from an insistence on making electronic commerce simple for the company rather than the customer. Small differences in design, especially of the process the customer has to go through, can make a big difference.

4. Design is not just what it looks like. Design is how it works, said Apple co-founder Steve Jobs. You claim that the presence on the web is no longer determined by having a nice web site only. And yet, contemporary web-based design can be used to generate business. Where do you see specific triggers at the interface between design, usability and conversion?

In general, design of a web site matters – but content matters more than colors, pictures and logos. Specifically, many companies forget that customers will enter their web site not through the front door – i.e., through the home page – but directly into any page visible, often through search engines. This means that you must design your web page not just to be esthetically pleasant – it must also be logical in its structure, be consistent in its message and quality no matter where the customers come from, and, most importantly, easy to find and link to for customers. If you type in the name of your product or your product category in a search engine, your site better be the one that pops up on top – or you have done something wrong.

5. For a few years already another buzzword has been on everyone’s lips: social media. In brief, where do you see the most poignant relation between higher sales and social media – if there is any at all?

Social media can be important – especially if you sell branded, high-end goods and services. They can enhance your value offering by providing customers contact with each other –many technology companies, for instance, use electronic forums to let customers help each other use, fix and even extend their offerings. They can also be a threat – news travels extremely fast on social networks, and you certainly don’t want to be the company whose poor service or stiff prices everyone is talking about. That being said, social networks offer you a chance to quickly fix mistakes – and to communicate how fast you fixed them. In short, social media offers you and your reputation everything a small town offers – only on a much larger and much faster scale.

6. Online business and e-commerce promises opportunities. On the downside, like everything, ecommerce is not only related with opportunities, but also with threats.

For most companies, e-commerce is a good opportunity, but for many it can be the first chink in the armor, the first sign that an industry upheaval is on its way. For the music industry, for publishers, for newspapers and for anyone selling access to information or entertainment, e-commerce can, long-term, be a threat to the company’s whole existence. The key lies in recognizing this threat early and turning the digital marketplace into an opportunity. For every industry facing a disruptive innovation threat such as e-commerce, there are companies that go out of existence, but also existing companies that seize the initiative and thrive in a digital environment. Often, these companies owe their existence to executives who had the foresight to see what was going to happen before it showed up in the financial results – and the legitimacy with their shareholders and their workforce to take action before everyone could see that it was necessary. Surprisingly often, these executives were not technical specialists – but they understood their business thoroughly, and that makes all the difference.