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High Velocity Decision-Making

Published by peter on 2017-04-12 in Decision theory, Getting-things-done intelligence, Project Management and Team working. 0 Comments

Amazon’s Jeff Bezos on decision making, in his 2016 Annual Letter to shareholders:

Day 2 companies make high-quality decisions, but they make high-quality decisions slowly. To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions. Easy for start-ups and very challenging for large organizations. The senior team at Amazon is determined to keep our decision-making velocity high. Speed matters in business – plus a high-velocity decision making environment is more fun too. We don’t know all the answers, but here are some thoughts.
First, never use a one-size-fits-all decision-making process. Many decisions are reversible, two-way doors. Those decisions can use a light-weight process. For those, so what if you’re wrong? I wrote about this in more detail in last year’s letter.
Second, most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.
Third, use the phrase “disagree and commit.” This phrase will save a lot of time. If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, “Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?” By the time you’re at this point, no one can know the answer for sure, and you’ll probably get a quick yes.
This isn’t one way. If you’re the boss, you should do this too. I disagree and commit all the time. We recently greenlit a particular Amazon Studios original. I told the team my view: debatable whether it would be interesting enough, complicated to produce, the business terms aren’t that good, and we have lots of other opportunities.They had a completely different opinion and wanted to go ahead. I wrote back right away with “I disagree and commit and hope it becomes the most watched thing we’ve ever made.” Consider how much slower this decision cycle would have been if the team had actually had to convince me rather than simply get my commitment.
Note what this example is not: it’s not me thinking to myself “well, these guys are wrong and missing the point,but this isn’t worth me chasing.” It’s a genuine disagreement of opinion, a candid expression of my view, achance for the team to weigh my view, and a quick, sincere commitment to go their way. And given that this team has already brought home 11 Emmys, 6 Golden Globes, and 3 Oscars, I’m just glad they let me in the roomat all!
Fourth, recognize true misalignment issues early and escalate them immediately.  Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision.
I’ve seen many examples of sincere misalignment at Amazon over the years. When we decided to invite third party sellers to compete directly against us on our own product detail pages – that was a big one. Many smart,well-intentioned Amazonians were simply not at all aligned with the direction. The big decision set up hundreds of smaller decisions, many of which needed to be escalated to the senior team.
“You’ve worn me down” is an awful decision-making process. It’s slow and de-energizing. Go for quick escalation instead – it’s better.
So, have you settled only for decision quality, or are you mindful of decision velocity too? Are the world’s trends tailwinds for you? Are you falling prey to proxies, or do they serve you? And most important of all, are you delighting customers? We can have the scope and capabilities of a large company and the spirit and heart of a small one. But we have to choose it.”

The Way

Published by peter on 2013-08-03 in Decision theory, Human intelligence, Humour and Project Management. 0 Comments

A recurring theme here has been the complexity of most important real-world decision-making, contrary to the models used in much of economics and computer science.   Some relevant posts are here, here, and here.    On this topic, I recently came across a wonderful cartoon by Michael Leunig, entitled “The Way” (click on the image to enlarge it):
Michael-Leunig-The-Way-2012
I am very grateful to Michael Leunig for permission to reproduce this cartoon here.

CIA and Sachs

Published by peter on 2013-06-02 in Economics, Intelligence and Espionage, Politics and Project Management. 0 Comments

I have been arguing against the ideas of wunderkind economist Jeffrey Sachs since his ruthless shock therapy advice in Latin America a quarter-century ago.  Now he has written some JFK hagiography which contains both errors of fact and interpretation.  We read:

Worse still, tensions intensified in the months between JFK’s election victory in November 1960 and his assumption of office on 20 January 1961. A long-awaited Khrushchev-Eisenhower summit failed when a CIA spy-plane was shot down in Soviet airspace just weeks before the scheduled meeting. This was par for the course: no agency did more damage more consistently to the cause of peace than the malign and bungling CIA. But Eisenhower compounded the CIA’s damage by brazenly denying the spy mission, only to have the Soviets produce both the plane’s wreckage and the captured US pilot for a global audience.
Kennedy came into office in 1961 hoping to reach a series of arms-control treaties with the Soviet Union, specifically a ban on nuclear arms testing to be followed by a nuclear non-proliferation treaty. Yet as an initially inexperienced leader, JFK drifted with events instead of leading them. The CIA reprised its spy plane bungling in a far larger and more dangerous debacle, by staging an invasion of Cuba by Cuban exiles. When the attempt immediately collapsed on the beach of the Bay of Pigs, Kennedy repeated Eisenhower’s blunder by brazenly (and ridiculously) lying to Khrushchev about the US role in the attempted invasion.”

Although planning for the Bay of Pigs operation began before Kennedy became President, he had had plently of time to cancel it.  Moreover, the White House – and he, JFK!, himself personally – interfered in its planning right up to the actual event.   Indeed, the specific site in Cuba of the invasion was changed – at JFK’s order, and despite CIA’s great reluctance – just 4 days before the scheduled date.   Afterwards, JFK knew that he was the one ultimately responsible for its failure – responsible not merely in a hierarchical or legal sense, but actually, morally and operationally, responsible, and to his credit he took public responsibility for the operation.   He did still later sack the leadership of CIA, though, since somebody needed to be punished for his failure.   But his hagiographers and those who wish to attack CIA continue to put all the blame on “CIA bungling”, while the anti-Kennedy right usually blame the failure of the operation on Kennedy’s repeated refusal to provide USAF air cover  for the invaders as they fought on the beach.
The chief problem of the Bay of Pigs, as I have remarked before (here and here), was not poor planning or ineffective operations or betrayal by JFK, but was existential:  the operation’s aim was to convince the Castro regime that Cuba was being invaded by the full overhwelming might of the USA military and to thus scare them into running away, without actual US forces invading anything.    To have used actual US military forces (including USAF airplanes) would have risked the operation escalating into a major conflagration with the USSR, Cuba’s supporters.   A similar bluffing game had worked for CIA in Guatamela in 1954, but Fidel Castro was made of sterner stuff than Jacobo Arbenz, and he called the US’s bluff.    To say the failure was merely due to “bungling” by CIA betrays both a lack of knowledge of the facts of the operation, and a lack of understanding of its Cold War context, when small events in far-away places often had global ramifications.
And the shooting-down of the U2 spy plane?   Another bungle?  “no agency did more damage more consistently to the cause of peace than the malign and bungling CIA”?  I’ve not done a survey of the activities US Government agencies in the Cold War period, so I could not possibly argue that there were not other US government agencies with worse records of damage to peace than that of CIA.    However, I’m sure Sachs hasn’t done a survey either, so I will take this statement as exaggerated for rhetorical effect.   But even excluding the comparison, did CIA’s activies consistently damage the cause of peace?    In a war, it is vital for each side to understand the enemy’s plans and intentions.   This is even more so in a cold war, when much offensive and defensive activity may be undertaken indirectly or through proxies or be part of some long-term game of influence.   For the West, spy agencies such as CIA played the major part in understanding the enemy’s motivating beliefs and their plans and intentions.   (The same role was played by KGB and its sister agencies for the Eastern bloc.)  The U2 plane shot down was part of a long-term, high-altitude espionage program that  provided the West with valuable information about Soviet activities not otherwise obtainable.  U2 spy planes run by CIA, for instance, first told the US Government in September and October 1962 that there were Soviet long-range missiles being installed in Cuba.  
Again, to ignore or overlook this function betrays a lack of understanding of the nature of the Cold War context, when knowledge about the enemy and their actual, true, beliefs and intentions was hard to come by – for both sides.   Arguably, no agencies did more to advance the cause of peace, and to prevent the Cold War escalating into a hot one, than CIA and KGB.

The semantics of communication

Published by peter on 2012-06-16 in Argumentation, Joint-Action Society, Philosophy of Language and Project Management. 0 Comments

A recent incident reminded me of Nicolas Negroponte’s argument that a single wink (one bit of information) may communicate effectively between two people, and yet require a thousand words to explain to someone else.
The scene: A small group meeting of 5 people (an EC research proposal review meeting), none of whom know each other or have worked together before. The meeting chair, let’s call her Alice, wants another person, Bob, to endorse a particular outline plan of action. This plan does not entail him doing anything, but he is nonetheless resistant, and puts forward both reasonable and unreasonable justifications for not endorsing the plan. Alice tries another couple of arguments, but each of these meets similar resistance from Bob. At this point, Alice does not know what the rest of us think about her plan or Bob’s opinion of it.
Having heard the two sides, I decide that Alice is correct and that Bob should endorse the plan. But Alice, I believe, has not used the best arguments in favour of his doing so, and thus I add my voice to her side, giving a new argument to justify Bob changing his opinion. My argument fails with Bob, but leads Alice to think of a further argument, and both our arguments together have a consequence that completely rebuts Bob’s reasonable main defence for non-endorsement. When she presents this line (my argument + her argument + their joint consequence) to him, Bob wilts and agrees to endorse Alice’s plan.
However, just before Alice presents this line to Bob, she shoots me a quick look of conspiratorial deviousness, as if to say, “We got him, you and I, and in getting him, we have demonstrated our intellectual superiority and mental agility over him. Although we just met, we two have conspired effectively and enjoyably together.” It was a look of the most profound respect – a connection between equals, in the presence of someone whose persistent and unreasonable resistance to a reasonable proposal had revealed himself to be less committed to the agreed purpose of the meeting.  And receiving it was the most profound of pleasures.

Tim Harford at LSE: Dirigisme in action

Published by peter on 2011-06-11 in Decision theory, Economics, Forecasting, Global Economic Crisis and Project Management. 0 Comments

This week I heard economic journalist Tim Harford talk at the London School of Economics (LSE), on a whirlwind tour (7 talks, I think he told us, this week) to promote his new book.   Each talk is on one topic covered in the book, and at LSE he talked about the GFC and his suggestions for preventing its recurrence.

Harford’s talk itself was chatty, anecdotal, and witty.    Economics is still in deep thrall to its 19th century fascination with physical machines, and this talk was no exception.   The anecdotes mostly concerned Great Engineering Disasters of our time, with Harford emphasizing the risks that arise from tightly-coupling of components in systems and, ironically, frequent misguided attempts to improve their safety which only worsen it.

Anecdotal descriptions of failed engineering artefacts may have relevance to the preventing a repeat of the GFC, but Harford did not make any case that they do.  He just gave examples from engineering and from financial markets, and asserted that these were examples of the same conceptual phenomena.    However, as metaphors for economies machines and mechanical systems are worse than useless, since they emphasize in people’s minds, especially in the minds of regulators and participants, mechanical and stand-alone aspects of systems which are completely inappropriate here.  

Economies and marketplaces are NOT like machines, with inanimate parts whose relationships are static and that move when levers are pulled, or effects which can be known or predicted when causes are instantiated, or components designed centrally to achieve some global objectives.  Autonomous, intelligent components having dynamic relationships describes few machines or mechanical systems, and certainly none from the 19th century.   

A better category of failure metaphors would be ecological and biological.   We introduce cane toads to North Queensland to prey upon a sugar cane pest, and the cane toads, having no predators themselves,  take over the country.    Unintended and unforeseen consequences of actions, not arising merely because the  system is complex or its parts tightly-coupled, but arise because the system comprises multiple autonomous and goal-directed actors with different beliefs, histories and motivations, and whose relationships with one another change as a result of their interactions.  

Where, I wanted to shout to Harford, were the ecological metaphors?  Why, I wanted to ask, does this 19th-century fascination with deterministic, centralized machines and mechanisms persist in economics, despite its obvious irrelevance and failings? Who, if not rich FT journalists with time to write books, I wanted to know, will think differently about these problems?

Finally, only economists strongly in favour of allowing market forces to operate unfettered would have used the dirigismic methods that the LSE did to allocate people to seats for this lecture.  We were forced to sit in rows in our order of arrival in the auditorium. Why was this?  When I asked an usher for the reason, the answer I was given made no sense:   Because we expect a full hall.    Why were the organizers so afraid of allowing people to exercise their own preferences as to where to sit?  We don’t all have the same hearing and sight capabilities, we don’t all have the same preferences as to side of the hall, or side  of the aisle, etc. We don’t all arrive in parties of the same size.  We don’t all want to sit behind a tall person or near a noisy group.

The hall was not full, as it happened, so we were crammed into place in part of the hall like passive objects in a consumer choice model of voting, instead of as free, active citizens in a democracy occupying whatever position we most preferred of those still available.  But even if the hall had been full, there are less-centralized and less-unfriendly methods of matching people to seats.  The 20 or so LSE student ushers on hand, for instance, could been scattered about the hall to direct latecomers to empty seats, rather than lining the aisles like red-shirted troops to prevent people sitting where they wanted to.

What hope is there that our economic problems will be solved when the London School of Economics, of all places, uses central planning to sit people in public lectures?

Update: There is an interesting critical review of Harford’s latest book, here.

Red River

Published by peter on 2011-01-30 in Film, Getting-things-done intelligence and Project Management. 0 Comments

One of my favourite films is Howard Hawks’ Red River (1948), which pitted John Wayne against Montgomery Clift.   I came across an insightful review of the movie by Roderick Heath, here. The one aspect of the movie not mentioned in that review is the context in which the movie was made, immediately after World War II.    At the time, the allies had large military forces being demobilized, with men – they were mostly men – returning with all deliberate speed to civilian life.  Many of these men had played responsible and important roles in the war effort, roles requiring intelligence, personal initiative, courage, and the leadership of others.  They returned to Civvy Street to find senior management posts occupied by the generation before them, and only subordinate roles available for themselves; they were often immensely frustrated.  I once heard of a businessman’s club memorial dedicated To the Men Whose Sons had Given Their Lives in World War II, which sums up for me the self-regard of the elder of these two generations.
With this context in mind, I see Red River as a parable about the struggle between the two generations for the control of business and society in the post-war world.   Clift’s caring and listening leadership style resonated much more with returning military men than Wayne’s deaf and inflexible approach, as it does also in the film with Wayne’s cattle drovers.   In Japan and Germany, of course, the generation before had made a mess of things, and so there were greater opportunities in the post-war period for the next generation to take immediate charge.

On Getting Things Done

Published by peter on 2011-01-27 in Anthropology, Argumentation, Getting-things-done intelligence, Joint-Action Society, Planning, Project Management and Team working. 0 Comments

New York Times Op-Ed writer, David Brooks, has two superb articles about the skills needed to be a success in contemporary technological society, the skills I refer to as Getting-Things-Done Intelligence.  One is a short article in The New York Times (2011-01-17), reacting to the common, but wrong-headed, view that technical skill is all you need for success, and the other a long, fictional disquisition in The New Yorker (2011-01-17) on the social skills of successful people.  From the NYT article:

Practicing a piece of music for four hours requires focused attention, but it is nowhere near as cognitively demanding as a sleepover with 14-year-old girls. Managing status rivalries, negotiating group dynamics, understanding social norms, navigating the distinction between self and group — these and other social tests impose cognitive demands that blow away any intense tutoring session or a class at Yale.
Yet mastering these arduous skills is at the very essence of achievement. Most people work in groups. We do this because groups are much more efficient at solving problems than individuals (swimmers are often motivated to have their best times as part of relay teams, not in individual events). Moreover, the performance of a group does not correlate well with the average I.Q. of the group or even with the I.Q.’s of the smartest members.
Researchers at the Massachusetts Institute of Technology and Carnegie Mellon have found that groups have a high collective intelligence when members of a group are good at reading each others’ emotions — when they take turns speaking, when the inputs from each member are managed fluidly, when they detect each others’ inclinations and strengths.
Participating in a well-functioning group is really hard. It requires the ability to trust people outside your kinship circle, read intonations and moods, understand how the psychological pieces each person brings to the room can and cannot fit together.
This skill set is not taught formally, but it is imparted through arduous experiences. These are exactly the kinds of difficult experiences Chua shelters her children from by making them rush home to hit the homework table.”

These articles led me to ask exactly what is involved in reading a social situation?  Brooks mentions some of the relevant aspects, but not all.   To be effective, a manager needs to parse the social situation of the groups he or she must work with – those under, those over and peer groups to the side – to answer questions such as the following:

  • Who has power or influence over each group?  Is this exercised formally or informally?
  • What are the norms and practices of the group, both explicit and implicit, known and unconscious?
  • Who in the group is reliable as a witness?   Whose stories can be believed?
  • Who has agendas and what are these?
  • Who in the group is competent or capable or intelligent?  Whose promises to act can be relied upon?  Who, in contrast, needs to be monitored or managed closely?
  • What constraints does the group or its members operate under?  Can these be removed or side-stepped?
  • What motivates the members of the group?  Can or should these motivations be changed, or enhanced?
  • Who is open to new ideas, to change, to improvements?
  • What obstacles and objections will arise in response to proposals for change?  Who will raise these?  Will these objections be explicit or hidden?
  • Who will resist or oppose change?  In what ways? Who will exercise pocket vetos?

Parsing new social situations – ie, answering these questions in a specific situation – is not something done in a few moments.  It may take years of observation and participation to understand a new group in which one is an outsider.  People who are good at this may be able to parse the key features of a new social landscape within a few weeks or months, depending on the level of access they have, and the willingness of the group members to trust them.     Good management consultants, provided their sponsors are sufficiently senior, can often achieve an understanding within a few weeks.   Experience helps.
Needless to say, most academic research is pretty useless for these types of questions.  Management theory has either embarked on the reduce-and-quantify-and-replicate model of academic psychology, or else undertaken the narrative descriptions of successful organizations of most books by business gurus.   Narrative descriptions of failures would be far more useful.
The best training for being able to answer such questions – apart from experience of life – is the study of anthropology or literature:  Anthropology because it explores the social structures of other cultures and the factors within a single lifetime which influence these structures, and Literature because it explores the motivations and consequences of human actions and interactions.   The golden age of television drama we are currently fortunate to be witness to also provides good training for viewers in human motivations, actions and interactions.  It is no coincidence, in my view, that the British Empire was created and run by people mostly trained in Classics, with its twofold combination of the study of alien cultures and literatures, together with the analytical rigor and intellectual discipline acquired through the incremental learning of those difficult subjects, Latin and Ancient Greek languages.
UPDATE (2011-02-16): From Norm Scheiber’s profile of US Treasury Secretary Timothy Geithner in The New Republic (2011-02-10):

“Tim’s real strength … is that he’s really quick at reading the culture of any institutions,” says Leslie Lipschitz, a former Geithner deputy.

The profile also makes evident Geithner’s agonistic planning approach to policy – seeking to incorporate opposition and minority views into both policy formation processes and the resulting policies.

Complex Decisions

Published by peter on 2010-06-27 in Decision theory, Economics, Forecasting, Game theory, Joint-Action Society, Market planning, Military strategy, Planning, Project Management and Team working. 0 Comments

Most real-world business decisions are considerably more complex than the examples presented by academics in decision theory and game theory.  What makes some decisions more complex than others? Here I list some features, not all of which are present in all decision situations.

  • The problems are not posed in a form amenable to classical decision theory.

    Decision theory requires the decision-maker to know what are his or her action-options, what are the consequences of these, what are the uncertain events which may influence these consequences, and what are the probabilities of these uncertain events (and to know all these matters in advance of the decision). Yet, for many real-world decisions, this knowledge is either absent, or may only be known in some vague, intuitive, way. The drug thalidomide, for example, was tested thoroughly before it was sold commercially – on male and female human subjects, adults and children. The only group not to be tested were pregnant women, which were, unfortunately, the main group for which the drug had serious side effects. These side effects were consequences which had not been imagined before the decision to launch was made. Decision theory does not tell us how to identify the possible consequences of some decision, so what use is it in real decision-making?

  • There are fundamental domain uncertainties.

    None of us knows the future. Even with considerable investment in market research, future demand for new products may not be known because potential customers themselves do not know with any certainty what their future demand will be. Moreover, in many cases, we don’t know the past either. I have had many experiences where participants in a business venture have disagreed profoundly about the causes of failure, or even success, and so have taken very different lessons from the experience.

  • Decisions may be unique (non-repeated).

    It is hard to draw on past experience when something is being done for the first time. This does not stop people trying, and so decision-making by metaphor or by anecdote is an important feature of real-world decision-making, even though mostly ignored by decision theorists.

  • There may be multiple stakeholders and participants to the decision.

    In developing a business plan for a global satellite network, for example, a decision-maker would need to take account of the views of a handful of competitors, tens of major investors, scores of minor investors, approximately two hundred national and international telecommunications regulators, a similar number of national company law authorities, scores of upstream suppliers (eg equipment manufacturers), hundreds of employees, hundreds of downstream service wholesalers, thousands of downstream retailers, thousands or millions of shareholders (if listed publicly), and millions of potential customers. To ignore or oppose the views of any of these stakeholders could doom the business to failure. As it happens, Game Theory isn’t much use with this number and complexity of participants. Moreover, despite the view commonly held in academia, most large Western corporations operate with a form of democracy. (If opinions of intelligent, capable staff are regularly over-ridden, these staff will simply leave, so competition ensures democracy. In addition, good managers know that decisions unsupported by their staff will often be executed poorly, so success of a decision may depend on the extent to which staff believe it has been reached fairly.) Accordingly, all major decisions are decided by groups or teams, not at the sole discretion of an individual. Decision theorists, it seems to me, have paid insufficient attention to group decisions: We hear lots about Bayesian decision theory, but where, for example, is the Bayesian theory of combining subjective probability assessments?

  • Domain knowledge may be incomplete and distributed across these stakeholders.
  • Beliefs, goals and preferences of the stakeholders may be diverse and conflicting.
  • Beliefs, goals and preferences of stakeholders, the probabilities of events and the consequences of decisions, may be determined endogenously, as part of the decision process itself.

    For instance, economists use the term network good to refer to a good where one person’s utility depends on the utility of others. A fax machine is an example, since being the sole owner of fax is of little value to a consumer. Thus, a rational consumer would determine his or her preferences for such a good only AFTER learning the preferences of others. In other words, rational preferences are determined only in the course of the decision process, not beforehand.  Having considerable experience in marketing, I contend that ALL goods and services have a network-good component. Even so-called commodities, such as natural resources or telecommunications bandwidth, have demand which is subject to fashion and peer pressure. You can’t get fired for buying IBM, was the old saying. And an important function of advertising is to allow potential consumers to infer the likely preferences of other consumers, so that they can then determine their own preferences. If the advertisement appeals to people like me, or people to whom I aspire to be like, then I can infer that those others are likely to prefer the product being advertized, and thus I can determine my own preferences for it. Similarly, if the advertisement appeals to people I don’t aspire to be like, then I can infer that I won’t be subject to peer pressure or fashion trends, and can determine my preferences accordingly.
    This is commonsense to marketers, even if heretical to many economists.

  • The decision-maker may not fully understand what actions are possible until he or she begins to execute.
  • Some actions may change the decision-making landscape, particularly in domains where there are many interacting participants.

    A bold announcement by a company to launch a new product, for example, may induce competitors to follow and so increase (or decrease) the chances of success. For many goods, an ecosystem of critical size may be required for success, and bold initiatives may act to create (or destroy) such ecosystems.

  • Measures of success may be absent, conflicting or vague.
  • The consequences of actions, including their success or failure, may depend on the quality of execution, which in turn may depend on attitudes and actions of people not making the decision.

    Most business strategies are executed by people other than those who developed or decided the strategy. If the people undertaking the execution are not fully committed to the strategy, they generally have many ways to undermine or subvert it. In military domains, the so-called Powell Doctrine, named after former US Secretary of State Colin Powell, says that foreign military actions undertaken by a democracy may only be successful if these actions have majority public support. (I have written on this topic before.)

  • As a corollary of the previous feature, success of an action may require extensive and continuing dialog with relevant stakeholders, before, during and after its execution.

    This is not news to anyone in business.

  • Success may require pre-commitments before a decision is finally taken.

    In the 1990s, many telecommunications companies bid for national telecoms licences in foreign countries. Often, an important criterion used by the Governments awarding these licences was how quickly each potential operator could launch commercial service. To ensure that they could launch service quickly, some bidders resorted to making purchase commitments with suppliers and even installing equipment ahead of knowing the outcome of a bid, and even ahead, in at least one case I know, of deciding whether or not to bid.

  • The consequences of decisions may be slow to realize.

    Satellite mobile communications networks have typically taken ten years from serious inception to launch of service.  The oil industry usually works on 50+ year cycles for major investment projects.  BP is currently suffering the consequence in the Gulf of Mexico of what appears to be a decades-long culture which de-emphasized safety and adequate contingency planning.

  • Decision-makers may influence the consequences of decisions and/or the measures of success.
  • Intelligent participants may model each other in reaching a decision, what I term reflexivity.

    As a consequence, participants are not only reacting to events in their environment, they are anticipating events and the reactions and anticipations of other participants, and acting proactively to these anticipated events and reactions. Traditional decision theory ignores this. Following Nash, traditional game theory has modeled the outcomes of one such reasoning process, but not the processes themselves. Evolutionary game theory may prove useful for modeling these reasoning processes, although assuming a sequence of identical, repeated interactions does not strike me as an immediate way to model a process of reflexivity.  This problem still awaits its Nash.

In my experience, classical decision theory and game theory do not handle these features very well; in some cases, indeed, not at all.  I contend that a new theory of complex decisions is necessary to cope with decision domains having these features.

Silicon millenarianism

Published by peter on 2010-06-18 in Corporate culture, Getting-things-done intelligence, Joint-Action Society, Project Management and Prophecy. 0 Comments

Here we go again! We have another blogger predicting the end of the office.   Funny how it’s almost always bloggers and journalists and thinktank-swimmers doing this – always people whose work, most of the time, is by themselves, and who therefore fail to understand the nature of actual work in modern organizations.   As I’ve argued before, workplace interactions are primarily about the co-ordination of actions and the assessment of people’s intentions concerning these actions, not (or not merely) about sharing information.  Why did Barack Obama summon the Chairman and CEO of BP to the Oval Office earlier this week?  Why was the CEO also called to testify before Congress?   Why didn’t the President or the Congressional Committee simply place a conference call?  Because it is very difficult, perhaps even impossible, to accurately assess another person’s intentions without immediate physical proximity and face-to-face interaction with said person.
If all you are doing is writing a blog or researching a story, perhaps you don’t ever appreciate this fact about work.  But anyone tasked with doing something other than writing knows it.   Seth Goodin thinks that within 10 years TV programs about office work will seem to be “quaint antiques”.  I bet him they will not at all.  Moreover, I bet the people in those offices will still be using paper, still having meetings, and still talking by the water-cooler.   In fact, while you’re placing my bets, put me down for 100 years, not 10.

Bonuses yet again

Published by peter on 2009-09-09 in Africa, Corporate culture, Decision theory, Forecasting, Market planning, Planning and Project Management. 0 Comments

Alex Goodall, over at A Swift Blow to the Head, has written another angry post about the bonuses paid to financial sector staff. I’ve been in several minds about responding, since my views seem to be decidedly minority ones in our present environment, and because there seems to be so much anger abroad on this topic.  But so much that is written and said, including by intelligent, reasonable people such as Alex, mis-understands the topic, that I feel a response is again needed.  It behooves none of us to make policy on the basis of anger and ignorance.
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