Really good New Yorker story from James Surowiecki on the “performance revolution” and how it’s gone from sports to the rest of the world. I particularly liked the way he connected sports to business:
A key part of the “performance revolution” in sports, then, is the story of how organizations, in a systematic way, set about making employees more effective and productive. This, as it happens, is something that other organizations started doing around the same time. Look at what happened in American manufacturing, a transformation that also has its origins in the nineteen-seventies. At the time, big American companies were in woeful shape. In the decades after the Second World War, they had faced almost no foreign competition, and typically had only a few domestic rivals. That made them enormously profitable but complacent about quality and productivity. The result was that, by the early nineteen-seventies, American productivity growth was stalling, while American products were often defect-ridden and unreliable. One study, in 1969, found that a third of the people who bought a new American car judged it to be in unsatisfactory condition when it was delivered.
Reminded me a bit of a great piece I read a few weeks ago on the “responsive enterprise” and how software changes this conversation around performance and improvement. A little snippet from that:
Software promotes agility by dramatically speeding up the feedback loop between output and input. In the past, companies could measure their performance every quarter, making it difficult to adjust quickly to changes in the environment. In contrast, Facebook ships new versions of its product multiple times a day, with enhancements and fixes determined by realtime feedback from actual use of the Web site. Companies such as Amazon and Booking.com continuously perform A/B testing or multi-armed bandit experiments on users to optimize purchase rates on their Web sites.
I’ve been reading quite a bit of Brian Arthur’s writing lately. He’s a “complexity economist” from the Santa Fe institute and a pretty interesting all around thinker. Need to put together a bigger writeup of his ideas, but wanted to share his steps on how technology forms the economy around itself from his book Complexity and the Economy:
The steps involved yield the following algorithm for the formation of the economy.
1. A novel technology appears. It is created from particular existing ones, and enters the active collection as a novel element.
2. The novel element becomes available to replace existing technologies and components in existing technologies.
3. The novel element sets up further “needs” or opportunity niches for supporting technologies and organizational arrangements.
4. If old displaced technologies fade from the collective, their ancillary needs are dropped. The opportunity niches they provide disappear with them, and the elements that in turn fill these may become inactive.
5. The novel element becomes available as a potential component in further technologies—further elements.
6. The economy—the pattern of goods and services produced and consumed—readjusts to these steps. Costs and prices (and therefore incentives for novel technologies) change accordingly.
It’s been a long while since I wrote anything here, going to see if I can get back on the horse.
Nate Silver on the parts of a chess match computers and humans excel at:
Both computer and human players need to break a chess game down into intermediate goals: for instance, capturing an opponent’s pawn or putting their king into check. In the middle of the match, once the pieces are locked in combat and threaten one another, there are many such strategic objectives available. It is a matter of devising tactics to accomplish them, and forecasting which might have the most beneficial effects on the remainder of the game. The goals of the opening moves, however, are more abstract. Computers struggle with abstract and open-ended problems, whereas humans understand heuristics like “control the center of the board” and “keep your pawns organized” and can devise any number of creative ways to achieve them.
I was reading this speech from Andy Grove, Intel chairman, from 1998 and while the whole thing is a bit hard to read, this bit about strategic inflection points and competition was quite interesting:
Some key warning signs that hint that the change you are dealing with make a Strategic Inflection Point is when it is clear to you that all of a sudden the company or the entity that you worry about has shifted. You have dealt with one particular company or establishment as a competitor all your life and all of a sudden you don’t care about them, you care about what somebody else thinks. I have this mental silver bullet test. If you had one bullet, who would you shoot with it? If you change the direction of the gun, that is one of the signals that you may be dealing with something more than an ordinary shift in the competitive landscape.
Last week I wrote a piece on AdAge revisiting Stock and Flow. If you’re interested you should read the whole thing, but here’s a snippet:
To answer that question, let’s start with what’s changed. The core social platforms, Facebook and Twitter, have continued to explode. Mobile has enabled a host of new social platforms such as Pinterest and Snapchat to grow at breakneck speed. LinkedIn has added informational content like LinkedIn Today, LinkedIn Influencer and sponsored updates. Google has built a massive social system with the deepest mobile integration of any platform we’ve ever seen (thanks to Google’s Android mobile operating system). “Native” advertising has come to the fore. And search and social have crashed together: According to SearchMetrics, seven of the top eight signals in social now come from search.