I had lunch on Wednesday with a friend whose company was using the Blue Ocean Strategy framework to evaluate their strategic positioning. Seems like the process was both well received by the management team and yielding some very useful insights within the management team.
Category: Business
Categories
Tyranny of the Experts
Scott Berkun posts about the tyranny of experts and other smart people, a recurring theme in my life.
From Studies in Intelligence, a declassified CIA journal:
The strengths of expertise can also be weaknesses. Although one would expect experts to be good forecasters, they are not particularly good at making predictions about the future. Since the 1930s, researchers have been testing the ability of experts to make forecasts. The performance of experts has been tested against actuarial tables to determine if they are better at making predictions than simple statistical models. Seventy years later, with more than two hundred experiments in different domains, it is clear that the answer is no. If supplied with an equal amount of data about a particular case, an actuarial table is as good, or better, than an expert at making calls about the future. Even if an expert is given more specific case information than is available to the statistical model, the expert does not tend to outperform the actuarial table.
The full essay talks about the paradox of using teams to balance against expert bias, the role of methedology, etc. The context of the essay is, you guessed it, CIA type intelligence gathering, but in reading this essay much of it applied to any kind of complex work.
The full essay is here.
Reminds me that Google’s hiring one heck of a lot of experts these days!
(Via Berkun blog.)
“Customers have a tendency to become like the kind of customers you treat them.”
So says Dave Martin in a great opinion piece about inspiring customer loyalty that’s posted on BankStocks.com.
Are your customers smart and loyal? Do you treat them that way? Hmm.
We recently had a telemarketing call from a certain unnamed monoline credit card issuer. This particular card issuer stumbled badly in the first quarter as a bunch of its customers paid down their outstanding credit card balances — probably a direct reflection of how this issuer had been treating them.
Anyway, our newfound friend the “account manager” (give me a break!) was calling to just see how we were doing, whether we might have some excess balances that we’d like to transfer to him or perhaps we’d even like to take out a mortgage on our house. We’ve cancelled our account with this issuer — a reflection of how we felt about “treatment”. Goodbye and good riddens!
Categories
Berkshire Notes
Over on Tom Brown’s Bankstocks.com, Matt Stichnoth does a nice job of taking notes from last weekend’s Berkshire Hathaway annual meeting. Words of wisdom from Warren Buffett:
Rule #1: Don’t run up charge card debt. That’s the first thing I tell students when I talk to them, and I tell them that if you remember nothing else, remember that.
What’s the best indicator of future success? How early in life you start your own business. A lot of success is based on your wiring—and a lot is based on how you work with the wiring you have. At Berkshire, our managers tend to have the right wiring. Some of them never say anything dumb about business. It’s wiring, and it’s temperament. You want to bet on those people.
Barry Diller’s spending almost $2 billion of his shareholders’ money to acquire Ask Jeeves, an online service that, quite frankly, I’ve NEVER EVER used. I consider myself pretty much an online addict — and I’ve simply never found any reason to use Ask Jeeves.
For the same reason, I was a bit surprised a few weeks back when Mark Fletcher sold his Bloglines to Ask Jeeves. It certainly doesn’t seem to me like I’m missing anything — but an awful lot of money is being thrown around for a service that I’ve never used — or, even missed!
Business Week has a great story about the Immelt revolution underway inside GE. In a sidebar Q&A interview, CEO Jeff Immelt discusses China:
China is really about infrastructure. There will be tremendous investments made in infrastructure, health care, energy, water, water, security. GE can approach China as one company and form a company-to-country relationship that’s bigger than any of the pieces.
We’re getting more comfortable with the rule of law. We’ve been careful so far. Our investments only trail our ability to understand what the rules are going to be. When I go there today, there’s a tremendous focus on the financial system. They’ve got external consultants working on it. China is not a slam dunk. But it’s right in GE’s sweet spot, so we’ve got to play and play big.
Howard French writes in this morning’s New York Times about respect for or lack thereof re: intellectual property rights in China using as his example GS Magic Stor’s 4 GB hard drive used in Apple’s iPod Mini.
In one sector after another, companies warn that China’s swift industrial rise is being greased by brazen and increasingly sophisticated theft of intellectual property.
Categories
Newspapers
Frank Ahrens writes in this morning’s Washington Post about the future of newspapers.
“Print is dead,” Sports Illustrated President John Squires told a room full of newspaper and magazine circulation executives at a conference in Toronto in November. His advice? “Get over it,” meaning publishers should stop trying to save their ink-on-paper product and focus on electronic delivery of their journalism.
At Glenbrook, we’re currently ramping up a new project focusing on the emerging payments infrastructure in China.
I’ll be in Shanghai (and potentially Beijing) the week of February 28th. If you’re in Shanghai that week, let me know and we’ll try to get together.
Should be fun!
Over on our sister site Payments News, we’re assessing the interest in a San Francisco Bay Area centric group of payments professionals that we’ve named BayPay.
If you qualify and would like to get involved, please send us an email and we’ll tell you how you can participate.