Homo economicus mortus est? (Who needs economists?)
by Eric Garland
Does anybody need economists?
This is the subject of a fascinating polemic raised by our colleague Gregor MacDonald. He notes, in an incredible understatement, “economists don’t ‘do’ energy.” They are content to set Keynes and Hayek in a never-ending cage match over monetarism versus free markets, while petroleum dwindles, Boomers retire, technology flattens work hierarchies – while real things are actually happening.
Some of the debate is set off by the paper embedded below by a Federal Reserve Bank economist. As the title indicates, he doesn’t think much of the input of non-specialists. We then have a similar question for his profession – how is it that we all participate in economic activity, and only you feel qualified to comment on it? And while we’re on the subject, why didn’t you predict an absurdly obvious bubble and subsequent crash?
Some things are too difficult for the laity to understand. Most of the hard sciences are really impossible to comprehend to outsiders, and news reports on their breakthroughs are often comically misunderstood. But is economics a hard science? Isn’t it a social science based around people trading things? Can we discuss our economy without the need for technocrats of this sort?
One hundred and five deadly cognitive traps to avoid
by Eric Garland
Everybody wants a profitable, just, humane, creative, interesting, healthy future – it’s just that while we are working in groups to achieve it, a bunch of other stuff happens along the way. Such is life in a world defined by bureaucracy, and instead of complaining about it, we need to realize why we’re having so much trouble actually thinking about the future. Until we recognize our collective problems, all the trends and scenarios in the world won’t help us create organizations with a strong sense of foresight.
The above statement is the central thesis for my next book, which will be a detailed, rich manual on exactly how NOT to study the future. I have identified twenty-five common traps into which leaders fall when attempting to think about the future. Before you get flogged with any more reports about nanogenetics or the rise of the Ghanaian automobile industry or reports on cell phones implanted in your molars, we need to look back at the past fifty years of futurism and see why it didn’t necessarily result in a world full of visionary futurists.
Given my new mission, I was excited to find this beautifully-presented look at cognitive bias in groups. The authors outline for us all the ways our group dynamics can result in dangerously inaccurate thoughts about the future:
- The 19 social biases
- The 8 memory biases
- The 42 decision-making biases
- The 36 probability/belief biases
I love this presentation in the way in does not invite to blame or ridicule – these are natural phenomena that occur within groups of people. I may have committed 75 of these mistakes before breakfast myself – it’s that easy. When we come around to such self-analysis with a touch of humor and understanding, we may finally be in a position to move on to organizations that are more sophisticated and more effective.
Cognitive Biases – A Visual Study Guide by the Royal Society of Account Planning
The future of corporate espionage and security
by Eric Garland
Corporate espionage. Security. Keeping your precious trade secrets from The Bad Guys, whether they be competitors or government agents looking to destabilize your economy.
This. Is. Serious. Stuff! Just ask Washington’s Eamon Javers, who just published Broker, Trader, Lawyer, Spy, about the use of former MI5, CIA, and KGB agents in the corporate wars over market share in the chocolate toy segment. Spies are involved!
He’s even on the Daily Show, the highwater mark of all important information.
| The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
| Eamon Javers | ||||
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So again, This Is Serious Stuff. Kids, break out your Cold War Mindsets!
This past weekend I spoke at the George Washington University’s graduate program for high-tech security to discuss the future of intelligence. As the professors expect, I take this from a much more broad perspective, bringing competitive intelligence, futures studies, scenario planning, stochastic thinking, and general irreverence into a bouillabaise we call Intelligence 2.0.
The real news piece here is that I am excited for the next generation of leaders. The dialogue that ensued among these future security professionals was broad-ranging, insightful, and fun. We’ll need plenty of all three in order to meet the needs of organizations that exist in a world of pervasive media, and these young people seem up to the challenge.
Some major points that came out of our dialogue:
- A command-and-control mindset about information will not fit with a world of social media – the goal will be to limit risk for a certain number of activities, not to funnel all information through one conduit.
- Asymmetry of analysis will be more important than asymmetry of information – it’s not who collects the most data, but who is the best at deriving insights who will be most effective.
- A corporate culture of constantly hiring and downsizing employees with decreasing levels of engagement is no recipe for data security – many corporations are begging for their data to hit the wild Internet through shoddy HR practices.
- The shift to Gen X management will be huge – while Boomers came up on strictly hierarchical, militaristic command structures, Gen X and Y believe much more in sharing information, decisionmaking power, even credit. This will change what “secure” means in the future.
- Increasingly multinational corporations are turning to nation-state legal apparatuses to enforce their own security needs – even though the economic benefit will not necessary transfer to the nation-state in question. Over time, tension will increase about this issue.
Not bad for a grad school class on a Saturday before lunch, am I right? If these are our future leaders, I couldn’t feel any more secure.
Post-modern management: Partnership more important than leadership in 2010
by Eric Garland
Professor Karl Moore from McGill, who did that interview with Michael Porter the other day on the future of business’ role in society, is back with a TED talk he gave on the future of post-modern management. He notes that as the internet creates a system of “algorithmic authority” and tears down the rigidity of authority, “leadership” and “management” will have less impact on team-building than partnership, especially for those under age thirty-five.
Given the role of larger and larger bureaucracies in many key industries, this reality will be quite disruptive.
Michael Porter: Business must recognize its interconnected role in society
This is a timely and very mature view on the changing role of business in society. Michael Porter, still the world’s leading authority on traditional business strategy, leaps out and asks some fascinating questions of private industry as a whole: does it realize the difference between its narrow self-interest and the broader society to which it is indelibly interconnected?
I particularly like how he distinguishes between multiple levels of not understanding social interconnection and responsibility. One end of the spectrum, you have the Madoffs and “banksters” of the world, pathologically removing value from society and giving absolutely nothing back. Toward the grey zone, you have businesses who may profit while destroying the social and economic fabric of the places around them, throwing on some charitable giving as a band-aid.
This talk is an important signal to private industry. Clearly, the lack of connection between business and society is so great that you not only have the occasional death threat on banking executives for taking bonuses straight from the US federal treasury, you have well-paid, world-famous consultants actually asking the question, “So why do we even have business, anyway?” Seriously, Michael Porter isn’t exactly a Trotskyite radical.
This isn’t connectivity for the sake of feeling good, it is a methodology that will lead you to provide value to your customers and withstand the forces of competition. Superconnection is the future.
The revolution of algorithmic authority
by Eric Garland
Clay Shirky recently began exploring a significantly important idea in Intelligence 2.0, that of algorithmic authority, a new form of trust that befits the complex informational environment of the 21st century. For those of us who assemble large amounts of data for decision makers, authority is critical, and it is under major stress due to the Internet. Until recently, you could help leaders make the most informed decisions by assembling the most authoritative sources, interpret the implications of that data, and go forth understanding several potential courses of action. Today, we must also add a new dimension – evaluating the validity of the information as the barriers to entry fall in the world of printing and distribution. Shirky’s theory helps us in this regard:
Algorithmic authority is the decision to regard as authoritative an unmanaged process of extracting value from diverse, untrustworthy sources, without any human standing beside the result saying “Trust this because you trust me.” This model of authority differs from personal or institutional authority, and has, I think, three critical characteristics.
First, it takes in material from multiple sources, which sources themselves are not universally vetted for their trustworthiness, and it combines those sources in a way that doesn’t rely on any human manager to sign off on the results before they are published. This is how Google’s PageRank algorithm works, it’s how Twitscoop’s zeitgeist measurement works, it’s how Wikipedia’s post hoc peer review works. At this point, its just an information tool.
Second, it produces good results, and as a consequence people come to trust it. At this point, it’s become a valuable information tool, but not yet anything more.
The third characteristic is when people become aware not just of their own trust but of the trust of others: “I use Wikipedia all the time, and other members of my group do as well.” Once everyone in the group has this realization, checking Wikipedia is tantamount to answering the kinds of questions Wikipedia purports to answer, for that group. This is the transition to algorithmic authority.
Arik Johnson on the organizations of the future
by Eric Garland
The most important implications of any strategic trend is usually not that your organization must do something drastic, it is that your organization is obsolete and can’t respond effectively at all.
Case in point: newspapers and the Internet. It’s not so much that newspapers could have done something to maintain their business model of classified advertising, it’s that they need a brand new business model and structure to survive. If that is the major implication of the trends we track as strategic analysts, then we almost must develop skills to help organizations change quickly and painlessly.
On that note, check out this talk from Aurora WDC’s Arik Johnson on the future of organizations, recorded at last month’s Intelligence Collaborative meeting in Washington.
August Jackson: Be the change you want to see in the intelligence profession
by Eric Garland
A sneak preview of August Jackson’s presentation at the inaugural Intelligence Collaboration meeting coming up this Thursday.
An introduction to the Intelligence Collaborative
by Eric Garland
I’m very excited for our upcoming inaugural meeting, this Thursday of our new, increasingly global, professional society, The Intelligence Collaborative.
The following video explains what intelligence is, why we need to collaborate, and why now is the perfect moment.
Have a look at the video, and if you’re anywhere in the MidAtlantic region, consider a trip to our nation’s capital this Thursday. Tickets are free – just bring your interest in how social media will change the practice of intelligence.
Interview with Arik Johnson on the future of competitive intelligence
by Eric Garland
It is more than enough work thinking about how the world is changing. Exceedingly few people think about how people think 
about the changing world. I’m proud to say I know some great folks who are on the cutting edge of understanding intelligence and decision making. Here, we’ve got a copy of the latest Competitive Intelligence Podcast, the brainchild of August Jackson. This time, he’s interviewing our friend and colleague Arik Johnson of the intelligence consulting firm Aurora WDC, on his view of the present and future of intelligence and its effect on leadership. The interview is broad ranging
- A new paradigm of intelligence: scarcity of analysis instead of scarcity of information
- The “perpetual beta” mindset, one of rapidly-changing technology and reduced barriers to entry
- The next decade of competitive intelligence: CI 2020
- CI’s evolving role as a mechanism and process to correct for cognitive bias
- The importance of a customer-centric model in delivering intelligence
It’s a great year to revisit our assumptions on how decisions are made. This is a great discussion to get you kicked off.
About Eric Garland
Eric is one of the world's pre-eminent thoughtleaders in forecasting and strategy. He helps leaders of business and government make critical decisions about their futures.Connect with us
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