jerryking + incentives   31

How to keep creative geniuses in check and in profit
March 10, 2019 | Financial Times | by Andrew Hill.

The story of how Eastman Kodak invented a digital camera in 1975 but failed to develop it is one of the most notorious misses in the annals of innovation. (It’s more complicated than that, but never mind.)

Polaroid, the instant-photo pioneer, took a slower path to the technology: its first digital camera appeared only in 1996. It filed for bankruptcy in 2001, 11 years before Kodak.
Polaroid’s founding genius, Edwin Land, could, though, have been first to the digital party. In 1971, as part of a secret panel advising the US president, he advocated digital photography, which the US eventually adopted for its spy satellites.
But Land was blind to the promise of digital cameras for the consumer.

This tale of failures of leadership, innovation and organisation is well told by Safi Bahcall, a physicist, former consultant and biotech entrepreneur, in Loonshots. There are four types of failure:
(1) Leadership failure. Edwin Land was guilty of leading his company into a common trap: only ideas approved by an all-powerful leader advance until at last a costly mis-step trips up the whole company.
(2) Innovation failure. Bahcall distinguishes between product-type and strategy-type innovation. Classic P-type innovators are the folks at innovation conferences conversing about new gadgets with less attention being paid to the analysis of innovative business models. Indeed, at some forums, P-type innovations also crowd the lobby. Delegates line up to try the latest shiny robot, electric car, or 3D printer.

(3) Organizational failure. Loonshots is based, refreshingly, on the idea culture does not necessarily eat strategy for breakfast. In fact, bad structure eats culture. Bahcall gives this a scientific foundation, explaining that successful teams and companies stagnate in the same way water turns to ice. A perfectly balanced innovative company must try to keep the temperature at the point where free-flowing bright ideas are not suddenly frozen by bureaucracy. How? Since the success of Bell Labs, companies have been told they should set up “a department of loonshots run by loons, free to explore the bizarre” separately from the parent. The key, though, is to ensure chief executives and their managers encourage the transfer of ideas between the mad creatives in the lab and the people in the field, and (the culture part) ensure both groups feel equally loved.

As for the assumption companies always ossify as they get larger, that risk can be mitigated by adjusting incentives, curbing office politics, and matching skills to projects, for which Loonshots offers a detailed formula.

Success also requires a special type of leader — not a visionary innovator but a “careful gardener”, who nurtures the existing franchise and the new projects. Though not himself an inventor, Steve Jobs, in his second phase at Apple, arguably achieved the right balance. He also spotted the S-type potential of iTunes. Even if Tesla’s Elon Musk is not losing that balance, in his headlong, top-down pursuit of loonshot after loonshot, he does not strike me as a born gardener.

Persuading charismatic geniuses to give up their role as leaders of organisations built on their inventions is hard. Typically, such people figure out themselves how to garden, as Jobs did; or they are coached by the board, which may install veteran executives to help; or they may be handed the title of “chief innovator” or “chief scientist” and nudged aside for a new CEO.

(4) They may find themselves peddling a fatally flawed product.
Bell_Labs  books  breakthroughs  business_models  creativity  digital_cameras  Edwin_Land  Elobooks  Elon_Musk  failure  genius  howto  incentives  innovation  inventors  Kodak  leaders  moonshots  office_politics  organizational_failure  organizational_innovation  Polaroid  product-orientated  Steve_Jobs 
march 2019 by jerryking
The path to enlightenment and profit starts inside the office
(Feb. 2, 2016): The Financial Times | John Thornhill.

Competition used to be easy. That is in theory, if not always in practice. Until recently, most competent companies had a clear idea of who their rivals were, how to compete and on what field to fight.

One of the starkest - and scariest - declarations of competitive intent came from Komatsu, the Japanese construction equipment manufacturer, in the 1970s. As employees trooped into work they would walk over doormats exhorting: "Kill Caterpillar!". Companies benchmarked their operations and market share against their competitors to see where they stood.

But that strategic clarity has blurred in so many industries today to the point of near-invisibility thanks to the digital revolution and globalisation. Flying blind, companies seem happier to cut costs and buy back their shares than to invest purposefully for the future. Take the European telecommunications sector. Not long ago most telecoms companies were national monopolies with little, or no, competition. Today, it is hard to predict where the next threat is going to erupt.

WhatsApp, the California-based messaging service, was founded in 2009 and only registered in most companies' consciousness when it was acquired by Facebook for more than $19bn in 2014. Yet in its short life WhatsApp has taken huge bites out of the lucrative text messaging markets. Today, WhatsApp has close to 1bn users sending 30bn messages a day. The global SMS text messaging market is just 20bn a day.

Car manufacturers are rapidly wising up to the threat posed by new generation tech firms, such as Tesla, Google and Uber, all intent on developing "apps on wheels". Chinese and Indian companies, little heard of a few years ago, are bouncing out of their own markets to emerge as bold global competitors.

As the driving force of capitalism , competition gives companies a purpose, a mission and a sense of direction. But how can companies compete in such a shape-shifting environment? There are perhaps two (partial) answers.

The first is to do everything to understand the technological changes that are transforming the world, to identify the threats and opportunities early.

Gavin Patterson , chief executive of BT, the British telecoms group, says one of the functions of corporate leaders is to scan the horizon as never before. "As a CEO you have to be on the bridge looking outwards, looking for signs that something is happening, trying to anticipate it before it becomes a danger."

To that end, BT has opened innovation "scouting teams" in Silicon Valley and Israel, and tech partnerships with universities in China, the US, Abu Dhabi, India and the UK.

But even if you foresee the danger, it does not mean you can deal with it. After all, Kodak invented the first digital camera but failed to exploit the technology. The incentive structures of many companies are to minimise risk rather than maximise opportunity. Innovation is often a young company's game.

The second answer is that companies must look as intensively inwards as they do outwards (e.g. opposing actions). Well-managed companies enjoy many advantages: strong brands, masses of consumer data, valuable historic data sets, networks of smart people and easy access to capital. But what is often lacking is the ambition that marks out the new tech companies, their ability to innovate rapidly and their extraordinary connection with consumers. In that sense, the main competition of so many established companies lies within their own organisations.

Larry Page, co-founder of Google, constantly urges his employees to keep being radical. In his Founders' Letter of 2013, he warned that companies tend to grow comfortable doing what they have always done and only ever make incremental change. "This . . . leads to irrelevance over time," he wrote.

Google operates a 70/20/10 rule where employees are encouraged to spend 70 per cent of their time on their core business, 20 per cent on working with another team and 10 per cent on moonshots. How many traditional companies focus so much on radical ventures?

Vishal Sikka, chief executive of the Indian IT group Infosys, says that internal constraints can often be far more damaging than external threats. "The traditional definition of competition is irrelevant. We are increasingly competing against ourselves," he says.

Quoting Siddhartha by the German writer Hermann Hesse, Mr Sikka argues that companies remain the masters of their own salvation whatever the market pressures: "Knowledge can be communicated. Wisdom cannot." He adds: "Every company has to find its own unique wisdom." [This wisdom reference is reminiscent of Paul Graham's advice to do things that don't scale].

john.thornhill@ft.com
ambitions  brands  breakthroughs  BT  bureaucracies  competition  complacency  constraints  Fortune_500  incentives  incrementalism  Infosys  innovation  introspection  irrelevance  large_companies  LBMA  messaging  mission-driven  Mondelez  moonshots  opposing_actions  organizational_culture  outward_looking  Paul_Graham  peripheral_vision  radical  risk-avoidance  scouting  smart_people  start_ups  staying_hungry  tacit_knowledge  technological_change  threats  uniqueness  unscalability  weaknesses  WhatsApp  wisdom  digital_cameras  digital_revolution  from notes
april 2016 by jerryking
Training Wheels for Treasury Secretaries - WSJ
By HOLMAN W. JENKINS JR..
Updated Dec. 11, 2002

Public choice holds that politicians and government officials have interests, like anyone else, and understanding these interests is a better guide to their behavior than some disembodied notion of the "public good." In the words of Prof. Buchanan, "If you want to improve politics, improve the rules, improve the structure. Don't expect politicians to behave differently. They behave according to their interests."
public_choice  appointments  Holman_Jenkins  interests  politicians  organizational_structure  public_servants  politics  U.S.Treasury_Department  incentives  self-interest  public_goods  behaviours 
february 2015 by jerryking
Stephen Dubner and Steven Levitt teach us how to think like a freak - The Globe and Mail
IVOR TOSSELL
Special to The Globe and Mail
Published Friday, May. 23 2014

In a collection of stories that read like modern parables, Mr. Dubner and Mr. Levitt try to teach their approach to problem-solving to the rest of us, with tactics that range from “thinking like a child” to devising incentives for miscreants to reveal themselves....they want to deputize the entire world to think differently about the world's problems differently... there’s a growing body of research that suggests the human mind does a lot of things incredibly well between the ages of late childhood and late adolescence.

I asked these kids, what if I told you that your brain right now, at 13, is almost at its peak power, and that you have another 12 or 15 years where it’s just gonna be kicking ass, and then it’s going to start to diminish. Once you start to think about that, what would you use your brain to do now, knowing that it’s a perishable resource?

That for me was a takeaway I got from the book. I really want to encourage my kids to understand that their brains are not the premature versions of the adult brains. Their brains are the optimal brain. When we say, “think like a child,” if you’re over 25 or 30, that’s the best we can do.
economists  book_reviews  incentives  freakonomics  economics  takeaways  books  thinking  howto  children  cognitive_skills  problem_solving  conventional_wisdom  metacognition  think_differently 
may 2014 by jerryking
The need for an analytical approach to life
November 3, 2013 | FT.com | By Rebecca Knight.

Risk analysis is not about predicting events; it’s about understanding the probability of possible scenarios, according to Elisabeth Paté-Cornell, professor at the Stanford School of Engineering.
In her latest research, she argues that expressions such as “black swan” and “perfect storm”, which have become journalistic shorthand when describing catastrophes, are just excuses for poor planning. Managers, should “think like engineers” and take a systematic approach to risk analysis. They should figure out how a system works and then identify the probable ways in which it could fail.
So does a black swan event exist?
The only one that I can think of is the Aids epidemic. In the case of a true black swan, you cannot anticipate it.
And what about ‘perfect storms’?
A combination of rare events is often referred to as a perfect storm. I think people underestimate the probability of them because they wrongly assume that the elements of a perfect storm are independent. If something happened in the past – even though it may not have happened at the same time as something else – it is likely to happen again in the future.
Why should managers take an engineering approach to analysing the probability of perfect storms?
Engineering risk analysts think in terms of systems – their functional components and their dependencies. If you’re in charge of risk management for your business, you need to see the interdependencies of any of the risks you’re managing: how the markets that you operate in are interrelated, for example.
You also need imagination. Several bad things can happen at once. Some of these are human errors and once you make a mistake, others are more likely to happen. This is because of the sequence of human error. When something bad happens or you make a mistake, you get distracted which means you’re more likely to make another mistake, which could lead to another bad event. When you make an error, stop and think. Anticipate and protect yourself.
How can you compute the likelihood of human error?
There are lots of ways to use systems analysis to calculate the probability of human error. Human errors are often rooted in the way an organisation is managed: either people are not skilled enough to do their jobs well; they do not have enough information; or they have the wrong incentives. If you’re paid for maximum production you’re going to take risks.
So in the case of a financial company I’d say monitor your traders, and maybe especially those that make a lot of money. There are a lot of ways you can make a lot of money: skill, luck, or through imprudent choices that sooner or later are going to catch up with you.
So you can do risk analysis even without reliable statistics?
We generally do a system-based risk analysis because we do not have reliable statistics. The goal is to look ahead and use the information we have to assess the chances that things might go wrong.
The upshot is that business schools ought to do a better job of teaching MBAs about probability.
+++++++++++++++++++++++++++++++++
“Numbers make intangibles tangible,” said Jonah Lehrer, a journalist and
author of “How We Decide,” (Houghton Mifflin Harcourt, 2009). “They
give the illusion of control. [Add "sense of control" to tags]
engineering  sense_of_control  black_swan  warning_signs  9/11  HIV  Aids  business_schools  MBAs  attitudes  interconnections  interdependence  mindsets  Stanford  imagination  systems_thinking  anticipating  probabilities  pretense_of_knowledge  risk-management  thinking_tragically  complexity  catastrophes  shorthand  incentives  quantified_self  multiple_stressors  compounded  human_errors  risks  risk-analysis  synchronicity  cumulative  self-protection  systematic_approaches 
november 2013 by jerryking
Think markets raise capital? Think again.
March 25, 2013 | G&M | John Kay as told to Brian Milner

On the glut of information available to investors:

“We need to dispose of the idea that more information is better and eliminate informa...
economists  information_overload  investment_custodians  relevance  middlemen  dysfunction  money_management  asset_management  capital_markets  noise  incentives  conflicts_of_interest  from notes
march 2013 by jerryking
Diamonds in the Data Mine
May 2003 | HBR | By Gary Loveman.

Harrah's Entertainment has outplayed its competition and won impressive gains, despite being dealt a weak hand by the economy The secret? Mining the company's rich database to develop compelling customer incentives. in the Las Vegas Strip, and all of the neighbors are making spectacles of themselves. The $750 million Mirage boasts a Vesuvian volcano that erupts...
HBR  predictive_modeling  Las_Vegas  databases  gaming  CEOs  Harrah's  casinos  yield_management  data_mining  incentives 
january 2013 by jerryking
Data Is the World
Aug 1, 2005 | Inc.com | Michael S. Hopkins.

Use your data. "Companies aren't taking advantage of the data they generate, Levitt says. "Often, data generated for one purpose is useful for another. Freakonomics describes the case of an entrepreneur selling bagels in corporate offices who kept meticulous records to track profits and loss—data that eventually yielded insights about white-collar crime and the effects of office size on honesty.
Ask different questions. The abortion-crime link revealed itself when Levitt thought to stop asking what made crime fall and try asking why it had risen so much in the first place. That led him to justice system practices in the 1960s, which led him to a statistical understanding of which individuals were likeliest to commit crimes, and ultimately to the question of why a large segment of that population seemed to have vanished.
Don't mistake correlation for causality. Innovative policing and a drop in crime happened simultaneously, but data proved the one didn't cause the other. (Be mindful of the feudal king who, having learned disease was greatest in regions with the most doctors, figured that reducing doctors would reduce disease.)
Question conventional wisdom. An idea that is both easy to understand and a source of comfort (such as the credit quickly given to innovative policing for cutting crime) should be especially suspect.
Respect the complexity of incentives. "You can't imagine, says Levitt, "all the ways humans will connive to beat a system.
Employ data against cheating. Just as companies don't sufficiently capitalize on the data they have access to, they aren't exploiting what Levitt calls "opportunities to think about fraud or theft in their businesses.
'60s  bank_shots  causality  cheating  conventional_wisdom  correlations  data  data_driven  exhaust_data  Freakonomics  gaming_the_system  incentives  insights  justice_system  massive_data_sets  metadata  oversimplification  questions  skepticism  social_data  Steven_Levitt  theft  think_differently  white-collar_crime 
january 2013 by jerryking
On the folly of rewarding A, while hoping for B
Feb 1995 | The Academy of Management Executive pg. 7 | Steven Kerr. Reprinted from AME Journal, 1975, 18, 769-783.

Whether dealing with monkeys, rats, or human beings, it is hardly controversial to state that most organisms seek information concerning what activities are rewarded, and then seek to do (or at least pretend to do) those things, often to the virtual exclusion of activities not rewarded. The extent to which this occurs of course will depend on the perceived attractiveness of the rewards offered, but neither operant nor expectancy theorists would quarrel with the essence of this notion.

Nevertheless numerous examples exist of reward systems that are fouled up in that the types of behaviour rewarded are those which the rewarder is trying to discourage, while the behaviour desired is not being rewarded at all.
control_systems  fallacies_follies  incentives  organizational_behaviour  rewards 
july 2012 by jerryking
Romney’s Former Bain Partner Makes a Case for Inequality - NYTimes.com
By ADAM DAVIDSON
Published: May 1, 2012

“Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong,

Now we’re at a particularly crucial moment, he writes. Technology and global competition have made it more important than ever that the United States remain the world’s most productive, risk-taking, success-rewarding society. Obama, Conard says, is “going to dampen the incentives.” Even worse, Conard says, “he’s slowing the accumulation of equity” by fighting income inequality. Only with a pro-investment president, he says, can the American economy reach its full potential.
high_net_worth  Bain  inequality  Mitt_Romney  books  innovation  unintended_consequences  incentives  income_inequality  Occupy_Wall_Street 
may 2012 by jerryking
Prizes for Solutions to Problems Play Valuable Role in Innovation
January 25. 2007 | WSJ | By DAVID WESSEL.

Prizes aren't a panacea. They won't replace corporate R&D labs or universities. Some problems -- a cure for cancer -- are just too big. Some require too much upfront investment. Some scientists are reluctant to admit defeat and surrender a problem.

Moreover, the secrecy on which businesses insist to protect intellectual-property rights has its downsides: "People are in a black hole," says Harvard's Mr. Lakhani. "They don't know anything beside whether they won or lost." Losers' knowledge isn't widely shared.

But prizes work in ways that conventional R&D doesn't, and finding ways to spur innovation is crucial to improving how well we -- and our children and grandchildren -- live.
David_Wessel  innovation  InnoCentive  Netflix  incentives  contests  problem_solving  prizes  bounties 
may 2012 by jerryking
The New Cold War
May 14, 2008 | New York Times | By THOMAS L. FRIEDMAN.

The next president is going to be a cold-war president — but this cold war is with Iran...As the May 11 editorial in the Iranian daily Kayhan put it, “In the power struggle in the Middle East, there are only two sides: Iran and the U.S.”

For now, Team America is losing on just about every front. How come? The short answer is that Iran is smart and ruthless, America is dumb and weak, and the Sunni Arab world is feckless and divided...Ehud Yaari, one of Israel’s best Middle East watchers, calls “Pax Iranica.” In his April 28 column in The Jerusalem Report, Mr. Yaari pointed out the web of influence that Iran has built around the Middle East — from the sway it has over Iraq’s prime minister, Nuri al-Maliki, to its ability to manipulate virtually all the Shiite militias in Iraq, to its building up of Hezbollah into a force — with 40,000 rockets — that can control Lebanon and threaten Israel should it think of striking Tehran, to its ability to strengthen Hamas in Gaza and block any U.S.-sponsored Israeli-Palestinian peace.

“Simply put,” noted Mr. Yaari, “Tehran has created a situation in which anyone who wants to attack its atomic facilities will have to take into account that this will lead to bitter fighting” on the Lebanese, Palestinian, Iraqi and Persian Gulf fronts. That is a sophisticated strategy of deterrence...Alas, the right question for the next president isn’t whether we talk or don’t talk. It’s whether we have leverage or don’t have leverage.

When you have leverage, talk. When you don’t have leverage, get some — by creating economic, diplomatic or military incentives and pressures that the other side finds too tempting or frightening to ignore.
Lebanon  Iran  U.S.foreign_policy  Tom_Friedman  nuclear  Hezbollah  incentives  deterrence  Middle_East  Mideast_Peace  Cold_War  leverage  ruthlessness  influence  Palestinian  Iraq  Persian_Gulf  multiple_stressors  grand_strategy 
january 2012 by jerryking
Growth through acquisitions: A fresh look
MAY 1996 | McKinsey Quarterly | PATRICIA L. ANSLINGER AND THOMAS E. COPELAND

LBOs outbid corporate buyers and then produce extraordinary returns. How do they do it? A study of over 800 acquisitions shatters some myths about the value of timing and leverage. Don’t do the deal if you can’t find the leader.

Making acquisitions work

But making this type of acquisition work is not easy. Our research found that successful corporate and financial buyers adopt seven key operating principles. These principles affect almost every stage of the acquisition process, from the identification of candidates to postmerger management. They are:

* Insist on innovative operating strategies.(The lesson: Don't look for growth only in high-growth industries.)
* Don't do the deal if you can't find the leader.
* Offer big incentives to top-level executives.
* Link compensation to changes in cash-flow.
* Push the pace of change.
* Foster dynamic relationships among owners, managers, and the board.
Hire the best acquirers.

MAY 1996 • PATRICIA L. ANSLINGER AND THOMAS E. COPELAND
financial_buyers  incentives  LBOs  McKinsey  mergers_&_acquisitions  M&A  private_equity  value_creation 
november 2011 by jerryking
Lessons from Private-Equity Masters
June 2002 | Harvard Business Review| by Paul Rogers, Tom Holland, and Dan Haas.

The Four Disciplines of Top Private-Equity Firms

Define an Investment Thesis

Have a three- to five-year plan

Stress two or three key success levers

Focus on growth, not just cost reductions

Don’t Measure Too Much

Prune to essential metrics

Focus on cash and value, not earnings

Use the right performance measures for each business

Link incentives to unit performance

Work the Balance Sheet

Redeploy or eliminate unproductive capital—both fixed assets and working capital

Treat equity capital as scarce

Use debt to gain leverage and focus, but match risk with return

Make the Center the Shareholder

Focus on optimizing each business

Don’t hesitate to sell when the price is right

Act as unsentimental owners

Get involved in the hiring and firing decisions in portfolio companies

Appoint a senior person to be the contact between the corporate center and a business
HBR  Bain  lessons_learned  private_equity  metrics  investment_thesis  measurements  dispassion  incentives  constraints  leverage  focus  sweating_the_assets  unsentimental  debt  owners 
november 2011 by jerryking
The Untapped Talent That Can Juice the Economy - BusinessWeek
September 30, 2011, 4:25 PM EDT

...Trying to stimulate the economy by encouraging more people to go into business for themselves doesn’t appear to work. That’s because entrepreneurial talent can’t be quickly built by giving people a short class in writing a business plan or using QuickBooks. If we can influence entrepreneurial talent at all—an open question—it takes long-term investments in education.....The levers policymakers can influence in the short term—giving entrepreneurs more access to credit or training people in business startup skills—also do little because these factors are only a small part of what limits the supply of entrepreneurial talent. .... Instead of trying to increase the amount of entrepreneurial talent in the economy, policymakers should provide incentives to reallocate that talent from unproductive or destructive forms of entrepreneurship to more productive forms.
To Baumol, entrepreneurship takes three forms: productive, unproductive, and destructive. Productive entrepreneurship is the kind we all want. ...policymakers will get more bang for the policy buck if they concentrate instead on encouraging those who have entrepreneurial talent to use it for productive purposes.

Examples of incentive are: tax earnings from business activities that merely shift wealth from one party to another at a higher rate than money made from productive entrepreneurship. We could forgive student loans of productive entrepreneurs, but not the unproductive ones. We could even make credit cheaper for productive entrepreneurs than for the wealth-shifting types.

Efforts to encourage anyone to start a business have done little for growth. Getting skilled professionals to focus on "productive" ventures makes more sense

By Scott Shane
entrepreneurship  policymaking  policymakers  economists  small_business  productivity  talent_allocation  gazelles  incentives 
october 2011 by jerryking
China’s Race for Patents to Build an Innovation Economy
Jan 1, 2011 | NYT | STEVE LOHR. China is trying to build an
economy that relies on innovation rather than imitation & intends to
engineer a more innovative society. The Chinese are focusing on
spiking the indigenous generation of “utility-model patents,” which
typically cover items like engineering features in a product & are
less ambitious than “invention patents.” China intends to roughly
double: (a) its # of patent examiners, to 9,000, by 2015. (The U.S. has
6,300 examiners); & (b) the # of patents that its residents &
companies file in other countries. To lift its patent count, China has
introduced incentives including cash bonuses, better housing for
individual filers & tax breaks for companies that are prolific
patent producers...DESPITE China’s inevitable rise, Kao says, the U.S.
has a comp. adv. because it is the country most open to innovation,
forgiving failure, tolerating risk & embracing uncertainty,” “the
future lies in being the orchestrator of the innovation process,”
competitiveness_of_nations  John_Kao  China  patents  industrial_policies  innovation  innovation_policies  Steve_Lohr  taxonomy  Silicon_Valley  bounties  orchestration  incentives  risk-tolerance  prolificacy 
january 2011 by jerryking
Op-Ed Columnist - Drilling for Certainty - NYTimes.com
May 27, 2010 | NYT | By DAVID BROOKS. "...the real issue has
to do with risk assessment. It has to do with the bloody crossroads where complex technical systems meet human psychology...we’ve come to depend on an ever-expanding array of intricate hi-tech systems. These h/w & s/w sys. are the guts of financial markets, energy exploration, space exploration, air travel, defense programs and modern production plants. These sys. which allow us to live as well as we do, are too complex for any single person to understand. (1) people can't
imagine how small failings can compound into catastrophic disasters. (2) people acclimate to risk (3) overconfidence in backup sys. and safety devices. (4) people match complicated technical sys. with complicated governing structures. (5) people tend to spread good news and hide bad news.(6) people in the same field suffer groupthink...Overlooks incentives that distort choices.
David_Brooks  oil_spills  complexity  risk-assessment  cognitive_skills  biases  Malcolm_Gladwell  certainty  overconfidence  psychology  incentives  catastrophes  groupthink  compounded  financial_markets  energy_exploration  space_exploration  air_travel  multiplicative  risk-perception  optimism_bias  risk-acclimatization  Richard_Feynman  cumulative  bad_news 
may 2010 by jerryking
Retailers Emphasize Top-Line Growth - WSJ.com
APRIL 19, 2010 | Wall Street Journal | By RACHEL DODES And
DANA MATTIOLI. "In a bid to boost sales as consumers cautiously reopen
their wallets, some retailers are putting more emphasis on top-line
growth in employees' incentive pay and training programs."
incentives  J.C._Penney  Macy's  Home_Depot  home-improvement  training_programs 
may 2010 by jerryking
Op-Ed Columnist - A Word From the Wise - NYTimes.com
March 2, 2010 By THOMAS L. FRIEDMAN. While America still has
the quality work force, political stability and natural resources a
company like Intel needs, said Otellini, the U.S. is badly lagging in
developing the next generation of scientific talent and incentives to
induce big multinationals to create lots more jobs here.
Tom_Friedman  Intel  competitiveness_of_nations  semiconductors  incentives  STEM  talent 
march 2010 by jerryking
WSJ.com - The Problem With Patents
When the patent sys. works, it rewards entrepreneurs &
inventors, encourages innovation & serves as a bulwark of property
rights. The Founding Fathers considered patents important enough to
provide for them in the Constitution, granting Congress (via the U.S.
Patent & Trademark Office & the courts ) the power to protect
the rights of patent & copyright holders "for limited times" &
to "promote the progress of science & useful arts." Patent rights
are good insofar as they are useful...A patent sys. is only as good as
the quality of patents that issue from it. If bad or dubious patents
proliferate, they can have the opposite of their intended effect, which
is to promote & reward innovation...the USPO is vulnerable to the
usual failings and perverse incentives of any other govt.
bureaucracy...What's broken with the patent sys. is that "it’s the
patent office, not the rejection office." The USPO gets paid when it
grants a patent, creating pressure on the staff to keep the $ coming in.
patents  USPTO  Founding_Fathers  incentives  constitutions  property_rights  innovation  innovation_policies  revenge_effects  perverse_incentives  Gresham's_law 
december 2009 by jerryking
Want to Buy a Porsche on the Cheap? - WSJ.com
DECEMBER 9, 2009 | Wall Street Journal | by JOSEPH B. WHITE. Flag for Davina Reid.
luxury  automotive_industry  incentives  financial  Porsche 
december 2009 by jerryking
'Asking people to reduce their carbon emissions is a noble invitation, but as incentives go, it isn't a strong one' | Books | The Guardian
Monday 12 October 2009 | The Guardian | by Oliver Burkeman
who reviews, Superfreakonomics: Global Cooling, Patriotic Prostitutes
and Why Suicide Bombers Should Buy Life Insurance, by Steven D. Levitt,
Stephen J. Dubner 288,
# Allen Lane
book_reviews  economists  incentives  freakonomics  economics 
october 2009 by jerryking
In Dry Times, Businesses Coddle Regulars - WSJ.com
JUNE 23, 2009 | Wall Street Journal | by ANJALI CORDEIRO.
Companies are allowing regulars to stagger payments or place smaller
orders, and even throwing in free services to keep long-time customers
interested. With fewer new clients coming in, small businesses hope that
holding onto regulars will help maintain stability and possibly boost
sales when the economy bounces back.
economic_downturn  small_business  customer_loyalty  incentives 
june 2009 by jerryking
High-Tech Start-Ups Put Down Roots in New Soil - WSJ.com
MAY 26, 2009 | Wall Street Journal | by SIMONA COVEL. Cities
Like Kalamazoo Dangle Incentives as Silicon Valley and Other Old Hot
Spots See Pullback in Venture Loans
San_Antonio  cities  economic_development  incentives  start_ups  silicon_valley  Simona_Covel  Michigan 
june 2009 by jerryking
Barney Breaks It Down - WSJ.com
OCTOBER 8, 2008 | Wall Street Journal | Op-ed
Who really caused the credit crisis? There is little question that it
resulted, at least in part, from a push to relax lending standards so as
to make it easier for poor and minority borrowers to get mortgages.
This in turn created incentives for banks to make bad loans, many of
which Fannie Mae and Freddie Mac acquired.
economic_downturn  root_cause  incentives  African-Americans  Barney_Frank 
may 2009 by jerryking
Easy Credit and the Depression - WSJ.com
MAY 5, 2009 | Wall Street Journal | by L. GORDON CROVITZ.
Judge Richard Posner's "A Failure of Capitalism: The Crisis of '08 and
the Descent into Depression". Explains behavior that looks irrational in
retrospect shows that it was logical, based on incentives at the time.
Prevention requires regulators with access to public and private
information to track systemic risk and clear, predictable rules for how
the Federal Reserve and other regulators would respond to various risk
situations.
L._Gordon_Crovtiz  economic_downturn  Richard_A._Posner  risks  book_reviews  credit  predictability  failure  U.S._Federal_Reserve  regulators  incentives  information  information_flows  irrationality  systemic_risks  causality  public_information  private_information  hindsight  rules-based 
may 2009 by jerryking
The Pros of Planting Startups in Smaller Cities - BusinessWeek
March 27, 2009| Business Week| By John Tozzi

Jack Schultz, founder and CEO of industrial developer Agracel of
Effingham, Ill., and author of Boomtown USA: The 7½ Keys to Big Success
in Small Towns. He also says states and cities are beginning to
recognize entrepreneurs as a "third leg" of economic development, as
important as retaining existing jobs and attracting large corporations.
cities  start_ups  economic_development  incentives  San_Antonio  entrepreneurship 
april 2009 by jerryking

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