**spoiler alert** Let's brainstorm. Or so I thought.
Open brainstorming sessions, as explained by Keith Sawyer in Group Genius, achieve less than we mi**spoiler alert** Let's brainstorm. Or so I thought.
Open brainstorming sessions, as explained by Keith Sawyer in Group Genius, achieve less than we might think. When a group's focus is on simply getting ideas onto paper, their output is less effective than if led with a strict instruction to focus on generating quality ideas. A creative group needs a facilitator, someone to define the problem and direct people to come up with solutions, someone who says, "No idea is ever worth anything unless it has been well thought out... We want good, practical ideas. Let's try to avoid stupid or silly ones... the emphasis is on quality not on quantity."
But, after all, this is a book about collaboration. Sawyer wants to destroy the myth of the "solitary flash of insight" and demonstrate that true creativity is a process of small sparks linked together over time. He uses the telegraph as an example. Henry Morse didn't invent the telegraph overnight, or even in a year. It took over a decade:
"His 1844 telegraph line depended on many insights contributed over time by many people. At every stage, Morse worked with others—Jackson, Gale, Vail—drawing on their expertise and collaboratively developing the next link in the chain. What made Morse successful was the twelve years of hard work required to iron out the technical problems, and the many small subsequent ideas that made the original idea possible."
This concept of a steady flow of progress underlies Sawyer's primary thesis on creativity. "Creativity isn't about rejecting convention and forgetting what we know. Instead, it's based on past experience and existing concepts."
Creativity emerges as one gains a greater understanding of how different people, ideas, and technology link together. Put another way, Sawyer suggests that creativity is about applying past experience to the present. "To be creative, you need to be aware of as many potential analogies as possible; and when faced with a problem, you should try as many analogies as possible."
In the most convincing section of the book, Sawyer delves into studies that test the solvability rates of certain puzzles. As background social clues and hints were introduced to the test subjects, they solved the problems at much higher rates. Additionally, the more people were exposed to difficult problems, the better they became at solving similar problems in the future. While the studies suggested that people derive their answers from social contexts, almost all the subjects from these studies, when asked how they reached the solutions, referenced a solitary insight. "This is a perfect example of the phenomenon psychologists call confabulation," Sawyer explains. "People have no trouble coming up with explanations for behavior after the fact. They believe they had a solitary insight, but the real story is that a social encounter was responsible for the idea."
These findings lead Sawyer to the conclusion that because "innovation emerges from the bottom up, unpredictably and improvisationally," institutions must be structured to best capture and combine the sparks that end up changing the world. Here he begins to lose himself. He champions Linux and Wikipedia as models of open collaboration. In spirit, the examples may be adequate, but in reality, Linux has yet to conquer Microsoft, and Wikipedia struggles to maintain a level of quality deemed acceptable for scholarly and professional work. Linux and Wikipedia are like open ended brain storming sessions. Linux comes up with more features at the cost of many mediocre ones. Wikipedia presents good information at the expense of erroneous entries. Quality monitoring and filtering out the good from the bad is the cost that will continue to hold each of them back from conquering their for profit competitors....more
**spoiler alert** It's a phenomenally difficult task to value an investment bank— a firm whose value largely derives from trust. When trust flows easi**spoiler alert** It's a phenomenally difficult task to value an investment bank— a firm whose value largely derives from trust. When trust flows easily across all counter-parties, the system is efficient at moving capital from where it's needed least to where it's wanted most. When trust begins to dry up, the entire system implodes under the weight of broken commitments.
Sorkin's book avoids causes in favor of documenting decisions. "This extraordinary time," he writes, "has left us with a giant puzzle—a mystery, really—that still needs to be solved, so we can learn from our mistakes. This book is an effort to begin putting the pieces together"
While accounts like The Greatest Trade Ever focus in on a small microcosm of the financial world, Too Big Too Fail attempts to portray the entire, fluid, global financial landscape— the one that Henry Paulson, Tim Geithner, and Ben Bernanke had to make sense of.
The book is laden with facts and events—it seems that no one sleeps, and Sorkin suggests that key players like Paulson caught maybe an hour or two a day for an entire week. With no down time, the book is successfully confusing— it captures the uncertainty of the situation. Key players were reacting to information as it came in without time to digest it. As a result, there isn't much time for editorializing on the crisis. In one passage Paulson is asked by President Bush, "How did this happen?" Sorkin could have used this as a spring board into the different theories of why, but he cuts it short:
"Paulson disregarded the question, knowing that the answer would be way too long and lay in a heady mix of nearly a decade of overly lax regulation—some of which he had pushed for himself—overzealous bankers, and home owners living beyond their means."
Sorkin highlights the fluidity of the decision making. Did AIG need 20 billion, 40 billion, or 100 billion? Did they need it next week, or two hours ago? Over reacting could create an unnecessary level of panic that could cause conditions to further weaken. It was a problem with no easily definable answers. The best anyone could offer was their best guess. Their best guess.
Guesses which so far have turned out to be the correct ones. By taking quick, decisive action, Bernanke, Paulson, and Geithner put themselves out ahead of Euro-zone countries which are beginning to realize they too must take decisive action to rescue their systems. The dollar gaining strength against the Euro couldn't come at a more perfect time—a stronger dollar accompanying economic expansion spells out recovery for not just the United States, but countries expecting to be repaid in dollars. Trust is trickling back into the system, in consequence, restoring confidence and catalyzing investment....more
**spoiler alert** The key take away from Jeff Jarvis's What Would Google Do? is that "making money through controlling production, distribution, and m**spoiler alert** The key take away from Jeff Jarvis's What Would Google Do? is that "making money through controlling production, distribution, and marketing is a diminishing game." Instead companies need to focus on becoming platforms upon which other people can do their business by becoming a hub for aggregating and distributing data.
After reading the first 20 pages, I felt like I'd picked up a Google public relations pamphlet. Jarvis wasn't telling me what Google would do, so much as what Google wants us to do— share as much as we can about ourselves on the internet for free. Ironically, I was reading this in a book, something that needs to be purchased. Curious, I did a Google Books search and noticed What Would Google Do? was conspicuously absent. Hmmmmm
But just as I was warming up to do a post on the hypocrisy, Jarvis brings it up himself: "I confess: I'm a hypocrite. If I had followed my own rules—if I had eaten my own dog food—you wouldn't be reading this book right now, at least not as a book. You'd be reading it online, for free, having discovered it via links and search... I'm no fool; I couldn't pass up a nice check from my publisher." Jarvis with the save.
But I still wasn't done. I had to take Jarvis's perceived argument to another level. Wouldn't doing exactly what Google does contradict the whole idea of what Google would do? As Google continues to grow, they're beginning to derive revenue by way of controlling large swaths of the search and online ad markets. Is Google becoming a middle man? Someone thinking like Google is trying to take them down.
Backing up even further, I found the key flaw in his argument. It's money that drives business, those who control it are the ones who control the destiny of start-ups around the world. Banking is far from a transparent industry. Clients pay handsome fees to investment consultants for access to their extended network of clients—a pay to play environment which opposes everything that Jarvis argues. But upon further inspection, the concept of a closed banking industry is fully consistent with one of Jarvis's main observations: a successful business is one that creates a platform upon which other's can build their own enterprises. By dealing quietly, banking institutions have created a climate where their clients feel they have access to proprietary information that will allow them to run their business more effectively. While Jarvis presents the concept of creating a platform as a novel approach to business, it's difficult to claim it's entirely new.
Jarvis is mostly on the mark. But the achilles heel of an argument about openness and the facilitation of information exchange would be a company like Apple. If openness is the key, how can Apple not just exist, but dominate? Jarvis waits until the last pages of his book before addressing this. He notes:
"Apple does not manage abundance. It creates scarcity. Witness the fanatics who camped out overnight to get each version of the iPhone. According to blog reports, the company cut off sales of the phones on the first day with devices still in stock so there would be lines again the second day. Apple makes its own mobs." So what's the reason? Why is Apple so good? He throws up his hands and has to concede, "It's just that good. Its vision is that strong and its products even better."
Alas, it seems, even the most well thought out positions have flaws. He notes that life—not unlike a Google product—is a beta. Jarvis is clear, honest, and like Google, he's encouraged people to correct him where he is wrong. In the process, he's lived his message and has a fun book to show for it....more
**spoiler alert** Death's a stranger; we know of it, we hear of it, but we don't know much about it. It lingers behind, above, or generally around our**spoiler alert** Death's a stranger; we know of it, we hear of it, but we don't know much about it. It lingers behind, above, or generally around our conscience— an entity that can simultaneously compel us to live while fully aware that it, along with our physical selves, shall whither and pass. Perhaps sensing a great opportunity in life, it's our conscience that compels us to make the most of it.
Camus's stranger, Meursault, embodies the notion of being physically alive but spiritually dead. He dismisses the trivialities of living because he feels time's irreversible, unwavering gravitation pulling him closer to a certain end: death. Overwhelmed by the certainty of eternal rest, he easily rationalizes the futility of life. Meursault's pessimism manifests itself while he's carrying his mother's casket at her funeral service. It's particularly hot, the sun's beating down on him and he reflects, "if you go slowly, you risk getting sunstroke. But if you go too fast, you work up a sweat and then catch a chill inside the church... There was no way out." A paradox no doubt, but one that can be worked around, maybe go fast at first and then slow down before you enter the church? Maybe move at a modest pace?
However, compromise is not a part of Meursault's character as he chooses a certain inaction over an ambiguous action time after time. "When I was a student," Mesursault reflects, "I had lots of ambitions... But when I had to give up my studies I learned very quickly that none of it really matters." Furthermore, his girlfriend asks him if he would marry her and he says, "it didn't make any difference to me and that we could if she wanted to... I explained to her that it didn't really matter and that if she wanted to, we could get married."
Meursault concedes his existence and fails to seize the opportunity to control his immediate fate. At the onset of a trial against him, he mulls the idea of reassuring everyone that he "was like everybody else, just like everybody else. But really there wasn't much point", and gives up the idea "out of laziness." Later, he laments, "they seemed to be arguing the case as if it had nothing to do with me. Everything was happening without my participation. My fate was being decided without anyone so much as asking my opinion." Ironically, the trial concludes with the judge asking him if he has anything to say, Meursault takes a moment before he answers, "No."
For Meursault, the most important thing was being right, being certain. Being right transcended the frivolities of his day to day existence. As he insists, "I had lived my life one way and I could just as well have lived it another. I had done this and I hadn't done that... Nothing, nothing mattered... A dark wind had been rising toward me from somewhere deep in my future... this wind leveled whatever was offered to me at the time." Meursault makes a personal choice (one he fails to see) by yielding to the inevitability of fate and thereby expediting his demise. He was never looking to confirm the power of the individual, but the "gentle indifference of the world."
By treating the world with the same gentle indifference he expected from it, he proves himself right: the world is indifferent, neutral to our passing. He reflects, "I was sure about me, about everything... sure about my life and sure of the death I had waiting for me. Yes, that was all I had... I had been right, I was still right, I was always right."...more
**spoiler alert** We give special meaning to moments that transform our view of the past and shift our perspective of the future. A curious one occurr**spoiler alert** We give special meaning to moments that transform our view of the past and shift our perspective of the future. A curious one occurred for me in the summer of 2006 when I watched a talk delivered by Sir Ken Robinson where he asks, are schools killing creativity?
He argues that our education systems mirror industrialism, whereby mass production of goods by the efficient execution of reproducible processes generates a payoff. In an industrial world, there's a high demand for engineers to define and optimize these processes. To meet this demand, Robinson argues, our education systems began to mirror the industrial model: take children as inputs and produce rational adults, set to earn a paycheck in industry.
Robinson makes the case that such an approach "ruthlessly squanders" the creative talents of children as it collects the paint brushes of future artists and replaces them with protractors. Teachers force future dancers to sit still and slog through multiplication tables. Robinson worries that this approach educates children in the wrong way. The world is becoming increasingly fast paced and uncertain, where the ability to create in uncertain circumstances becomes more important than ever. Shouldn't we be guiding students towards "their Element—the place where the things you love to do and the things that you are good at come together."
The Element is Robinson's attempt to elaborate on why it's in our collective interest to foster creative talents rather than suppress them in favor of economic expediency. He challenges the commonsense view of intelligence that "we are all born with a fixed amount of intelligence," and that "it's possible to measure how much intelligence we have through pencil-and-paper tests, and to express this as a numerical grade." He suggests that people that we consider successful, be it Matt Groening or Bill Gates, are where they are because "they found the things they were made to do, and they have invested considerably in mastering the permutations of their professions." They are NOT where they are as a result of a rigorous adherence to the mandated educational standards of their schools' curriculum.
Rather than mandate additional education requirements, Robinson firmly believes that the role of educators and the system they comprise should focus less on subjects but on mentoring students to find their passion. "When mentors serve this function—either turning a light on a new world or fanning the flames of interest into genuine passion—they do exalted work." I recall a few key mentors in my life:
-the seventh grade science teacher that went beyond the syllabus and connected with me in a time of great need by believing in me. -the fourth grade basketball coach that shaped my character by demanding perfection when I seemed content with doing just enough to get by.
I am grateful to these mentors because they understood it was only their secondary responsibility to teach children about plate tectonics or how to play man to man defense. Their primary role was to lift us from our bouts of self-doubt and to "remind us of the skills we already possess and what we can achieve if we continue to work hard."
Ken Robinson's twenty minute talk and 260 page book serve as evidence of the impact an individual can have not just on the people they know, but kids that stumble across their material on the internet. He gives them confidence to believe their intuition—that there's more to human intelligence than standardized test scores, that there's more to math than problem sets, and that our best work comes in the material we're most interested in.
**spoiler alert** I picked up "To the Lighthouse" six years ago as a senior in high school. I read about 50 pages, comprehended little of it, and shel**spoiler alert** I picked up "To the Lighthouse" six years ago as a senior in high school. I read about 50 pages, comprehended little of it, and shelved it. I dismissed the commentary on the back cover which casually suggested it was, "without question one of the two or three finest novels of the twentieth century." I couldn't follow it, therefore it wasn't good.
Part of the difficulty comes in the flowing, yet abrupt style that Virginia Woolf frequently employs. If a scene contains three people and five lines of dialogue, you'll undoubtedly receive all three people's interpretations of the exchange, analysis of everyone's body language, and insight into what characters are thinking that other characters are thinking about thinking about each other— it can get complicated. With Woolf, often times it seems nothing tangible is happening, but a world, a war, of activity is going on in the brains of her characters.
"To the Lighthouse" is a story about very little. People talk (or not) and time passes. The novel of stuff is in the thoughts and expectations of our characters and Woolf succeeds in addressing what we need vs. what we receive, what we want to say vs. what we do, what we expect vs. what happens.
Mr. and Mrs. Ramsay co-exist as the gravitational centers of the book. Not rich, but married and in their early sixties, they have enough space in their island mansion to raise their eight kids, as well as house younger men and women who, for whatever reason, want to be around them. The Ramsay's elicit strong responses from people in the book. People are either entranced by Mrs. Ramsay's beauty, or are completely dismissive of her effusive personality. People either admire Mr. Ramsay's success, or consider him a tyrannical leach, feeding off the sympathy of others.
Lily Briscoe, in her early thirties also finds herself at the house. She's there to paint a picture, but finds herself struggling to capture something, anything, worth putting to canvas. What she's looking for she later describes as "that very jar on the nerves, the thing itself before it has been made anything." Lily's fiercely independent, probing mind offers us another, eventually important, lens into the Ramsay household.
Myriad are the vignettes of the human condition, sparks of marital and social mores glimmer as the book crescendos to a few silent minutes of Mr. and Mrs. Ramsay's life.
It's presented as a delicate scene, because to Mrs. Ramsay, it is. Though to the Woolf and the reader, it's unsettling as Mr. Ramsay comes off as a demanding tyrant, in search of sympathy, always taking, and oblivious to the impact this has on others. The exchange begins when the Ramsay's eyes meet:
Their eyes met for a second; but they did not speak to each other. They had nothing to say, but something seemed, nevertheless, to go from him to her. It was the life, it was the power of it, it was the tremendous hour, she knew, that made him slap his thighs... Don't interrupt me, he seemed to be saying, don't say anything; just sit there. And he went on reading.
Woolf's diction yields the control to Mr. Ramsay. Demanding, asserting that the silence shall remain. Mrs. Ramsay accepts this silence, but, begins to realize that Mr. Ramsay wants the silence only to heighten the tension, to prod, to elicit a greater response from her.
He wanted something— wanted the thing she always found it so difficult to give him; wanted her to tell him that she loved him. And that, no, she could not do... A heartless woman he called her; she never told him that she loved him. But it was not so— it was not so. It was only that she never could say what she felt
The scene is entirely one sided. Mr. Ramsay wants and Mrs. Ramsay acquiesces by finding a way to deliver:
Then, knowing that he was watching her, instead of saying anything she turned, holding her stocking, and looked at him. And as she looked at him she began to smile, for though she had not said a word, he knew, of course he knew, that she loved him. He could not deny it. And smiling she looked out of the window and said (thinking to herself, Nothing on earth can equal this happiness)— 'Yes, you were right. It's going to be wet tomorrow. You won't be able to go [to the lighthouse:].' And she looked at him smiling. For she had triumphed again. She had not said it: yet he knew.
This constant giving is tragic. Later in the book, Lily Briscoe, still in search of the perfect painting, notes, "That man, she thought, her anger rising in her, never gave; that man took. She, on the other hand, would be forced to give. Mrs. Ramsay had given. Giving, giving, giving, she had died— and had left all this."
As Lily is painting, Mr. Ramsay approaches her, "this was one of those moments when an enormous need urged him, without being conscious what it was, to approach any woman, to force them, he did not care how, his need was so great, to give him what he wanted: sympathy"
All Lily wanted was that this enormous flood of grief, this insatiable hunger for sympathy, this demand that she should surrender herself up to him entirely, and even so he had sorrows enough to keep her supplied for ever, should leave her, should be diverted... before it swept her down in its flow.
There's an irony to this. Lily intended to acquiesce, though fails to. "Her feeling had come too late; there it was ready; but he no longer needed it. He had become a very distinguished, elderly man, who had no need of her whatsoever. She felt snubbed." It's precisely because she fails to deliver— and thereby unknowingly stands up to him— that she ends up giving Mr. Ramsay something even bigger.
Lily has shown him the weight of being scorned, pushed away. After years of taking sympathy, Mr. Ramsay finely gives his son James a token of approval. James captains the small boat to the lighthouse, and when they arrive at the lighthouse, Mr. Ramsay (who had been silent all trip) delivers the words "Well done!" to him. Here, the reader realizes the trip to the lighthouse has become a metaphorical awakening for Mr. Ramsay.
As he reaches the lighthouse, "he sat looking back at the island. His children wonder, What could he see?... What was he thinking now? What was it he sought, so fixedly, so intently, so silently?... What do you want... They both wanted to ask. They both wanted to say, Ask us anything and we will give it to you... But he did not ask them anything... He sat and looked at the island and he might be thinking, We perished each alone, or he might be thinking, I have reached it."
At the same time, across the water, Lily Briscoe says, "He must have reached it," as she gazes out across the water, the lighthouse far in the distance, "the effort of looking at it and the effort of thinking of him landing there, which both seemed to be one and the same effort, had stretched her body and mind to the utmost. Ah, but she was relieved. Whatever she had wanted to give him, when he left her that morning, she had given him at last."
**spoiler alert** Simplifying complex, intricately linked events, people, and decisions into a few take away messages is at once the primary task and**spoiler alert** Simplifying complex, intricately linked events, people, and decisions into a few take away messages is at once the primary task and the biggest challenge an author faces. In A Demon of Our Own Design, Richard Bookstaber adroitly conquers the complex question of "why do our markets keep crashing?" by using decades of first hand experience and observation to show that our so called efficient markets are actually "built to crash".
Having been the managing director of firm-wide risk management at Salomon Brothers and a hedge fund manager, Bookstaber knows his stuff. While most pundits and market professionals consider the most recent developments to be an event beyond predictability, Bookstaber saw it coming all along.
Despite the growth in the world GDP, life expectancy, and overall improvement in just about every global indicator, the financial markets seem to be missing this memo. Or, perhaps more accurately, doing too much with it. It isn't for lack of enough information that the markets seem so fragile Bookstaber claims, but because we drape layers of complexity over our markets in the form of options, portfolio insurance, leverage, statistical arbitrage, regulations, etc. As a result, the financial system becomes "tightly coupled" whereby stability depends on many components all working in harmony. While the failure of any one component in isolation is unlikely and inconsequential, the same failure within the context of a larger system can trigger a catastrophic unwinding of the system. Correcting the death spiral becomes more difficult, as actions taken to stem the crisis actually end up accelerating the meltdown. For instance, in a flight to liquidity mass selling of an asset begets even more selling.
Challenging academic economic theory seems to be a running theme these days, but in the spirit of progress, the evidence is growing that theories concerning the rational agent and the profit maximizing firm may need revision. Bookstaber gives the reader insight into an intuitive sense he had in graduate school "that the culprit leading to our apparent nonresponsiveness to optimality was a lack of knowledge, a realization that the world could change in ways we could not anticipate or model." Merely having a "sense" got him nowhere in a field dominated by theoretical mathematics, so he took his idea into the world of biology.
He was most interested in identifying behavioral patterns that would increase a species' probability of survival and applying these lessons to the world of finance. Bookstaber notes, "Because the cockroach has survived through many unforeseeable changes—jungles turning to deserts, flatland giving way to urban habitat, predators of all types coming and going over the course of the countless millennia—it can provide us with a clue for how to approach unanticipated risks in our world of financial markets." So, what makes the cockroach so survivable? Simple, really. It moves away from slight puffs of wind, wind that might indicate an approaching predator. By keeping the algorithm simple, the cockroach can respond to whatever environoment he's thrown into. On the other hand, species that develop behaviors optimized for their current environment flourish while the ecosystem remains constant, but perish when confronted with a new predator or ecosystem. Bookstaber concludes, "The coarse response although suboptimal for any one environment, is more than satisfactory for a wide range of unforseeable ones."
In the long run, the best approach is to hedge against the unknown. But the time horizon of the inidividual is much shorter than the firm's. Where's the incentive to hedge against something that doesn't exist when it's possible to own your own island in a few years? Why not squeeze every possible dollar out of the system now, and let someone else worry about the consequences? This is precisely the rigorous wealth maximizing attitude that Bookstaber cautions against. "Just because you can create a swap or forward contract to trade on some state variable doesn't mean it makes sense to do so... Each innovation adds layers of increasing complexity and tight coupling."
What is his prescription for fixing the system? In a single word, simplify. ...more