Marina Gorbis's Blog, page 1480

Use Language to Shape a Creative Culture

Language is the crystallization of thought. But the words we choose do more than just reflect our thought patterns—they shape them. What we say—and how we say it—can deeply affect a company’s culture. To change attitudes and behaviors, it helps to first change the vernacular. To spark innovation, it helps to influence the dialogue around new ideas.

Several years ago, IDEO hosted a visit from Jim Wiltens, an outdoorsman, author, adventure traveler, and speaker, who also teaches a program of  his  own design for gifted and talented children in Northern California schools. In his programs, Jim emphasizes the power of a positive vocabulary. And he leads by example. You will literally never hear him say, “I can’t.” He uses more constructive versions of that sentiment that emphasize the possible, such as “I could if I…” He actually promises to pay his young students a $100 if they ever catch him saying, “I can’t.”

Think Jim’s approach sounds a bit simplistic for adults? Don’t be too sure. When Cathie Black took over as president of Hearst Magazines, she noticed that negative speech patterns had cre­ated an environment hostile to new ideas. One person close to the company reported that the naysaying had become a cynical mantra for the executives. So Black told her senior team that every time they said things like, “We’ve tried that already” or “That will never work,” she would fine them $10. (Note the difference be­tween business executives and teachers: they levy the fine on others, not themselves.) Of course, $10 was a trivial amount for the Hearst managers, but no one wants to be embarrassed in front of his or her colleagues.

After enforcing her rule just a few times, Black effectively wiped those expressions from the office vocabulary. Did the shift to more positive words have a broader effect beyond changing the tone of meetings? During Black’s ten­ure, Hearst kept its flagship brands like Cosmopolitan healthy through an extremely tough period for the publishing industry and launched new mega-successes like Oprah’s O magazine. Meanwhile, Black rose to become one of the most powerful women in American business.

IDEO’s favorite antidote to negative speech patterns is the phrase “How might we…?”  It was introduced to us by Charles Warren, now salesforce.com’s senior vice president of product design, as an op­timistic way of seeking out new possibilities in the world. In a matter of weeks, it went viral at our firm and it’s stuck ever since. In three disarmingly simple words, it captures much of our perspective on creative groups. The “how” suggests that improvement is always possible. The only question remain­ing is how we will find success. The word “might” temporarily lowers the bar a little. It allows us to consider wild or improbable ideas instead of self-editing from the very beginning, giving us more chance of a breakthrough. And the “we” establishes own­ership of the challenge, making it clear that not only will it be a group effort, but it will be our group. Anyone who has worked with IDEO in the past decade or participated in OpenIDEO’s social innovation challenges has undoubtedly heard the phrase.

We’re also careful about how we critique ideas. As we explained in this HBR article, our feedback typically starts with “I like…” and moves on to “I wish…”. We refrain from passing judgment with a simple thumbs up or thumbs down. When you open with the positives, then use the first person for suggestions, it signals to everyone that you’re offering your opinion in an effort to help, which makes them more receptive to your ideas.

As adults, we sometimes forget the simple power of words. Try fine-tuning your group’s vocabulary, and see the positive effect it has on your culture.

This post is adapted from our book Creative Confidence: Unleashing the Creative Potential within Us (Crown Business, 2013). 

Culture That Drives Performance

An HBR Insight Center




The Defining Elements of a Winning Culture
There’s No Such Thing as a Culture Turnaround
The Three Pillars of a Teaming Culture
Three Steps to a High-Performance Culture

The Dangerous Myth of Reinvention

Gary Maxworthy spent three decades in business until a personal tragedy prompted him to reexamine his priorities. He left the corporate world behind, set off to find his true calling, and in the process discovered both a new identity and the path to accomplishing his most important work fighting hunger.

In this telling, Maxworthy is an archetypal example of the reinvention mythology that seems omnipresent today, especially when it comes to those in the second half of life. Self-help columns are packed with reinvention tips. Financial services ads depict beaming boomers opening B&Bs and vineyards. More magazine, that bastion of midlife uplift for women over 40, even sponsored a series of reinvention conventions.

Retirement itself, we’re advised, is being reinvented.

There’s no denying the heroic appeal of the reinvention narrative, especially to 50- and 60-somethings confronting uncharted territory and the imperative to forge ahead with a new chapter. And this notion surely beats the counter-narrative that says you’re washed up at some arbitrary age, your best work behind you with two choices: hanging on or the abyss.

Yet for all its can-do spirit, I’ve come to believe the reinvention fantasy — the whole romance with radical transformation unmoored from the past — is both unrealistic and misleading. I’ll even go further: I think it is pernicious, the enemy of actual midlife renewal.

For the vast majority of us, reinvention is not practical — or even desirable. On a very basic level, it’s too daunting. How many people have, Houdini-like, escaped the past, started from scratch, and forged a whole new identity and life? Sure, it happens — but not often, at least outside of Hollywood.

More troublesome is the underlying assumption that the past — in other words, our accumulated life experience — is baggage to be disregarded and discarded. Isn’t there something to be said for racking up decades of know-how and lessons, from failures as well as triumphs? Shouldn’t we aspire to build on that wisdom and understanding?

After years studying social innovators in the second half of life — individuals who have done their greatest work after 50 —I’m convinced the most powerful pattern that emerges from their stories can be described as reintegration, not reinvention. These successful late-blooming entrepreneurs weave together accumulated knowledge with creativity, while balancing continuity with change, in crafting a new idea that’s almost always deeply rooted in earlier chapters and activities.

That’s a clear lesson inherent in the work of the 430 winners and fellows of the Purpose Prize, an annual award for social entrepreneurs and innovators in the second half of life (sponsored by my organization, Encore.org). In 2007, Gary Maxworthy was one of them.

As a young man, Maxworthy heard JFK’s call to service and aspired to join the Peace Corps. But practicality intervened: He had a family to support, and put his early dreams on hold to work.  And work he did, for 32 years in the for-profit food distribution business. Then his wife died of cancer. That tragedy forced him to reevaluate his life, particularly how he would spend the coming decades. Maxworthy then joined VISTA, the domestic sister organization of the Peace Corps, which in its wisdom placed Maxworthy in the San Francisco Food Bank.

The food bank, he quickly realized, was only set up to distribute canned and processed foods. Meanwhile, his years in the food business had taught him that an enormous amount of fresh food is discarded daily by growers throughout the state, simply because it is blemished. Drawing on his knowledge of how to distribute large quantities of food in ways that preserved freshness, he launched Farm to Family — which distributes nutritious food, that otherwise would have been thrown out, to food banks in California and elsewhere.

Maxworthy might have been able to do some good as an idealistic young Peace Corps volunteer, but after a significant body of midlife work, he was able to accomplish something truly remarkable, something at the intersection of experience and innovation — qualities long regarded as oxymoronic in nature. You could say Maxworthy put two and two together, except in this case common sense logic led to something larger: this year Farm to Family distributed over 100 million pounds of food.

I could recount a hundred other tales with essentially the same pattern, and fundamentally the same lessons — tales of reintegration that are not only more pragmatic than the reinvention fantasies but also, to my mind, far more heartening.  They affirm the value of what we’ve learned from life and remind that the seeds of change — even very big change — are often already within us.

Why, then, has the reinvention myth proved so persistent, even as it serves us poorly?  I think the answer lies deep in American character and history. Literary critic R. W. B. Lewis unearthed this cultural vein in his classic 1955 volume, The American Adam.  From the earliest days of the republic, Lewis wrote, Americans were enthralled with the ideal that they could fashion a future liberated from the past. One magazine of the 19th century movement known as Young America wrote, for example, in 1839: “Our national birth was the beginning of a new history … which separates us from the past and connects us with the future only.”

D.H. Lawrence observed in 1923 that glorifying the new and jettisoning the old amounted to “the true myth of America.”  In this narrative, Lawrence writes, America “starts old, old, wrinkled and writhing in an old skin.  And there is a gradual sloughing of the old skin, towards a new youth.”

That perspective has not only influenced our view of youth, but of later life.  The Golden Years retirement mythology was built around the dream of a second childhood, graying as playing. Retirement communities were age segregated not only to avoid school taxes, but somewhat paradoxically, to evade the idea of old age itself.  If everyone was old, then no one was old.

To me that’s the most damaging part of the reinvention mythology: the preoccupation not only with rebirth, but with youth itself, even as it is slipping away. Today 70 is upheld as the new 50, 60 the new 40 or even 30, and 50 practically adolescence.

So as we head into the resolution season, let’s think less about reinvention and more about forging ahead in ways that draw on our accumulated knowledge — what former Alvin Ailey star Elizabeth Roxas-Dobrish describes as “all the things that life has put into you.”

And as the nation enters the year in which the youngest of the boomers will turn 50, and we take another sizable step into the graying century, let’s think about a new myth of America, one that breaks free from the notion of eternal youth, and that learns to appreciate the true value of experience.

Why Not Take a Year Off to Work in Government?

One year ago, Rahul Mewawalla was a senior executive building out the mobile arm of Nokia. Today, he is using his telecom industry expertise to help San Francisco’s Mayor Ed Lee launch the nation’s first entrepreneurship-in-residence (EIR) program for cities. The program pairs start-ups with government workers to improve government services in areas including transportation, energy, data services, and the environment. The selected start-ups are being challenged to come up with solutions that not only work for San Francisco but can also address similar problems in cities across the nation.

Noelle Galperin was heading up her own strategy-consulting firm when she decided to engage in civic service by joining The Children’s Movement of California, an initiative by the nonprofit Children Now, which advocates for children’s issues. Using her private sector savvy and entrepreneurial mind-set, she was able to more than double the number of California companies that support policies for improving children’s health and education. She ultimately built a strong private-public sector coalition by convincing existing members to tap their networks and bring other organizations on board.

Rahul and Noelle both made the transition into public service through Fuse Corps—a social sector start-up launched in 2011 with the support of companies like McKinsey, GE, and Starbucks to provide a pathway for talented professionals who wish to contribute to the public sector but don’t know where to begin. Fuse Corps does this by matching business professionals and entrepreneurs who have an average of 15 years of experience with an innovative mayor, governor, or community leader in a one-year fellowship to help cities and states implement breakthrough projects.

Whether they’re developing the EIR program or building a large-scale movement to advocate for children, we have found that our fellows make progress by skillfully working across sectors and forging coalitions with local companies, community groups, and nonprofits.  We believe that leaders from the private and public sectors bring different skills and networks to bear, as well as a unique ability to navigate their own cultures.  Put them together and they can design solutions that align the incentives of a wide range of actors to solve our toughest challenges in healthcare, education, economic development, and the environment.

The Fuse Corps executive fellowship comprises one month of intense professional development and eleven months working on a public sector project. Certainly, these projects are worthwhile in themselves, but we think it’s fair to ask: Why would talented professionals want to leave well-established careers and well-paying jobs to work in government? When we asked our fellows, here are the reasons they shared with us:

The opportunity to explore something new and find new paths to leadership. After spending a decade and more building a practice as a lawyer, investment banker or other professional, many of our fellows wanted to solve new challenges and find new ways of being relevant. As one remarked, “After eight years, I had built the foundation and expertise in markets and finance. It was time for me to explore paths to leadership in other contexts.” 


The opportunity to regain a sense of purpose and passion about their work. Many fellows said that they were at a point in their careers where their personal achievements were not enough, and they wanted use their skills to make a difference in their communities. As one put it: “I was curious about finding a professional path that would tap into my energy, excitement, and motivation to make a difference and get things done.”


The opportunity to make a big impact. The public sector may appear to be slow moving and bureaucratic from the outside. But only governments, as a number of fellows pointed out, have the budgets to undertake the really big projects that can transform the lives of millions of people. Just think about the U.S. military’s investment in developing the internet or the National Institutes of Health’s role in developing life-saving drugs. “At over $140 billion, the U.S. government’s IT spending is much bigger than the R&D budget of the world’s most successful company,” Rahul points out. For tech-savvy entrepreneurs, that spells a huge opportunity.


The opportunity to get hands-on leadership training. At a time when resources for professional mentoring are limited in many organizations, our fellows are assigned a leadership coach who works with them throughout the entire year to lend support and help them devise strategies to tackle unfamiliar challenges. “I describe the fellowship as an inverse graduate program,” one fellow says. “As a Fuse Corps fellow you gain hands-on experience for a year while also learning the tools and strategies to apply beyond your placement.” 


The opportunity to make a connection to local communities and local government. Working in the public sector provides a connection with the local community that some fellows said they missed while working for big corporations.  When asked what motivated her to join Fuse Corps, for example, alumna Erika Dimmler said that after producing the news for 17 years at CNN, where she was covering the White House and national politics, she was eager to shift her focus to understanding “how local politics really works, because at the end of the day all politics is local.”


Opportunity to extend or apply their experience to new contexts. Fellows say they are excited by the opportunity to work across the government, business, and nonprofit sectors. As Fuse Corps fellow Christine Guardia pointed out: “In my work as a government consultant before joining Fuse Corps, I was removed from the policy side of government.  My fellowship now allows me to play a role in helping shape government policy.”

Cities and states are becoming the R&D engines of the U.S. economy, conducting large-scale experiments in economic development, environmental sustainability, and education. For talented senior executives and entrepreneurs who are curious about working in the public sector, these are exciting times. A one-year fellowship can be your path to conducting your own experiment in social change. We hope you will join us and spark a movement to innovate our cities and states across America.

Are Electric Utilities in a Death Spiral?

With Americans installing more solar panels, utilities are selling less electricity. But the utilities’ costs haven’t dropped, so prices per kilowatt hour are rising, which makes rooftop panels even more cost-competitive and further encourages the spread of solar power. The result of this and related trends, including increased energy efficiency nationwide, may be a “death spiral” for electric utilities, says the Wall Street Journal. U.S. electricity consumption in 2013 is expected to be 2% below the peak in 2007.

Achieve Your Goals in 2014 — Here’s Research That Can Help

1. Successful people do nine things differently than everyone else.

2. The rest of us hold ourselves back in five major ways.

3. But don’t stress! Just change the way you think about stress.

4. To spot new opportunities, imagine yourself in the future.

5. And act like a leader before you are one.

6. Decide what not to do in order to make time for the work that matters.

7. Keep meetings on track. Please.

8. Try not to make decisions when you’re nervous.

9. Money can actually buy happiness (if you give it away).

10. Give away your time while you’re at it.

11. Basically, be generous.

12. And say “thank you.”

13. Be quiet (sometimes).

14. Ask for feedback.

15. Pick the right battles to fight at work.

16. Don’t be too confident.

17. Challenge yourself with a growth mindset.

18. Go to sleep.

19. Seriously, go to sleep.

20. And go for a walk, too.

21. Remember: It’s really hard to change.

22. But it can be done.

The Key to Making New Year’s Resolutions Stick

This time every year, millions of people across the globe commit themselves to the pursuit of virtuous goals, such as losing weight, being a more understanding boss or partner, obtaining a better education, eating more healthfully, and saving money. But when are such reflection exercises effective? And will your resolutions stick and turn into real changes in your behavior?

Let’s examine each of these two questions. As it turns out, temporal landmarks like the New Year do help motivate us to reach our long-term goals when such goals are salient in our minds. This is because these landmarks trigger reflection and thus can potentially highlight the gap between our current behavior (such as watching TV every night or overspending) and our rosier, desired future behavior (working out every night or saving more). We all regularly face decisions that entail a conflict between choices that primarily provide instant gratification and virtuous ones that mainly provide long-term benefits (watching TV versus working out). As mounting evidence suggests, we often choose what we impulsively want over what we should choose given our long-term goals and interests. (In fact, I wrote an entire book on how we can easily get sidetracked while trying to reach our goals!)

The contrast between our present shortcomings and the hoped-for ideal state that the New Year highlights not only boosts motivation but also helps us meet our goals. For instance, research has found that when individuals who intended to quit smoking wrote about their desired personal future first and then about the negative aspects of their current reality, this contrast was more effective in bringing their actions in line with their expectations than was only fantasizing about future success. Similarly, related research has found that individuals who were committed to the goal of supporting a charity pledged more money when focusing on the discrepancy between the current state (the amount already collected) and the target goal than when focusing on only the amount of money already collected.

It seems that as long as our reflections highlight a contrast between a desired future state and present reality, they should motivate us to act on our goals. Although we can induce such contrasts between current and future goals in many ways (such as by getting feedback from trusted friends and advisors), a temporal landmark such as the start of a new year may be a relatively cheap way to motivate us to accomplish our virtuous goals. Importantly, though, if we feel close to our ideal state already, then the result will be complacency: we will congratulate ourselves for our anticipated achievements rather than take action.

Now, let’s turn to the second question – whether our New Year’s resolutions will actually stick. As it is the case for other points on the calendar that demarcate the passage of time, such as one’s birthday or the start of a new job, the arrival of the New Year generates “fresh start” feelings that can motivate us to meet virtuous goals, such as exercising regularly or finally starting our diet. Psychologically, the New Year gives us an opportunity to wipe the slate clean, and these feelings do inspire beneficial behavior. For instance, a recent study examined gym attendance at the campus of a business school in the Northeastern United States. The results? Gym attendance increased at the start of the year, then decreased over the course of the year.

We certainly do not need to wait until the beginning of the year to get off the couch more often. The start of a month, your birthday, or the start of work after holidays can be equally motivating, this research suggests. Even more interesting, the magnitude of these effects matches or exceeds factors that we would expect to dramatically influence exercise rates. For example, the increase in a person’s probability of going to the gym immediately following her birthday is equivalent to the effect of keeping the gym open for two extra hours.

So, to answer the second question: yes, our resolutions may stick, but our commitment to them may drift over time unless we find regular ways to experience a fresh start.

Many religions have rituals that give people the opportunity to begin anew. In Judaism, at the start of each New Year (called Rosh Hashanah), people reflect upon their bad deeds over the past year and ask for forgiveness, so that they can enter the New Year with a clean slate. Similarly, devout Hindus bathe in India’s holy rivers every year to wash away their sins and get rid of their past imperfections. Whether our reflections are religious in nature or not, their ability to highlight a disconnect between our past behavior and a better future may be worthwhile. However, even without the presence of such rituals, the upcoming transition to a new calendar year can trigger the same sense of dissociation from the past and move us closer to our virtuous goals.

Get Out of Your Comfort Zone: A Guide for the Terrified

No one likes to move beyond his or her comfort zone, but that’s really where the magic happens. It’s where we can grow, learn, and develop in a way that expands our horizons beyond what we thought was possible.

Also, it’s terrifying.

For me, operating beyond my comfort zone was participating in classroom discussions in college. Early in my career, it was public lecturing and participating in departmental meetings. I knew I had things to say, but was very unsure if they were worth saying.

And you know what? I didn’t say a word in nearly all of my undergraduate classes, and uttered very little in professional meetings at for a long time. From talking with others about their own unique fears and challenges, I’m sure I’m not alone.

Fast forward 20 years, and I am now in the interesting position of teaching and coaching others to operate outside their comfort zones. So in this new year, how can we get the courage to take this leap — and develop the skill and ability to actually pull it off?

Tip 1: Recognize When You’re Tricking Yourself

When I was afraid of participating in meetings or in class, I would rationalize away my discomfort. I’d tell myself quite convincingly that, “Participating just isn’t that important.” Now, in my position helping others to operate outside their comfort zones, especially outside of their cultural comfort zones, I hear similar rationalizations: “Networking isn’t that important; it’s the quality of your work,” or “People who network are slimy or full of themselves, and I’m not like that.”

These statements may be true, but they also may be masking the reality of the situation: that you are afraid of networking or public speaking and can’t get yourself to admit it.

So ask yourself this question:  If you didn’t experience any anxiety at all in your chosen situation — if it were completely comfortable and stress free — would it be something you’d like to be able to do?  Would it be exciting?  Would it help your career?  If the answer is yes (and be honest!), it’s probably fear that you’re grappling with — and that’s OK.  In fact, it’s great to recognize that so you can move onto the next step in the process, which is to use your power of rationalization for instead of against you.

Instead of rationalizing why the behavior is something not worth performing, actively brainstorm all the reasons why it is worth performing.  How can taking the leap and starting to work on performing this tough, but key behavior advance your career, give you chances to grow and learn in exciting ways, or whatever other goals you happen to care about?

Answering these questions honestly will actually give you great fodder for moving forward. Understanding why you want to take this leap and what’s in it for you is a wonderful motivator.

Tip 2: Construct a Plan That’s Unique to Your Situation

Taking a leap without a plan is bold, but unwise.  And without a strategy for how you are going to actually make this change, you’ll likely end up just where you started. So what kind of strategy should you use?

In my work helping people move outside their comfort zones, I help people clearly and specifically identify what is most challenging for them in a particular situation, and then I provide a set of tools to help them develop a solution for overcoming these particular challenges.

The system I use in scary situations is predicated on the idea that there is no single perfect way to perform the particular behavior you’re working on, be it networking, participating at a meeting, or simply learning to make small talk.  Rather, in most situations, you can find a way to customize or personalize your behavior so you are effective in the new situation while not feeling like you’re losing yourself in the process.

Let’s say, for example, that you’re an introvert who simply dreads the idea of schmoozing with a group of strangers at a networking event.  In fact, you’d rather skip the event altogether. I know many people in this situation (myself included) and my advice to them — which is similar to the advice Susan Cain gives in her path breaking work empowering introverts to thrive in an extraverted world — is to resist the idea that there is one single way to perform at these events. Yes, for some people it’s natural to do classic, prototypical networking behavior. But for others it’s not. And if that’s you in whatever situation you’re working on, tweak the situation to your liking.

So, in the networking context: instead of feeling pressured to meet everyone in the room, focus on one or two people you seem to hit it off with, and actually try to get to know them. Or, if this type of conversation isn’t for you, especially in a noisy, crowded room, focus instead to making initial contacts at the event with the ultimate goal of arranging follow-up conversations in a more comfortable setting, like over coffee or even on the phone.

The point is that instead of being overwhelmed by the situation, you can take control of it and make it your own. That’s the power of customization.

Tip 3: Find a Mentor or Coach

Even with a solid plan and a revitalized sense of purpose, a good source of help, courage, inspiration, and feedback can seal the deal. It can be a professional coach, but doesn’t have to. A thoughtful and encouraging colleague or friend can also do the trick.

For example, a mentor can help you identify gaps between how you’d naturally and comfortably behave and how you need to behave in the new situation to be effective.  A mentor can also then help you customize your behavior to find that sweet spot blending effectiveness and authenticity.  Finally, a compassionate and encouraging mentor can help you persevere when the going is tough — and when you’re operating outside your comfort zone, in situations that really matter, that’s almost inevitably going to be the case.

So when it comes to getting outside your comfort zone, don’t mistake magical outcomes for magical processes. Adaptation takes time, effort, strategy, and determination. But with a solid plan in place and the courage to take it forward, your results can be extraordinary.

Which Came First: The Human or the Algorithm?

One thing is for certain: society’s reliance on human judgment, unaided by computers, is going to decrease. This point is made forcefully in a recent post here at Harvard Business Review by MIT’s Andrew McAfee, and in Average Is Over, the latest book by economist Tyler Cowen.

But machine intelligence will not simply displace human intelligence; it is also poised to complement it. In many areas, the combination of human and machine intelligence will outperform either on its own.

How will this collaboration work? Cowen and McAfee both address this, differing on one key dimension: order.

Cowen’s thesis is that one’s ability to augment machine intelligence will define one’s value in the labor market. “Are your skills a complement to the skills of the computer,” he asks, “or is the computer doing better without you?” His key metaphor throughout the book is that of a freestyle chess player. In freestyle chess, human and computer teams play together, and are able to outperform either on their own (at least for now). The key challenge for the freestyle player is not to be a master of chess, but to understand the strengths and weaknesses of chess programs so as to know when to trust their recommendations and when to override them. Here’s how Cowen describes his own amateur experience playing freestyle:

I’ve spent many hours playing a form of Freestyle at home… My procedure is simple. I play Shredder [a chess program for iPad] against itself, but every now and then I overrule the decisions of the program. In essence it’s “me plus Shredder” against Shredder. The human-computer team usually wins. At four or five crucial points during the game, I override the strategic judgment of the program and come up with a better move, or at least what I think is a better move. Then I let the superior execution of the program take over. This works maybe four times out of five.

In this model of human-machine collaboration, the computer handles the bulk of the decision-making, with the human adding a layer of judgment on top. It is echoed in Nate Silver’s book The Signal and the Noise, which uses the rather remarkable example of meteorologists:

The programs that meteorologists use to forecast the weather are quite good, but they are not perfect. Instead, the forecasts you actually see reflect a combination of computer and human judgment… Some of the forecasters [at the National Weather Service] were drawing on these [computer-generated] maps with what appeared to be a light pen, painstakingly adjusting the contours of temperature gradients produced by the computer models… The forecasters know the flaws in the computer models… The unique resource that these forecasters were contributing was their eyesight… According to the agency’s statistics, humans improve the accuracy of precipitation forecasts by about 25 percent over the computer guidance alone, and temperature forecasts by about 10 percent.

But McAfee’s idea of collaboration looks quite different. Here he is responding to experts who claim to consider algorithmic output before making a decision, like the freestyle chess player:

The research is clear: When experts apply their judgment to the output of a data-driven algorithm or mathematical model (in other words, when they second-guess it), they generally do worse than the algorithm alone would. As sociologist Chris Snijders puts it, “What you usually see is [that] the judgment of the aided experts is somewhere in between the model and the unaided expert. So the experts get better if you give them the model. But still the model by itself performs better.”

Things get a lot better when we flip this sequence around and have the expert provide input to the model, instead of vice versa. When experts’ subjective opinions are quantified and added to an algorithm, its quality usually goes up. So pathologists’ estimates of how advanced a cancer is could be included as an input to the image-analysis software, the forecasts of legal scholars about how the Supremes will vote on an upcoming case will improve the model’s predictive ability, and so on.  As Ian Ayres puts it in his great book Supercrunchers, “Instead of having the statistics as a servant to expert choice, the expert becomes a servant of the statistical machine.”

This idea isn’t new — it fits within a long literature about information aggregation that doubles as the intellectual justification for crowdsourcing. As law professor Cass Sunstein summarized in his 2006 book Infotopia:

Suppose that we want to answer a disputed question of fact… A great deal of evidence suggests that under certain conditions, a promising way to answer such questions is this: Ask a large number of people and take the average of the answer… When the relevant conditions are met, the average answer, which we might describe as the group’s “statistical answer,” is often accurate, where accuracy is measured by reference to objectively demonstrable facts.

What is averaging, after all, but an extremely simple algorithm?

These two models for human-machine collaboration raise a number of questions, including which will be more effective, and whether human judgment will be valued more in the market when the human is feeding the algorithm or when the human is overriding it.

Some of the most interesting research on these questions is being done by Philip Tetlock of Wharton, who is running a series of geopolitical forecasting tournaments and measuring how well teams of experts do at prediction, compared to algorithms based on those same experts’ analysis. Here’s how he described this work at Edge.org in 2012:

In our tournament, we’ve skimmed off the very best forecasters in the first year, the top two percent. We call them “super forecasters.” They’re working together in five teams of 12 each and they’re doing very impressive work. We’re experimentally manipulating their access to the algorithms as well. They get to see what the algorithms look like, as well as their own predictions. The question is–do they do better when they know what the algorithms are or do they do worse?

Ultimately, the debate over which model of collaboration is most effective is likely to become as circular as the one over the chicken and the egg; algorithms will feed humans who will feed algorithms who will feed humans and so on. Decision-making is, after all, a multi-layered process.

The controversy will be over who gets final say, the human or the algorithm. Philosophically, this may seem a moot point for now, so long as humans control computers. Even if we “let” the algorithm have the final say, we’re the ones making that decision. Still, this final layer of decision making will be contentious in practice. Imagine the case of a medical diagnosis. A doctor consults the advice of an algorithm which uses your health records to remind her of the most statistically likely ailments. She then questions you and submits her observations and her best diagnosis to yet another algorithm which issues your “final” diagnosis. If the doctor has a nagging suspicion that the algorithm’s diagnosis is wrong — one that she can’t explain except with reference to her intuition and experience — whose diagnosis do you act on?

Different answers to this dilemma will be appropriate for different sectors, based on both efficacy and what we’re able to stomach. Determining which approach works when will require plenty of research and a good bit of trial and error.

Nonetheless, combined human and machine intelligence, in one form or another, will likely define much of our work lives. Unless, of course, we put it off long enough that computers start making decisions without our help at all.

The Three Most Innovative Companies of 2013

One can naturally debate any system that seeks to crown the world’s most innovative companies. Boston Consulting Group’s list, which relies heavily on surveys asking senior executives to name the companies they perceive to be innovative, risks succumbing to the halo effect, where generally successful companies are assumed to be good at everything. Forbes’s mathematical approach, which calculates an “Innovation Premium” baked into a stock price, suffers from market capriciousness. Editorial driven approaches at MIT Technology Review and Fast Company can trip over hype (recall how Fast Company in 2009 named “Team Obama” its most innovative company?).

Nonetheless, if you want a fun ice-breaker at your next team meeting, ask people to guess which three companies made it to the top 50 on all four lists (only 29 made it on two or more, and only seven are on three or more). You can even give a hint – two of the three are technology companies from America’s West coast, and one is from Asia.

If your groups are anything like the ones I’ve been with over the past few months, they will assume that the American companies are some combination of Google, Apple, and Amazon. Apple is perhaps the surprising odd man out of that troika, ranking 79th in Forbes’s list (owing primarily to a somewhat bumpy stock price, which to Forbes indicates a lack of investor confidence in its ability to innovate in the future).

But if you’d guessed Google and Amazon, you’d be right. Both trace their success to bringing new business models to their respective markets. While Google is commonly viewed as a search company, what made Google Google was figuring out how to parlay its search technology into a highly disruptive advertising model by which companies bid to tie their advertising to specific search terms. In recent years the company’s free, flexible Android operating system – a stark contrast to the closed, proprietary systems that historically dominated the industry – has helped new competitors like Samsung from South Korea and ZTE from China offer devices that are both low priced and highly functional.

Amazon continues to be the world’s best example of a serial business model innovator. Its core e-retailing model, with its hyper-efficient supply chain, turned the retail world on its head. It has subsequently launched three successive disruptive business models. Its Prime subscription model now provides close to $1 billion of revenues. With its Kindle e-reading platform, the company happily sells low-cost devices and makes money on content. And through its Amazon Web Services business, it has built a multibillion-dollar business by turning its internal technology prowess into a powerful cloud-computing service.

So, which is the third company on all four lists? Some guess Korea’s Samsung (on three); Japan’s Toyota (on two); China’s Huawei (interestingly, on none of the lists); or Alibaba (also, shockingly, on not a single list). The home country of the latter pair is right, but the right company is Tencent.

Tencent remains relatively unknown outside Asia, but that won’t last long if its torrid growth continues.  Its core offerings — its QQ instant-messaging service and WeChat SMS service — aren’t particularly interesting. But it follows a business model that is distinct from most of its competitors. Instead of seeking to build wide audiences and parlaying them into advertising revenue, the company has built a multibillion-dollar business out of micro-transactions, such as charging consumers to upgrade the look of the avatar that appears on their chat service. Hundreds of millions of small transactions add up, powering the company’s explosive growth. A chart in a recent Economist article says it all. Global Internet giants like Baidu, Google, and Facebook each draw at least 80% of their revenues from advertising. Tencent has flipped the model, earning about 80% of its $7 billion annual revenues from value-added services.

Innosight research shows that business model innovation is the ticket to explosive growth. In Seizing the White Space, my colleague Mark Johnson noted that more than half of the relatively recent companies that made it onto the Fortune 500 before their 25th birthday—including Amazon, Starbucks, and AutoNation—were business model innovators. It’s easy to get captivated by shiny technology or compelling marketing, but if you really want to identify tomorrow’s giants, pay the most attention to innovators that have figured out how to create, capture, or deliver value in unique ways. History shows they are the best bets for long-term success.

Inflation-Adjusted Median Earnings for Male U.S. Grads Have Fallen Over Past 40 Years

For young American men with at least a bachelor’s degree, median earnings were significantly lower in 2011 than in 1971, if inflation is taken into account. Moreover, the real average earnings of college graduates ages 25 to 34 with just a bachelor’s degree have declined about 15% since 2000, says Nancy Folbre of the University of Massachusetts. Nevertheless, a college education still gives young adults an earnings boost that is more than enough to justify its cost, Folbre says.