Bias busters: Avoiding snap judgments
Despite their best intentions, executives fall prey to cognitive and organizational biases that get in the way of good decision making.
By Tim Koller, Dan Lovallo, and Phil Rosenzweig – The board of a mining company thinks it’s time for a new CEO, one who understands the increased role of technology in the industry and can inspire the next generation of mining leaders. The hiring committee has a few internal candidates in mind—namely, the heads of the copper, nickel, and coal divisions.
All three have similar years and types of industry experience and comparable P&L responsibilities. But the front-runner in the minds of many on the committee is the head of the copper division. After all, copper has contributed the most to the bottom line over the past few years, while the other divisions have been lagging. It must be because the unit head is a tech-savvy people person, with a good understanding of industry trends, they reason. “Seems like a no-brainer,” the head of the hiring committee notes.
But how can the board be sure that it is picking the best candidate for the top job?
These distortions don’t apply only to company performance; the halo effect can also alter how we view individual performance. That’s what happened in the case of the mining company. The front-running CEO candidate’s division had performed well in large part because of a significant spike in the price of copper, something over which he had no control. Yet the halo of high profits shined on the business-unit leader, the hiring committee’s initial impressions of him stuck, and he was appointed CEO.
Much to the board’s dismay, the new CEO did not demonstrate either skillful use of technology or strong leadership, two capabilities that were critical for this role. Early in his tenure, the company incurred billions of dollars in losses. more>
By Katie Bo Williams – More than a year since the new National Defense Strategy refocused the U.S. military away from counterinsurgency and back towards the country’s greatest strategic competitors, some policy and strategy experts say the Pentagon hasn’t yet figured out how to “compete” with Russia and China.
In fact, it hasn’t even settled on a definition for the “competition” in “great power competition.”
The uncertainty has left former officials scratching their heads about how, specifically, the Defense Department plans to counter China and Russia beneath the threshold of armed conflict. It also appears to be pulling the Pentagon’s policy planners beyond their traditional purview of fighting and winning wars.
“The NDS has two pieces to it: it says you have to compete with China and Russia and prepare for conflict with China and Russia,” said Mara Karlin, a former deputy assistant defense secretary for strategy and force development. “Those are different. The way you would manage and develop your force is different depending on which one you are biasing towards.” more>
Posted in Business, Economy, Education, History, Leadership, Media, Net, Science, Technology
Tagged Business improvement, Capital, Government, Leadership, Super regions, Technology, United States
AI for Good’ or scary AI?
By Neil Sahota and Michael Ashley – Some futurists fear Artificial Intelligence (AI), perhaps understandably. After all, AI appears in all kinds of menacing ways in popular culture, from the Terminator movie dynasty to homicidal HAL from 2001: A Space Odyssey.
Though these movies depict Artificial General Intelligence (AGI) gone awry, it’s important to note some leading tech scholars, such as George Gilder (author Life After Google), doubt humans will ever be able to generate the sentience we humans take for granted (AGI) in our machines.
As it turns out, the predominant fear the typical person actually holds about AI pertains to Artificial Narrow Intelligence (ANI).
Specialized, ANI focuses on narrow tasks, like routing you to your destination — or maybe one day driving you there.
Much of what we uncovered when cowriting our new book, Own the A.I. Revolution: Unlock Your Artificial Intelligence Strategy to Disrupt Your Competition, is that people fear narrow task-completing AIs will take their job.
“It’s no secret many people worry about this type of problem,” Irakli Beridze, who is a speaker at the upcoming AI For Good Global Summit and heads the Centre for Artificial Intelligence and Robotics at the United Nations Interregional Crime and Justice Research Institute, told us when interviewed for the book.
“One way or another, AI-induced unemployment is a risk we cannot dismiss out of hand. We regularly see reports predicting AI will wipe out 20 to 70 percent of jobs. And we’re not just talking about truck drivers and factory workers, but also accountants, lawyers, doctors, and other highly skilled professionals.” more>
Posted in Book review, Business, EARTH WATCH, Economic development, Economy, Education, How to, Media, Net, Science, Technology
Tagged AI, Artificial intelligence, Business improvement, Capital, International Telecommunication Union, Internet, ITU, Jobs, Leadership, Skills
Public disclosures help hold politicians accountable
By Rebecca Stropoli – A common problem in democracies is that, once elected, politicians may fail to address the needs of their constituents, especially the poorer ones. But is there a way to empower the electorate by holding officials accountable for their actions?
MIT’s Abhijit Banerjee and Harvard’s Nils Enevoldsen, Rohini Pande, and Michael Walton examined the effect that publicizing politicians’ records had on electoral results in the 2012 municipal elections in Delhi, India. They find that being issued public report cards caused politicians to shift their spending priorities.
With more than 18 million people, Delhi is the world’s second-largest city, behind Tokyo. Poor people living in slums form a significant share of the Delhi population. Slum dwellers, in fact, account for an electoral majority in many of the city’s 272 single-member wards, each of which elects a councilor to the municipal government every five years.
The anticipation of media reports did influence the policies of politicians representing poorer areas, the findings suggest. Councilors in high-slum wards whose report cards were published shifted their spending priorities to better match the needs of their constituents.
The “effective spending” on the needs of the poor by these councilors over two years increased by about $5,000 on average, or more than 13 percent, Enevoldsen says. more>
Posted in Business, Economic development, Economy, Education, How to, Leadership, Science, Technology
Tagged Business improvement, Capital, Chicago Booth, Health, Internet, Leadership, Skills
By Umair Irfan – Humans are pumping more carbon dioxide into the atmosphere at an accelerating rate. But climate change is a cumulative problem, a function of the total amount of greenhouse gases that have accumulated in the sky. Some of the heat-trapping gases in the air right now date back to the Industrial Revolution. And since that time, some countries have pumped out vastly more carbon dioxide than others.
The wonderful folks at Carbon Brief have put together a great visual of how different countries have contributed to climate change since 1750. The animation shows the cumulative carbon dioxide emissions of the top emitters and how they’ve changed over time.
What’s abundantly clear is that the United States of America is the all-time biggest, baddest greenhouse gas emitter on the planet.
That’s true, despite recent gains in energy efficiency and cuts in emissions. These relatively small steps now cannot offset more than a century of reckless emissions that have built up in the atmosphere. Much more drastic steps are now needed to slow climate change. And as the top cumulative emitter, the US bears a greater imperative for curbing its carbon dioxide output and a greater moral responsibility for the impacts of global warming.
Yet the United States is now the only country aiming to withdraw from the Paris climate agreement. more>
Posted in Business, CONGRESS WATCH, EARTH WATCH, Education, Energy, Energy & emissions, History, Media, Nature, Science, Technology
Tagged Business, Capital, Climate change, Congress Watch, Government, Leadership, Super regions, Technology
The idea that ‘the market’ must be the organizing principle for collective decision-making should be abandoned.
By Diane Coyle – Despite ever-improving conditions for millions of people around the world—documented by entities like the University of Oxford’s Our World in Data and highlighted by scholars like Steven Pinker—popular discontent is on the rise in many places.
The reason is simple: whereas the first trend is being driven by low- and middle-income countries, the second is concentrated in high-income countries.
Throughout the developed world, conditions for many workers are deteriorating, with no recovery in sight. Income inequality is near historic highs, wealth inequality is even higher and economic insecurity is widespread.
As the United Kingdom tears itself apart politically and constitutionally over Brexit, many of its citizens struggle with low-quality jobs, inadequate housing and poverty so severe that they rely on food banks.
France’s yellow-vest protests have been hijacked by violent extremists, but they reflect real grievances about the growing challenge of maintaining living standards.
In the United States, the Economic Report of the President touts the supposed elimination of poverty, but life expectancy does not decline in a prosperous country.
In short, the post-World War II social contract in many of today’s developed economies is breaking down. And even more uncertainty and insecurity are on the way, as new technologies such as artificial intelligence and robotics take root.
Given the depth of the transformation ahead, however, it is not just the policies themselves that must change, but the very framework on which they are based. This means abandoning the idea—which has shaped public policy for more than a generation—that the ‘market’ must be the organizing principle for collective decision-making. more>
Posted in Book review, Business, Economic development, Economy, Education, History, Leadership, Media, Net, Science, Technology
Tagged Business improvement, Capital, Credit, Government, Internet, Leadership, Markets, Organizing Principle