Subba’s Serendipitous moments

October 28, 2010

Extrapolating the past Vs Inventing the future.

Filed under: Business,Innovation,Leadership,Learning,Perspective,Strategy — Subbaraman Iyer @ 10:41 pm
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Vinod Khosla –a co-founder of Sun Microsystems and its first Chairman is a highly respected Silicon Valley investor as the general partner of Kleiner Perkins. Over the last few years, he has moved away from technology to Energy and Greentech.

Yesterday he delivered an interesting talk at Caltech on Extrapolating the past Vs Inventing the future. The talk was peppered with some brilliant statements, some philosophical musings and scenarios for the future. I found the talk scintillating The entire talk can be viewed here. (The audio quality at the beginning of the session is poor quality, but when Vinod begins his talk, the audio quality is excellent)

Here are some of the excerpts:

Extrapolating the past is ridden with mistakes starting from forecasts:

On why forecasts go wrong (he talks about a number of forecasts that’s gone completely haywire:

Assumptions get embedded in our system. We don’t question our assumptions. Forecasting is about our embedded assumptions not explicitly stated.

On quantitative modeling:

Chasing the false precision, chasing the 3rd order effects

Input the measurable, ignore the immeasurable

Obscured embedded assumptions.

He concludes the section after giving several instances by saying that “The more rapid the change, the less likely are the assumptions to be right”.

On why inventing the future is absolutely critical:

He starts by explaining the Black Swan effect giving several examples and declares that much of what we assume to be true is retrospective predictability. Some great statements that he makes:

Improbable doesn’t equal unimportant and the only thing that’s important is the improbable.

No matter where you look, there’s room for innovation, however unlikely it looks

Bring me the ideas that has a 90% chance of failure!

If you take enough shots at the goal, failure doesn’t matter; it doesn’t exist.

“Imagine the possible”.

His final words in response to a question from the audience sums it all: “The talk is just to give a perspective; but most importantly is to convey an attitude”.

Well said, Sir !

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June 4, 2007

Mckinsey overstates the value of scientific management

Filed under: Business,Leadership,Strategy,Winning — Subbaraman Iyer @ 12:05 am
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Mckinsey recently released its annual report on Ten trends shaping the future corporate landscape, and most of it was well known. Yet, one trend (trend #9) seemed to imply that scientific management would triumph over gut instinct and intuition, to imply that companies can be run on a technology auto-pilot. I completely disagree.

Roger Martin who served as Dean of the School of Management at the University of Toronto gives his opinion here.

I am intrigued at how Mckinsey reached this conclusion (perhaps they must be watching the trend of increased use of Enterprise software and BI), I can’t help but disagree with Mckinsey’s assessment.

Whenever any business activity is caused or is a result of human activity, a complete rational approach never solves any business problem. While a scientific approach helps in solving operational problems and improving operational efficiency, growth and innovation comes about differently. It requires instinct, insight and an intelligence of a rare kind to discover opportunities.

I have seen companies deploying elaborate Business intelligence applications, and do sophisticated data mining. Yet asking the right question, or framing the right context is often the trigger to get more out of data warehouses, even for operational decision making. Strategic decisions often rely on data only to the extent of making projections, but assessment of capabilities, risk etc. are clearly areas where the gut instinct plays a dominant part.

Business problems are indeed getting complex, and often throwing more data at the problem and hoping that somehow sophisticated data analysis will simplify the problem is indeed a seductive thought. Worse people adopt the SCATE approach, without fully realizing that they could be misled. In all my consulting approaches, I tend to use data and a rational approach, but never ignore my own gut instinct.

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