BusinessDay: By EDWARDS GLAESER: Man occupies an awkward midpoint between thoughtless insect and all-wise demigod. We like to imagine we understand the complex, far-reaching consequences of our decisions but most of the time we just muddle through. Tim Harford’s terrific new book, Adapt, urges us to understand and profit from our muddling. Humanity has done and will do great things, not because we’re always right but because our randomness generates lots of gold amid the dross. Harford begins with an experiment in which psychologist Philip Tetlock asked experts from many fields "to make specific, quantifiable forecasts ... then waited to see whether their forecasts came true". The experts did better than random undergraduates, "but by any objective measure, they didn’t do well". Harford pulls corporate chieftains into his march of folly by discussing the decline of once seemingly invincible businesses and the fact that "10% of American companies disappear every year". Yet even though the world’s complexity can overwhelm our limited brainpower, we are often saved by an evolutionary process through which "the market fumbles its way to success, as successful ideas take off and less successful ones die out". That perspective leads Harford to favour decentralised authority, not top-down control. I share his enthusiasm for decentralisation and have long thought attracting smart people and getting out of their way is the best strategy for academic management and urban economic development. Yet I wonder whether Adapt slightly undersells old- fashioned hierarchies. There is always a trade-off between the innovation and local knowledge created by decentralisation and the losses in co-ordination and control it entails. Perhaps many corporations today have the right level of centralisation for an era dominated by logistics and scale, but too much for an era of innovation and creativity. D ecentralised entities prosper by allowing for experimentation — and Harford spends 75 pages making the case for trying new things and testing them rigorously. He tells the story of the Spitfire, which was built despite the conventional wisdom that "bombers could not be stopped" because one public servant "decided to bypass the regular commissioning process and order the new plane as ‘a most interesting experiment’." Harford argues compellingly that Air Commodore Henry Cave-Browne- Cave’s success reflected his willingness to try new things, not any ability to predict which things would succeed. Evaluation is the necessary counterpart to experimentation. If we are going to try new things, we need to rigorously measure whether they work. Harford earnestly advocates randomised trials pretty much everywhere. Source: BusinessDay
Wednesday, 4 January 2012
Book Review: Adapt: Why Success Always Starts with Failure
BusinessDay: By EDWARDS GLAESER: Man occupies an awkward midpoint between thoughtless insect and all-wise demigod. We like to imagine we understand the complex, far-reaching consequences of our decisions but most of the time we just muddle through. Tim Harford’s terrific new book, Adapt, urges us to understand and profit from our muddling. Humanity has done and will do great things, not because we’re always right but because our randomness generates lots of gold amid the dross. Harford begins with an experiment in which psychologist Philip Tetlock asked experts from many fields "to make specific, quantifiable forecasts ... then waited to see whether their forecasts came true". The experts did better than random undergraduates, "but by any objective measure, they didn’t do well". Harford pulls corporate chieftains into his march of folly by discussing the decline of once seemingly invincible businesses and the fact that "10% of American companies disappear every year". Yet even though the world’s complexity can overwhelm our limited brainpower, we are often saved by an evolutionary process through which "the market fumbles its way to success, as successful ideas take off and less successful ones die out". That perspective leads Harford to favour decentralised authority, not top-down control. I share his enthusiasm for decentralisation and have long thought attracting smart people and getting out of their way is the best strategy for academic management and urban economic development. Yet I wonder whether Adapt slightly undersells old- fashioned hierarchies. There is always a trade-off between the innovation and local knowledge created by decentralisation and the losses in co-ordination and control it entails. Perhaps many corporations today have the right level of centralisation for an era dominated by logistics and scale, but too much for an era of innovation and creativity. D ecentralised entities prosper by allowing for experimentation — and Harford spends 75 pages making the case for trying new things and testing them rigorously. He tells the story of the Spitfire, which was built despite the conventional wisdom that "bombers could not be stopped" because one public servant "decided to bypass the regular commissioning process and order the new plane as ‘a most interesting experiment’." Harford argues compellingly that Air Commodore Henry Cave-Browne- Cave’s success reflected his willingness to try new things, not any ability to predict which things would succeed. Evaluation is the necessary counterpart to experimentation. If we are going to try new things, we need to rigorously measure whether they work. Harford earnestly advocates randomised trials pretty much everywhere. Source: BusinessDay
