Tim Kastelle

Category: book riffs

  • impact

    There’s an interesting post on the Six Pixels of Separation blog today about metrics for social media. Here’s the problem that is set up:

    Maybe we have it all wrong (and I’m just as guilty as the next person). Why are we looking at how many people have joined Facebook overall? Why do we care about how many people are following us on Twitter? There are countless online discussions about the quantity over the quality of these platforms, and we all know that it’s not realistic to have one person try to engage in any sort of meaningful way with 312,000 of their closest “friends.”

    There is then some further discussion about things like “… engagement, attention, intention and time spent. All very interesting metrics, and all of them make most traditional media folks roll their eyes.” The post ends with a call for more thinking about the matter.

    Even when I was in marketing, I never took those metrics relating to reach very seriously. For me, it’s always been much more about impact. How can we best measure impact? It’s harder, but possible. On my first blog, the main thing I tracked was comments. There weren’t many good web metrics available on the site that hosted that, so all I had to go on was page views and comments. Since I wanted people to be engaging with what I said, comments was the only metric I really cared about. On this blog, I’ve got much better data available. But I’m still mostly interested in getting ideas to spread – so the ones that I pay attention to are average time on the site/page, and comments (again!). Mark & I edit a journal called Innovation: Management, Policy & Practice, and I keep having arguments with our published over the value of page views on the journal’s web site. He loves it when the site gets a lot of hits. I’m a lot more interested in how often the journal gets cited, and how many people are actually reading the articles.

    Since innovation is about introducing new ideas into the economy, and getting them to spread, we should get better about figuring out how to measure impact. I’m absolutely convinced that this is the key. Who cares how many people are exposed to an idea? I want to know how many people engage with the idea, who is taking it seriously, and how it’s being used. These are all harder to measure, but whether you’re writing a blog, providing a service or making a product, these are the things we need to know about. I guess in the end it’s a lot easier to measure a broadcast than it is a conversation.

    Here’s something that I can’t figure any good way to write a whole post about, but it’s still interesting. Economist Peter Leeson talks about his book The Invisible Hook: The Hidden Economics of Pirates in this podcast from EconTalk. The economics of pirates! How cool is that?

  • black swan innovation

    black_swanpair

    After John & I yelled at him for an hour last friday, our PhD student Sam MacAulay was still gracious enough to continue talking with me. In the course of discussion he asked a good question – what actual impact complexity science has had on management studies? We talked about it for a while, and concluded that complexity has primarily been used as a metaphor. However, I did point out as an example that Didier Sornette has done superb work in modeling the stock market as a non-linear complex system. Elizabeth Garnsey has also done some really nice research in this area (see for example the interview that is linked to on her webpage, or the excellent book she co-edited with James McGlade Complexity and Co-Evolution). But in the main, I had to agree with Sam that we probably haven’t made as much out of complexity theory as we could.

    Nevertheless, Sornette’s book Why Stock Markets Crash is one of the best pieces of practical complex systems thinking that I’ve run across. So I was very pleased to see his work discussed in this article from physicsworld.com. The article also talks about the work of Nassim Nicholas Taleb and Lee Smolin, two other people I’ve got a lot of time for. The main thrust of the article is that scientific research may be too conservative these days as researchers focus more on taking a safe approach to facilitate publishing, while not spending enough time on the riskier big questions. While black swan events (things with a low probability of occuring, but which have a large impact if they do actually arise) are often negative in financial markets, they are sought after in science and innnovation.

    I found the article through the excellent Nesta Connect blog. The angle that they thought was most interesting was that the article proposes the formation of markets for research. That is an interesting angle, but not the one that grabbed me. I was struck by this section:

    Some scientists, he suggests, are what we might call “hill climbers”. They tend to be highly skilled in technical terms and their work mostly takes established lines of insight that pushes them further; they climb upward into the hills in some abstract space of scientific fitness, always taking small steps to improve the agreement of theory and observation. These scientists do “normal” science. In contrast, other scientists are more radical and adventurous in spirit, and they can be seen as “valley crossers”. They may be less skilled technically, but they tend to have strong scientific intuition — the ability to spot hidden assumptions and to look at familiar topics in totally new ways.

    To be most effective, Smolin argues, science needs a mix of hill climbers and valley crossers. Too many hill climbers doing normal science, and you end up sooner or later with lots of them stuck on the tops of local hills, each defending their own territory. Science then suffers from a lack of enough valley crossers able to strike out from those intellectually tidy positions to explore further away and find higher peaks.

    This is a nice description of innovating on fitness landscapes, an idea that John and I have been talking about in our classes. And it is particularly important now. There are numerous reports coming out showing that companies are becoming increasingly conservative in their innovation efforts as a reponse to current economic conditions. In Smolin’s analogy, companies are reverting to only undertaking hill climbing. Many have never thought much about valley crossing in the first place, while many others are pulling resources out of more speculative ideas.

    This is as wrong for business as it is for science. Innovation is central to survival, and successful innovation requires both hill climbing and valley crossing. Now more than ever it is critical for firms to figure out a way to continue to invest in areas that have breakthrough potential. Newspapers and record companies have collectively been very effective at getting to the top of their hills. And these industries are in big trouble now because they have completely missed on out the discovery of new, better hills. It’s a challenging process to manage in good times, and probably even harder now. But it’s still essential.

    Note: The photo at the start is from the very useful resource, the Australian Bird Image Database.

  • extra-dimensional innovation

    When I started university I thought I would be a math major.  I had always been pretty good at math, and, just as importantly, I had always enjoyed it.  Things went well reasonably well until the second semester, when we started working with n-dimensional matrices.  Because I couldn’t visualise n dimensions, I had real problems with this.  It was all those extra dimensions that knocked me off the math track.

    Reading The Trouble With Physics by Lee Smolin brought this memory back to me. It is an excellent book, which I strongly recommend. Smolin describes the state of play in physics today. His primary question is why haven’t we had any major empirically supported breakthroughs in physics in the past twenty years? He discusses several reasons for this – but his main contention is that the reason is that physicists have spent the bulk of that time on string theory, which, while beautiful, is very difficult (impossible?) to verify empirically.  The story will be interesting to anyone curious about modern physics, or in the scientific process as Smolin spends the last 1/3 of the book discusssing how physicists might best proceed given some the difficulties with their dominant research program, string theory.

    Smolin’s discussion of difficult technical issues is outstanding.  One thing that struck me is that most of the versions of string theory that are possible require extra dimensions – usually 10 dimensions plus time.  This is what sent me back to freshman year math!  It also got me thinking – most of us actually struggle with just three dimensions when you add time in.  This was brought home quite strongly when I ran across a post on The Long Now Blog which talked about a website called Artificial Owl (the source of the picture at the top of this post).  Artifical Owl contains a series of posts describing and showing abandoned man-made creations.  This is overwhelmingly appealing for anyone that has ever been a fan of Ozymandias… It’s also interesting for anyone involved with innovation.  There are two key points to consider.  The first is that new innovations always (well, nearly always) destroy existing technologies or ideas.  In innovating, we are making newly abandoned man-made creations. In other words, the innovations don’t just exist in three dimensions, they exist in three dimensions plus time.  Artificial Owl shows us how often we underestimate the impact of time.

    The second point is that all innovations have a lifespan.  We often forget this.  If you haven’t yet, be sure to read the cover story from the March issue of Wired, which describes the rise and fall of the Gaussian copula function.  This formula originated in 1999, and then became the mathematical foundation for a number of financial innovations, including most forms of Credit Default Swaps and especially Collateralised Debt Obligations.  In light of recent events, most of these innovations had a lifespan of about 8 years.  Many innovations last longer than this, and quite a few don’t make it this far.  In my innovation strategy class, several students have been interested in sustainable innovation.  I’ve told them that the key to sustainable innovation is to develop ideas that are likely to have a long lifespan.  Which means that again we have to be able to think well in three dimensons – plus time.

    As the years have passed, I still struggle with n-dimensions.  But I’ve gotten quite a bit better at thinking about time and working in four dimensions.  I think this is an important skill for all of us to develop.  It’s time to start innovating in four dimensions instead of just three.

  • A must read

    Kevin Kelly has put his book New Rules for the New Economy online – readable for free.  Personally, I find nearly everything that Kelly writes worth reading, but this book in particular is essential.  It’s pretty easy to discount a book written about the ‘new internet economy’ written over 10 years ago – it’s a class of books that hasn’t aged well at all.  However, New Rules is the exception.

    Kelly does a superb job of identifying the most important issues raised by the internet, which makes this book just as crucial now as it was when it came out.  Some of the issues that he addresses are:  the impact of sharp increase in the availability of many things (but especially information); the impact of the steady decrease in price caused by this; the difficulties of controlling things within an evolving complex economy (a section that includes a great description of fitness landscapes); and the importance of generating ideas that create new opportunities rather than simply aiming to improve efficiency.  All of these are critical issues in the management of innovation.  Every time I read this book, I find one or two ideas that surprise me or that suggest a new way of approaching things in each chapter.

    One key issue with books like this though are what do you do with it?  As Seth Godin asks, when you encounter big ideas like Kelly’s, do you act on them? Innovations are discovered in action.  For me, one of the best ways to implement new ideas is to make new connections through reading – but the ideas don’t count for anything until they are turned into action.  So here’s my suggestion for today – read Kelly’s book, make a new connection, then do something about it.

  • On sacrificing limbs…

    I just finished reading Old Man’s War by John Scalsi. Overall, it was pretty entertaining. One part of it reminded me of a conversation about innovation from earlier in the week.

    The book is set well into the future, and there are three types of humans around. The first is the normal everyday variety, like you and me. Many of these are setting off into space to colonise newly found planets. However, there are plenty of other species that also want these planets, so these people are protected by the Colonial Defense Force. The CDF consists of the other two types of humans. One group people that are all 75 years old when they sign up for the army. Their memories are implanted into a cloned version of themselves, which are heavily genetically modified. So they have all of the knowledge and wisdom that you accumulate over 75 years of living, but with superhuman powers. The last group of people are the CDF’s Special Forces – even more heavily modified. They are stronger than the normal CDF recruits, and have other additional capabilities. They don’t have any previous life experiences or knowledge embedded in these bodies – so from their first moment of consciousness, they are fully adult superpowered killing machines.

    John Perry, the protagonist of the book is a normal CDF volunteer. He talks about his experiences in his new body, and, as you would expect, he finds himself in a lot of combat situations. At one point, he presides over a situation where five people from the Special Forces have to engage in ritual one on one combat with members of an alien race. Overall, the Special Forces do pretty well in this. One of the things that Perry notes is that the Special Forces fight in a way that is completely different from the way that normal CDF soldiers fight – they are much more willing to sacrifice arms and legs if they need to in order to get into a position to win the fight. All of the CDF forces have remarkable powers of recuperation, but the Special Forces members take these for granted – and actually take them into account when formulating strategy. The CDF soldiers that have already lived a lifetime in a fragile, normal human body are much less able to take full advantage of their ability to get by without a limb or two for a bit – they’re just too used to protecting themselves.

    So what does this have to do with innovation? I think this is actually a pretty good analogy for a situation that a lot of firms find themselves in now. As sceptical as I tend to be of ‘everything is different now’ type arguments, in a lot of ways…. everything is different now in business. Even if you don’t buy all of Tom Friedman’s ‘The World is Flat’ concept, the internet and related digital technologies are unquestionably changing the way that business is done. This has led to rapid and often unsettling change for people in a lot of industries that seemed awfully stable and boring 10 or 15 years ago. In order to cope with this situation, one key strategy is to innovate – and in particular, to try to find the thing that will make your industry obsolete. I had lunch with one of the people that took our Innovation Leadership class two years ago and we talked about this. He said ‘sometimes you have to cut off your own arm, because if you don’t, someone else will come along who’s trying to chop off your head.’

    And that’s pretty much exactly what happens in Old Man’s War. The soldiers that are willing to make sacrifices that are inconceivable to their elders succeed. Maybe that’s what firms in industries that seem stable right now need to be doing too – to use their wisdom and experience to learn how to fight the same way that the youngsters are. It might be the only way to keep their heads…