I think that one of the most important changes we’re going to see in lots of professions over the next few years is the emergence of tools that close the gap between the middle and the top–that allow the decision-making who is merely competent to avoid his errors to be reach the level of good.

Malcolm Gladwell writing on his blog.  His musing lately have dealt with finding good basketball metrics, but this post was in response to his article about an algorithm that predicts movie box office receipts from scripts.

Gladwell is right that metrics and decision tools raise the quality of the average decision, but he seems to think it affects most the people right below the top or near the middle.  What it actually does is take the implicit knowledge of the best decision makers and make it explicit for everybody else.  I’m not sure the precise numbers, but if you asked a group of people if they were in the top 10% of their profession, something like 70% will say that they are, even though by definition, only 10% can be.  Everybody thinks that they can make better decisions without structure, advice, or metrics, but reality tells a different story.  This was one of the key findings I took away from Gladwell’s book Blink.  In practice, the biggest issue is that nobody wants to admit that their complex “art,” like picking hit movies or music, making business decisions, or medical services, can be reduced to a simple algorithm or decision tree.  But on average, that algorithm does better than the specialists.

There are two areas where I think you need to watch out with the movie algorithm.  First, movie revenues are heavily influenced by a number of factors that are decided by people today – opening size, marketing budget, timing.  The biases of the studio execs are all inside these factors, which means that they are biasing the results of the neural network.  IT could be argued that in fact, these things don’t matter, but I’m not sure if the current network controls for them.

The second issue is profitability.  Just because a movie will generate revenue, doesn’t mean it’s the most profitable investment.  A studio gets a better return with a $5 million film that generates $50 million in revenue than a $50 million film that generates $200 million in revenue, and if they can make ten of the cheaper films, then they’re able to make more profits with lower risk.  I see Hollywood moving, begrudgingly, in this direction, and entrenched organizational structures, distribution partners, and false preconceptions as the biggest osbstacles.

As an aside, the actual Gladwell article is worth reading for the description of Kamesian thinking and Dick Copaken alone.

Categories: Entertainment Media, Information Asymmetries, Information Economics
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The business landscape of the past couple of decades is replete with companies that have flourished as third wheels, and with companies that have struggled to make money despite being No. 1 in their industries. (Today, would you rather be Honda or G.M.?) And while it’s true that in many industries there is a correlation between market share and profitability, one doesn’t necessarily lead to the other. A recent survey of the evidence on market share by J. Scott Armstrong and Kesten C. Green found that companies that adopt what they call “competitor-oriented objectives” actually end up hurting their own profitability. In other words, the more a company focusses on beating its competitors, rather than on the bottom line, the worse it is likely to do.

From “In Praise of Third Place” in the New Yorker. Believe it or not, the article starts out about video games, which is why I read it.

This actually ties in with the most recent case in my B-School class, on Capital One’s use of an information based strategy to target profitable customers, rather than going after market share.

Categories: Entertainment Media, Strategy, Video Games
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I don’t want to be so strident. At first, I thought that content holders weren’t taking the tectonic potential of these services seriously. I now believe it’s just the opposite. Looking at their model, it’s almost engineered to make digital delivery the least appealing option.

That’s Tycho at PennyArcade railing against the high price of digital delivery. The more I read up on the economics here, the more I realize that it isn’t so much that the media companies don’t get it; they do. The problem is that right now, so much of their revenues come from DVDs, and DVDs are sold at Wal-Mart and other brick and mortar retailers (but especially Wal-Mart), who see direct-to-the-home as a competitor. The reason studios and networks can’t deliver reasonably priced downloads to the home isn’t because they don’t want to, it’s because their “distribution partners,” who make a fortune off of DVDs, won’t let them.

Categories: Distribution, Entertainment Media, Information Economics
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I’ve updated my gallery and integrated it into the blog. Most of the pictures are Members Only, so in order to see them, you need to create a username.

I’m using this as a way to restrict access to people who actually know me, and if I find a lot of total strangers looking at them, I may escalate the security to “Just Friends.” As an added incentive, I’m also going to start posting things Members Only as well, and my guess is that these posts will end up more interesting (or at least funnier) than the usual stuff.

Categories: Ephemera, Photos
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Red Team Report:

Scarborough told NEWSWEEK that it became a “running joke” for members of the Class of ‘94 to say to each other, “Well, there goes the revolution,” every time one of their Contract With America reforms—like imposing term limits on members of Congress—was abandoned by lawmakers intoxicated with power.

From “Where the Republicans Went Astray” in Newsweek (I just randomly picked one up and read this)

Blue Team Report:

What you missed was Carville, a former Clinton adviser, charging Dean with “leadership that was Rumsfeldian in its incompetence” and arguing that if it hadn’t been for Dean, the party would have gained even more seats in the midterms. At a gathering of the Association of State Democratic Chairs in Wyoming, Dean responded: “This is the new Democratic Party. The old Democratic Party is back there in Washington; sometimes they still complain a little bit.”

From “Howard Dean isn’t getting tossed from the DNC” in Slate

Categories: America, Governance, Politics
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1. Jimmy Carter discusses his new book on Israel in The Forward.
2. An associate of Tyler Cowen’s says people live in cities to enjoy casual and anonymous sex. Having lived in the Detroit suburbs for a summer, I can say they are definitely not conducive to such arrangements, and in general, the automobile makes them significantly more difficult.
3. The Phat Phree gives relationship advice and idealizes the single life – Ben Toth has failed misogyny.
4. The New Yorker profiles Sim-creator Will Wright.

Heidi says I don’t make enough funny posts, but numbers 2 and 3 above are on the whimsical edge (3 is downright offensive).

Categories: Ephemera
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Aside from those who believe that there is no such thing as free speech, most intellectuals can be counted on to oppose efforts at censorship. In my own case, it was the Jewish environment in which I was raised that led me to value free speech and expression. Although I grew up a secular Jew — my bar mitzvah was as pro forma as they come, and after that, I have returned to synagogue only a handful of times — I was spoon-fed a version of Jewish liberalism in which we Jews were always expected to come to the defense of unpopular ideas. When American Nazis announced in 1977 their intention to march in Skokie, Ill. — a town in which one-sixth of the population was related to a Holocaust survivor — the American Civil Liberties Union defended their right to do so, and many of the leaders of and contributors to the ACLU were Jewish. I recall taking considerable pride in the ACLU’s actions, not out of Jewish self-hatred, but out of pride in Jewish liberalism.

From “Free Speech, Israel, and Jewish Illiberalism” by Alan Wolfe in the Chronicle of Higher Education.

Wolfe discusses how Jewish organizations, but more often, large individual Jewish donors, will pressure institutions to drop anti-Israel speakers, exhibitions, and articles, in contrast to the traditional liberal Jewish principle which answered disagreeable speech with more speech. It’s spot on and something I’ve been thinking about for a while. It gets me thinking, though: why the shift? Here are some hypotheses I’ve come up with:

1. Gentiles are too afraid of offending Jews: There’s a tendency, especially in America, to over-estimate Jewish sensitivities (I’m reminded of a censored episode of Family Guy, which every Jew I know found hysterical). Most Jews might still support the right of anti-Israel speakers to be heard, but when a few make a stink, gentiles, who aren’t in touch with the Jewish community, assume that the they just offended the lot of us, and afraid of the Antisemite label, panic. This isn’t just a phenomenon with Jews, though – people often tread lightly around minorities, weather they’re talking about race, gender, ethnicity, or religion. We’re just sensitive as a society.
2. Gentiles are too afraid of losing Jewish money: I don’t mean this in a conspiratorial sense, I mean it in the sense that Jews are disproportionately philanthropic, and offending them en masse is a bad idea for any institution. This isn’t really a religious thing, it’s another instance where an organization is beholden to their donor stakeholders, and it often happens with much more mundane institutions (I’m thinking of bad purchases by art museums). In this case, I think the problem doesn’t lie with Jews having lost their liberal attitudes towards free speech, but with individual Jews exercising their donor muscle illiberally. I’m conflicted about this, because while they shouldn’t censor speech, I don’t think they have an obligation to sponsor speech they disagree with. Bottom line: when it all comes down to it, I highly doubt that Jewish contributions to universities and cultural institutions are nearly as sensitive as these institutions’ leaders seem to think.
3. Jews are more afraid of anti-Israel speakers than Nazis: I can really believe this one, especially among baby-boomer Jews, who have internalized a real fear for Israel’s survival that Gen-x and younger Jews just don’t relate to. Nazis in America aren’t seen as powerful, so we can let them march, but there are Jews who are genuinely afraid of what anti-Israel speakers have to say, whether because it has a grain of truth, because they fear so heavily for Israel, or because they feel it has more mainstream support. Regardless, what this says is that Jews who feel this way are liberal when it’s convenient, and that’s just a bad way to set up policy like this.
4. Most Jews Are Still Liberal: As of a few years ago, members of the ADL were still telling me that “more speech” is the counterweight to hate speech, and the leadership hasn’t changed significantly since. The position of the Israel on Campus Coalition and its constituents is that campus activists should focus on a positive message for Israel, talking about things other than conflict. The debate really isn’t that important, so it’s safe for Jewish activists to ignore controversial speakers. When I did PR and communications for the Michigan State Jewish community, my first successful press release was for a pro-Israel event with a moonwalk, my statements in response to anti-Israel events looked like this:

“The college campus should always embrace the free discourse of ideas,” Dworin said.

However, Dworin said the film only presents one side of the conflict.

“I think it is disingenuous to show these women, who have killed other human beings, as if they have a monopoly on victimhood,” Dworin said.

These are just a few hypotheses, and I think there’s an interplay between all of them, and other factors, at work when Israel elicits illiberalism. When it comes down to it, the real issue for me here isn’t about Isreal, it’s about the free speech and civil liberties implications, and how we deal with speech that we disagree with.

Categories: America, Israel, Jewishness, Politics
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After an independent investigation determined that their relief efforts after Hurricanes Katrina and Rita were rife with fraud and mismanagement, and that the organizational culture cared more about publicity than results, the American Red Cross is changing their governance structure:

“We had a board that was designed and set up under guiding principles that are no longer relevant,” said John F. (Jack) McGuire, the Red Cross’s interim chief executive. “We needed to take that board and bring it up to today’s expectations.”

They’re learning a lesson that HP learned recently as well:

“You can’t have two leaders running the organization,” she said. “You have one leader running the organization.” (from original CoP article)

Governance of non-profits is often more difficult than for corporations because the make-up of the stakeholders is so different. Looking at the difficulty huge companies are having, I’m not surprised that large non-profits find themselves with the governance troubles they often do.

Categories: Community, Governance, Philanthropy
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As Campfire perfected that mode of storytelling on “Beta-7,” the team realized something else: The virus they discovered on Blair catches on only if it forges a community where none existed. The infection has to start small and feed on fascination. “You can’t start by thinking about what’s going to appeal to the mainstream,” says Monello. “You have to ask, ‘What’s this narrow target market going to embrace and absolutely make its own?’”

That’s from an fascinating story in this month’s FastCompany on the viral marketing efforts of the team behind The Blair Witch Project. They create immersive story lines that suck in hardcore users, casual observers, those who have bought in completely, and those who just wants to see what happens next. Around the whole product, out of nowhere, they create a community of interest, and from it, the word of mouth spreads. It’s entertainment as advertising, with the products integrated into a sort of interactive theater on a massive scale. And the best part is, unlike traditional marketing efforts, it generates tons of positive buzz, provides for two way interaction with customers, and more importantly, if done right, doesn’t piss people off.

Categories: Community, Marketing, Social Software, Users as Partners
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WN: What do you make of opinions that Gracenote privatized two public goods: the original open-sourced software that CDDB was based on, and song information input by unpaid volunteers?

Scherf: This is a popular opinion in certain circles. At first, there wasn’t a negative reaction to the sale, and I took this to mean that people weren’t fundamentally opposed to CDDB finding a commercial home. People only started complaining around the time certain folks at the company started mishandling developer relations. (None of the people directly responsible for this behavior remain at Gracenote, and thankfully there’s a much better understanding of how to treat customers now).

CDDB depended on partnering with it’s user community for success, but in this Wired News article, Gracenote Co-Founder and Chief Architect Steve Scherf talks about the challenges of managing that relationship. Those interested in these issues may also be interested in my Futurtech Panel on Users as Partners.

Categories: Futurtech, Information Economics, Social Software, Users as Partners
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The Slate 60 Conference on Innovative Philanthropy:

This week, Slate is co-hosting the Slate 60 Conference on Innovative Philanthropy with the William J. Clinton Foundation and the Clinton School of Public Service at the University of Arkansas. The idea is to gather 150 donors and thinkers in hopes of spurring more and better giving. To accompany the conference, we’re running a series of pieces that take a practical and sometimes skeptical look at major philanthropy:

Every year the Slate 60 ranks the largest charitable contributions of the year, but they also give a serious look into the culture of philanthropy that you rarely get elsewhere.

Most of Dworin Consulting’s services are geared towards non-profits and philanthropies (though, because they apply private sector best practices, work there as well). Especially take notice of our Project Portfolio Management practice, which helps non-profits optimize where they spend their money, align it with their strategy, and track improvement over time.

Categories: Philanthropy
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