## Friday, December 25, 2009

### In defense of BS (Business Speak)

Let's leverage some synergies, the comedian said and all laughed.*

This happened in the middle of a technology podcast, the sentence unrelated to anything and off-topic. Such is the state of comedy: make a reference to a disliked group (businesspeople) and all laugh, no need for actual comedic content.

Business-Speak, or BS for short, does have its ridiculous moments. Take the following mission statement:

HumongousCorp's mission is to increase shareholder value by designing and manufacturing products to the utmost standards of excellence, while providing a nurturing environment for our employees to grow and being a responsible member of the communities in which we exist.

There are two big problems with it: First, it wants to be all things to all people; this is not credible. Second, it is completely generic; there's no inkling of what business HumongousCorp is in. Sadly, many companies have mission statements like this nowadays.

Back when we were writing mission statements that were practical business documents, we used them to define the clients, technologies/resources, products, and geographical areas of the business.

FocussedCorp's mission is to to design and manufacture medical and industrial sensors, using our proprietary opto-electronic technology, for inclusion in OEM products, in Germany, the US, and the UK.

This mission statement is about the actual business of FocussedCorp. Mission statements like this were useful: you could understand the business by reading its mission statement. It communicated the strategy of the company to its middle management and contextualized their actions.

FocussedCorp's mission statement is what was then called a strategic square (should be a strategic tesseract): it has four dimensions, client, product, technology/resources, and geography. Which brings up the next point:

Most BS is professional jargon for highly technical material, just like the jargon of other professions and the sciences. So why is it mocked much more often than these others?

Pomposity is a good candidate. Oftentimes managers take simple instructions and drape them in BS to sound more important than they are. In some cases this might even be a form of intimidation, along the lines of "if you question my authority, I'm going to quiz you in this language that you barely speak and I'm fluent in."

Fair enough, but there's much technical jargon in work interactions and only BS gets chosen for mockery. Professionals and scientists do use their long words to the same pompous or intimidating effect as managers, and the comedian in the podcast is as unlikely to know the meaning of "diffeomorphism," "GABA agonist," or "adiabatic process" as that of "leveraging synergies."

I suspect the mockery of BS rather than other professional jargon has to do with the social and financial success of the people who work in business, and therefore are conversant in BS. The mockers are just expressing that old feeling, envy.

They can't play the game, so they hate the players.

------
* Leveraging synergies means to use economies of scope, spillovers, experience effects, network externalities, shared knowledge bases, and other sources of synergy (increasing returns to scope broadly speaking) across different business opportunities.

## Saturday, December 19, 2009

### My measurement mistake of this morning.

Oh, my! How could I make such a beginner's mistake in such a public way?

Earlier today I tweeted:
Revealed preference matches stated preference: my favorite jazz tune is Take 5; my iTunes library has 27 versions of Take 5. (=max in jazz)
This is all true: Paul Desmond's Take Five is my favorite jazz tune. I own multiple arrangements of it, 27 of which are on my iTunes library. There is no other jazz tune for which I have more than 27 versions.

But the number of different versions one has on iTunes is not a good measure of preference. What's wrong with it? (And along the way, with other measures of preference that we might consider in alternative?)

First, there's the books by the foot effect. Some people like to have many impressively-titled books in their shelves, but have no interest in what the books say: they own, but never read, the books. Similarly, I could own 27 versions of Take Five and never listen to them.

Second, there's a supply effect. There are many versions of Take Five to choose from, but few jazz arrangements of Marin Marais's Alcione. My favorite tune might indeed be a jazz arrangement of Alcione, of which I have only the one existing version, while the 27 Take Five versions count as 27.

Maybe I should use play counts as the measure of preference. Which bring us to the next problem with being careless about measures:

If I have more play counts of Take Five than of Rachmaninov's Third Piano Concerto (aka Rach 3), that doesn't mean I like Take Five better than Rach 3. (I don't.) The longest version of Take Five I have takes about 9 minutes; the shortest performance of Rach 3 I have takes about 33. If the play count for Rach 3 is at least 28% of Take Five's, I spend more time listening to Rach 3 than to Take Five. Given the different durations and the discreteness of the play count (if I listen to 32 minutes of Rach 3, its play count is unchanged), play counts are not good measures.

Luckily there's one good measure: choice under scarcity. But, you say, there's clearly no scarcity of variations on Take Five, and no shortage of them on my library either. True, but there's limited space on the iPods, and therefore the music that I carry in them reveals my preference. And indeed my main iPod carries six versions of Take Five.

Well, this was an educational mistake. It taught me not to go shooting off tweets with technical terms while my brain is still asleep. But at least I got a post to send to people who ask me about measurement, in lieu of addressing their specific concerns.

Eternal vigilance is the price of appropriate measurement.

-----
Post Scriptum: Some people believe, incorrectly, that Dave Brubeck wrote Take Five. He didn't, but Paul Desmond, his long-time saxophonist, did write it for the Dave Brubeck quartet to play, so the misconception is understandable.

## Tuesday, December 8, 2009

### Managing my digital life, a continuing series

Some more observations on managing my digital life, focussing on entertainment content and on how I'm thinking of using social media in an upcoming class. I'll let revealed preference speak for itself:

ENTERTAINMENT IS GETTING LIGHTER, CHEAPER, ABUNDANT...

Kindle books I have bought recently: Brian Arthur "The Nature of Technology," which I first got as an Audible book. John Derbyshire "We are Doomed," which is how I feel. Dominick Dunne "Justice: Crimes, Trials, and Punishments." Dalton Fury "Kill Bin Laden," written under pseudonym by the commanding officer of the Delta Force team who went after UBL in Afghanistan. I also downloaded several free books, both ones in the public domain and some that amazon is offering for free as promotion for the Kindle platform. I'm counting on a Kindle App for the Mac soon.

Audible books I have bought recently: Matthew Crawford "Shop Class as Soulcraft." Brian Arthur "The Nature of Technology," yes, both audio and ebook. Levitt and Dubner's "Superfreakonomics." Joshua Cooper Ramo "The Age of the Unthinkable." Niall Ferguson "The ascent of Money," which I already own on dead tree. PJ O'Rourke "Driving Like Crazy," aka the case against letting PJ drive. Stephen Fry "Fry's English Delight."  Ross King "The judgment of Paris." I got two free books, one a gift from Audible to its members, Charles Dickens's "A Christmas Carol," performed by Tim Curry, another a gift from Leo Laporte's podcast This Week In Tech, Larry Niven's "Ringworld," using the URL audible.com/twitfree. (Of course I have read it! But now I can listen to it.)

Books on dead tree I have bought recently: Avinash Kaushik's "Web Analytics 2.0," on paper because I want to write notes on it. Alas, the paper has a lot of bleed-through with liquid ink pens! Had to fill it with free-standing inserts and post-it notes.

Music I have bought recently: Jacques Loussier "Play Bach: 50th Year Anniversary recording," from Amazon MP3. The latest recording of Mahler's 8th Symphony by the San Francisco Symphony, with supplemental materials, from the iTunes Store. I have about 1TB of music mostly from my collection of over three thousand CDs (80% "Classical" and 18% Jazz); there's little incentive for me to buy new music.

TV Shows I have bought recently: House episode "Ignorance is Bliss," from iTunes, in HD. I'm not a complete hermit, though: I watched some episodes of other programs on Hulu and some movies on Netflix. Some even on TV!

DVDs, CDs, Magazines, Newspapers I have bought recently: (no entries found).

...AND ON THE WORK SIDE, THINGS KEEP PILING UP.

A school I have had a long-term relationship with asked me to teach a class there next summer. There's a lot of things to do before the class begins, which I'll start doing once the class is confirmed and I have an estimate of the enrollment.  I will also use some social media tools, so I had to create two placeholders:

First, I set up a blog for the class and reserved the Blogspot domain for it. Yes, I use Blogger and Blogspot. Cheap I am. This will be a blog about and around the topics of the class, not the class materials repository. For that the school has a very good content management system.

I'll probably post minor things to the class blog: observations about business topics related to the class, interesting or idiotic things other people write about the topic (with my enlightening comments), links to things referenced in the class, credits for materials used from online sources like Flickr and YouTube, and a list of music I play in class. Unlike my personal blog, the class blog will allow comments (by students).

Major things like supplemental handouts, solutions to class exercises, data and computational examples, rants about the improper use of "exponential" to mean "convex," and such are posted to the class repository in the official content management system. By school policy students are expected to check that repository, whereas reading the blog is optional.

Second, I set up a Twitter feed for micro-blogging specific to the class. This is where I'll tweet things like Today's @WSJ discusses the company in the case we're discussing next week: [link] and other minor observations.  Aside: I use Brizzly to manage Twitter feeds; a tip of the hat to Michael Driscoll at Dataspora for bringing it to my attention.

I considered setting up a class forum. But decided against it, since most students will be part-time MBAs and a forum might create the impression that I expect them to participate assiduously. I was once one of them and I know that time for the MBA is a limited resource, purchased with sacrifice; wasting it is disrespectful!

One important observation here, since I have written a 3500-word post on how I prepare presentations: teaching a class and making a presentation require very different skills. I seldom present anything in a class: there are case discussions, class exercises, Socratic give-and-take, and few lecturettes. Other than "define clear objectives; prepare, prepare, prepare; and then prepare some more," there is little advice on the presentation post that would bear on how I teach.

I'M STILL JUST TAKING UP SPACE ON FACEBOOK

My use of Facebook is still limited to keeping a placeholder: if at some point in the future I find value in telling a limited number of people things that I can tell a broader audience using a blog and a twitter feed, maybe I'll move something to Facebook.

## Saturday, November 21, 2009

### Statisticians and marketers: two professions separated by a common dataset.

Some days ago, in response to a friend's question, I wrote a tweet about nested choice models:
Someone else saw the tweet and sent me a question (edited):
Why choose order logit for quantity instead of a count model, say a Poisson regression?
This is a reasonable question: the Poisson "regression" (aka, the estimation of the Poisson lambda parameter as a linear combination of independent variables) is widely used to model physical count processes and makes writing the likelihood function easier. (In the old days, we wrote likelihood functions by hand! Kids these days, I tell you, with the clothes and the music and the hair, I mean, the Mathematica and the R libraries and the powerful home computers...)

The question illustrates an important difference between the statistical view of purchase data and the marketing analysis view of purchase data.

Marketing research, both of the commercial measurement type and of the experimental academic type, has produced a lot of consumer behavior knowledge. Within such knowledge we find that a count process is unlikely to be a good description of buying products in diverse quantities.

Instead, the number of cans of tuna purchased by customer Olivia is likely to fall into a handful of ordinal categories: zero, lower than normal inter-purchase interval consumption, normal inter-purchase interval consumption, higher than normal inter-purchase interval consumption, and very high. It's this categorical variable that should be regressed (order-logited, methinks!) on the variables thought to change Olivia's behavior. For Olivia the categories might be
{0}, {1,2,3}, {4,5}, {6,7,8,9}, {n | n>9}
These categories can be identified before the estimation of the nested choice model; coding them into a separate DV for the ologit is trivial. (The {0} category is never coded, as it is subsumed by the inter-purchase timing part of the nested model.)

Using the categories captures the behavior that marketers really want to understand: how does a marketing action M make Olivia change her quantity consumption in the Olivia scale, rather than the shared scale of natural numbers?

And this is one of the reasons why people analyzing marketing data need to know the basics of marketing model-building: because thinking like a marketer is different from building models based on physical processes.

----
Post-Bloggum: Yes, I know about the identification problems and how sensitive the estimation is to numeric issues. Those really important details are part of the -- unacknowledged and mostly misunderstood -- barriers to entry to the profession.

## Wednesday, November 18, 2009

### Online learning can teach us a lot.

Online learning is teaching us a lot. Mostly about reasoning fallacies: of those who like it and of those who don't.

Let us first dispose of what is clearly a strawman argument: no reasonable person believes that watching Stanford computer science lectures on YouTube is the same as being a Stanford CS student. The experience might be similar to watching those lectures in the classroom, especially in large classes with limited interaction, but lectures are a small part of the educational experience.

A rule of thumb for learning technical subjects: it's 1% lecture (if that); 9% studying on your own, which includes reading the textbook, working through the exercises therein, and researching background materials; and 90% solving the problem sets. Yes, studying makes a small contribution to learning compared to applying the material.

Good online course materials help because they select and organize topics for the students. By checking what they teach at Stanford CS, a student in Lagutrop (a fictional country) can bypass his country's terrible education system and figure out what to study by himself.

Textbooks may be expensive, but that's changing too: some authors are posting comprehensive notes and even their textbooks. Also, Lagutropian students may access certain libraries in other countries, which accidentally on purpose make their online textbooks freely accessible. And there's something called, I think, deluge? Barrage? Outpouring? Apparently you can find textbooks in there. Kids these days!

CS has a vibrant online community of practitioners and hackers willing to help you realize the errors of your "problem sets," which are in fact parts of open software development. So, for a student who wants to learn programming in Python there's a repository of broad and deep knowledge, guidance from universities, discussion forums and support groups, plenty of exercises to be done. All for free. (These things exist in varying degrees depending on the person's chosen field -- at least for now.)

And, by working hard and creating things, a Lagutropian student shows his ability to prospective employers, clients, and post-graduate institutions in a better country, hence bypassing the certification step of going to a good school. As long as the student has motivation and ability, the online learning environment presents many opportunities.

But herein lies the problem! Our hypothetical Lagutropian student is highly self-motivated, with a desire to learn and a love of the field. This does not describe the totality of college students. (On an related statistical note, Mickey D's has served more than 50 hamburgers.)

The Dean of Old Mizzou's journalism school noticed that students who downloaded (and presumably listened to) podcasts of lectures retained almost twice as much as students in the same classes who did not download the lectures. As a result, he decreed that henceforth all journalism students at Old Mizzou would be required to get an iPod, iPhone, or similar device for school use.

Can you say "ignoring the selection effect"?

Students who download lectures are different from those who don't: they choose to listen to the lectures on their iPod. Choose. A verb that indicates motivation to do something. No technology can make up for unmotivated students. (Motivating students is part of education, and academics disagree over how said motivation should arise. N.B.: "education" is not just educators.)

Certainly a few students who didn't download lectures wanted to but didn't own iPods; those will benefit from the policy. (Making an iPod required means that cash-strapped students may use financial aid monies to buy it.) The others chose not to download the lectures; requiring they have an iPod (which most own anyway) is unlikely to change their lecture retention.

This iPod case scales to most new technology initiatives in education: administrators see some people using a technology to enhance learning, attribute that enhanced learning to the technology, and make policies to generalize its use. All the while failing to consider that the learning enhancement resulted from the interaction between the technology and the self-selected people.

This is not to say that there aren't significant gains to be made with judicious use of information technologies in education. But in the end learning doesn't happen on the iPod, on YouTube, on Twitter, on Internet forums, or even in the classroom.

Learning happens inside the learner's head; technology may add opportunities, but, by itself, doesn't change abilities or motivations.

## Tuesday, November 17, 2009

### Professional amateurs

It's funny when professionals in one field make amateur mistakes in another.

When economists without any training in software design or large-scale programming start writing large computer programs, for example elaborate econometrics or complicated simulations, they tend to make what programmers consider rookie mistakes. Not programming errors; just missing out on several decades of wisdom on how to set up large programming endeavors: creating reusable code, working in modules, sharing data structures across problems, appropriate documentation -- the basics, ignored.

Of course, when the roles are reversed, that is when engineers and scientists start butting into economics and business problems, a similar situation arises. A good physicist I know makes a complete fool of himself every time he tries to write about economics, making basic mistakes that students of Econ-101 are taught to avoid.

The main difference seems to be that, while many economists and business modelers will appreciate the advice of programmers on how to handle large scale projects better, most non-economists and non-business researchers are unwilling to consider the possibility that there's actual knowledge behind the pronouncements of economists (and some business researchers).

Which is why I find this tweet so funny:
It's funny because it's true: most of the time technocratic pronouncements by technologists and scientists are either examples of the ceteris paribus fallacy (also known as the one-step-lookahead-problem) or would only work within a thorough command-and-control economy.

The ceteris paribus fallacy is the assumption that when we change something in a complex system, the only effects are local. (Ceteris paribus is Latin for "all the rest unchanged.") A common example is taxes: suppose that a group of people make $1M each and their tax rate is 30%. A one-step thinker might believe that increasing that tax rate to 90% would net$600k per person. That assumes that nothing else changes (other than the tax rate). In reality, it's likely that the increase in the tax rate would give the people in the group an incentive to shift time from paid production to leisure, which would reduce the pool of money to be taxed.

The need for a command-and-control economy to implement many of the quick-fix solutions of technologists and scientists comes from the law of unintended consequences. Essentially an elaboration on the ceteris paribus fallacy, the law says that the creativity of 15 year old boys looking for pictures of naked women online cannot be matched by the designers of adult filters: for any attempt at filtering done purely in the internet domain (i.e. without using physical force in the real world or its threat, aka without the police and court system), there'll be work-arounds popping up almost immediately.

Consider the case of subsidies for mixing biodiesel-like fuels with oil in industrial furnaces. Designed to lower the consumption of oil, it led to the opposite outcome when paper companies started adding oil to their hitherto wood-chip-byproducts only furnaces in order to get the subsidy. Pundits from the right and the left jumped on International Paper and others and screeched for legislative punishment; but the companies were just following the law -- a law which did not consider all its consequences.

Because people game rule systems to fit their own purposes (the purposes of the people living under the rule system, not the purposes of the people who make the rules), mechanism design in the real world is very difficult, prone to error, and almost never works as intended. Therefore, in most cases the only way a one-step based solution can work is by mandating the outcome: by using force to impose the outcome rather than by changing the incentives so that the outcome is desirable to the people. *

So, it is funny to see some people we know to be smart and knowledgeable about their field make rookie mistakes when talking about economics and business; but we should keep in mind that many others take the mantle of "science" or "technology" to assert power over us in matters for which they have no real authority or competence.

That's why that tweet is both funny and sad. Because it's true.

-----
* Sunstein and Thaler's book Nudge suggests using psychology to solve the problems of mechanism design. My main objection to Nudge is that I don't trust that those who would change our behavior would give up if the nudges didn't work. In the words of Andy Stern of SEIU: "first we try the power of persuasion, then, if that doesn't work, we use the persuasion of power."

I fear that the Nudge argument would be used to sell the outcome to people ("sure we want people to eat veggies, but we are just making it a little more work to get the chocolate mousse, don't worry") and, once the outcome was sold, the velvet glove would come off of the iron fist ("tax on chocolate," "ban chocolate," and eventually the "war on chocolate dealers").

David Friedman wrote a much better critique of Nudge and its connection with slippery slopes here.

## Tuesday, November 3, 2009

### More online [work-related] books.

It seems I cannot stop work-related topics from seeping into this personal blog... Here are two more work books I like whose authors have generously posted the full text online:
Eric von Hippel's Democratizing Innovation.

Yochai Benkler's The Wealth of Networks.
And Cory "every author should put their books online for free because I make a good living even though my books are available for free online, but never mention that said good living is from giving talks, not selling books" Doctorow put his new novel Makers online as well. Haven't read it yet, but his earlier works were ok and this one seems to have engineering as the hero, so I'll give it a read when I have free time, around 2020 or so.

## Saturday, October 24, 2009

### Online books on work-related subjects

A quick round-up of some recent good books, generously posted to the internets by their authors:

Noam Nisan, Tim Roughgarden, Eva Tardos, and Vijay V. Vazirani's Algorithmic Game Theory is a good introduction to algorithmic game theory, which explores the impact of computational cost on game-theoretic results. (At least that's how my game-theory-biased brain perceives AGT.)

Trevor Hastie, Robert Tibshirani, and Jerome Friedman's Elements of Statistical Learning, Second Edition. I haven't read this edition yet, but I have the first edition (on dead tree) and it is a very good book. This second edition will probably be even better.

David Easley and Jon Kleinberg's Networks, Crowds, and Markets summarize some important results of economics, graph theory, and computer science as they relate to, unsurprisingly, networks, crowds, and markets.

Christopher D. Manning, Prabhakar Raghavan and Hinrich Schütze's Introduction to Information Retrieval is a book on information retrieval. I've only read it lightly, but it appears to both illustrate the issues of large scale data retrieval and the current best practices clearly and with good detail.

Yes, these are work-related books, which sort of goes against my desire to keep work out of this personal blog. But sometimes one does these things even as one knows they go against one's blog's mission.

## Monday, October 12, 2009

### You're using that number wrongly!

Sometimes, when reading a statistics paper on economic or business matters, I feel a desire, nay, a moral obligation, to track down the authors and beat some sense into them with an econometrics tome. The latest edition of Greene's introductory graduate textbook, weighing in at 4lbs, would be a good choice. (I don't act on these feelings.)

That's probably similar to what statisticians feel when they see something like this stylized version of a discussion I read online. I stylized it so that it's short and doesn't identify the culprits or the forum.
Poster X: I'm never having children because one in four paternity tests show that the husband is not the father.

[Arguments over the "one in four" statistic. Number is acceptably sourced.]

Poster X: Since paternity fraud is one in four...
I couldn't read any more. Holy innumeracy!

Paternity fraud is not one in four, even if the number of failed paternity tests is one in four (by "failed" paternity test I mean that the presumed male parent is not the father).

Thinking like a statistician, I would question the extrapolation of the sample to the population: only a small set of parents test the paternity of their children; is the selection random?

Of course not. For a test to be done there's probably some doubt there. Maybe the child looks a little to much like mom's fitness trainer, for example. You know, the one with the muscles and the hair and the free time.

Econometricians are a subset of statisticians: they too build models over a foundation of probability theory. The subset-ing is on how they build models: typically beginning with a behavioral description of the process underlying the data, said description being based on economic theory.

An econometrician would suggest that the doubt has to be substantial. The costs are high: paying for the test, recriminations (on his part if it fails, on her part if it doesn't), and the general lack of trust that testing indicates. These costs are sure if the test is taken.

What are the benefits? If the test passes, there's guaranteed genetic continuity; but what happens if the test fails? Divorce? Strained relationship? These benefits are probabilistic, with the probability being an a-priori function of the lack of trust.

For a test to happen, the expected benefits have to outweigh the sure cost. So, either the probability of test failure is high or the father places a high differential value on genealogy vs. divorce/relationship strain.

My estimation: /* = guess */ the value of genetic continuity must be high enough to cover the sure costs in the "test passes" case, otherwise there wouldn't be any tests. How much more than the costs, I can't say. For the "test fails" case there's a secondary decision point. Value of divorce may be positive, since there was clear infidelity and attempted deception, but it may also be a net negative. Value of continued relationship given the failed test, positive or negative? I leave these questions to the philosophers and assume that, integrating over the space of possibilities, the value will be small in the "test fails" case.

So high probability will be the main reason for testing.

Using this inference, the rate of failed tests must be much higher than the actual rate of paternity fraud. The difference decreases with the value fathers place on accurate genealogy and with the availability of muscular long-haired fitness trainers.

(Predicting comparative statics is one of the advantages of always thinking in behavioral models.)

I see some potential here for an Exec-Ed exercise, but to pass the Gauleiters it must be gender-neutral. Huh.

----
Yes, Wrongly. Adverb, not adjective. Modifies "using," the verb, not "number," the noun. It's not the wrong number, it is the right number used for the wrong purpose. Used wrongly.

## Saturday, September 19, 2009

### Small screen? How numerologist of you!

A friend asked me how I could watch movies on my 15" laptop screen. Why don't I connect it to my [old, CRT] 27" TV? My answer: Because the movie on the 15" laptop is much larger than on the 27" TV!

"Surely you jest. It can't be," explodes the interlocutor.

Yes, it is. The laptop sits about 50cm from me, the TV about 3.5m. So the laptop covers approximately the same fraction of my visual field as a TV seven times as large, or about 105". Since I watch both from the same slouchy bad posture on my overstuffed couch, the laptop is better. (Yes, it is linear to a first approximation; it's a simple homothetic projection with my eyes as the center.)

Talking about numbers without understanding their meaning is one of the afflictions of the modern-day citizen/consumer/audience/manager. Unthinking reactions to magnitudes (27 vs 15) without context (that the TV is much farther from my eyes than the computer screen) are common and the source of much dismay [when they affect me] or amusement [when they don't].

It's like a new form of numerology, where people use numbers as magic wands -- understanding of the underlying reality considered unnecessary. I have used the BMI as my bête noire and preferred example to motivate students about the follies of neonumerology, but I think that from now on I'll use this even simpler example first.

Numbers mean things. The things are what matters.

## Monday, September 7, 2009

### Inferences can be deceiving

Watching TV can make you act smarter. All it takes is thinking as you watch. For instance:

A car insurance company boasts that "customers who switched to [the insurance company] have saved an average of $ManyBucks." I'm sure that's true, and I'm sure many people make the wrong inference. The wrong inference to make is that [the insurance company] has lower premiums than its competitors. Significantly so, given the average savings of$ManyBucks.

The right inference is: well, duh! Switching insurance companies is effortful; only people who save a significant amount are likely to switch. Thought experiment: would you switch insurance companies for $1/yr? What about$10/yr? What about $100/yr? What about$1000?

Failing to see that the advertised savings come from a sample that self-selects on those same savings, some people infer --- incorrectly --- that [the insurance company] must be cheaper. (This is an example of what statisticians call sampling on the dependent variable.)

This works to the advertiser's advantage mostly when people are buying new insurance rather than switching. After all, the switchers will know whether it makes sense to switch, but the new buyers may just use their perceptions to base their decisions.

As I said in the title, inferences can be deceiving.

## Tuesday, September 1, 2009

### Managing My Digital Life - Introduction to the series

I liked the (now defunct) Managing Your Digital Life podcast with Scott Bourne and Andy Ihnatko. So much of our lives has moved to the digital domain that how we manage that domain has risen in importance. Therefore, I decided to create a blog series in which I explore my own experiences with managing my digital life. In particular how different the digital world is from the sometimes called "real world" or "physical world" as if digital work and entertainment were unreal or its physical expression unimportant.

(Saying that I'll create a blog series strains credibility given how sparse postings have became in this, my fifth personal blog. My use of Twitter for micro-blogging, planned use of Posterous for mini-blogging, and the need to earn a living has made long posts unlikely.)

For example, here are some information products I created or used in the last few weeks:
1. Shopping list for a grocery run, divided by retailer. Created with a fountain pen on a Moleskine.

2. Data from exercise, entered into Apple Numbers. The late great Peter Drucker used to say that if you don't measure it you can't manage it. So, in order to manage exercise, I keep tabs on exactly how much I'm stuck on sticking points at the gym.

3. Some tweets, created either on the website or on Twitteriffic for iPod Touch.

4. This post, edited on TextWrangler.

5. Large number of emails, processed in Inbox Zero fashion, mostly by deleting them.

6. Large number of RSS feeds, forum postings, print media gone online, and web pages skimmed. Some read. A few copied and archived for future reference

7. Commissioned work, in TextWrangler.

8. My own papers, in LaTeX format.

9. Academic papers in PDF. No, not "PDF format." The F in PDF is for Format.

10. Data set for an academic paper, analyzed on my computer using Stata. I could have done the analysis in R, but since I have started this particular project on Stata, there was no reason not to conclude it there.

11. Data set for another academic paper, processed on my computer using a program I wrote in R. (The difference between data processing and data analysis: when I'm analyzing, I spend most time thinking and then issue a command to test an hypothesis. When I'm processing data, I write the program, then leave it alone to run on the data.)

12. Several nonfiction, non-work books on dead tree that I've been rereading at the end of the day.

13. A Kindle book, read on the iPod Touch Kindle app. (My first Kindle book, purchased as a test.)

14. Some reference math, economics, statistics, and technical business books.

15. Several photos taken with my old trusty Canon 5MP camera.

16. Several Keynote presentation masters, which I keep up to date even when I'm not using them. I updated my Marketing Analytics and Decision-Making and Consumer Behavior masters.

17. Several InDesign handout masters, on the same topics and for the same reason as the presentation masters.

18. Many MP3s and AACs of what is called in the retail channels "classical music."

19. A few podcasts, heard while doing household chores, walking, BARTing, or waiting.

20. A few chapters of an Audible audiobook. When out for a walk or on a grocery run.

21. Some CDs of what is called in the retail channels "classical music."

22. Several DVDs, mostly courtesy of Netflix and a couple from my private collection.

23. The Snow Leopard update for my laptop.

First, work versus entertainment: At the most basic level, I can get by without the entertainment part (unhappily), but the work is how I fund my lavish lifestyle. Some of the work material is confidential and might have costly implications for me if its security was compromised.

A second dimension is what is necessarily in hard-drive or disc files (like data that I get to process or analyze) versus data that is conveniently placed in hard-drive or disc files. I used "hard drive" instead of "digital" because a printed book is a digital product, just not an electronic one. This second difference highlights the trade-off one makes between convenience on one side and privacy and longevity (think music CDs vs JAZ drives) on the other.

A third dimension is connectivity requirements. Living in the San Francisco Bay Area, I don't need a MiFi or even an iPhone to get connected easily, but for other areas always-on internet may be a very important consideration. Or to plan ahead for outages: for example, having off-line reading is important for those of us who travel a lot. Enter Instapaper and Evernote.

Identifying the dimensions of a decision problem is just a first step towards solution. This first post has but scratched the surface of what is involved in managing a digital life. I intend to elaborate on these dimensions (and others that may appear) and on other aspects of managing a digital life in this blog series, tagged MMDL.

My marketing training shows through, though: these are not dimensions of the technologies used for living a digital life -- they are the dimensions (some of the dimensions, at least) of the lifestyle. (Maybe I can take this series at some point and use if for teaching or exec-ed...)

## Saturday, June 20, 2009

### Thoughts on Grown Up Digital, by Don Tapscott

And I looked and beheld a great pale horse and his name that sat on it was Net Generation, and the Future followed with it. And Power was given unto them over the Internet, to create with blogs, and wikis, and tweets, and to usher in the New New New Economy.

Here are some of my observations about and around the topics of "Grown Up Digital," by Don Tapscott. In short, it's a good book, not a one-pager, and serves good food for thought -- though I don't agree with all its generalizations. Well worth reading and meditating upon: a keeper.

The general idea is that those currently between 11 and 31 form the Net Generation (NG). NGs have distinct attitudes, values, and life styles, and the motile force behind that distinction is their integration of communication and information processing technologies in day-to-day life. This integration has important implications for the design of institutions: family, democracy, education, work, commerce, and entertainment.

DUMB OR NOT?

Many non-NGs believe the NGs to be the dumbest generation ever. Kids these days, I tell you, with the clothes and the music and the hair... oh sorry, I mean with the texting and the ipods and the twitter... Yes, I'm being sarcastic. But there's a lot of criticism leveled at the NGs: they don't pay attention, they are coddled by their parents and teachers, they can't concentrate on anything for more than a minute, they don't respect their elders' wisdom, etc.

Tapscott presents the critics' position and his short rebuttal in this video; the book elaborates on both. In all fairness, most criticisms of NGs are based on anecdotes, while the rebuttal is based on a systematic proprietary study. Of course, this study has its own critics, who mostly raise questions of methodology.

Because the book's research is proprietary and not available for peer review, I can't address criticisms of substance that hinge on assuming methodological errors. Note that there's no evidence of methodological errors, but closed research is frowned upon by academe and considered suspicious therein. Having worked both in academe and consulting, my view is that the people who paid the $4M for the research have a right to restrict access to their results; given the importance of the topic, partial replications will appear in academic journals eventually. Even if the methodologists were right and Tapscott's data was full of selection effects, that would only make a tiny difference in the impact of the book. It's a matter of order statistics, you see. THE MEDIAN NET GEN-ER IS MOSTLY IRRELEVANT Suppose there are 11 pizza parlors in Extremeville; ten produce mediocre pizza at high cost, one produces great pizza at low cost. The median quality of a pizza parlor is mediocre and its cost is high. Yet, the median quality of the pizza consumed in Extremeville is great and the cost is low. This apparent paradox is solved by noting that almost all pizza consumed in Extremeville comes from the good pizza parlor. This is why I believe that even if the methodology criticisms were correct, and Tapscott's data were rife with selection effects, it wouldn't matter. If the median NG only uses the new technologies to produce gossip, but the NG-enabler technologies afford the most creative and productive NGs tools, channels, and feedback, we all win. The idea is that the change in technologies and its effects on the NGs allow future Pages and Brins and Zuckerbergs to flourish, and institutions should focus their attention on these outliers, instead of making laws and designing institutions based on the critics' worry that Page, Brin, and Zuckerberg's NGs classmates are more interested in Kendra Wilkinson's new reality show than in learning calculus or Latin declinations. To be clear: this is my argument, not Tapscott's, and I present it to make the point that even if the critics were correct it wouldn't matter. EIGHT NORMS OF THE NET GENERATION (Need a balance here between explaining the norms and cutting into Tapscott's book sales, so if you want elaboration I recommend reading the book.) NGs want and prize: 1. Freedom. NGs tend to pick the freedom side of the freedom-security tradeoff in many areas of life. This has led to some interesting developments in the workplace and education, and also to some of the most vociferous criticism of the NGs by those who focus on processes rather than outcomes. 2. Customization. Many people like customization, but to the NGs it is part of their basic cultural ethos. Customization is one of the inexpensive luxuries born of the digital nature of most value propositions and cheap short-batch fabrication techniques. Having come of age with these inexpensive luxuries, NGs take them for granted. 3. Scrutiny. Easy access to data allows NGs to check on the authoritativeness of some authorities -- to the detriment of many of these authorities. Add to that an attitude of skepticism and the willingness to spread one's opinion and the NGs are big scrutinizers. 4. Integrity. Huh? Don't they steal a lot of intellectual property? Yes. On the other hand, they're also active watchdogs of the excesses of institutions. Given how thorny issues around IP can get, and how ham-fisted-ly the IP-holders have behaved, let's call this one in favor of the NGs for their policing of the institutional fringes. (My position, not the book's.) 5. Collaboration. Online forums; blog comments; Facebook and Myspace; instant messaging; wikis; open-source software... does anybody not get the point? (Unfortunately, yes.) Too much openness, however, is leaving the NGs privacy-deficient. Those drunken Spring Break photos on Facebook can and will be used against you in a job interview. 6. Entertainment. An outgrowth of both technological lowering of the cost, and economic conditions favoring the production and consumption, of entertainment, again as the NGs came of age -- thus taking it for granted and demanding/expecting it in all facets of life. 7. Speed. Partly because of technological change and partly because they moved much of their communication to asynchronous high-bandwidth channels (that is, instead of meeting in a cafe to talk they send written instant messages), NGs have a preference for immediacy that is much stronger than previous generations. This can be overwhelming even to NGs, though not as much as to those older people. 8. Innovation. Because they were born in an environment that was changing rapidly, NGs are more receptive to innovation; or, better said, because their product-space environment was always turbulent, they never had time to develop the inertia characterizing a majority of the earlier generations. The book elaborates on the implications of these norms to all institutions of modern life. The following are some of my thoughts on the two that interest me most, education and marketing. EDUCATION New learning for a new generation, or a new generation that actually wants to learn and understands that lecture-based education has never worked well? Sometime in my first week of graduate study, I was told the learning rule: 1% is the lecture, 9% is studying, 90% is solving the problem sets. Practice is how you really learn something. Lectures are not made obsolete by new technologies, they were made obsolete by the technology of printing. (Philip Greenspun writes a longer piece on this, well worth reading. I especially like the part about separating the teacher from the grader.) There are some uses for the occasional lecture, especially when there is no alternative source of the knowledge in the lecture: a research talk discussing recent research; an overview of a field motivated by recent news of interest to the class. But, as a general rule, reading or some form of multi-media self-directed study, followed by practice and application, is a better way to absorb knowledge. The lecture does offer the possibility of interaction, of asking the lecturer a question or starting a discussion with the class, which is one of its last reasons for existence. [How I hate to say this, but] Harvard Business School's use of participant-centered learning does explore this one advantage of the classroom over the multi-media self-directed study materials. Because a well-managed discussion can raise many more questions than study and practice, there's a place for universities as interaction centers. The reason why this is different from the interaction in a online forum is that the HBS participant-centered learning has a strong emphasis on the "managed" part. For all its apparent spontaneous fluidity, the discussion in the classroom is highly choreographed, without appearing to be so to those students involved. Is it worth it? If well done, no doubt; it combines self-study with community interaction and gets the advantages of both. As it is done most of the time, it's a complete waste of time for all involved. A good study plan, with practice exercises and problem sets, a discussion forum, and good testing materials would replace most lectures that "also use the case method." And would yield greater learning and lower cost. Elaborating on the ideas in the book, Tapscott writes about the impending demise of the university as we know it in Edge. Sometimes I think "good riddance," sometimes I think universities are foundation institutions in a society; so I'm torn between the piece's position and the value of having research institutions where young minds can be exposed to the best thinkers in their fields. Which is only relevant to those fields where the best thinkers can be found in universities, I guess... I defer to my personal hero's opinion on some academic fields. THE NEW NEW NEW CONSUMER Consumers who do research, who communicate with each other, who prize integrity, who care about the implications of their consumption activities: NGs are what the nightmares of those with 1960s marketing attitudes (still widespread in 2009) are made of. How can you sell the same product for twenty different prices (to extract that sweet consumer surplus) if search engines allow customers to find low prices effortlessly? How can you sell your old products, 10% of which leave the factory defective, when consumers can immediately post their experiences with them and deter those buyers who might get the 90% which work? How can you lie to consumers anymore? -- Yes, if lying, cheating, being asleep at the wheel, not understanding consumers, not tracking their trends, and generally ignoring value creation, is your idea of marketing, then your nightmares have came true. Same for some marketing academics: If your brand new marketing communication textbook has a section on "the Internet," tacked on at the end, ignoring the distinctions among email campaigns, SEO (Search Engine Optimization), online forums, Twitter, blogging, Facebook, etc, and their implications for the new value proposition, you're not avoiding irrelevance. You're just signaling how clueless you have become. Ironically, NGs make better marketing targets than the previous generations. The very social norms that make them harder to reach by incompetent marketers, oops, I mean "marketers who cannot adapt to change, learn new material after their MBAs, or understand the analytics revolution," make NGs great sources of business intelligence, great collaborators in new product design, and customers highly receptive to that great marketing tool "planned obsolescence," or in its more politically correct name, "new and improved next generation product." I have many thoughts on this, which I'll probably write up in the future, but the essence of these thoughts is captured above. Some of them touch on the discussion in the book, some of them are orthogonal and more technical marketing and strategy points. However both Tapscott and I (and many others) are in agreement with the basic point: Marketers who cannot learn and will not change are toast with the NG. Much more so than with the previous generations of consumers. FINAL THOUGHTS This book is definitely worth reading and pondering. I bought a copy even though it is available from the SF public library, which -- given the overpopulated shelves of my humble abode -- is a very strong recommendation. Definitely worth elaborating upon and arguing with, either inside your head or on the Grown Up Digital web site. ------- NOTE: The opening paragraph is my take on Revelations 6:8 after reading Grown Up Digital, not a quote from the book. ## Thursday, June 11, 2009 ### Quants make good scapegoats Inspired by this post by Eric Falkenstein, here's some advice to managers: You need a quant. If there's any risk you'll make a mistake, and if your boss, board, or stockholders are dumb enough to accept a pass-the-bucket excuse, you need a quant! Quants make good scapegoats. Nobody likes smart people, nobody understands their elaborate models, and everybody wants to beat up the kids whose success is based on being smart and knowing difficult technical stuff. You may be thinking finance is the only field blessed with such great flak-catcher posts as "Chief Economist" and "Head of Analytics," but if you're in marketing or strategy, quants are now available to you as the whipping boys for the ignorant to feed upon. Forgot that marketing is about creating and delivering value to customers, first and foremost? (Oh, you were texting during that MBA class?) No problem, for only a zillion of your stockholders' dollars you can buy a CRM system that will support your multiple decisions to force churn the bottom 10% of customers -- until there's no one left. Then you don't need to bother with the pesky customers and can blame SAP/SAS/Accenture/Whomever. Never mind that these CRM purveyors tried hard to explain what you were doing wrong; they'll take the blame because they can't succeed by attacking their clients. At least they understand this. No time for strategic thought? Why bother with complicated things like understanding the sources of differential advantage or identifying potential threats? You can get always a quadruple-PhD's macro-economic model to take the blame when you miss out subtle indicators, such as your competitor buying your only distribution channel. Odds are that your golfing buddies... I mean your board will side with you over the kid who can't tell a mashie from a niblick. Don't like your quants' recommendations? Ignore them. Got in trouble? Point the finger at the nearest quant. Odds are that when quants start explaining nobody will listen, anyway. Nobody ever wants to listen to knowledgeable smart people. And the quants will be on the defensive, with only the truth on their side... and truth is so overrated in these post-modern times. Get a quant! They're cheap insurance against your incompetence. Because not everyone may notice this is sarcasm, my position on the above is summarized by the chyron with which I finish all my modeling classes: Unlike the managers who blindly trust them, computer models cannot be fired. ## Thursday, June 4, 2009 ### Some observations on being an Accidental Tourist In a bit over 20 years of business-related travel, most of it for one- or two-day engagements of the peroration-plus-consulting type, I have collected some ideas that have made travel less miserable. These are ideas that work for me, derived from observation, planning, experimentation, and reflection, all in the context of what I do in these trips, which is talk to people about highly technical business topics, generally wearing business attire and usually including a presentation of some kind that requires last-minute edits and some data processing on-site. Yes, these details matter. Little of what's below applies to Jean-Michel Jarre going on tour. Don't check bags. The site OneBag elaborates on this -- for tourists, mostly. As a business traveller for whom flexibility is important, I find that being able to carry all my stuff, fast and without having to negotiate ramps for wheeled trunks, is a great advantage. After working through a large collection of rolling carry-ons and hanging garment bags, I've settled on a Victorinox trifold bag. Yes, the tri-fold may harm the suits if you're such a novice at packing that you don't know how to pack a suit for travel. But the small size and light weight, the large open space, and the backpack conversion (for when you have to lug it over miles, oh, say, in Heathrow airport, if you're ever so unlucky as to be forced to fly through it) are worth the small risk. For some one-day trips, I take only a Brenthaven Urban backpack; its design and all-black look are professional enough to not clash with the clothes, and judicious choice of suit and chinos will allow the suit jacket to work as odd jacket (hung during the flight), while the suit pants & vest and the other clothes take up the rear compartment of the backpack. (Bundle packing is worth learning, if you travel much.) If you need to get a large bag from place A to place B when you fly from place A to place B, say a lot of A/V equipment in a Pelican case, use a messenger service like UPS or FedEx. This doesn't work well internationally, but is a good alternative domestically. Multitaskers are very important. Smart phones and high-end laptops are worth carrying; the Kindle, not so much. Because I do data analysis and the occasional data processing on the road, I have to carry a full fledged MacBookPro instead of a MacBookAir. I'm hoping for a new iPhone next week which will replace a gaggle of small electronics: phone, iPod Touch, voice recorder, GPS, camera, camcorder, and ebook reader. The main point about multitaskers is not the particular choices I made, but an attitude of doing more while carrying less. For entertainment, I used to carry DVDs to watch; now I have movies on the computer. To work on downtime, I used to bring a stack of papers to read; now I bring them as PDFs. If in my office I'd print them to read off paper, but on the road I make my adjustments. The quintessential multitasker, the Swiss Army Knife, of which I have several, is sadly no longer a staple in my travel, as the ridiculous "security" rules in place now preclude it. For some critical tasks, you need the optimal tool, even if it is a unitasker. Neckties are unitaskers, in fact their task is just to be present, but they are a part of business attire and must be worn to many social functions. Presentation remote controls are unitaskers, but the difference between being at the podium operating the computer and doing the theater that is a live presentation makes it worth carrying some of these. (One? Are you kidding? Critical equipment requires backup.) Backups are very important. Everything in the laptop is replicated in a portable hard drive, obviously, and all the critical materials are replicated again in several flash drives, each with a full set of copies. Everything important is also on the cloud -- encrypted, of course. But that's just the obvious backing up. There are other things to backup: your flight, your hotel, your transportation. Having backup plans for these help. It doesn't mean having the reservations on several flights and hotels, but rather knowing available alternatives. There's a big difference between letting the front desk at the hotel try to help -- assuming that they try -- and having a list of hotels and their phone numbers ready. Backing up your presentation doesn't mean just backing up the presentation materials. It may mean backing up the presentation strategy. My most important backup is a high-quality print of my handout, which can be photocopied just-in-time if all other materials fail. (I generally send the handout as a PDF early, so the client can make and distribute copies in advance. And I always try to get the contact of the point person whose job is to get these handouts made, distributed, etc. Of the times I don't get a point person contact, it's best to carry copies myself. Pays to make 1-page handouts.) I always carry my prescription glasses, even though I never wear them, which makes them no-taskers. They back up my eyes' ability to hold contact lenses. If it's temporarily lost, I don't want to be blind. (Of course I carry extra contact lenses; but that's no use to me if for some reason I can't wear them.) And entertainment or social commitment backups are also a good idea. If I was planning to spend a free afternoon hiking in the hills near my hotel, a list of nearby museums and rare music stores is a good thing to have in the event of rain. If my plans to exercise vigorously are cancelled by being tired from presenting, having a map of local parks and eateries is a good idea. The main thing here is the attitude that there must be more than one alternative to everything important. It doesn't need to be planned -- though I've found out that planning and researching does help. With time and experience, I have built a personal library of ideas to serve as alternatives at the drop of a hat. Now I never need to watch TV in the hotel to pass the time. (I take a look at the news, especially if I find out via the web, feeds, and twitter that there's something interesting there.) Always carry a notebook and pen. Ubiquitous capture, as they say in Getting Things Done. In my case, it's more a matter of remembering ideas, of quickly sketching out presentations, or doing some recreational math or drawing while on the move. Making notes helps me remember things (as Field Notes say, I'm not writing to remember it later, I'm writing to remember it now). I've used Moleskines more than other options because I like the elastic close, the place-marking ribbon, and the back pocket. But I'm not a snob, and use various notebooks. Mostly I buy these from the museums I'm a member of, supporting the arts and differentiating my notebooks from those of other consultants. I like fountain pens, but they are not practical for in-flight use. Even the Rotring Initial doesn't work well -- though it doesn't leak. I've used a variety of high-tech pens (including the Fisher space pen), but I found that carrying a nice Montblanc Starwalker Rollerball and a couple of Papermate ballpoints is best. The MB impresses upon people what good taste I have (it was a gift) and the others give me two additional colors to think with and they're essentially disposable (I won't care if a borrower never returns them). Audiobooks turn wasted time into useful time. True in all situations, like walking or running, and certainly for waiting in line while the airlines mutate their customers from sheep to sardines. (Mintzberg's joke.) But in my case audiobooks make a significant difference in the travel experience. My eyes tire very easily when reading from an unstable surface; even watching a movie is difficult. (I wear very strong contact lenses.) So, instead of trying to work or read a paperback, I just listen to audiobooks. Audible has quite a large selection of both fiction and non-fiction, and I can easily go through my Platinum membership's two free books a month. In fact, I keep buying extra credits. Of course podcasts are a cheap alternative, and sometimes a good way to get up-to-date on some specific areas. However, other than the WSJ Morning Read (which I get gratis as a Platinum member), most business-related podcasts are disastrously bad, and podcasts about strategy, innovation management, marketing, analytics, statistics, and business economics -- my interests -- are even worse. I do listen to many TWIT podcasts and several non-work related ones. I find that I retain less of audiobooks than I do of books I process visually (ebooks or paper books). For scifi and other fiction that's not a problem, and for many non-work related books that's acceptable. For work-related books, or books that I really want to explore, I end up buying a visual copy in addition to the audio copy. (How about bundling the three options, publishers, ebook, book, and audio file, for a discount? Huh? Too advanced for you?) As with client, so is locale and trip: a little research does a lot of good. Taking a look at a map and figuring out how your hotel, client, and airport relate to each other, figuring out the major thoroughfares, locating restaurants and convenience stores nearby, picking interesting locations to visit if there's downtime, the possibilities are endless. Same with the trip: research the airports involved, if some are unfamiliar to you, and the amenities available at each; research the hotel and its amenities and the neighborhood. Weather is always good to know, and sometimes a quick question on internet forums catering to your personal interests may lead to interesting discoveries. Travel vests are lifesavers. I used to wear tactical pants and tactical shirts to fly. This is a bad idea: you spend a lot of time at security emptying and refilling pockets. Two better alternatives are the fanny pack and the travel vest. With either you just put them on the conveyor belt without taking anything out of their pockets. I used to prefer fanny packs (worn in front), but some places have "no bag" rules, and some airlines want to count them as your personal piece of luggage, so travel vests won. In my experience nothing beats a Scottevest travel vest; its pocket-in-pocket architecture allows me to keep things organized, its structure lets me carry a lot of weight with comfort, and its Personal Area Network is a great way to keep wires out of the way. I have several cargo vests, including two Scottevests, a Columbia, a Trail Designs, and a Paul & Shark, and I'm buying more Scottevests. Avoid airline food, drink as much water as they'll give you, and carry multivitamins. Airline food is not as bad as it's made out to be, but just barely. If you want to eat airline food, ask for one of the alternative meals when you make the reservation. Alternative meals are usually handled more carefully and generally better prepared. Depending on the arbitrariness of the day's security personnel, you may be able to bring outside food into the plane, say a sandwich from a good deli. I used to bring several protein bars and eat them in lieu of food. If all fails (the TSA page says you can bring food, but you might be made to miss your flight by the petty tyrants manning the x-ray machine if you argue that point with them), not eating for a few hours is not a big deal. Water is important, though. Dehydration decreases your ability to speak clearly, your mood regulation, your cognitive abilities, and especially your brain executive function. Keep hydrated. I'm shameless in my quest for airborne water; you need to be, given how unfriendly the skies have become. Multivitamins are important because on the road you may not have time to eat right, or to eat, outright. Vitamins are more necessary than other nutrients, so making sure they're available is important. Plan your clothing, and I don't just mean the outfits. But do plan the outfits. In my case this is fairly easy as I travel with conservative color schemes for everything but ties and pocket squares. (What? Wear a tie without a pocket square? The horror!) Add backup underwear and shirts. You always end up needing one more than you thought. Not wearing tactical pants for travel means you can wear chinos, which -- in a suit emergency or in some social situations -- can dress down a business outfit to a business casual outfit. Yes, there are many places where this matters. Chinos can then multitask as travel, walk-around, and business casual clothes. Sorry, 5.11 pants. Black sneakers are not shoes. But, as a last resort, when your oxford shoes are dripping wet due to your inadvertently walking on the rain-filled potholes that your client's city calls sidewalks, they might work as part of a business casual ensemble. And you can exercise with black sneakers as well as with those with funny colors. Exercise works out the kinks of travel. Even if the hotel doesn't have a health center (what kind of cheap-ass hotel doesn't have a health center of some kind or a swimming pool?), doing some calisthenics in your room or going for a run -- even an energetic walk -- helps get those lactic acid deposits out of the muscles. It also helps relax and re-oxygenate your body. ## Sunday, May 24, 2009 ### Books I've read recently Due to my adoption of Twitter for micro blogging, I neglected my 1000-words-plus-posts blog. (There's also that nagging "work" thing associated with the "earning a living" thing.) Here are some short booknotes on recent readings, in no particular order: Daemon by Daniel Suarez. Neuromancer for the 2010 decade, but with much better research than Gibson's genre-changing opus. Unlike other recent cyberpunk books, it's not politicking with a monomolecular-thin veneer of technology on top. It's a technology-driven story that twists and turns mostly with the unfolding of an AI's plan. Strongest candidate for my preferred fiction book of the year; almost as good as Stephenson's Anathem. Beyond Human by Gregory Benford and Elisabeth Malartre. A fun read peppered with sci-fi examples, this book summarizes some contemporary advances in our evolution into cyborgs. It also raises and attempts to answer some questions about social, economic, and ethical issues prompted by the change from homo sapiens sapiens to homo sapiens machina. The Big Switch by Nicholas Carr. This book raises some interesting questions to which it proposes what I believe are mostly wrong answers. Getting the right answers requires broad technical business knowledge and is a monetizable skill. [To be continued, possibly on dead tree.] Animal Spirits by George Akerlof and Robert Shiller. A good summary of both old and recent research on Behavioral Economics, by two authors who really know their Economics. My only criticism is that they make an implicit assumption that government is the solution to market inefficiency. Instead we should compare the cost of market inefficiency with the cost of government intervention in the market. Governments can be very inefficient as well. On Intelligence by Jeff Hawkins and Sandra Blakeslee. Thought-provoking book on how understanding the structure of the brain is key to understanding how intelligence happens. Full of interesting ideas and worked-through examples. Sanjiv Das recommended it and I put it on my "someday" reading list, reading it after this tweet by Michael Driscoll. Maybe it was an anti-Gladwell knee-jerk response, but it was worth it. The Art Of Intrusion by Kevin Mitnick. Be afraid; be very afraid. Most of our beliefs regarding safety and security are wrong; mostly because of people and policies, not technology. Mitnick depicts several different types of attack on corporate security and includes examples of counter-measures. The scary part is how much security is an attitude, not a service or product, and how many people don't understand that. Nudge by Richard Thaler and Cass Sunstein. Very good overview of Behavioral Decision Theory research. But, like their title suggests, they go beyond the descriptive and become prescriptive. I believe that their well-meaning idea of libertarian paternalism fails because in reality those who would use "nudges" to soft-enforce their choices on others eventually move towards limited choice sets and hard enforcement (link goes to David Friedman's blog). ## Thursday, April 9, 2009 ### Three Easy Pieces 1. DATA VERSUS INFORMATION Many people use "information" and "data" interchangeably. This lack of precision creates problems for knowledge workers --- those who extract information from data and act upon the extracted information (perhaps by communicating the information to a decision-maker). To illustrate the difference between data and information, consider the case of Lucky, a degenerate gambler. Lucky wants to know whether the Giants beat the spread; this information drives Lucky's choice of whether to search for his bookie or to hide from the bookie's goons. That's it: One bit of information, yes or no. A play-by-play narration of the Giants game has a lot of data, but for Lucky there's only one bit of information in it; the rest is noise. (How we get information from data is the question that divides data-miners from model builders: two professions separated by a common problem.) To take an extreme case, consider Jorge Luis Borges's Library of Babel: It contains all possible books, each with exactly as much data as the next. But most of these books are entirely noise, having no information. Vast data stores without the knowledge to extract information from the data is as unusable as the Library of Babel. Information is what we care about; data is only an input. In the sense that brain function is what life is about and oxygen is only one input: It is necessary, but in no way sufficient. 2. BANDWIDTH OF REAL LIFE Bandwidth measures flow of data. But I'm going to abuse the term to measure information flow for real life. Otherwise we would have to consider the astronomical numbers involved into the massively parallel data acquisition and processing system that is the human brain and its attached senses. Bandwidth came to my mind as I purchased a couple of audiobooks and paperbacks. Books (and the written word in general, including blog posts) have a high potential bandwidth, and the pace of information acquisition is controlled by the reader. Audiobooks (and podcasts) have a much lower bandwidth and listeners have much less control over the pace. So why listen to these? My personal reason is that audiobooks (and podcasts) can be "read" while doing things in which a printed book (or on-screen ebook or blog) is not as convenient: While running on a treadmill, taking mass transit (like air travel), shopping in brick-and-mortar stores, for example. The high bandwidth of books has a counterpart requirement: attention. That is why so many people who read technical books fast -- while "multitasking" -- learn almost nothing from them. Then they blame the book. 3. KNOWING MEANS DIFFERENT THINGS TO DIFFERENT PEOPLE What does it mean when someone says they understand Gibbs sampling, or customer service level analysis with option pricing, or -- to use a simpler example -- the importance of validating models after calibration? At the most base level it means that they heard of the concept. This is the level I found many students coming from a marketing modeling class into my product management class: They didn't understand the need for validation at all and therefore they mostly didn't do it unless an external force (the professors' arbitrary demands) imposed it. These students had no knowledge, even though they thought they did. Then there are those who were able to follow the explanation, and understood it as it was done by their marketing models professor, but couldn't repeat it later. At the time of learning, they could see how each step developed into the next and how the whole made a coherent picture. These students did validate models after calibration; they knew that it was important to, but didn't really know why. This is a reasonably operational level of knowledge, but it is not very flexible. A few students were able to redo the explanation they had been taught (more likely the one they learned from self-study, when most learning in MBA programs happens). They really understood the reason for validation, not just its importance. They could concoct examples of how things could go wrong in the absence of validation. This is the level of knowledge that makes for proficient modelers and clear-thinking product managers in the age of analytics. Finally, there's a higher level of understanding, the one where the student (or more likely a professional, a consultant, or a researcher) figures out the explanation from first principles -- discovers the concept in fact. This is a level of subject matter knowledge that goes beyond the proficient and becomes the basis for professional creativity. ## Saturday, March 21, 2009 ### Designers and decision-makers I understand why Douglas Bowman is upset, but he's ultimately wrong: he makes a common error, that of using zero as an approximation for a very small number. First, let me avoid misunderstandings: design is important and trained graphic designers tend to do it better than other people; experiments don't solve all problems and sometimes mislead managers; judgment and data complement each other. On to why Mr. Bowman is wrong, using an hypothetical based on one of his examples. We learn that Google tested 41 different shades of blue for some clickthrough application. Given his writing, he appears to think that the idea is ridiculous; I disagree. Suppose his choice of blue is off by a very small amount; to be precise say that his favorite color leads to one in ten thousand fewer clicks than the one that does best in the experiment. (How finely tuned would his color sense have to be in order to predict a difference of 0.0001 clickability? Without the experiment we'd never know.) The problem is that a small number in day-to-day terms (one in ten thousand) is not used in day-to-day applications (serving millions of search queries per day). Googling the number of links served per day I get about 200 million searches, each with a few sponsored links. Let's say 5 links per search, for a total of 1 billion links. Even if the average payment to Google for a clickthrough is only 5c, the difference in colors is worth$ \$5,000$ a day or 1.8 million a year. (These numbers are for illustration, but management at Google knows the real ones.)

This hypothetical loss of 1.8 million doesn't seem much compared to Google's total revenue but it is a pure opportunity cost of indulging the arrogance of credentialism (meaning: "as a trained designer I should overrule data"). I don't intend this as an attack on Mr Bowman, because I don't think most designers perceive the problem this way. But this is the business way of looking at the decision.

Ok, but what if he is right about the color choice? That is, what if after running the experiment the color that performs best is the one he had chosen?

Then the experiment will waste some clicks on the other colors and there's the added cost of running it and processing the data. Say it costs $\$100\$k to do this. That means that if there is more than a 5.56% chance that Mr. Bowman is wrong by at least 0.0001 clickability, the cost of the experiment will pay itself off in one year.

Using numbers lets management ask Mr. Bowman a more precise question: Can you be 95% sure that the maximum error in color choice translates into fewer than 1 in 10,000 clicks lost?

The main problem here is the same as with most experience-based judgements when they encounter lots of data: they are roughly right and precisely wrong. And, while in each instance the error is very small to be noticed, multiplied across many instances it becomes a measurable opportunity cost.

## Wednesday, March 4, 2009

### How to deliver great presentations

Most presentations are terrible, and that's a choice made by the presenter.

Some may find it hard to believe that anyone would choose to be a bad presenter, so let me explain what I mean. When I finish a exec-ed session, a MBA class, or a seminar, some audience members ask me for advice on how to be better presenters. I ask them a simple question: how long do you prepare for a one hour presentation? Typically the answer is between fifteen and thirty minutes. My answer is about five hours, if it's a presentation for which I already have all the background material.

Let me repeat: If I am ready to start preparing the presentation, meaning I don't have to learn the material or find the information being presented, just create the means of presenting it, it takes about five hours to prepare a one-hour presentation. It gets worse: if the presentation is about twenty-minutes long, it takes more than three hours to prepare it, and it may take one hour to craft the one-minute elevator pitch for any given topic.

Presentation design is very time-consuming. It takes a lot more work than jotting down an outline and turning it into bullet-point slides. Except for people who make presentations for a living, this work is not a good use of the presenter's time. When I tell those who ask me for advice my five-hour per hour rule, they recoil in terror: they can't take that much time away from their other responsibilities. And that is what I mean by their choice to be bad presenters. It is not irrational for them to do so, but it is a choice that they make nevertheless.

Great presentations are not created in the delivery, they are crafted in the preparation. There are ways in which a bad delivery can destroy a great preparation, but there is no way in which a great delivery can salvage mediocre preparation.

I've done this for a while now and I have settled on a method that works for me. I offer it here, free of charge and of guarantees. It is based on three observations: presentation design is work, it takes time and effort, and its results get better with experience and practice.

PHASES OF A PRESENTATION

There are five phases in a presentation: 1. Knowledge or information gathering; 2. Presentation design; 3. Presentation delivery; 4. Audience interaction; 5. Postmortem analysis. To be clear, the five-hour to one-hour proportion is for phase 2 alone.

Phase 1, knowledge acquisition and information gathering, is all the work that goes into what the presentation is about. For example, a sales presentation requires having the numbers, the analytics, maybe some what-if simulations. A teaching presentation (not the best way to teach, but that is another post) requires knowledge of the subject matter, examples, exercises, questions. These are all prerequisites to design the specifics of the presentation.

In addition to the specific knowledge and information to present, it also helps to know the audience: what is their purpose here, who they are, what they believe, etc. These allow a presentation designer to tailor the knowledge (the sales simulations or the teaching objectives) to the audience level. For example, two presentations on clustering, one to the R User Group, another to MBA students, necessarily emphasize different aspects of clustering.

Phase 2, design of the presentation after its objectives are defined and the knowledge is collected, will be described below.

Phase 3, delivery, is very important. But what makes it successful is its reliance on a good design. Many presenters and academics rely on cheap theatrics, which may be entertaining but can never make up for mediocre preparation. Obviously a painfully shy person will flop miserably and a monotone delivery will put the audience to sleep, but most presenters can learn to address these shortcomings.

Truly bad presenters are those who have no trouble facing an audience and deliver in well-modulated tones the flaccid prose of bullet points, punctuated by the switching of institutionally-templated slides. Because that presenter is effectively saying to its audience: I didn't spend my time to make this presentation a good use of yours.

Phase 4, interaction with the audience, usually Q&A, is important because it allows for clarification, expansion, and debate. Therefore, Q&A should be prepared as well as the delivered presentation. Few presenters prepare for Q&A specifically; most assume, incorrectly, that being knowledgeable is enough. Like preparing for phase 3 makes for smooth presenting, so preparing for phase 4 makes for smooth Q&A.

Phase 5, the postmortem, is important, uncommon, and -- when it happens -- usually wrong. Phase 5 is important to learn what works and what doesn't: the actual information and knowledge transmitted, the examples or clarifications used, the delivery media, the rhetorical devices, the questions and the answers, indeed all elements. This feedback is an essential part of learning to be a better presenter.

After a presentation I like to take a few minutes to write my impression of the experience, including my perceptions of what worked and what didn't. I also talk to attendees who linger afterwards, and sometimes email them later. This creates networking advantages, but that is not my main reason. My reason is that there is always opportunity for improvement.

The wrong way to do a postmortem, alas, is to circulate, immediately after the presentation, a closed-answer questionnaire cribbed from some fast-food customer satisfaction survey. If a questionnaire is circulated it needs to be designed specifically for the desired outcome of the presentation and administered with an appropriate lag. Therefore, ending a refresher course in marketing models by asking executives to rate the "likability" of the instructor in a 7-point scale (which is a cribbed "how friendly was your McFriedBurger server" question) is preposterous. Instead, asking the executives some questions about models, a few weeks after the course, measures the impact of the instructor in the variables of interest: did they learn and did it stick?

PRESENTATION DESIGN

The focus of this post is phase 2, presentation design, and how I do it. I repeat: this has worked well for me; my approach is a lot of work; it has taken me several years to get good at it; and, no, I don't know any shortcuts.

When I begin preparing, I first summarize the objectives of the presentation in concise state descriptions. For example, one such objective for a model-building course is "the student can select among binomial logit, multinomial logit, order logit, and rank-order logit as appropriate to the type of dependent variable." This is the presentation equivalent of Management By Objectives: define the outcomes first, then plan the actions. Note that these objectives also make for testable outcomes.

With the list of objectives for the presentation, I plan the structure. This requires ordering the objectives and their supporting materials, allocating time for each, building bridges between them, and setting review points. Many presenters do this. Then they falter: their plan, in outline form, becomes the end product -- instead of being the foundation on which to build the presentation, their outline is plastered on slides, made into bullet points.

The detailed plan is a tool for the presenter, not for the audience. A well-designed presentation doesn't waste audience attention on the structure of the presentation. It may bring up the structure of a rationale, but these two structures (rationale and presentation) are not the same. Also, I've found that pointing out the rationale as we go is less effective than just building it and then, in review, go over the structure of the rationale in detail. Preferably without bullet points.

Regarding tools, outliners were designed for outlines, so why not use them? Two reasons: first, outliners over-emphasize hierarchy; second, it's too tempting to use their entries, usually sentence fragments, as presentation materials -- "why, they export right there to Powerpoint templates, see?"

Extreme hierarchical thinking brought on by outliners is easily ridiculed; instead of the cheap laugh, I just like to point out that Richard Feynman wrote his Lectures On Physics, covering all of Physics, with only three hierarchy levels: chapter, section, and text. If all of Physics needs only three levels, why does each slide on quarterly sales figures for Duluth need five?

I like to outline on a text editor, as it allows for easy insertion, deletion, and movement of topics. Some people use outliners with immense discipline, working within two levels only and never exporting anything, but I don't have that kind of self-control.

WORDS, WORDS, WORDS

Having the plan, do I start Keynote? No. Not by a long shot. A presentation lives and dies mostly by two of its moments: the opener and the closer. These require a lot of thinking in text. Now, in some cases, the opener or the closer are actually other media: pictures, videos, sounds. But I decide to use these media only after I figured out what the message is. And for that I need to think; I do so better in text.

A strong opening statement, a memorable closing statement, clear bridges between topics, and a few key sentences in the presentation (what in media circles are called sound-bites) take a disproportionate fraction of the effort. It is very important to get these right, not just because they are what the audience will remember most, but also because they punctuate the delivery.

These sentences don't just come to me. They are crafted. Most good sentences are: Ted Sorensen's "Ask not what your country can do for you, ask what you can do for your country" (no, JFK didn't write his own speeches; presidents have speechwriters); Winston Churchill "We shall fight" speech (Churchill did write his speeches); Steven Pinker's "I know you believe you understand what you think I said, but I'm afraid what you heard is not what I meant"; and Sir Humphrey Appleby's unintelligible answers in the Yes Minister series. They all share one thing: they were not improvised.

I found useful crafting advice in many sources: The Elements Of Style, by Strunk and White, On Writing Well by William Zinsser, Speak Like Churchill, Stand like Lincoln by James Humes, and Artful Sentences by Virginia Tufte. All are worth rereading once in a while. Being well-read helps, of course, if by well-read one means versed in the works of authors whose wordsmith abilities are singular, as opposed to buying and scanning the fashionable -- and somewhat illiterate -- authors du jour.

Once the key sentences are crafted, there's the rest of the plan to fill in. Here, depending on the audience and the delivery, I decide on how much detail to write down. (When I write a speech for someone else, I write the entire speech, of course.) I'm partial to outline plus key sentences for teaching and to full text for speeches and professional presentations. It doesn't mean I read the text, but it means I invest some time in polishing the words.

In addition to this polish, there are other advantages to the speechwriting approach: I can check for rhetorical pitfalls and use my knowledge of cognitive psychology to minimize communication failure. A good source for those who would rather not get a PhD in decision sciences just for speechwriting is Made To Stick by the Heath brothers.

Knowing some limitations of the human mind helps identify possible problem points in a presentation. Take the case of very large or very small numbers. If I have the number one billion in my presentation, I will come up with some way to make it clear how big it is. Say we're talking about one billion web transactions per week for some transaction system; here's my approach:

"What's the average age here, about thirty? If you made one transaction every second of every day of every year since you were born, you'd only reach one billion transactions two years from now, at around 32. Imagine all those seconds. Now, that is the volume of transactions this system manages, every week: more than the number of seconds since two years before you were born. Per week." (The redundant "per week" is on purpose.)

Another advantage of writing the speech is that it can be edited for clarity and simplified. There are three common types of failed academic presenter: first, those who don't know the subject. Writing the speech ahead would raise their awareness of that fact and they would either learn or cancel the presentation. Second, those who obfuscate on purpose to make the trivial appear deep. Obviously this is a matter of presenter objectives, but a good copy editor -- here preferably not the presenter -- would cut through the obfuscation. Third, those who have new, complex, and difficult material to present and cannot make up good clarifying examples on the spot. Writing the material ahead would allow them to reflect on where sticking points might appear and to prepare alternative explanations or clear examples for these places.

MATERIAL CONCERNS

With the plan (and the speech) I now turn to presentation materials. Most presentation materials fall into two categories: chorus for the speech (as when Steve Jobs says "We sold 300,000 iPods" and the screen behind him has the number 300,000) or object of the speech (as when Steve Jobs says "This is the new iPod" and the screen shows a picture of the iPod; note that the object is not the slide: he doesn't say "this slide shows the new iPod"). Presentation materials can be many things, not just slides.

What is not a presentation material: the outline of the talk. Sometimes it is necessary to have agenda milestones in the presentation, though I try to avoid them as much as possible. Instead of the dreaded agenda slide, I prefer a bridge-or-review statement, maybe with a chorus slide restating the main point. The agenda can -- no, should -- be on paper, with contact information for the speaker and other administrative items. Paper, I said: dead tree with cotton or linen.

The materials to prepare for a presentation fall into four classes. First there's the objectives list, the plan, the speech, and the ancillary examples, prepared responses to questions, and backup talking points. These are speaker-eyes-only materials. I have no problem with audiences knowing that I speak from notes, but my notes are for me not for them: they are designed for presenting, not for audience reading -- they include speaker prompts such as "long pause."

Second, there are presenter-support materials, like projected images and video, sound files, props, walk-through handouts, posters. These are materials designed to help the presenter get a point across, not for further elaboration by the audience. The walk-through handouts may share a physical handout with the agenda and other administrative materials and with reference and self-guided study materials, but it is important to keep in mind their use as presenter supports when making them.

Presenter-support materials are there to help the presenter. In contrast, take-away self-study and reference materials, for instance an article or a list of web references for self-guided study, are there to help the audience learn on their own. In my opinion, unless it poses insurmountable logistical problems, all presentations should have these take-away further exploration documents. In some cases mine have been a single sheet of paper: administrative minutiae and speaker information on one side, references for further exploration on the other.

Note that for teaching engagements there are many occasions in which the students are supposed to prepare materials prior to the class; this is a type of take-away material too. Many rookie teachers have unreasonable expectations of how many audience members will read these materials and how much those who do read actually understand. It is best for most presenters to assume a worst-case scenario of zero on both questions and prepare alternatives that do not depend on the expectations. More so on non-degree engagements.

The teachings of Edward Tufte are essential for making materials used for audience reflection and self-guided learning. Tufte goes a little too far in his dislike of the presenter-support materials (and Donald Norman takes him to task here), but reading his books is essential to learn how to present complex technical materials, and how to receive and consume presentations of complex technical materials.

A fourth type of material is required for instruction engagements: testing materials. Whether they are for grading purposes or for self-testing purposes, a teaching engagement must have an assessment tool. This can also be extended to non-teaching engagements, though I've noticed that some audiences are reluctant to do things that feel too close to being in school. Post-Tutelage Scholarly Disorder, possibly.

(At this point it is probably clear why five hours to prepare a presentation that lasts one hour is positively optimistic.)

The materials themselves vary a lot: from business cases to analytics worksheets to multi-media presentations to post-prandial podium perorations. What is important here is that the materials are created to fit the objectives, the plan, and the words, not the opposite.

Many people like Powerpoint because it allows them to create their slides, their handouts, and their notes in a single program. I don't believe either Powerpoint or Keynote do any these three things well enough. I use Keynote to manage the projector, but I make all the materials with other programs. Powerpoint and Keynote may be the Swiss Army knifes of presentations, but professionals don't use SAKs, they use professional-grade specialized tools.

Putting your slides on paper two, three, six, or more per page is not the same as making a handout. A good handout combines some basic administrative information, some presenter-support materials that can use the high-resolution of paper to their advantage, and all take-away materials and references (including self-test materials if applicable). This task is better done with a word processor and a layout program than by Powerpoint.

Rather than focusing on production tools, it is better to begin by choosing the appropriate presenter-support material. Chorus slides are clearly projection materials. High-resolution engineering diagrams are clearly paper materials. With other things, it depends: short quotes can act like chorus for the presenter, and be on slides (put the quote up after saying it, and most definitely don't read it off the projection screen), zooming in and out of pictures can be done in computer screens, but to compare high-resolution images (say two brand logos) color prints are better. Mathematical proofs should either be in the take-away material (i.e. not in the presentation) or -- if really necessary to have them in the presentation -- done by hand on a whiteboard or flipchart pad.

I make my diagrams in Illustrator, my graphs in Stata, R, or Mathematica, my math typesetting in LaTeX, and my text editing in a simple editor (TextWrangler or Pages used just for editing). Handouts are assembled in InDesign and all graphic post-processing for slides is done in Photoshop. I use many pictures but never clipart: professional-quality photos and graphics only. Yes, I bought them for this purpose; professional work costs money. Animations and video are usually created and processed by people who really know how to do it. (Professionals know their boundaries and therefore subcontract when appropriate.) Sequencing of projection materials is done in Keynote, since I use a Mac.

All these materials, on which so many people fixate, are only the supporting cast for a much more significant actor: the speech, the delivery, and -- I'm not immune to it -- some theatre. Namely props, story telling/acting, and physical demonstrations.

Most people ignore the power of physical props and demonstrations. In contrast, Walter Lewin, a famous MIT Physics professor, uses almost no projected images: writing on the board slows his presentation of mathematical Physics down, giving the audience time to absorb it; this he complements with actual physical demonstrations. Lewin links the equations on the board to the physical demonstrations with the mastery his many years of practice afford him. But even so, as he mentions in the video introduction to his course, he rehearses each class twice every time before delivery.

A final remark on materials: I try to be as robust to material failure as possible: the show will go on even if the TSA confiscates my props, if the main character of my exemplar story of heroic management is indicted for fraud that morning, if the computer projection system in the room is stolen, if there are no whiteboards or flipchart pads, if the handouts... actually the handouts are my tool of last resort, so I tend to bring them myself.

As long as I know what I want to say, have my key sentences memorized and well rehearsed, and distribute my handouts, I can get the job done. Maybe not as perfectly as if everything went well, but surely better than the speaker who had a nervous breakdown in front of 500 colleagues at a conference when he/she couldn't get his/her slides off the internet. (Sex hidden to protect the guilty.)

One time I gave a talk to a large audience. I was promised a computer projection system, but the system didn't work. The room was too big to use any props that fit in a carry-on (nobody would see them) and too dim to use handouts, yet I made no significant changes to the speech, just adapted to the situation: all slides were chorus or illustration; you can live without the chorus and you can rely on the audience for illustration. (Instead of showing a picture of a crowded supermarket, I said "imagine being inside BigBoxStore on the friday after Thanksgiving.") The handouts had the references so the audience could explore the ideas on their own later.

FINAL THOUGHTS

The best advice about public speaking I ever received was "the audience is there to listen to you." Which means I must have something that is worth their time -- "must" in the sense that it is my job to make sure of it. It's like eating out: I'm the restaurateur, they're the diners. The objectives, the plan, the speech, that's the prime rib. The slides, the props, the handout, that's the side dishes. That's why so many presentations are bad: all the effort goes on the side dishes. In the end, there's no meat in them; I make sure there's plenty of meat in mine. So if there's an issue with the side dishes the clients are still well fed.

A final point on preparation: always rehearse. Out loud. In the presentation room and with a camera if possible. Often a rehearsal will suggest some changes, from words that don't work well aloud (avoid rhymes; don't over-alliterate), to projection materials that are wrong for the room (small type on medium screen in large room is a common problem), to demonstrations that won't work in the space provided or break safety rules (burning a copy of a Business Week article to emphasize a point requires talking to the fire marshall beforehand).

Some people confuse memorizing a speech with rehearsing it. If you want to memorize a speech, more power to you, but it does not replace a full scale, all-materials rehearsal. I don't memorize speeches, since I can read a teleprompter or my notes discreetly. (President Obama looks like he's watching a tennis game when he reads from the teleprompters.)

So what is the secret? No secret, just hard work, practice, and experience. The books I referenced throughout helped me. They will help you.