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.

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* 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.

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.

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.