Archive for the ‘Corporations’ Category

Aligning worker and corporate interests

December 24, 2007

Here are two approaches to solve the problem of aligning worker interests with the corporate interests:

  1. Home owners are, in general, more likely to take good care of their property than renters are. Similarly, workers who have an ownership in a company are more likely to be interested and productive than if they simply “work there.” Give workers stock options.
  2. When someone else makes all the decisions (about how to solve a problem, which alternative to take, etc.) then workers have no incentive to be creative and are not motivated. Give workers real decision-making power.

— Extracted from The Wisdom of Crowds by James Suroweicki

Organizations: focus on creating a great system, not finding great talent

November 28, 2007

People’s performance (in an organization) depends on the resources they have to work with, including help they get from colleagues, and the infrastructure that supports their work.

It is impossible for even the most talented people to do competent, let alone brilliant, work in a flawed system.

A well-designed system filled with ordinary — but well-trained — people can consistently achieve stunning performance levels.

Consider investment analysts: they are treated like stars, hired away at enormous salaries, and many achieve great media notoriety. Boris Groysberg found that after a company hires a star, bad things happen all around: “The star’s performance plunges, there is a sharp decline in the functioning of the group or team the person works with, and the company’s market value falls.” In particular, “46% of the research analysts did poorly in the year after they left one company for another … their performance plummeted by an average of about 20% and had not climbed back to the old levels even five years later.”

Why do so many companies still place so much emphasis on getting and keeping great people and so little on building and sustaining great systems? A big part of the answer is that Western countries glorify rugged individualism so much that we make cognitive errors. We give too much credit to individual heroes when organizations do things right and place too much blame on individual scapegoats when things do wrong.

Hard Facts by Jeffrey Pfeffer and Robert I. Sutton

A related blog: Myth: talent is completely fixed and predetermined at birth

Demise of the scientists ethos of sharing information?

September 21, 2007

Prior to 1665, in medieval Europe, scientific knowledge was confined to a secretive exclusive few.

Then, in 1665 the Royal Society published the first issue of its Philosophical Transactions. This was a seminal moment in the history of science, it was the beginning of open access to scientific information. The journal was committed to the idea that all new discoveries should be disseminated as widely and freely as possible.

Today, an increasing share of scientific research and development is funded by corporations. These corporations have an economic incentive in protecting information rather than disseminating it widely.

Example: recently we have seen instances of companies funding studies and then demanding that they be suppressed when the results do not come back to their satisfaction.

The challenge the scientific community faces today is whether it can survive the growing commercialism of scientific endeavors.

— Extracted from The Wisdom of Crowds by James Suroweicki