HBR debate… pleasing Wall Street
November 5, 2009 Leave a comment
Ed Catmull posted an article in the Harvard debate: Pleasing Wall Street is a Poor Excuse for Bad Decisions.
My comment on Ed’s article is as follows:
It’s been clear to us for 15 years that misalignment between compensation incentives and the long-term needs of organizations, investors, communities, and individuals were increasingly competing for the prize of chief cause in systemic crises.
Let’s not forget the impact of stock options — both negative and positive, and the interconnected relationship with markets — from regional housing markets to Wall Street brokers to the formation of bubbles.
What we’ve found in our long-term effort, which trust me was far more difficult in my small private lab than the challenges discussed here and by my peers, is that to deal effectively with the highly complex issue of alignment of interests in large organizations, several other issues must be dealt with simultaneously, creating an exceptionally high bar for resolution in the digital work place environment that is infamous for incremental improvement at best. A few of the key issues I found in our research:
1) A holistic systems approach was essential, without which it may require dozens if not hundreds of years in an incremental model– my best guess is never.
2) Privacy / IP protection and transparency must be tailored by mandate in the vast majority of organizations; even those not required by regulation to do so.
3) The system must be interoperable so that it can be integrated with partners, to include in many cases public and private, R&D partners; without which new adoption is probably impossible anyway.
4) The system must be adaptable to quickly changing forces in the global economy, with the ability to tailor down to the individual.
5) A substantial menu of compensation models (psychological and financial) is required for tailoring to specific needs (for example the model described by Charles) — one size or model that normally dominate debates on motivation and compensation is based on either conflicts or ignorance– having nothing to do with the variety of cultures out there. Wall Street is a tiny minority culturally, despite the global impact.
6) Alignment of incentives is but one very important consideration in overcoming a host of interconnected issues facing large organizations today, all of which influence the other, requiring embedded intelligence on the individual worker, original work, communications, project teams, business groups, and organizations, among others.
Unfortunately, despite humbling interest in next generation intelligence systems, particularly in the past year, when we approach industry leaders we have been faced with a similar response to that by Vint Cerf when he and his partner presented their DARPA project to the then CEO of AT&T: “It’s impossible, and even if it were not….”, which is almost like saying survivability is impossible — from what I’ve observed in looking at our ever growing series of man caused crises — it may not be possible not to adopt far more intelligent systems design. Fortunately it is quite doable and far more strategic to the interests of many than they apparently understand.
After many conversations with decision makers in the private and public sector, I can confidently share that each needs to look at a mirror when it comes to adoption policies of long-term R&D in their own organizations, for that is the problem, assuming of course we want others to take the often brutal long-term approach to overcoming the most difficult problems, particularly in a manner free from conflicts that can actually lead to solutions. Thanks again for the contributions.
Founder & CEO
Santa Fe, NM