JustinIdea - Justin Ricaurte's Personal Blog

Stanford Prison Experiment and Swarm Intelligence

Guy Kawaski recently conducted an interview with Dr. Philip Zimbardo, the person who created the Stanford Prison Experiment.  I've been fascinated with this experiment, because of how the situational factors of it could turn good college students into sadistic guardsmen.  Dr. Zimbardo recounts it in the interview and also in his recently published book, The Lucifer Effect: Understanding How Good People Turn Evil.

Although the interview talks a lot about Abu Ghraib, I thought it would be interesting to apply the experiment to corporate cultures.  In the experiment, the night watchmen were given nearly complete authority over what they did, with little oversight and a management team that does not care about the lapses.  Each little lapse will compound over time, until the entire system is enveloped in unethical behavior.  In corporate America, how do you get rid of ethical lapses when people are given much more autonomy?  Some argue you need rigorous internal controls and a great degree of oversight over the employees.  By creating the controls, you can get rid of the behavior quickly.

There is just one problem with having lots of controls...they inhibit system performance.  Swarm Intelligence deals with this area, describing systems of behavior where there a couple of general rules followed by everyone involved.  Researchers found that when you run a simulation with dumb robots and they have a plethora of rules, the dumb robots will collectively act in a simple, dumb manner.  Although if you keep the number of rules to no more than four or five simple ones, the dumb robots as a collective will exhibit complex, intelligent behavior.  Given human beings are an intelligent complex species by nature, giving us a lot of rules to live by will probably make us take simple, dumb actions for fear of breaking one of the rules.

There was on example in the pdf linked to, but what other ways could you implement this to make sure that everyone acted in an ethical and efficient manner?

HBR - Globalization and Summit Syndrome

I've been trying to catch up on the stack of magazines I've accumulated recently.  Here are summaries for two of the articles I enjoyed from March's Harvard Business Review. 

The first was on "Managing Difference: The Central Challenge of Global Strategy".  Ghemawat proposed the AAA Triangle framework to tackle global challenges: adaptation, aggregation, and arbitrage.  With adaptation, companies seek to boost revenues and market share by maximizing local relevance.  With aggregation, they focus on building economies of scale by creating regional/global operations.  And with arbitrage, they exploit differences in national or regional markets by locating different parts of their supply chain in different places.  Although all companies use all three A's to some extent, the A's can be used to create further global differentiation and to exploit competitor weaknesses. 

The second was on the crises gifted performers have at each peak of their success.  This article resonated with me, because I thrive on encountering new challenges and get bored when I no longer seemed to be challenged as much.  Summit syndrome, when gifted performers become dissatisfied at the peak of their success, has three phases.  In the approach phase, the person puts in a lot more effort with marginal gains in improvement, trying to recreate the adrenaline rush of the climb.  Plateauing then occurs when virtually all of the challenges have been conquered.  These individuals continue to produce stellar results but become much more dissatisfied with the work they're doing.  The final phase is descent.  In this phase, performance will slip noticeably and sometimes wrecks havoc on relationships and personal morale. 

To be able to keep this syndrome at bay, it needs to be recognized early on, which can be difficult to do for both an on-looker and the individual.  When it is recognized though, these four steps can be taken to dispel the confusion and set the stage for the next stage of productive growth:

1. Understand your "winning formula" and the vital part it plays in feeling stale or losing your edge.
2. Reconnect with your core purpose in life.
3. Recast your current, or future, job to better align your internal aspirations with external requirements.
4. Create a developmental path by honing a handful of core leadership competencies.

I'm going to keep this in mind the next time I start to feel bored over an extended period of time. :)

2-Day Trip to the Bay Area

I went to the bay area the last two days, and it was a blast!  On Thursday, I met everyone from NUSEA (National University of Singapore Entrepreneurs Association) at their Rainmakers Live! event.  Shao Rong and Eugene were great hosts and introduced me to everyone there.  The challenge Mint put on was a bit intense.  We had 30 minutes to solve a hypothetical problem for the company.  The thirty minutes flew by.  I'm used to 5-hour meetings and 42-hour case competitions, haha.  At the end of the night I was finally able to meet Noah and Aaron of Mint.  They're a couple of great guys and love what they do.  I can't wait until they allow members of the public to try their service!

Yesterday morning, I went back to up to Berkeley and met Yuki from the Lunar Society for bubble tea.  He's also really passionate about being able to make flying to space (and especially the moon) more economical.  Its awesome to meet people that are really passionate about what they do.  Yuki and I are now working on putting together a national team to find a way to make going to space more economical.  If you're interested, shoot me an email at justin [at] justinricaurte.com.  We need both engineers and business people.

After meeting with Yuki, my friend Brenda showed me around Berkeley.  They have some great architecture there.  My favorite building by far was the Haas School of Business building.  It's beautiful!  I forgot to take my camera, but here are a couple pictures I found online, here and here.  There is also a great view from the big C behind the campus, photo found here (San Francisco is in the distance and the Golden Gate bridge is to the right). 

That was my trip in a nutshell.  I didn't want to make you read a novel. :)

The World is Round?

Valeria Maltoni wrote about a very interesting article she ran across by Pankaj Ghemawat in Foreign Policy about why the world isn't flat (a free pdf can be found here), contrary to the thesis put forward by Thomas Friedman in The World is Flat.  One of the most interesting statistics Ghemawat showed was that when looking at cross-border transactions, a best estimate can be that only 10% of everything, from cash flows to immigration to trade, crosses national borders.  Only 10% of telephone revenue comes from cross-national calls, and 20% of trade and only 3% of migration crosses borders.  Another interesting point comes from the fact the previous peak of international integration was in the early 20th century.  It was only in the last 10 years that we passed the peak, and in some cases, we still haven't.

By viewing a localized world as a problem that needs to be solved, there are three areas that can potentially make a lot of money.  Finding a way for people, capital, and products to move relatively freely between countries are gold mines for entrepreneurs to go after.  With respect to people and products, some of the problem stems from government protectionism, but finding a way to transport people and goods at 10% of the current cost could radically change the global playing field.  What if a ticket to fly to Shanghai or London cost only $100?  How many more people would jump at the opportunity to travel?  I'm guessing the price of a ticket to California would drop to $15 and to New York to $20 each way. I would definitetly be traveling more at these kinds of prices. :D

Thought Experiment - Would a 90% decrease in travel costs further push a greater adoption of English around the world as the lingua franca?  Or would Mandarin start to edge it out as more middle-class Chinese were able to travel longer distances?

Entrepreneurs as Idealists

Wednesday in my entrepreneurship class, my professor asked the class what they thought drove entrepreneurs to start their own businesses.  I was surprised when half of the people who spoke-up said it was purely for profit.  Now why does this surprise me?  Because entrepreneurs (or at least the most successful ones) tend to have an ideal/vision of what they want the world to be like and use business to change the world to fit the vision.  Gates wanting every desk to have a computer; Walton wanting to save low-income, American consumers money; Dell wanting to drive down the cost of computers; and Brin+Page wanting to make an algorithm that is more efficient at finding things on the Internet.

Personally, I want to use business as a vehicle to help improve their places in the world, whether it's through education, finance, or an industry yet to be created.  I want everyone in the world to have the opportunity to enjoy an American standard of living.  Why not teach a person to fish and get paid for it?  Both are better off, and the more people you teach to fish, the more money you make in the end.