'Manager and the Moron': Bounded rationality unplugged

I was born when Science had progressed so much that we had thirty moons in our Solar system with nine planets; now we have 166 natural moons and Pluto is no more a planet (cannot clear its neighborhood, they say), while there are eleven 'dwarf planets' discovered, of which Pluto is one. There is also confirmed news that there are 200 such 'dwarf planets'.

The entire body of computers that sent the first man to the moon had the same computing capacity as the single smart phone that we hold now.

A 350 year old math problem, Fermat’s Last Theorem got solved in our times; the entire String Theory never was known to Einstein, and he hardly had to deal with more than four dimensions, while the current String Theorists start with minimum ten dimensions in their most mundane puzzles.

Taking agricultural productivity of our times, the most dramatic has been the crop yields in U.S. over the last fifty years, wheat for example increased from 900 kg/ hectare in 1964 to 2700 kg/hectare in 2004.

If you want to read more read in my blog post: http://procyonmukherjee.in/article/62

The progress in many things in business is path breaking that has made allowance for lower cost, making things available to people. Cost of travelling long distances or moving things has shrunk so much that they would be one fourth the price of what it was fifty years back. Information, or its movement, or communication could be virtually free of cost, such is the biggest progress made in making science work in practice. Most of all it connected every man or woman in this planet to the other, remotely, every machine to man, or machine to machine. And at a fraction of the cost, one would have imagined even a few years back.

Peter Drucker, wisely wrote the piece, “Manager and the Moron”, a few years after I was born; he would actually have to eat his words, if he attempted that piece now without making some substantive changes.

Yes, computer is a moron, but managers have made brilliant use of it. If this was Drucker’s message, he was right. A computer cannot do what a man can do, but a man cannot do what a computer can do and that is where the role of a manager comes in.

Speed of analysis and computation is the easiest of examples, where the computer chips in with a clear winner; current complex puzzles would have needed several years of computation without a computer, the results would have been meaningless as they would have lost relevance by the time the results arrived.

Time stamp on a position is one of the brilliant innovations of our times, which can be processed by computers to do wonders and with modeling and statistics, the probabilistic treatment makes it possible to take decisions, which otherwise would have been impossible.

Let me give some worldly examples like the bounded rationality view. Managers, without the morons, got entrapped in the world of bounded rationality; they could see a very small part that lay within their area of control and had to resort to heuristics to solve very complex puzzles. Today the morons make it possible to make far better informed judgments; the judgment however would have to be made by managers and cannot be left to the morons.

The most complex planning puzzle is to match supply with demand at every stocking point, while conflicting requirements from the customers of different segments come up on one hand, and the different objective functions of the business must be optimized. This is a planner’s nightmare as he would have attempted to use heuristics to arrive at some local optima. The only way to solve these complex puzzles is use algorithms that allow us with a solver window to act, which is far more simple, but not as vague as local information would make out of the problem. This is a work that morons can do brilliantly and men cannot. Given a set of constraints, how to tune or modulate the system, such that a desired result could be predicted is a work that morons can do, that managers utilize. When to initiate an action, never too early, neither too late, is something that is easily possible with the help of algorithms, that computers can work on. It makes it possible for demand to be managed with the right supply, not leading to inventories that are not in your control.

Convergence, the like of which the world had not seen before, happens today when machine-man-machine is brought together in one single edifice of an intelligence paradigm, now better described in IOT.

Imagine the world with pedestrians calling cabs and waiting for them and this exchange was left to luck, in absence of a connecting mechanism that could link large number of commuters and cabs, as it could take any amount of time depending on the time of the day. Today these two disjointed sides of the exchange are connected through a technology that makes it possible for the fastest connection to happen. This could be taken forward to freight carriers, who were hauling long distances and had to wait for a return load; today this connection can be efficiently made as connecting an “apparent demand” with a “waiting supply” could be done with a touch on a screen. Every waiting time is a cost and IOT is fast eliminating each one of them systematically.

I am waiting for that day when someone would not have to wait for a cup of coffee when she reaches home, the machine would know when to start warming water even before the lady steps into the house; every switch in the house could be coordinated intelligently saving time and energy. The productivity, in leisure hours, would bring in free time to do so much more.

Men and women, can do what the morons cannot; write a poem, compose music, make art, choreograph a sequence or design a new model in economic theory. There will only be more time for these timeless creations.

Thanks to the morons.