Cristian Mitreanu's Blog

What Is Interesting?

Ever wondered what makes an idea interesting? In his 1971 article "That's Interesting!: Towards a Phenomenology of Sociology and a Sociology of Phenomenology," published in the Philosophy of the Social Sciences, Murray S. Davis provides some timeless insight. Here are three interesting (no pun intended) excerpts:

"It has long been thought that a theorist is considered great because his theories are true, but this is false. A theorist is considered great, not because his theories are true, but because they are interesting. Those who carefully and exhaustively verify trivial theories are soon forgotten; whereas those who cursorily and expediently verify interesting theories are long remembered. In fact,the truth of a theory has very little to do with its impact, for a theory can continue to be found interesting even though its truth is disputed -- even refuted!"

"We have seen that an audience finds a proposition 'interesting' not because it tells them some truth they did not already know, but instead because it tells them some truth they thought they already knew was wrong. In other words, an interesting proposition is one which denies some aspect of the assumption-ground of its audience, and in The Index of the Interesting we have categorized the various aspects of this assumption-ground which can be denied. Since this is the defining characteristic of an 'interesting proposition', it can also be used as a criterion to determine whether or not a particular proposition is interesting."

"But even the 'Stars' of social science sometimes assert propositions found to be non-interesting. Why should this ever be the case? Besides the occasional fall of the Stars themselves into mediocrity, the fault may lie not in the Stars, but in their audience. Propositions are interesting or uninteresting only in relation to the assumption-ground of some audience. If an audience finds a proposition asserted by a reputable social scientist to be obvious or irrelevant or absurd, it may be because the proposition has come to the attention of an audience other than the one to whom it was originally intended. A proposition which merely affirms a particular assumption, is irrelevant to any assumption, or annihilates the whole assumption-ground, of one audience may have been formulated to deny a particular assumption, be relevant to some assumption, or harmonize with the whole assumption-ground, of another audience." 

You can download the entire article here.

Powerful Quick-Fix for the MBA

Criticism of the conventional MBA program is nothing new. For years, Professor Henry Mintzberg of McGill University has arguably been the champion of this movement. In the 1992 Harvard Business Review debate “MBA: Is the Traditional Model Doomed?,” he describes the product of such programs as “people [who] are committed to no company and no industry but only to personal success, which they pursue based on academic credentials that are almost exclusively analytic, devoid of in-depth experience, tacit knowledge, or intuition.” Later, in his 2005 book “Managers, Not MBAs,” he writes, “Using the classroom to help develop people already practicing management is a fine idea, but pretending to create managers out of people who have never managed is a sham.”

Some may disagree with this stance. And considering that the demand for MBA degrees continues to remain high (as illustrated by the New York Times article “Bank Crisis Shifts Demand for M.B.A.'s” and the Graduate Management Admission Council’s own records “Total GMAT Tests Taken by Testing Year”), it does appear that employers do value these graduates. So, could it be that the conventional MBA program has become more of a recruiting tool that supplies employers with strong employees rather than future managers? Hard to tell.

On Harvard Business Review’s blog, in early 2009, several thinkers discussed problems and potential solutions on the forum “How to Fix Business Schools,” followed later by more posts on the same theme. Things are moving, nonetheless. Most schools seem to be hard at work refining their MBA programs by either tweaking their respective curriculums or their approaches to teaching, or both. A group of Harvard Business School faculty has even documented some of these developments in their 2010 book “Rethinking the MBA: Business Education at a Crossroads."

Unfortunately, the biggest problem, as it was articulated by Prof. Mintzberg (you can’t create managers in the classroom), is inherent to the conventional MBA program. In general, a lower graduating age means more time available to advance up the corporate ladder, which further means an increased probability of a successful business career. In addition, an increased number of success stories means a larger applicant pool (which also tends to push the average age lower, where managerial experience is low). And so, as long as schools can show some sort of causality between the MBA degree and a successful career, this cycle becomes self-reinforcing.

The advent of the Internet has made this causal relationship increasingly elusive. Not only that the knowledge taught in school has a lower value due to its widespread availability, but the limitations of our general understanding of how businesses work is becoming more apparent. And this, as one of the main drivers behind the value proposition of the conventional MBA program, will prevent the current revamping efforts undertaken by many schools from having any meaningful impact. A true overhaul will only occur when the business management body of knowledge successfully makes a significant leap forward.

However, as we wait for a new theory that would allow us to integrate currently disparate concepts and generate a more realistic business big picture, there is one easy and powerful solution for the MBA program: introduce a mandatory class of history of business and economic thought.

In spite of the underlying implication of the word “history,” this class should be more about thought and historical circumstances, than about the completeness of the record. If developed and implemented in harmony with the rest of the program, the “history” class could have a significant impact on three dimensions. First, it would help students acquire not only a dynamic perspective of the business world, but also a better understanding of how various concepts are related or fit together. Second, the class would provide a platform that would “nudge” students into thinking critically about existing concepts, and further into creating their own. Lastly, the new capability of providing students with the more advanced skill of understanding the big picture could be a significant source of competitive advantage for any MBA program.

UPDATE 3/15/2011: This idea was also submitted as a "hack" at the Management Innovation eXchange (http://www.managementexchange.com/hack-67).

Enabling Individual Freedom and the Pursuit of Happiness

Formatted as a "YouTube video," here's an introduction to the new economic worldview that stems from the theory detailed in my article "A Business-Relevant View of Human Nature" (this should be your next stop). Some interesting conclusions can be drawn from it, including a potential explanation for the current economic crisis...

UPDATE 1/23/2009: A transcript is now available here.

My Human Nature Article Gets "Must Read"

My article "A Business-Relevant View of Human Nature" has been recently recommended by Stephan Zimmermann, professor and former department chair for economics, whose blog "No Widgets Here" is part of the online economics magazine Amateur Economists. In the comments section of his post "Dominant Economic Views in Western Society, Part II," Professor Zimmermann says (bold type is mine):

"Cristian - your article should be a "must read" for all of our "Amateur Economists" readers. Obviously I agree with your concept of "successful existence," which really cannot (or should not) be reduced to a pat formula, economic or otherwise. This might even, as you suggest, include maximizing, as long as the inherent dangers of such maximization are considered."

In his article "Turning Bright Lights on the Dismal Science," Prof. Zimmermann explains one of the reasons a deep insight into human nature is important:

"Economics is just another method of trying to solve the age-old question of what, how and to whom to distribute finite resources. [...]

Ever since Adam Smith, the foundations of economics have been presented as scientific fact. The facts presented as economics are really two: an assumption regarding the nature of man as well as a strict belief and usage of logic. Unless someone can show an alternative to thousands of years of developed logic based on fact, we should be able to live with that assumption. More difficult, of course, and subject to endless debate is the assumption regarding the nature of mankind. [...]

Too many would-be economists in graduate school or beyond may never really have had asked themselves about the fundamental nature of man.

Once we understand and accept the essentials of mankind, bolstered with valid facts, we should be able to look at the "dismal science" with a much brighter perspective."

A New Take on the Business Cycle

The concept of the Business Cycle, or Economic Cycle, is one of the most important topics in economics.   It represents the quest to understand why an economy tends to alternate between periods of growth and periods of decline, or recession (a subject all too common these days!).   Expectedly, this is a fiercely debated subject, and thus there are several related theories out there -- check Wikipedia's "Business Cycle" for a good introduction to the concept.   As I mentioned in the past, the business theory that I developed recently has the potential to provide novel explanations for broader economic phenomena; including the Business Cycle.   Since I just published the article "A Business-Relevant View of Human Nature," which details (as opposed to the more abstract explanations from BizBigPic or my book "Spointra") the basis of my fundamental theory of business, it is now possible and timely to elaborate a little on the new perspective on the Business Cycle.   Despite my efforts to keep this simple, though, you should read the article.

... Done? ... Let's move on, then.

As you know now, all business transactions can be represented on the continuum of problem-solving behaviors.  At any given time, a transaction occupies a particular position on the continuum.  Furthermore, over time, that position tends to move lower under the effect of commoditization.  Now, if we think of a national economy as the totality of business transactions that take place within that particular country, the economy can be seen as a collection of positions, or dots, that are moving lower on the continuum of problem-solving behavior. In addition, dots are continuously added (i.e., new offerings) or discarded (i.e., irrelevant offerings).  (For some help with visualizing these dynamics, you can check the second part of my video "Strategic Vision a la Spointra," with the note that: (1) it is a two-dimensional representation; (2) it refers to a firm; and (3) the continuum is placed horizontally, as opposed to the vertical orientation from the article.  So, instead of a top-down movement, you will see a right-left movement.)

We know that each of these dots has an associated stream of revenue that grows larger as the dot moves lower (a.k.a. commoditizes).  We also know that during its continuous evolution, the collection of dots tend to form a cluster, where a majority of the revenue is generated.   I will refer to this cluster as the Center of the economy.   Due to the continuous downward movement of all transactions in an economy, the Center will typically emerge at the lower end of the continuum of problem-solving behaviors.  Now, there are three general areas on the continuum, each associated with a particular business environment.  At the lower end, the environment is characterized by commoditized offerings, high levels of standardization, high levels of competition, low margins, etc.  All this implies that practices like consolidation through mergers & acquisitions, business-process outsourcing, and personnel reduction due to process automation are very common.

 

I will conclude for now with some thoughts.   It is clear that the Center's formation or migration to the bottom of the continuum is natural, being driven by human nature.   The way down is characterized by increasing revenues, and thus economic growth.   But once there, the conditions tend to worsen for most participants.  Moving up or dispersing the Center can be caused by technological revolutions (which would create a multitude of new high-level offerings).   However, it can also be caused by widespread divestures of irrelevant offerings, and profound social and political change (which would cause many transactions to be repositioned on the continuum), among others.   That is why it is often that we see recession, or economic contraction, being associated with these sort of events.

So, there you have it -- another view of the Business Cycle, or a general pattern for economic fluctuations.   I will come back with more thoughts in the future, but in the meantime let me know what you think.

Referenced in Upcoming Book "Strategy and the Fat Smoker"

My MIT Sloan Management Review article "Is Strategy a Bad Word?" will be referenced in David Maister's upcoming book "Strategy and the Fat Smoker." To be released in January 2008, the book brings together articles that David, a renowned consultant and former Harvard Business School professor, wrote over the past few years. Nevertheless, the bound galley shows that the articles have been slightly reworked and formatted to serve the main purpose of the book -- to offer practical advice on how to overcome short-term temptations and go after enduring corporate health. Simply put, the book shows you how to "get the fat smoker on the diet."

David previously referenced "Is Strategy a Bad Word?" in his article "What's Our Deal?" (also a chapter in the book), and in his blog entry "What IF There's No Final Whistle?" Although its release was fittingly timed to coincide with the New-Year-resolutions season, the book can be pre-ordered now at Amazon.com.

Puzzled by Diagrams?

Here's what Prof. Henry Mintzberg writes in his paper "Developing Theory about the Development of Theory:"

"My work is loaded with diagrams, seeking to express every which way how the ideas I am trying to make come together. Aristotle said 'The soul...never thinks without a picture.' I try to help my soul think. [...]

These diagrams really help me a great deal: I can see it all at a glance, even if outside my head. But not always into other heads. I have been puzzled to find that some people are puzzled by these diagrams. They don't think in such terms, nor are they even able to see it in the work of others. Even many of my own doctoral students, sometimes including the best, when urged by me to express their ideas in diagrammatic form, have not gotten past a 2x2 matrix or two. Maybe this has to do with my education as a mechanical engineer -- probably the only thing left of that -- or at least my predisposition to do that kind of education, because I like to see things altogether, at a single glance, to quote a famous composer."

My book "Spointra and the Secret of Business Success," as well as the related initiative BizBigPic, is quite heavy on the graphic side. However, this blog and BizBigPic, which uses a blog technological platform, are perfectly suited for discussions. So, if you have any questions, please don't hesitate to start a discussion.

How to Innovate Your Online Venture

Earlier today, MarketingProfs.com published my new article, "How to Innovate Your Online Venture," based on an earlier post on this blog. The publication is timely. Recent announcements from Google and Amazon.com, highlighting new improvements (read "innovations") of their services, support the model presented in the article.

Google: Universal Search
http://www.google.com/intl/en/press/pressrel/universalsearch_20070516.html

Amazon.com: Digital Music Store
http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1003003&highlight=

Spatial Thinking in Strategy

Tiha von Ghyczy (Darden School of Business, University of Virginia) wrote an interesting article, "Constructing Strategic Spaces," as a precursor to a future book about spatial thinking in strategy. Here is one of the closing ideas:

"Strategy is a particular form of social coordination across scales of space and time that can be bridged only by articulated and shared thought. Strategic spaces are superb catalysts and vehicles for the thinking itself and for the articulation and the sharing. They are also -- unlike narratives in the form of vision and mission statements -- open-ended and highly plastic."

Remember, the concept of ofmos, introduced with my fundamental theory of business at BizBigPic.com and later presented in the book “Spointra and the Secret of Business Success,” is actually a strategic space.