New Metrics for Turbulent Times – Excerpts
April 23, 2009
Cutter IT Journal’s issue on “New Metrics for Turbulent Times” is out! Here’s an excerpt from my Guest Editor introduction. This issue contains some great articles by Cutter authors Vince Kellen, Michael Rosen, Evan Campbell, Sara Cullen, and William Walton on Ethics, IT Architecture, Agile Methods, Outsourcing, and Portfolio Management. Interested in more – perhaps a trial subscription? email me at email@example.com.
New Metrics for Managing Turbulent Times
Point: Tough Times Demand New Metrics
The recession is forcing companies to make tough decisions. New metrics are needed to make the right decisions on getting through the downturn.
Counterpoint: Existing Metrics Are Good Enough
Organizations should resist the urge to concoct new measures when the existing ones, applied correctly, will do.
Opening Statement, by Michael Mah
The current economic downturn has cut a deep gash in the economies of virtually every country and industry, affecting the lives of perhaps every living person in many ways not seen in over 50 years. In a recent live appearance on CNBC, billionaire Warren Buffett said unemployment will likely climb higher and that the economy has basically “fallen off a cliff.” Fear is dominating Americans’ behavior and the economy has followed the worst-case scenario he envisioned. Moreover, in a global recession – fear goes global. It’s not limited to just Americans and U.S. companies. Economies around the world are more interdependent today than ever before. In work and in private life, no one seems immune from having to make tough decisions in the months ahead.
How do people make wise decisions in the face of such unrest? What information do they rely upon and how does that data come into play? When it comes to work life, if cutting costs are mandatory, should we simply make across-the-board cuts with a hatchet, or is it wise to find a more surgical approach? Or is this a time to make strategic decisions to invest, and thereby out-recover the competition when the recession ends? What information, what metrics, should we rely upon to decide?
We are firmly on the scarcity side of the abundance/scarcity continuum. For many (but not all), cost cutting is the order of the day. If you’re a bank or an auto company, it could be a question of survival. Meanwhile, others may find opportunity. For example, discount auto insurers and others are finding their market share increasing as households look for less expensive choices. Companies in these spheres might make a case for investment as their competitors shrink. In fact, during the last economic downturn, some like Intel and IBM famously invested in R&D as their competitors slashed investments. They generated record profits and dominated in technologies like Wi-Fi, once the economy recovered. While this downturn is certainly more severe than the last, the opportunities for those who capitalize may perhaps be even greater.
But let’s get back to the title of this issue, where we allude to metrics in turbulent times. Metrics, put simply, are a synonym for information. While the nature of information is something we want to address in this issue, we also question how people’s minds use or don’t use information during times of turbulence and fear. Joseph LeDoux, professor of neuroscience at New York University and author of The Emotional Brain, explains that the amygdala, an almond-sized clump of tissue above the brainstem, triggers fight-or-flight responses in the brain that actually inhibit cognitive thinking and the logical use of information by the cerebral cortex. In short, our primitive brain imagines that there’s a saber-toothed tiger about to eat us, and it tells us to not think: just run for your life. And in his book “Blink,” author Malcolm Gladwell describes that great decision makers aren’t those who process the most information or spend the most time deliberating, but are those who filter factors that matter from an overwhelming number of variables. Sometimes this happens in the blink of an eye. How should we make decisions while under duress, and what are metrics that matter?
In this issue of Cutter IT Journal, our authors offer you a variety of perspectives to help you address these challenges. We welcome their perspectives on whether new ways of thinking and new forms of information are in order as we confront the current dramatic swing in the business cycle. learn more…