I gave a presentation at South by Southwest earlier this month. I appreciate the many people who voted for my idea, who attended my talk, and who gave me feedback via twitter or face to face afterwards. It was a great experience.
It was a great experience, not for the people I met or for the thrill of speaking , both of which were nice, but more so because it forced me to think deeply about what I wanted to say. A famous writer once said that “How do I know what I think until I see what I say?”. My thoughts are still evolving (one person, who was positive about the talk, commented to me after that she could see my thoughts evolve on stage), and if I did the presentation over, I would frame it differently, but what I believe I arrived at, is this: Big data should measure value fit. Or perhaps more generally, the proliferation of data should be used to measure the intangible things that we say are important to us.
Here is more or less what I ended up saying in narrated powerpoint:
I was happy with my talk, but I will try to simplify things a bit the next time I do it. Rather than present more cool findings from psychology, which are endless but ultimately forgotten, I would have focused more clearly on the point I started with: that we need to bridge the gap between the things we say we care about and the things that we measure.
Just as countries are starting to question whether measuring gross domestic product is a good measurement of that which is worthwhile, companies should start to question whether measuring profits/monthly unique visitors/return on investment/facebook likes/valuation, is measuring that which is worthwhile. A recurring theme at South by Southwest was a focus on the importance of values and happiness as evidenced by talks with names like "Go Forth and make Awesomeness: Core Values & Action" or "Why Happiness is the new Currency?". But while companies talk about values and happiness as outcomes, they don’t measure them, perhaps because they feel like they can’t measure the intangible. Moral psychology and positive psychology, which deal with the quantification of values and happiness related constructs, can provide this methodology so that big data can eventually be used to measure the right things.
Once you start to think in this way, you can see this need everywhere. On cue, a friend recently sent me this article from the New York Times, that illustrates the points I make. It’s by a courageous Goldman Sachs employee who quit because of he felt, in the terms of this post, that Goldman was measuring success the wrong way.
How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.
What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.
Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.
I am sure that Goldman Sachs has sophisticated algorithms to use their giant data sets to predict financial markets and make as much money as possible. I doubt they’ve ever considered measuring the values of their employees. Sometimes what you measure is a reflection of your values.
- Ravi Iyer
ps. I am not short on projects, but if you would like help taking the data you have and using it to measure intangible/psychological things, feel free to email me.