The manager and the moron (1967)
mckinsey.com
mckinsey.com
The notion that it eliminates the instinctual and actually introduces information is actually an incredible insight to have at the dawn of available(ish) computing.
One developed, if one had any sense, a reasonably good instinct for what
invention was plausible and likely to fly, and what wasn’t. But real
information just wasn’t to be had. Now, for the first time, it’s beginning to be
available—and the overall impact on society is bound to be very great
It's always nice to chew on some good old thoughts that are still relevant.
""" Our greatest managerial failure rate comes in the step from middle to top management. Most middle managers are doing essentially the same things they did on their entrance jobs: controlling operations and fighting fires. In contrast, the top manager’s primary function is to think. The criteria for success at the top level bear little resemblance to the criteria for promotion from middle management.
The new top manager, typically, has been promoted on the basis of his ability to adapt successfully. But suddenly he’s so far away from the firing line that he doesn’t know what to adapt to—so he fails. He may be an able man, but nothing in his work experience has prepared him to think. He hasn't the foggiest notion how one goes about making entrepreneurial or policy decisions. That’s why the failure rate at the senior-management level is so high. In my experience, two out of three men promoted to top management don’t make it; they stay middle management. They aren’t necessarily fired. Instead, they get put on the Executive Committee with a bigger office, a bigger title, a bigger salary—and a higher nuisance value because they have had no exposure to thinking. This is a situation we are going to eliminate.
From experience, I think this is still somewhat apt today in that we push people to go through the grunt -> middle manager -> upper management chain with a detour through an MBA program possibly tossed in for good measure rather than grooming people to think and develop a different kind of leadership. It's an interesting thought.
I'm not sure how applicable it is to entrepreneurship as to small to mid-size companies, but I think it's worth nothing.
Interesting stuff!
""" Perhaps the greatest shock to our Rip Van Winkle economist, however, would be the fact that, with the exception of the plastics industry, the main engines of growth in the past 50 years were already mature or rapidly maturing industries, based on well-known technologies, back in 1913. """
and
""" Within the next ten years, information will become very much cheaper. An hour of computer time today costs several hundred dollars at a minimum; I have seen figures that put the cost at about a dollar an hour in 1973 or so. Maybe it won’t come down that steeply, but come down it will. """
Overall, a very interesting read.
From
http://en.wikipedia.org/wiki/Gross_world_product
The gross world domestic product in 2012, using 2012 value dollars, was a bit under 72 trillion dollars.
Gross facebook revenue per google in 2013 was 7.9 billion dollars.
Some arithmetic done in my head and to one sig fig facebooks revenue is about one ten thousandth of the worlds GDP.
Fortunes can be made in tech, but its always going to be a rounding error compared to food, shelter, etc. There's just too many people eating, for example.
"To be sure, the computer has created something that had never existed in the history the world—namely, paying jobs for mathematicians."
And yet, it's rather the reverse. Air cargos exist, but they're low weight, high volume.
From the US DOT "Freight Transporation, Global Highlights 2010", total world ocean freight exports were 8,032 million short tons in 2007.
Total air freight handled by the top 25 world airports was 34.535 million tons.
That's 234 tons of ocean cargo per ton of air cargo.
The real revolution was in containerization, not air freight.
The leading seaport (Shanghai) handled 561.446 million tons of freight.
The leading airport (Hong Kong), only 1.462 million.
The energy cost of air travel per ton mile is roughly 250 times that of ocean cargo -- about 5.9 ton miles per gallon for a Boeing 777 (I don't have 747 numbers handy), vs. about 1500 ton miles/gallon for a large container ship.
But even with all that, Peter Drucker couldn't predict Moore's Law.
OP's claim that 1913 to 1967 was an era of minimal (linear) change couldn't have been more wrong. While many nations returned to economic "trend line" there was a lot of, um, painful stuff in between. Even if you downplay World War I and II, you've still got the 1918 flu, the Great Depression, etc. Also, the US went from a regional power to a superpower in about 30 years, while Europe dealt with poverty (and lingering remnants of fascism) into the 1960s. That's a change. Only Americans (excluding those who served in the wars) had the privilege of saying that 1913 to 1967 was a smooth ride.
Oddly enough, this time period (in which he understates progress) was written when world GDP growth was at its all-time (unmatched, even now) peak of 5.7% per year (we're around 4.5% now, which is better than we've been). The R&D efforts that didn't seem to be delivering (because flying cars and AI hadn't been invented yet) were already pushing the economy to grow faster than it ever has (and will have, as of 2014). It got a bad rap ("people in those cushy R&D labs aren't earning their keep") because it underperformed relative to unreasonable expectations, not because it wasn't working. (Oh, and there was that perceptron thing; the bit of high-school geometry needed to show that a single perceptron can't do XOR became "neural networks don't work" became "AI is a dud".) So we have a lot to learn from the 1960s, and as a society, we should consider dumping the Snapchat nonsense in order to some real R&D.
Here are a couple of gems:
Twenty years hence, an institution that’s the equivalent of a steel mill in terms of mental work—MIT, for example—might well have its own computer.
Technically there is no reason why Sears, Roebuck could not offer tomorrow, for the price of a television set, a plug-in appliance that would put us in direct contact with all the information needed for schoolwork from kindergarten through college.
So there were no computers at MIT in 1967 (So what was that Whirlwind thing back in 1948) but Sears and Roebuck could have invented the Internet that year.
I think by far the most twisted notion in the article is the idea that little changed between 1913 and 1967. I'm pretty sure technological change during that period had more impact on the average Westerner's life than any other 54 year time span in history. It takes a very peculiar world view to completely ignore the invention of television or to consider a biplane as being basically equivalent to a jumbo jet.
That's not what it says at all. He states that the 60s economy is still dominated by technologies that pre-date 1913. He even specifically cites the economically dominant technologies, instead of the vague assertion, "I'm pretty sure ...". He particularly notes aeroplanes and computers as being invented during that period and can be expected to have enormous economic impact. Which they did, but hadn't by that point. The same with television.
Looking at the rest of your comment, I kind of think you should delete and reread the article. Every criticism is incorrect or unsupported - like the MIT crack. He's clearly talking about the "thin client" approach to providing computing - he was wrong, but it was not an unreasonable supposition to make.
Aren't Chromebooks, tablets and smartphones thin clients to Google's mainframe, Facebook's mainframe, Apple's mainframe?
What processes the Siri commands? Who calculates the directions in your navigator?
So, I would argue, that for the period he is talking about the fat client and stand alone models were much more dominant than the thin client, in contrast to his expectation.
Or to use his reference point, nearly every university had its own computer in the 80s, rather than using a thin client to a host at MIT/Oxford/Harvard etc.
And in general, despite the cloud, I think fat clients are still dominant. I.e. look at gaming, the majority of processing is still done locally, despite MMOs and the internet.
EDIT: I think most people expected thin computing to dominate. But it turns out to be easier to manufacture and ship PCs around than data.
So, it wasn't because they thought the thin client approach was better, it was just the only realistic future they could see given the cost and size of computers at the time.
You cpmpletely misunderstood that paragraph. He said that MIT would still have its own computer in 20 years because knowledge is its core business, but that other institutions would, instead of owning their own computers, use rented ones remotely.
He was basically predicting cloud computing.
The main thrust was about the increasing importance of knowledge and information, where he was spot on.