tjbresearch.com
This blog is no longer active here, but is one of the offerings on The Investment Ecosystem.
You can use the search button below or scroll through the archives to see short descriptions of the postings.
I was going to call this piece "time and motion," but then I realized that I had already used that title before. In a 2009 posting,the research puzzle | More than a decade ago! I led off with a quote from The Principles of Scientific Management by Frederick Winslow Taylor. I didn't spend too much time on him or his work; I was in a hurry to bewail the dangers of multitasking and the diversion of attention to smart phones, a trend that was supercharged by the opening of Apple's App Store nine months earlier.AppleInsider | The date that happened was July 10, 2008.
That, of course, was only the beginning; those issues have intensified in the decade since then. And with each new wave of technological progress, there are new challenges and dilemmas as to the implications of their use.
Before considering some of them, let's return to Taylor. Peter Drucker credited him with being "the first man in recorded history who deemed work deserving of systematic observation and study."E&T | That quote, a summary of time-and-motion studies, and subsequent developments are found in this posting. It's worth asking how we should think about "systematic observation and study" of actors in the investment ecosystem.
If we were to be tracked, it would be obvious that as investment professionals we spend a lot of time looking at screens for one thing or another. On our multiple monitors we peruse charts, spreadsheets, reports, chats, and news feeds, as well as participating in the normal diversions online that everyone else enjoys. No doubt the portions of "work" and "distraction" vary widely. (I wonder how many people follow their advisor or portfolio manager on Twitter and are dismayed by the kind or amount of activity they witness.)
We also find ourselves in conversations and meetings. Some of those move the debate forward or help to solve a problem — and a few result in a real decision — while others are a complete waste of time. Often you think you know in advance which will be which, but an idea or a breakthrough can show up when it is least expected.
There can be much disagreement as to whether time is being allocated productively. Which brings us to the specter of Time and Motion 2.0 (or is this 3.0?). We've already seen many examples of it.
A recent column in the Wall Street JournalWall Street Journal | It was written by Greg Ip. talked about how the "robot overlords have arrived." It concerned developments at Amazon and other firms; the subhead provided a summary: "Software and algorithms are used to screen, hire, assign and now terminate workers." And monitor continually.
It's worth asking what the effects of such monitoring are. Tracking customer service personnel working the phone lines or chat windows might increase the efficiency of a firm, but I don't know anyone who thinks that it has improved service. The electronic and mobile age features many great conveniences, but you have to endure lousy customer service when you need help.
The WSJ piece specifically referenced the impact on "low-paid workers" from these methods of oversight, but it's silly to think that it's going to stop there.
A Bloomberg articleBloomberg | It was titled, "Every Move You Make, WeWork Will Be Watching You." on WeWork attracted attention for highlighting the firm's actions in "placing battery-powered thermal sensors under conference room tables to measure how many pairs of legs were present and for how long." The firm wanted to figure out the optimal size for conference rooms, but: creepy.
And the combination of new sensors and vast data processing capabilities will bring on many new possibilities. Two TED talks highlight some of them. In the first, Rébecca KleinbergerTED | There are a variety of related topics on voice analysis touched upon, among them the differences in our own "outward, inward, and inner voices." covers some of the ways that changes in the sound of a voice may provide indications of health conditions, including Parkinson's, heart disease, menstrual cycles, pregnancy, and depression. Also, the voice modulates in response to conversations with different people and in group interactions. You can imagine how tracking those changes might be used for good or nefarious purposes.
The TED summary of the other talk, by Poppy Crum,TED | Crum is chief scientist at Dolby Labs. asks, "What happens when technology knows more about us than we do?" From reading our micro-expressions like pupil dilation to "tracking the honesty of feelings in someone's thermal image" to gauging the chemical composition of our breath, she talks about how our personal data will be used in new ways. Crum thinks it's a positive, but it's not hard to imagine the other side.
How will these new capabilities make their way into investment organizations and what are the implications?
No doubt Bridgewaterthe research puzzle | I write about Bridgewater and Ray Dalio's philosophy in 2015's "welcome to the machine." comes to mind. Ray Dalio's own TED talkTED | "Ray Dalio makes the business case for using radical transparency and algorithmic decision-making to create an idea meritocracy." is titled "How to build a company where the best ideas win." Videotaping meetings and having scorecards for each employee, constantly updated with live feedback from co-workers, were apparently ahead of their time. But surely the firm isn't standing still; what new technologies are being tried out there now?
Given the reputation for unethical behavior in (at least certain parts of) the investment industry, maybe Big Brother can head some of that off at the pass. Writing for Tabb Forum,Tabb Forum | The site requires free registration before reading. Nick Child notes that "we have more sophisticated means than ever of identifying and preventing incidents of inappropriate behavior." In the trading realm, for example, that could range from catching the kind of "boom-boom room" talk (and action) that poisons a work environment and leads to litigation, or the illegal manipulation of markets that can ruin a firm.
An articleBehavioral Scientist | It was written by Azish Filabi and Robert Hurley. from Behavioral Scientist says that some companies (across industries) "are starting to monitor employees' every click, word, and interaction to catch would-be trust violators," while noting, "Monitoring employees can have benefits, but it can also decimate employee morale and, paradoxically, weaken ethical behavior." Distrust breeds distrust.
There are complicated decisions to be made as to whether and how to use the tools for monitoring that are now at our disposal (and the even-more-powerful ones that will follow in their wake).
And there is the very important consideration of what constitutes productive effort. Free time when the mind can wander often yields better insights than structured time and dawn-to-dusk-and-beyond effort. Yet it seems to overlords like a waste. As Cal NewportCal Newport | His posting carries the interesting title, "On Monks and Email." recently wrote, "few organizations think seriously about thinking, which, after all, really is the fundamental value-producing activity in knowledge work."
There's no doubt that the leaders of organizations will need to wrestle with whether and how to incorporate surveillance technologies going forward. There will be new ethical, practical, and incentive questions for them to ask, but the likelihood is that over time there will be more resources devoted to watching you.
© thomas j. brakke, llc 2023
tjb research