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April 2015

MIT SMR on building your personal board of advisors

The March 2015 issue of MIT Sloan Management Review has a great article on building one's personal board of advisors. Tagline: "In today's complex business environment, one mentor is no longer sufficient. Executives and managers need an array of advisors, mentors and role models to provide critical information and support at defining moments." The authors identify 6 types of supporters, stretching from someone who takes an active role in a protege's career to someone who is not particularly close to the protege and even unmet heroes and anti-role models.

The six types are:

  1. Personal Guides. (Supportive relationship in the past, no current interaction. Role models, source of inspiration.)
  2. Personal Advisors. (Frequently interact with proteges outside work. Serve as emotional outlet or sounding board.)
  3. Full-Service Mentors or True Mentors. (Provide the protege with a wide range of career and psychosocial support. Usually outside the protege's current workplace.)
  4. Career Advisors. (Relationship involves job or professional needs and tends to be shorter in duration.)
  5. Career Guides. (Fairly limited relationship, triggered by specific events such as crises or career changes.)
  6. Role Models. (Passive or nonexistent relationship.)

The authors found that "relationships can change from one category to another as closeness and interactions wax and wane due to changes in an individual’s work or life circumstances. For example, the development of a personal friendship over time was found to be an important step associated with supporters moving from being guides or advisors to full-service mentors."

Further, "Seven relationship types (superiors, work teammates, manager/supervisors, former work colleagues, business associates, informal mentors and close and distant personal friends) accounted for 65.7% of all of the survey respondents’ personal advisory board members... [T]apping into relationships with individuals one already knows may be an especially good way to develop and enhance one’s personal board of advisors."

The article has more very valuable insights, for instance on the importance of fit and the impact of organizational context. The authors also discuss implications for organizations and individuals.

I highly recommend this article to anyone interested in professional development.

#Analytics15 conference: Managing Risk track

Last week I attended the Analytics conference in Huntington Beach, CA. As a member of the organizing committee, my responsibilities were to co-organize the Early Career Connection program with Michelle Opp of SAS and help organize the new "Managing Risk" track alongside several other sub-committee members led by Freeman Marvin of Innovative Decisions. (I also presented a poster of my research with my PhD student Tengjiao Xiao, about our analysis of "inefficient" health plans on public health exchanges.) This post is on the new Managing Risk track. The purpose of the track is to provide a "home" for talks that do not fit neatly in more traditional categories such as supply chain or marketing yet capture important dimensions in risk management of benefit to analytics practitioners.

The track had five talks: Kenneth Fletcher of the Transportation Security Administration discussed how enterprise risk management can be used to identify threats to priorities and goals, Angela Fontes of NORC and the University of Chicago described a comprehensive model of consumer risk tolerance, Mike Dziecichowicz of Ernst & Young provided an overview of retail credit loss forecasting that I hope to convince him to present again at Lehigh to my financial optimization students in the spring (Mike is a former student of mine and it was great to hear about some of the projects he's been working on since Lehigh), Milind Tambe of USC delivered a fascinating presentation on the emerging science of security games and finally Sam Savage ended the day with a talk on how to apply risk model analysis to utility business decision-making.

The talk farthest from my own background was Tambe's and it is all to his credit that he was able to captivate a large audience of conference attendees with disparate interests and backgrounds with his examples of security games drawn from research projects from security at LAX (Los Angeles Airport) to wildlife protection in Africa. You can learn more about his research here.

Conference attendees can download presentation slides online (at least those from the speakers who share them) through the INFORMS Connect service. Unfortunately, no presentation from the Managing Risk track is currently available, but attendees can browse through 68 very informative presentations from other tracks.

Tom Davenport in praise of "light quants"

Here is an article I want my students to read in the fall for my "Operations Research Models & Applications" course. It is called "In praise of light quants and analytical translators" and was authored by Tom Davenport, the President's Distinguished Professor of Information Technology and Management at Babson Analytics and an independent senior advisor at Deloitte Analytics. Davenport deserves much of the credit for bringing the concept of "analytics" to the attention of the general public through his books Competing on Analytics, Keeping Up With the Quants, and more. (Full list here.)

In the article linked above, Davenport argues that we need more "light quants" and "analytical translators": people who understand analytics and can communicate effectively those analytical insights to, as well as interact with, the business side of the company. Davenport makes the distinction between "light quants" and "heavy quants", but it seems to me that more broadly the distinction is between BS in operations research related fields and PhDs. MS holders can fall in either category, depending on their training, expertise and job experience, and also obviously their communication skills. 

To me, the perfect example of a light quant as described by Davenport and for the US market would be a graduate with a BS in Industrial and Systems Engineering from Lehigh and (a nice plus) a MS also from our department, for instance in Management Science and Engineering, or a dual BS in Integrated Business and Engineering (our four-year honors program) with a concentration in ISE and BS in ISE. Those students receive advanced operations research training suitable for their level but also have exceptional communication skills that make them uniquely capable of playing the role of "light quant" described by Davenport. (They will also be the audience of my course in the fall; hence the choice of article.)

I think many Lehigh ISE undergraduates may not realize their skills are in high demand, because they have spent most of their time in the classroom and at one, perhaps two, internships, where they may or may not have made full use of their operations research and analytical skills. It's important for them to realize they fill a critical need in the market. The excellence of the training they have received was documented by the position of finalist (1 out of 3) that the department has received four years in a row in the international INFORMS UPS George D. Smith Prize Competition, which rewards the programs best preparing O.R. students to become future practitioners.

On Small Private Online Courses (SPOCs)

The March 14 issue of The Economist also had an article about "the log-on degree", or the fact that "digital cures" seek to mitigate the high university tuition costs in America. It was most interesting when it touched on SPOCs, or Small Private Online Courses, which are emerging as a compelling alternative to MOOCs (Massive Open Online Courses). They target on-campus university students, in particular to support blended learning and the "flipped classroom", where students watch lectures online out of class and use class times to do exercises and discuss the material.

The article does some particularly good PR for ASU (especially its programs such as the eAdvisor system) and "Designing the New American University", the recent book by ASU President Michael Crow but also mentions Harvard Kennedy School and pure online courses, which have the potential to "fre[e] universities from their geographical constraints" and thus "increase choice for students and create new revenue streams for the universities with the best digital offerings".

The part of the article on SPOCs is more convincing than its end on digital courses because SPOCs are better aligned with the high-level goals of universities, which are to train and graduate students who will become highly accomplished members of the workforce for life. SPOCs also ensure a certain homogeneity in the students' level of preparedness, which makes the course better suited for their needs and avoids having well-intentioned but ill-prepared students waste their time.

At the same time, it seems that every professor who has ever wanted to has been able to assign readings in his class and he could have tested students before the beginning of each lecture to make sure they had done the readings. It's a bit rich to pretend that video has enabled a whole new way of teaching - in many cases, this is simply not true. I don't assign readings but I've always made my lectures (especially for my undergraduate elective in operations research) highly interactive with students working on problems with me during class time. So professors had similar tools before, albeit less technology-intensive. If everyone is so enthusiastic about SPOCs now, why were they not teaching that way before?

Additional readings on SPOCs:

  • Forget MOOCs, a September 2013 article in Slate. Tagline: "Free online classes shouldn't replace teachers and classrooms. They should make them better." By far the best article on SPOCs and blended learning, with early results from a San Jose State pilot program and Bunker Hill Community College near Boston.
  • A June 2013 article in The Harvard Crimson, "HarvardX's new fall offerings to include two SPOCs." Excerpt: "[T]wo of the new HarvardX offerings are “small, private, online courses” called SPOCs. One of the offerings, GSD1.1x: “The Architectural Imaginary,” is open only to incoming Design School students but may be opened up to the broader public at a later date [...] HarvardX’s first SPOC, a Law School course titled HLS1x: “Copyright,” debuted in January. [There were 4,100 applicants worldwide for 500 spots. ...] Other new HarvardX courses include HKS211.1x, “Central Challenges of American National Security, Strategy, and the Press: An Introduction,” a Kennedy School module SPOC that will have limited enrollment for certain features, such as discussion boards." The Harvard Kennedy School SPOC is also mentioned in the Economist article and is the focus of a Harvard Kennedy School magazine article in its Winter 2014 issue.
  • Blog post on the edX site by Brian White about a biology SPOC he created for UMass Boston. He distinguishes between the MOOC time unit of a week and the SPOC time unit of a day. I am not sure how common this is (some MOOC teachers use the traditional lecture as their time unit and thus have two time units a week, while it is maybe a bit optimistic to think that SPOC students will work on a course every single day, since they also have other courses to study for) but it is food for thought nonetheless.
  • "From MOOCs to SPOCS" in Communications of the ACM, December 2013.

Data-driven insurance

The Economist had an interesting article in its March 14 issue on the way data and technology are starting to up-end the insurance business ("Risk and reward"). The author gives the example of drivers buying car insurance from Progressive in the U.S., who can install a device in their car that monitors their driving and "adjusts the rate they pay accordingly". He/she argues that "data mining and monitoring not only allow insurers to price policies more accurately, but also enable them to modify customers' behaviour."

Another interesting excerpt: "[a client's] database singles out unsafe drivers so that agents can visit them at home in an effort to persuade them to change their habits. Kaiser Permanente, an American health insurer, does something similar with its most at-risk policyholders." The article provides some evidence suggesting that such approaches do succeed in promoting 'good' behavior, although it may be that the people who sign up are naturally inclined to adjust their ways. ("Demand for Progressive's prying car insurance... now accounts for over $2 billion in premiums.")

Risk pools will become smaller, which should result in lower premiums in competitive environments where insurance companies will vie for the lowest risks. Left unspoken in the article but a natural consequence of those data-driven developments is the fact that enrollees could in effect decide how much they want to pay for car insurance (health insurance is trickier since people have less control on some of their health conditions) and adjust their behavior accordingly. They may also create their own models of insurance premiums to figure out how to pay as small a premium a possible while taking into account their driving style and what the Progressive-type device monitors.

The article also touches upon the possibility of new entrants with extensive experience in data analytics but no experience in insurance, such as Amazon or Google. "In response, insurers are busy trying to make themselves more like tech firms... Partnerships with non-insurers are another way for conventional insurers to smarten up their act." It looks like the insurance business is headed for a shake-up.