Get inside your competitor’s OODA

OODA is a concept that originated in air warfare. It stands for Observe, Orient, Decide, Act: the process is a powerful one for many classes of problem. The more frequently you can complete an OODA loop, the more disruptive you will be to your competitors. This is called ‘getting inside your opponents OODA loop’ and some have suggested this is the reason Trump succeeded in the 2016 Presidential Election.

In business, it means keeping your plans light and your ability to execute agile and flexible. Amazon should never have beaten Barnes & Noble, but their flexibility, ability to change direction quickly and to execute without long programme and project cycles was enough to disrupt anything the incumbents could do.

I came across the concept in Tim Harford’s book, Messy. There are lots of interesting and disruptive ideas here – recommended reading.

Close to the Edit … the benefits of digital

The BBC’s Seriously, Close to the Edit was a fantastic listen on the history of editing, created by Mike Figgis. Given the subject matter, it had to sound great, with some lovely examples of good and bad editing.

Walter Murch, who created the sound design for Apocalypse Now, told a good story about editing pre-digital. Talking about Apocalypse Now, he related how the film’s raw material was spread over 236 hours of film, weighing 7 tonnes, and sometimes he was looking for a single frame (weighing grams) to use in his edit process. Much easier, I imagine, now everything is on digital storage.

The key point the programme makes is that almost everything we experience has been edited before we read, see or hear it: it always pays to question what is really going on.

 

Email interception scams – beware

This article https://www.theguardian.com/money/2017/oct/21/couple-lose-120000-email-hacking-fraud-legal-sector tells the store of a couple who lost £120,000 after they relied on banking details in an email which appeared to be from their solicitors. In fact, their solicitors’ email was a fake, and the couple had sent a tax payment to the bank account of a fraudster. The Guardian reports the couple may never get their money back.

The most important lesson from the story is not ever to trust banking details received in emails. Emails can easily be faked today, though the technology to defeat this has been available for some time. Always confirm bank details through a trusted channel, for example face to face with the intended recipient or in a phone call with someone whose identity you know for sure.

Email non-repudiation technology, which can confirm reliably that the sender is who they say they are, is widely available and proven. It hasn’t gained widespread acceptance because the big technology companies most of us rely on haven’t adopted it and rolled it out. If Apple, Google and Microsoft decided to implement it by default (as we have for many years with SSL / TLS encryption on websites) it would become normal very quickly, and the risk of this sort of crime would fall as a result.

Secure bank transfers would also be quite simple to implement – banks don’t today verify that the recipient’s name on a bank transfer is the same as that of the account the money is destined for. Given that banks have high ‘know your customer’ standards for opening an account, this simple check would reduce the risk considerably. If the transfer says ‘Steed & Steed Solicitors’ and the account is in the name of ‘Graceak Ltd’ it could (and should be returned to sender.

Ultimately, blockchain technologies offer considerable benefits in money transmission for businesses and customers. Traceability of transactions (because of the open ledger technologies used), coupled with strong cryptographic identification of sender and recipient, and robust delivery mechanisms, would greatly reduce the risk we all take when we send money through digital channels.

Using AI in retail – Michael Ross

This is an interesting and very useful talk by Michael Ross of https://twitter.com/DynamicAction

He has captured some strong ideas around the practical use of AI, focusing on Amazon’s successes in applying it, and his conclusions are very actionable.

I was fascinated to hear that Amazon are training managers to manage teams of people and AIs. I wonder what the AIs’ performance reviews are like?

How to improve forecasting

Forecasting is hard, whether it’s about the weather, economic performance, sales volumes, or anything else. This article by Dan Gardner, originally in the RSA Journal, makes some very helpful observations on the psychology of forecasting, and on how to get better at it.

We all have unconscious biases. A lot of people remember the things they forecast correctly, but not the rest – this is called the outcome bias. Looking back with a view that everything that happened could have been predicted is also common – this is the hindsight bias. Wikipedia has this excellent list of cognitive biases.

Hindsight bias makes it very hard for people to compare today with the past reliably. In his article, Dan Gardner talks about the recurrence of people looking gloomily at the present and nostalgically at the past, because the things we were anxious about in the past are so readily forgotten. He writes:

“Dig into the contemporary records of almost any year and you will find people worrying about the future and looking back to more certain times.”

A sensible, practical thing we can all do to improve our forecasting, and address these biases, is to track forecasts and their outcome, and to learn from the good and bad outcomes. This is common in science, but a lot less common in business.