Saturday, May 10, 2014

On the shareholder value myth

I came across a small booklet entitled "The Shareholder value myth" by Lynn Stout.   I now have the privilege to look at the corporate world now from the outside so I can write more freely from my academic seat now.   The book starts with the assertion that during the last 20 years there is a common practice to see the "shareholder value" as the only consideration in corporates' strategy.  Actually when I studied in an MBA program in the early eighties,  we learned that there are multiple stakeholders: shareholders, employees, customers, suppliers, regulators and the social environment, and the management needs to balance the interests.    Since that time the equation has changed to have shareholder as the primary stakeholder. The main thesis of this book is that this is actually a wrong thing to do, since it biases towards short term (the speculative shareholder vs. the long-term shareholder).  Since the author is a professor of law, she starts by legal claims that disputes the common thinking that the shareholders own the corporate, and discusses the relations between these two entities.  She claims that the current economy takes it to extreme by saying that the goal of maximizing the value for shareholders is a goal the justifies all means to achieve it. Stout claims that this kind of thinking is typical for psychopaths, and that most people, thus most shareholders are not psychopaths.

The consequences according to Stout are damaging to corporates, employees, customers and society.  The drive for short-term results, fueled by linking senior executives compensation to short term goals, and cutback of R&D, employee benefits, and quality and affordability for customers.    It also triggers unethical behavior.  The good news according to Stout is that we see first signs that this paradigm starts to decline, however the "Wall Street" culture is still quite pervasive. 

I'll write more opinion about socio-economical issues in time -- still learning it! 

Friday, May 9, 2014

Internet of Things - what's holding us back?

InformationWeek published an article this week by Chris Murphy entitled: "Internet Of Things: What's Holding Us Back".   In this article Murphy describes several reasons that hold us back from exploiting the potential of the IoT.  The reasons he mentions are:

  1. The data is not good enough:  the claim is that the conception that all requested data is readily available is not consistent with reality, where data suffers from quality,  frequency and spatial coverage of the sensors, and data integration issues.
  2. Networks aren't ubiquitous:   The product owners don't have control over the availability of networks
  3. Integration is tougher than analysis:  The main problem is not to analyze the data, but to integrate all data needed for analysis
  4. More sensor innovation needed: The stated areas of required innovation are - combine video sources which today are under-utilized; more-refined and more-affordable environmental sensors; software-defined sensor,a combination of multiple sensors plus computing power that sits out on a network and "calculates rather than measures."
  5. Status quo security doesn't cut it.  Security systems for IoT should be radically different than those developed for traditional IP.
I agree that all of these contribute in one way or another to the difficulties around exploiting the potential of IoT.    Dealing with inexact or uncertain data is a major issue, a link to our tutorial on the topic can be obtained from this blog post.  What Murphy refers as "software defined sensor", is in fact, the ability to use multiple sensors and get sense out of it in real-time,  this is exactly what the event processing discipline produces, furthermore, our work on event modeling contributes to make it simpler. 

I am planned to deliver a tutorial on "Internet of Everything" in DEBS 2014 in Mumbai, where I'll discuss all these issues.  

More - later.