Johnson: The importance of pauses in conversation

15. December 2017

Date: 14-12-2017
Source: The Economist

“Um”, “uh”, “mm-hmm” and interruption are not killers of conversation, but its lubricants

MARGARET THATCHER was known for a voice that brooked no disagreement. While still in opposition, she had taken elocution lessons to sound more forceful. Despite this, she was often interrupted in interviews as prime minister, and in 1982, three researchers set out to understand why. They played clips from one of her interviews to a variety of people. The clips included segments that ended in interruption (while editing out the interruptions themselves). More often than not, those hearing the interrupted phrases thought that the prime minister was ending her conversational turn. It seems her interviewer had come to a similar conclusion.

Why? Conversation, it turns out, is a finely tuned machine, as Nick Enfield, a linguist at the University of Sydney, suggests in “How We Talk”. Humans mostly follow a rule called “no gap, no overlap”, reacting to the end of a conversational turn by beginning their own in about 200 milliseconds—about the time it takes a sprinter to respond to the starting gun. This is all the more remarkable given that it takes about 600 milliseconds for someone to work out what they are going to say by mentally retrieving the words and organising how they are to be expressed.

People, therefore, must plan to begin speaking before their conversation partner has stopped. That requires a fine attention to the cues signalling the end of a turn, such as a lengthening of syllables and a drop in pitch. As it happens, using a downward shift of pitch is also a frequent piece of advice given to those who want to sound more authoritative—like Thatcher. The researchers studying the times she was interrupted found precisely that a sharp drop in her pitch accurately predicted an interruption. Read the rest of this entry »

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Crowded cloud: Microsoft

20. July 2017

Date: 20-07-2017
Source: The Economist

Today the world’s largest software company reports earnings for the second quarter. Its share price is at an all-time high, elevated by expectations that the chief executive, Satya Nadella, will continue to transform the company and develop new business lines.

Mr Nadella, who is enthusiastic about artificial intelligence (AI), wants Microsoft to become an “AI-first” firm. He has pumped more time and money into Azure, its cloud-computing business, hopeful that it will account for much of the firm’s future growth.

But the company faces stiff competition from deep-pocketed rivals, such as Amazon and Google. Jefferies, an investment bank, reckons Azure will chalk up around $5bn in sales in 2017, or 21% of the market—an impressive sum but far less than Amazon Web Services, with 71%. Investors will be looking for clues as to how much new cloud business Microsoft has won. When expectations are great, even good results can disappoint.


Harvard Business School risks going from great to good

7. May 2017

Date: 04-05-2017
Source: The Economist: Schumpeter

A confidential memorandum of warning to its senior faculty

YOU will all be aware that a book has just been published about our institution, Harvard Business School (HBS). Entitled “The Golden Passport”, by Duff McDonald, it makes a number of unflattering claims about the school’s ethics and its purpose. While often unbalanced, it is likely to galvanise hostility to HBS both inside Harvard University, of which we are a part, and among the public. This memorandum, circulated only to the most senior faculty members, assesses HBS’s strategic position.

Our school has been among the country’s most influential institutions since its foundation in 1908. Our forebears helped build America’s economy in the early 20th century and helped win the second world war. HBS educates less than 1% of American MBA students but case studies written by our faculty are used at business schools around the world. Our alumni fill the corridors of elite firms such as McKinsey. Many bosses of big American companies studied here. Even in Silicon Valley, where we are relatively weak, about a tenth of “unicorns”—private startups worth over $1bn—have one of our tribe as a founder. Read the rest of this entry »


What Satya Nadella did at Microsoft

17. March 2017

Date: 16-03-2017
Source: The Economist

The world’s biggest software firm has transformed its culture for the better. But getting cloud computing right is hard

A DECADE ago, visiting Microsoft’s headquarters near Seattle was like a trip into enemy territory. Executives would not so much talk with visitors as fire words at them (one of this newspaper’s correspondents has yet to recover from two harrowing days spent in the company of a Microsoft “brand evangelist”). If challenged on the corporate message, their body language would betray what they were thinking and what Bill Gates, the firm’s founder, used often to say: “That’s the stupidest fucking thing I’ve ever heard.” Read the rest of this entry »


Indian outsourcing specialists must reboot their strategies

21. January 2017

Date: 19-01-2017
Source: The Economist

IT firms need an upgrade in the face of technological and political shifts

COMPUTERS slow as they age, and before long must be replaced by newer models. Something similar is true of the business models of Indian IT firms. Specialised in running global companies’ outsourced back-offices, the likes of Infosys, Wipro and Tata Consultancy Services (TCS) used to be national champions growing at double-digit rates. Their prospects have dimmed of late; an entire industry built on the back of globalisation is fretting about the incoming American president. But Donald Trump is merely the latest threat to their operating systems.

Over three decades, Indian IT has become a $140bn industry built on a simple proposition: rich-country companies could trim costs by getting tedious behind-the-scenes IT work done by cheap engineers in India. The Indian firms hoovered up bright graduates—the big three have over 700,000 employees in total—paying them starting salaries of $5,000 or so, a decent local wage. After gaining some experience, tens of thousands were dispatched to client sites in Europe or America, along with a few expensive local staff. The rest ensured their clients’ computer systems kept ticking over from cosy cubicles in Bangalore, Hyderabad and elsewhere. Read the rest of this entry »


Conclusion: Answering the machinery question

26. June 2016

Date: 23-06-2016
Source: The Economist

Glimpses of an AI-enabled future

THE ORIGINAL MACHINERY question, which had seemed so vital and urgent, eventually resolved itself. Despite the fears expressed by David Ricardo, among others, that “substitution of machinery for human labour…may render the population redundant”, the overall effect of mechanisation turned out to be job creation on an unprecedented scale. Machines allowed individual workers to produce more, reducing the price of many goods, increasing demand and generating a need for more workers. Entirely new jobs were created to oversee the machines. As companies got bigger, they required managers, accountants and other support staff. And whole new and hitherto unimagined industries sprang up with the arrival of the railways, telegraphy and electrification.

To be sure, all this took time. Industrialisation caused pervasive labour-market upheaval as some jobs vanished, others changed beyond recognition and totally new ones emerged. Conditions in factories were grim, and it took several decades before economic growth was reflected in significant wage gains for workers—a delay known as “Engels’ pause”.

Worries about unemployment gave way to a much wider argument about employment conditions, fuelling the rise of socialist and communist ideas and creating the modern labour movement. By the end of the 19th century the machinery question had faded away, because the answer was so obvious. In 1896 Arthur Hadley, an American economist, articulated the view of the time when he observed that rather than destroying jobs, mechanisation had brought about “a conspicuous increase of employment in those lines where improvements in machinery have been greatest”. Read the rest of this entry »


The imperial CFO

17. June 2016

Date: 16-06-2016
Source: The Economist: Schumpeter

Chief finance officers are amassing a worrying amount of power

THE days of imperial CEOs have long gone. Today’s chief executives do their best to contain their egos and, instead, project a modest image. They talk about “servant leadership” and make a point of cultivating their “stakeholders”. Many bosses leave the limelight to company founders and big-name investors. And yet a new authority figure has emerged within companies, much less exuberant than old-fashioned autocratic CEOs but just as determined to amass power: the imperial CFO.

Chief financial officers barely existed 50 years ago: company accounts were administered by mysterious people called “comptrollers”. Today, CFOs are at the heart of all the world’s big firms. They are the only corporate officers other than the boss who are able to monitor every corner of an organisation. They are the only executive other than the chief who is feared by everybody: a “no” from the CFO means that your precious project is dead. Russell Reynolds, a search firm, calls them “co-pilots”. At one high-profile company, Twitter, the CFO, Anthony Noto, is arguably doing most of the piloting. Read the rest of this entry »