Drops from the Fire Hose – September 26, 2012

Data Analytics and the Information Transfer Gap — MIT Sloan Management Review

According to our survey data, 65% of respondents say their organizations are effective at capturing data, but just 46% of respondents say they are effective at disseminating information and insights. [You can read more about our initial research findings in “Innovating With Analytics,” in the Fall 2012 issue of MIT SMR. The full report will be available mid-November.] Compounding the issue, only four percent of organizations use all the data they collect. Nearly 30 percent use “not much” of the data they collect.

The Marketplace in Your Brain — Chronicle of Higher Education

Through experiments, researchers have shown that when people reject a low, unfairly priced offer, a part of the brain associated with disgust kicks in, but that when they view the offer as fair, a brain region linked to reasoning seems more active. Researchers have also tackled the puzzle of “overbidding,” when people pay too much for something. An area called the striatum, associated with rewards, is more active when people bid high in an auction because they fear losing an item, but is not as active when they think they have a good chance of winning. So fear of losing may be key to things like overvalued stocks.

Learning to let go: Making better exit decisions — McKinsey Quarterly

Faced with the prospect of exiting a project, a business, or an industry, executives tend to hang on despite clear signs that it’s time to bail out. Indeed, when companies do finally exit, the spur is often the arrival of a new senior executive or a crisis, such as a seriously downgraded credit rating.

Getting it Right: Rebuilding Local Economies After a Natural Disaster — GOOD

Many survivors faced chicken-and-egg problems as they struggled to rebuild their homes and communities. They could not move back without schools for their children, for example, but schools could not reopen without students to attend them. The city faced similar problems writ large. The municipal government could not begin to rebuild infrastructure or restore services until its tax base returned—Katrina bankrupted City Hall overnight—but the tax base could not come back without these supports. After losing most of its clients, the city’s power utility had little choice but to drastically cut its repair budget, even as thousands of blocks remained without power. Most residents would not return to a city without a functioning hospital, but hospitals could not reopen without patients to treat or places for their staffs to stay. Besides, doctors and nurses would not come back to the city without schools for their children. The list went on and on.


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