Business

Those Weird and Wonderful Benford Numbers

From the Report on Business Magazine, December 2010
 
When WikiLeaks released nearly 80,000 classified documents relating to military operations in Afghanistan this past July, a wide range of journalists, politicians and members of the public were eager to see the data. Some of them were looking for a true tally of IED attacks, others for the number of civilian casualties, and so on. One group, led by Drew Conway, a PhD candidate in political science at New York University, had a more unusual goal. They wanted to use an arcane statistical law to determine if the data in the reports was truly raw, or if anyone had tampered with it.
 
The fact that Conway could do so, and reach findings that are considered scientifically valid, has ramifications in many other fields, including forensic accounting and possibly finance.
 
Posted: Tuesday, Jan. 4, 2011 10:04am

What We Talk About When We Talk About "Buyer's Pain"

Globe and Mail ROB Magazine

My introduction to the topic of “buyer’s pain” came via a colleague, an editor of an American food magazine, who was describing the excruciatingly long line-ups he had to endure to get a hamburger at the Shake Shack in New York’s Madison Square Park. I’ve never eaten one, but I’ve talked to a few people. This is not a particularly special burger. It has your basic beef patty on a squishy bun plus all the ordinary garnishes: American cheese slice, pickle, lettuce, tomato etc. I’m stymied to think why anyone would wait for up to 2 hours (yes, I actually heard that from someone) all for what another foodie colleague, Amy Rosen, Food Editor at Canadian House & Home magazine described to me as “not mind-blowing”.

Painful, yes. And so, the Shake Shake seems to me a perfect example of what a Carnegie Mellon neurological study published two years ago has shown: that when consumer experience discomfort buying certain products, this frequently enhances the appeal of those same products.

Posted: Tuesday, Nov. 16, 2010 12:00pm

Blink and You'll Miss It

 

Thursday, Aug. 26, 2010
I was made to feel stupid by a video on YouTube the other day. Designed by neuropsychology professors Christopher Charbris and Daniel Simons, the clip shows some basketball players passing a ball around. Count the passes, the viewer is instructed. So I did, and got the right answer: 15. But I entirely missed the person in the gorilla suit who danced across the screen halfway through.
I’m not alone. Half the people who have taken the test missed it, illustrating how we frequently overlook the bigger picture when making quick assessments. It’s a principle Charbris and Simons explore in The Invisible Gorilla: And Other Ways Our Intuitions Deceive Us, a book that should be compulsory reading for anybody who keeps a dog-eared copy of Malcolm Gladwell’s Blink in their desk drawer. That would have included former Lehman Brothers president Joseph Gregory, who was so impressed by Gladwell’s case for “the power of thinking without thinking,” he had Gladwell address Lehman staff not long before the whole company went down the drain.
Posted: Monday, Aug. 30, 2010 10:45am
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Jacqui Cohen: Army and Navy's Sole Survivor

Jacqui Cohen, Army & Navy’s Sole Survivor
There was a story the newspapers used to tell about Army & Navy. It showed up a number of times during the late ’70s and early ’80s. It involved pointing out what was then considered to be a central irony about the company. That is, the fact that the iconic Vancouver discount department store – opened on Hastings Street in 1919 by Samuel Cohen and still owned at that time by his fashionable, sports car driving, glamorously good-looking descendants – was in fact run and controlled by a teetotalling Baptist counting pennies in a dingy converted stockroom in Regina.
That old story is easy enough to parse today. The implication was that selling seconded clothing and fishing tackle might make you very rich but that the very rich themselves (certainly two generations later) didn’t have the right mental culture to sustain their wealth by the same method. To actually take care of business, to think strategically about the future, to be engaged with the here and now, they needed to bring in a man with a discount frame of mind. They needed that penny-counting Baptist in his poorly lit Regina stockroom.
Posted: Tuesday, Jul. 13, 2010 3:36pm

The Ugly Truth

Globe and Mail Report on Business Magazine June 24, 2010

Facing down a world wracked with financial turmoil, Mark Carney brings many strengths to the table on behalf of Canadians: Harvard and Oxford training, years of experience in the private sector at Goldman Sachs. But Carney may also have another, less obvious competitive advantage: The current Governor of the Bank of Canada happens to photograph very well.

 

Posted: Tuesday, Jul. 13, 2010 7:53am

The Envy Economy

 

 

From the Globe and Mail Report on Business Magazine

When Oliver Stone's upcoming sequel to Wall Street (Wall Street 2: Money Never Sleeps) is released this fall, there will be renewed debate on whether "greed is good." People may disagree with Gordon Gekko, just as his protégé Bud Fox ultimately did in the original film, but most will accept that greed is, if not good, then at least centrally relevant to the argument. Since the 1980s, you could say that greed has become the economic and cultural meta-factor: either the juice that drives markets and innovation, or the corrosive force bent on bringing the global economy to its knees (again).

But what if the Gekkos and the Foxes were arguing about the wrong variable entirely? What if greed were secondary, a shadow cast by a different meta-factor altogether? That's what Eric Falkenstein, a U.S. economist with a growing following, argues in his book Finding Alpha, published by Wiley last year. Falkenstein does not believe the market is driven by greed. He thinks the market is driven by envy.

Posted: Friday, May. 28, 2010 8:07am

The Tiger Trap

From The Globe and Mail Report on Business Magazine April 2010
 
In December, a pair of UC Davis economists estimated that Tiger Woods's off-course philandering managed to wipe out about $12 billion (all currency in U.S. dollars) market value for his sponsors. It wasn't long before experts were speculating that the whole celebrity endorsement market was headed for a crash. One fallible human could not be relied on to personify a whole brand, was the suggestion from at least one consultant. And the sports attorney who writes the excellent blog Sportsbiz pragmatically pointed out that insurance costs were sure to rise for endorsement deals, driving down any hopes of profitability.
Posted: Thursday, Apr. 8, 2010 10:54am
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Age and Innovation

From the February 2010 Report on Business Magazine
 
You may have heard rumours that the Mayan calendar forecasts the world will end in 2012. However, the Mayans missed a lesser milestone: In two years' time, fully half of all federal government employees will be eligible for retirement.
 
Yes, the work force is aging. There will soon be fewer young people entering the work force than there are older people leaving it. The demographic shift has Stanford economist Paul Romer worried. "Young people, I think, tend to be more innovative, more willing to take risks, more willing to do things differently," he said in a recent interview, "and they may be very important, disproportionately important, in this innovation and growth process."
Posted: Monday, Mar. 1, 2010 10:48am

The Feel Good Economy

From the January 2010 Globe and Mail Report on Business Magazine
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"Paying it forward" is an old idea with new life lately. Brands as different from one another as Dove, Starbucks, TalkTalk wireless in Britain, and the Albertan credit union Servus have each launched promotional campaigns that blur the line between business and philanthropy.

Benjamin Franklin pioneered the idea more than 200 years ago when he lent a colleague some money on the condition that it be repaid not to Franklin but to someone else in need. Franklin wrote at the time: "This is a trick of mine for doing a deal of good with a little money."

Posted: Friday, Jan. 29, 2010 5:13pm

The Xerox Effect

From the December Globe and Mail Report on Business Magazine
Marketers already know we're copycats at heart. Now science proves it
Most of us believe we make up our own minds in the marketplace: Apple or Dell, Brooks Brothers or Boss, equities or gold. But recent studies suggest we exert less control over these decisions than we realize. Or, at least, we may not make choices in either of the two ways we typically assume we do: that is, either in accordance with innate individual taste, or based on an objective appraisal of the options.
Posted: Tuesday, Jan. 5, 2010 3:16pm
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