Kids have mastered real-time resource allocation. Have you?

WHILE the processes of business, institutions and government seem to have changed very little over the past 200 years, technology has advanced rapidly: the world got connected, and everything is moving faster. And although it is evident that making decisions in a ‘slow environment’ is easier than doing so in a fast one, most continue with the old methodologies as if nothing had changed.

In many modern situations, the starting conditions and assumptions are unlikely to be fixed or stable in the short term, never mind the long one. The number of factors to be considered has also increased. But far worse, the business environment has become non-linear and unpredictable as unintended consequences are the new normal. Most are confounded by how small input changes create big results. Weather systems and earthquake prediction are good exemplars of similar environments – and of the small change, big outcome problem.

The business situation has never been so volatile and unpredictable, as automated banking now dominates and there is very little delay between any decision and action. This is a different world to that of even 20 years ago, and we can safely assume that no one understands the situation. But change continues to accelerate along the same technologically driven axis.

So it is no longer sufficient to identify the three most important parameters of some problem and then apply them. Past experience also tends to be misleading. The old way and methods no longer work, and they can be downright dangerous – often with disastrous consequences.

Few military commanders would plan a battle without great attention to detail, comprehensive modeling, with real/computer gaming of every situation to assess risk and contingencies. No one wants to lose people by being unprepared or making bad decisions. But in business and government, managers under-prepare, and lack the training necessary to model and game, and they still rely on intuition and past experiences.

Many scoff at the young and their apparent addiction to computer gaming, but I see it as a pure dedication to training and a new way of learning and understanding. With all my years of education, training, management experience and accumulated skill at deploying resources in real time, I cannot compete with the best in the computer gaming world. Youngsters decide faster and, more importantly, make better decisions. They have mastered the art of real-time resource allocation in a dynamic environment by doing it over and over against many different minds and in many different scenarios.

This also happens to be true of military gaming. I can’t compete. In the past, it was the game of chess that was used to train strategic thinkers, but computers now play a much better and far more sophisticated game than any human. And when it comes to the military and medicine, we are fast approaching that same cusp of machine superiority. But business is on the back foot and needs to enter the fray quickly. Managing a 21st century organisation using methods from the 1800s will not work, and can only lead to decline.

At the forefront of the modeling field, you also find chips on boats, aircraft, buildings, mobile devices, networks. Every aspect of performance is now integrated into the design. Drop your phone, crash your car, escape from a burning building, and you can rest assured that all potential damage has been reduced by computer-aided design and automated machine decisions.

If we can invest in all these other fields, then why not business and government? Why are they last? People resisted the driverless train, the auto-pilot and cruise control, and will no doubt reel at the driverless car. I fear we don’t have the luxury of time in business and government – it is vital that we get on with it, and the first essential component is now with us: big data.

Peter Cochrane is an IT consultant and former chief technologist at BT