20/03/2014 § 1 Comment
I attended a talk on economic modelling today. It was a straightforward presentation of a certain technique, explaining how it works and providing some examples.
There was some close questioning of the presenter. The questions weren’t always, um, helpful. They weren’t in the spirit of the presentation and raised questions with no real answers.
As I was listening, I suddenly heard Lacan’s discourse of the hysteric. And then I thought about the whole structure of the talk.
The presenter was trying to say something like this: economics has some theories –> we can turn those theories into a model –> we can solve the model –> we can then model things that didn’t happen or haven’t happen.
It was all presented in the discourse of the university: knowledge (S2) trying to reduce the excess (a), bounding the uncertainties and keep them from spilling over the edges of the research. The group contained many who were aspiring to know ($) more about the technique: holding the workshop produced a group of people who wanted to know.
The questions did not stick to the discourse. They did not, for example, ask what the equation structure was or where the elasticities were sourced. Such questions would validate the modelling. They would confirm that having an elasticity is important, and having a model in which to put it is important.
These questions were:
- why do you believe your theory? I have another one
- have you included my special knowledge of the subject?
- your method is incomplete, isn’t it?
These are questions that come from the perspective of the hysteric. The perspective was: I have lived, I am specific ($) — what does your unifying model (S1) have to say about my own experience?
Then, a consultant in the room answered from the analyst’s discourse. The comment was, we would like to talk to you more about it. It would be good to discuss your specific knowledge and incorporate it into our analysis. The idea of the un-modelled excess (a) would make the specific subject ($) speak, in order to re-produce signification (S1).
Odd to think of consulting as analysis, but I think it might work.
20/11/2013 Comments Off on Keeping the tools sharp
Q: What statistics software do pirates use?
A: ‘We use R, me hearties!’
Turn away now, it doesn’t get any better….
I’ve spent the last two days in a workshop on R, run by the lovely people at the New Zealand Social Statistics Network. It was billed as ‘Intro to R’, and ended up being partly intro, partly intermediate, and also an intro to statistical packages generally, a refresher in statistics and lecture on good data visualisation. Something for everyone.
I went along because I’ve taught myself R from various online sources, and cobbled together analysis from bits of code pillaged from the Web and other people’s projects (’cause I’m down with OPP). I needed to see what I’d missed through my autodidacticism and pick up new tips and tricks. Keep the tools sharp, as it were. The course absolutely delivered — there are a few things I should do differently and lots I can do better.
The open-source approach — giving it away for free — creates different incentives. Several people asked me why I use R. It’s simple — R is free, and it gets the job done. But it isn’t the price itself that’s the issue. The issue is that I’ve moved around from job to job over the last 20 years, and everybody uses something different. I’ve used SPSS, SAS, Limdep, GAMS, Eviews, and probably others. I got quite good at SPSS, for example, and then went somewhere that didn’t have a licence. When I started my current job, I had the choice of retraining in Stata or improving my Eviews, or venturing out into the wilds of R. I chose R, because I figure that jobs will keep coming and going, and there’s no guarantee that the next place will use Stata or whatever.
In a world where data is largely accessible and files are in the cloud and people change jobs regularly, there is a lot less call for investing in site-specific resources. That includes training in software that ties you to a particular employer. Portable tools make sense, and open source is portable. It does raise the question of who should pay for training, the employer or the employee. Training will increase the employee’s potential contribution to the current workplace, but also raises her value on the job market. That suggests that open-source software might have more value in economies with greater agglomeration, where a number of employers essentially train a pooled workforce from which they all draw. It also may have more value where there is greater job entry and exit — if people don’t tend to change jobs, then having portable skills isn’t as valuable.
Now I’ll leave you with my earworm. On the first day of the course, in the first presentation, the presenter said about our data files, ‘They should be comma-separated.’ Since then, I’ve had that line going around my head, but sung by The Offspring:
22/10/2013 Comments Off on Be professional
Yes, yes, I know. I have been absent. Mea culpa, truly. I am trying, as a friend of mine used to say, to fit 10 pounds of ‘stuff’ into a 5-pound bag. Feel free to convert to metric.
Anyone out there need a job?
I interrupt this unscheduled silence to point to Slate article by Laura Helmuth via Scott Lemieux at Lawyers, Guns & Money (an eclectic blog and excellent Zevon song). The title of the article — words to live by, actually — is ‘Don’t Be A Creep’.
The point, as Lemieux summarises, is that professional people should be professional. Helmuth:
If you are established in your career and in a position to help others, congratulations. Be as generous as you can be, and while you’re at it, remember to thank the people who helped you. But recognize that you have a tremendous responsibility to take your mentees seriously. It’s easy to forget how insecure and uninformed someone can be starting out, and it’s hard to remember that you have a lot of power in comparison, even if you have just a few years more experience or feel like a cog yourself. Be respectful, be appropriate, be professional. Above all else, do not be a creep.
This piece is a good reminder of something important. I am filing it under ‘7 skills of consulting’, because it ties in with the whole idea of those posts. My recipe for being a consultant includes cultivating a sense of restraint, sobriety, balance — professionalism. It’s also a good way to treat other people. Just because you’re
Mayor of Auckland Commodore in the Navy principal investigator on a few projects doesn’t make you irresistible, regardless of what Kissinger said.
Even a little power comes with responsibility.
14/08/2013 Comments Off on Five stages of workplaces
Another business book review. This time, it’s Tribal Leadership, by Logan, King, and Fischer-Wright. The book is, helpfully, available as a free audio book from the website.
Overall rating: good. useful. pretty smart.
Yes, there are the annoying traits of pop-culture business books. There are beautiful anecdotes about teams that overcome adversity to realise the potential hidden within. There is the university research used as a totem, such as the cameo appearance by Daniel Kahneman. There are the impossible generalisations, the air-brushing of complex people (such as Frank Jordan, former San Francisco mayor — ask Food Not Bombs how cuddly he is), and the simple tools to make things better.
But there is also good stuff.
What hooked me into the book was that it starts off saying that ‘life sucks’ for some people. The First Stage of Tribes describes bad environments. It was really refreshing to have a book recognise that it isn’t all good and not everything can be fixed.
The Second Stage of Tribes is when ‘life sucks for me’. This is apparently an advance on the First Stage, because it recognises that life is good for some people, which opens up the possibility that it could actually one day be good for me. Wisely, the book acknowledges that professional workplaces can suck. They can be awful places, horribly dysfunctional and unpleasant to work in. The authors recognise their readers may be in such a situation. Recognising ‘where we are’ is important if we are trying to change.
So what if we want to fix it? The authors say that slogans and techniques don’t work, especially not in a dysfunctional environment. When you have people in a beaten-down state, you can’t change them with one-minute management or good thoughts for the week. These devices only add to the insult. The authors admit that it takes work to sort out problems.
Of course, this is also a self-help book, so they do offer techniques to make things better, and they do give examples of slogans that motivate workplaces. But this is the central irony of the genre, no?
Something else that they get right is that it’s all about people. It is always about people and their relationships. The book focuses on how people feel about where they work and how they relate to each other. From a consultant’s perspective, there is nothing more important. People decide whether to send work your way; people decide whether your work meets their needs. There can be all sorts of objective measures to judge that a proposal or a report is really bad or really good, but in the end a consultant needs to convince people.
And so the book goes, taking us through the Third, Fourth, and Fifth Stages of Tribes and Tribal Leadership. At each stage, life gets better, people feel more fulfilled, and workplaces are more productive. Stages Four and Five are the Future of Business, according to the authors. Their message, in a sense, isn’t too far off books on Flow or Bliss or Being in the Zone. The less time we spend bickering amongst ourselves, the more energy we have for working towards a common purpose. Simple thermodynamics.
Subtly, though, the book undermines its central premise (which is the central premise of all self-help books), that everyone can be great. To get to Stages Four and Five, you have to go through Three, whose catchcry is ‘I’m great!’ The authors tell us that we should become great — world-class, even! — at something. Then, we can really live Stage Three and be recognised as a valuable member for a Stage Four organisation. The problem is that we can’t all be world-class. Does that mean we should embrace Stage Two? Should we join in saying, ‘Bonjour paresse‘?
But you wouldn’t be reading Tribal Leadership to be a slacker, would you? So my verdict is that it’s worth reading and thinking about, and wondering about the interpersonal dynamics in your workplace. Then wonder if maybe there isn’t a way to improve them and of being the change you wish to see.
09/05/2013 Comments Off on Effort and reward for consulting projects
I have been pondering how effort and reward vary by the size of the project. There’s no data to this, just jaded experience from many years of consulting. There just seem to be some project sizes that generally work well, and some that are difficult for the money involved.
- Under ten grand — quite variable projects; some are easy and some are impossible
- $35,000 — a really horrible number. The client wants a $50k project but doesn’t have the budget
- $40,000 — oddly, usually much better than $35k. If the client had wanted a $50k project, they would have found the extra money. They really just want $40k of work
- $80,000 — sweet. This is a great project size. Enough budget to do something interesting, small enough that admin effort is low, reasonable client expectations
- $90,000 — client wants $100,000 project but that’s a scary number
- Over $100 grand — it all depends, so manage carefully.
For those of you who are visual, I came up with the following chart to show average effort:reward ratio by project size (solid line) and the spread around the average (dotted line). Values over 1.00 mean the effort is greater than the reward; values under mean the opposite.
22/04/2013 § 2 Comments
I posted flippantly last week about the Reinhart and Rogoff (R&R) re-assessment by Herndon, Ash, and Pollin. There’s been more bytes spilled since then. The Economist says it’s not such a big deal, because ‘Ms Reinhart and Mr Rogoff acknowledge in their academic work that this conundrum “has not been fully resolved”, but have sometimes been less careful in media articles.’ Paul Krugman counters that, yes, it is a big deal and provides some links. Matt Nolan at TVHE provides more links and more perspective:
it has been used as an inconsistent marketing tool by people for selling their own unrelated ideological policies….
I’m going to be careful here. Media interviews are not the same as academic writing. Keeping my thoughts straight while listening to someone else’s questions, and then controlling the random thoughts that spring to mind whenever (ask my poor students — I don’t censor digressions quite the same way in lectures) while not babbling — hey, it’s fun and energising but only approximately accurate. So, I’m not going to pile on.
I’m fascinated that it was a spreadsheet error, at least in part. Most economists I know proudly and loudly avoid Excel for anything analytical. Grunty programmes like Stata, sure, and nerdy open-source stuff like R (thanks, Auckland!), absolutely. I mean, these are guys (yes, guys) who sneer at SPSS. To find out that R&R were relying on Excel is like, I don’t know, seeing a celebrity chef eating at Burger King.
There’s a lesson for consultants here. Excel is the sort of programme that gave rise to this:
To err is human, but to really foul things up requires a computer.
Nevertheless, I like Excel a lot. Despite all the stupid and paranoid security controls that Microsoft has added, it is still a portable way to give clients the analytical details of what I’ve done. It also allows me to build dynamic tools to help clients tweak the analysis for their own questions. And, I can show them exactly which number is multiplied by which other number, and then transform it all into pretty pictures clearly and transparently. Throw in some macros and buttons, and it’s really powerful.
The best advice I’ve heard about building those sorts of files is to treat them like programming tasks. You are essentially programming a new bit of software. There are established protocols for tracking versions and checking code — that’s a place to get some tips on good design processes.
It’s the best advice, but I’ve generally ignored it (like a lot of good advice). It’s just too hard. So, let me offer my own advice:
- do it differently — there are always multiple ways to make calculations. I like to make calculations two different ways, and then check whether they have the same values (‘=A3=B3’ will give a TRUE or FALSE; or, use an IF statement)
- back-of-the-envelope — just the other day, we were looking at a spreadsheet model (again, portability is important), and we did some back-of-the-envelope calculations to check whether they were sensible. It’s similar to the idea of an elevator pitch — can I explain in simple language and logic why we get these results?
- have someone check — give it to someone else. Let them see everything, get them to check everything. Make sure they have the chops, too, to do it right. Now, that can be expensive, several hours of work. So ask yourself,
do I feel lucky todayis it worth it for the job or the client? I mean, if I’m going to recommend unemployment for a few million people, I want to make sure my cell references are right. But not all clients warrant that level of scrutiny.
After all that, though, mistakes will happen. The best thing to do is be a mensch — I’m not sure what the New Zild translation is. Own up, walk the client through the impacts, and do as much work as you need to do with the client to restore some credibility.
And then, add it to your bag of tricks. You’ve just learned an expensive lesson.