Savvy Avi

Molded after the popular Sloan experimental courses (e-Lab g-Lab) SLAM lab (System Leadership and Management) is a course offered only to SDMs. Students consult Cambridge technology firms with strategic decision making. The course, offered in fall, has a summer preparation course adequately called pre-SLAM lab. During the summer course, the class is presented with cases about MIT spinoffs: E Ink, A123 Systems, Ember. All the cases have been written by Harvard Business School. I think I have spotted a pattern: MIT incubates companies and HBS writes case studies about them. Professor Michael Davies, who teaches the class, is the most charismatic lecturer I have had so far at MIT. Pre-SLAM class is always entertaining but when class ends I am not always sure what I’ve learned. One lesson I did pick up is that even very smart people can make stupid decisions. People are ‘prisoners’ of their own history and tend to bias strategic decision with emotional ‘reasoning’. I have seen it in poli...

As a blog writer I am interested in viewing who, if at all, is reading my blogs. I installed a tracker. I use tracemyip.org but Google analytics and probably many other sites provide similar services. So now I know a lot about you. I don’t know your identity but what I can tell is your approximate location, through IP address, the links or search words you used to get into my blog and even your browser, OS and screen resolution. I was surprised to find out that in several months I had a few hundred readers. In a typical day I have two or three readers one of which is a first timer. 70% of the readers come through SDM, which for me means more of my blogs should be SDM related. Other readers either come from Google search with searches related to my latest post title (“up on the bridge”, “performance based bonuses”, “credit defaults” are some examples), from LinkedIn or from looking me up directly (probably family and friends). The last category of entries to my blog is crawlers; the we...

Performance based bonuses (PBB) is an effective management tool but quite often it causes unintentional effects. PBB are supposed to improve productivity by compensating employees according to their contribution to productivity. However organizations are complex systems and it is impossible to measure an employee’s contribution accurately. Companies are forced to use performance models that are a simplification of reality. As a result, employees are focused on maximizing performance under the model which not completely aligned with the benefit of the company. In banking, for example, the bonus models underemphasized risk, causing a worldwide catastrophe. Leaving the financial crisis aside, there are other common pitfalls. It is simple to construct performance-based contribution for sales representatives. The more they sell the more they earn – simple. It is much harder to construct a model for back-end functions, say an IS developer. This is where it gets messy. Measurement by schedul...

As engineers, many of us at some point contemplate founding a start up. For most, it is nothing more than a thought and for a sound reason – we know the start up success rate. However, if you are anything like me a dormant entrepreneurial seed lingers in the back of your brain. Product Design and Development, a foundation course in MIT’s System Design and Development program, encourages experiments in that direction. The course reviews the product development process starting with deriving user needs and on to designing a concept and prototype. Interesting guest lecturers come to speak to class such as industrial designer Matt Kressy who talked about rapid prototyping and Yoav Shapira a startup VP who talked about agile development. Class teaching is followed by a semester long project to come up with a new product. Each group receives $800 to create a prototype. At the end of the course there is a competition and the winners receive a small budget to continue with the product devel...

Another nail to the coffin There is much hustle in Brussels as the EU market commissioner proposes steps to curb swap trading. The German chancellor presses for tighter EU regulations on hedge funds. In the UK, we are told, regulators seek tools to “burst dangerous asset bubbles before they are built”. Four banks, including JPMorgan Chase my employer, face trial over sale of derivative to Milan municipality, allegations that echo the role investment banks had in fueling Greek debt. It’s interesting that in the Greek and Italian stories the banks are cast as villains and public sector as a defenseless simpleton. But what is really amazing is that all these stories are reported in just one Financial Times edition. Things are moving at a dizzying pace. Financial policy is going through an overhaul. Aiming at the wrong target Meanwhile in the US, where the villains are the same but the simpletons are the homeowners, there is talk of a new regulatory body, the Consumer Financial Prote...

The thesis is one, of several reasons, that made me choose the System Design and Management program and not an MBA program. I have been looking forward to it with much anticipation. Now that I have started the thesis seminar, I quickly found out what’s the hardest thing about starting a thesis. It’s not finding a subject. Ideas come easily, every week I think of a new idea that gets me hipped. It’s not finding an advisor. There are plenty of experienced professors willing to advice. Unless the research subject is theoretical or not case-specific, which is not my desired direction, the hardest thing is connecting to a company that is willing to share data for research. Sponsored students are lucky (not just because of money) they have an established relationship with a supportive company. No worries, with patience and persistence even hard things reach a successful conclusion.

I am taking the first spring semester as a long distance student in MIT's System Design and Managment (SDM) program. The long distance option, which I am grateful for, poses some challenges. A month into the semester, I am still trying to improve the interaction with the classroom, faculty and fellow students and maintain a balance between school and work. Setting up a work station I am using my home office (/living room /dining room/ guest sofa) from which I connect to the ‘bridge’. I find it useful to work with two screens. One displays the class, the mike controls and my video (I want to see how I appear to people looking at me from the classroom). The other displays the presentation slides and notebook (OneNote). The webcam is positioned above the main screen and when I look at the other screen, I am not facing the webcam. Class participation The video and sound quality are good. Material is always available before hand on the web. So keeping up with the studies is eas...