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Talk about Newsnight

Paul Mason's Idle Scrawl

Can McLaren's software keep a business off the crash barriers?

  • Paul Mason
  • 29 Sep 06, 02:49 PM

We had a fascinating day at the futuristic bond-like HQ of McLaren, the Woking-based Formula One team. They're about to spin off the software that runs race strategy into a commercial business tool aimed at chief executives. The software analyses about 8 million possible scenarios per race, and recalibrates the possibility of them happening every two seconds: the idea is that the same methodology - for geeks it is based on Bayesian probability - can be used to speed up and make rigorous the kind of strategic decisions you have to take if you are a chief executive...


To me it speaks to a wider set of developments that are going on in business: globalisation has broadened the number of variables in each business decision: if you're Shell you are juggling the oil price, hurricanes in the Gulf of Mexico, the state of the revolt in the Niger Delta, Vladimir Putin's moods over environmental issues in Sakhalin, and the possibility of nuclear war with Iran, even the propensities of uppity investigative journalists. And that's just on a good day.

What that requires, say the business boffins, is "strategic agility" - which sounds good on paper but has for many people been a contradiction in terms. Strategy is something that, before internet+globalisation changed our world, could be set in stone for years: and there was a sequence that went "set the strategy then execute it". Now what they're saying is you have to do both at the same time: and the sheer number of new entrants to your market, disruptive technologies, geo-political factors mean that if one variable shifts, the whole direction of the company might have to change. So, as Professor Donald Sull of London Busines School tells me tonight, a CEO has to have a heads up display, like a fighter pilot, because he just can't be situationally aware enought to win without it: of course if he was flying a Spitfire in 1940, the human brain and a radio would be enough.

I wonder where it will all end up: everybody else - including journalists - has seen bits of their so called skill and even genius usurped by machines and computers. Could that happen to the masters of the universe, the chief execs? And more imminently, could software take the place of expensive strategy consultants? The backers of this new technology are prepare to venture the answer "probably" - at least except for the really clever stuff.

Going to McLaren also made me realise how advanced and tecchie modern engineering can get: the whole campus is like something out of the Matrix and the food in the canteen is restaurant standard (and you have to take a lunch hour, food being banned frmo the pristine workbenches the black-clad PhDs work at).

See it all on Newsnight tonight. Vroom.

Comments  Post your comment

  • 1.
  • At 11:29 PM on 29 Sep 2006,
  • Bob Goodall wrote:

Pity they dont win any races... or do they?
software designed to take the ceos eye sufficently off the ball for his company to er....crash

  • 2.
  • At 11:36 PM on 29 Sep 2006,
  • DG wrote:

I've just watched this article and am disappointed that something so totally lacking in analysis was aired on Newsnight. This was the TV equivalent of reading a flimsy article in the technology trade media and realising it was cut and pasted from a press release.

For this to have been a story with any merit would have involved addressing the question so what? So what if this software can track hundreds or thousands of variables? So what if it can run millions of scenarios for their values? Is it automating business strategy? Only if the software can magically develop the right strategy for each of its scenarios. That's what was implied.

All this product is really doing is tracking a lot of data and providing ways to present it. Useful input in setting strategy, but no more than that. The key challenge remains ie picking out the relevant data and coming up with the insight about how to best respond.

Sadly instead of asking and answering this obvious, basic question we were treated to throw away journalism, epitomised by the conclusion "...if horsepower can be automated, why not the bosses?" Hmmm, perhaps because you haven't given this any worthwhile thought.

Come on Newsnight, pick up your game!

  • 3.
  • At 12:42 PM on 30 Sep 2006,
  • D9 wrote:

A Bond-like HQ and all that geeky technology and they still come in third. What I'd really like to know is what are Ferrari and Renault using?

  • 4.
  • At 12:01 PM on 04 Oct 2006,
  • Paul Mason wrote:

I'm sorry #2 didn't like the report. I understand where you are coming from DG (and I hope you are not the Director General of the 大象传媒!) The problem is with only 5'30" to make the piece in, you have to choose what to focus on: if I'd been writing a feature on it for a newspaper I would have asked exactly the questions you did; however it takes so long, and is so new to most people, to explain what business decision support software is, I decided to use the launch as a way into discussing changes in the ways CEOs work: since most of us will never meet a CEO or the head of America's #1 business school, I still think that had value as journalism. And believe me I did not just read a press release about the McLaren software: I got a thorough briefing on who their clients are, what their references were etc, off the record, before just running with a story about their product: since all the people who will make decisions about buying it are not likely to be swayed by Newsnight, I didn't feel the need to include a whole list of competitor's products - but I did think about whether I should. Cheers

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