Covid-induced innovation in the business world

The Economist has a full article on this topic, here is one good excerpt:

But the defining feature of the latest innovation revolution is breakneck speed. Companies are being forced to raise their corporate metabolism and overcome “analysis paralysis”, an affliction caused by top managers having pored over the same irrelevant case studies at business school. In a recent briefing consultants at Bain urged companies to throw out old data, test quickly and often, and assume you will be in testing mode for some time to come.

The article is interesting throughout, and here is my earlier post on the rising speed premium in a pandemic world.

Comments

Some might even call it expected Kurzweilian increases from unexpected sources.

Returns to the mean. Indifference curves are multiplex in vector space.

I do not understand why this is urprising. At all. From hyper-fincom 8 years ago to present to palantir and quantum why would anyone think think that correct assumption (aka risk), at speed, greater than ETF flunkies, is less than traditional methods is the proper way of investing eludes me. Holy crap they don't even have to be right half the time, just faster.

This (not prior comment) is dumb. How could you not think computation speed was important? Isn't that what gave us the alpha is the fission bomb? Computation speed + accuracy is the ONLY metric that matters. Otherwise, you're deluding yourselves, and failure to provide proof, or otherwise, is ruin. Keep sending prospectus flunkies. Eat sushi. Mercury bearz a message.

Did you escape from r/WSB?

CNTRL + F + "patent"?

Didn't read it, did ya? A few paragraphs in:

"Most large companies do not use or license most of their patents, save their “crown jewels”."

'Confronted with the sudden closures of its primary distribution channel to restaurants and institutions, Sysco, a big American food-distribution firm, built an entirely new supply chain and billing system to serve grocery stores in less than a week.'

This cannot be true, as it should be said again: America’s regulatory state is failing us. Meaning that there is no way Sysco could possibly have done this, as one reason why food intended for restaurants is not reallocated to supermarkets involves labeling regulations.

R U being sarcastic? Hard to tell. I would say probably Sysco changed its invoices a bit, probably took a couple of days, and probably they are indeed running afoul of a food regulation or three, but in these crisis days nobody is paying much attention.

Sysco did nothing wrong. The FDA relaxed labeling rules recently:

https://www.fda.gov/food/cfsan-constituent-updates/fda-provides-temporary-flexibility-regarding-nutrition-labeling-certain-packaged-food-response-covid

Blaming "regulations" is a popular sport among readers of this blog, who see what they want to see. Goods bound for restaurants and goods bound for grocery stores are very different, with restaurants buying in bulk, which shoppers at the local grocery store don't. Ever looked in the store room at a large restaurant? You won't find 12 ounce cans of tomato sauce. And produce bound for a restaurant comes in a crate, not delicately wrapped for the family dinner. Finally, branding: branding sells goods on the shelf at the grocery store, not so for goods at the restaurant.

Yeah, there was a good "Indicator from Planet Money" interview with a potato farmer about this.

I heard something about this locally. They are delivering to homes to replace the restaurant market that has disappeared. You tell them what you want, and they will drop it off. Some restaurants have product for sale as well.

Rayward: Around here baking goods disappeared from the shelves the first week and haven't been replenished. Some packaged for restaurant marked flour is available at some grocery stores. The bulk of baking products are consumed by restaurants and bakeries, relatively few people bake at home. But that has changed and the vendors have scrambled to fill demand as required.

I suspect that the packaging and labelling requirements were waived.

And the packaging isn't much different. They sell what you order, and typically restaurants need large quantities. The difference is the labelling. Often clearly marked not for retail, because it doesn't meet retail regulations.

That's why I still wonder about the toilet paper shortage. Some guy on the web claimed it's because people are now using toilet paper at home instead of at work, and the supply chains are designed to provide "work" toilet paper to businesses and "home" toilet paper to stores for consumers to buy. And claimed that those supply chains are rigid and the work toilet paper can't be re-directed to the consumer market.

Well there's no shortage of entrepreneurial types eager to arbitrage by buying those alleged truckloads of un-needed work toilet paper and selling it to consumers. And even big companies such as Sysco are evidently showing such flexibility. So I'm still skeptical of that guy's story about why supply chains are to blame, rather than panic buying by consumers.

OTOH, it's clearly true that household demand for toilet paper has increased greatly, without any panic element needed. Around early or mid-March I glanced at my TP stash, saw that I had months' worth, and didn't even worry about buying more. But after a month of lockdown, I realize that I am using toilet paper a lot faster than before; instead of what I thought was a 3-4 month supply might be more like 2 months' worth.

Howdid,

Please provide evidence of your assertion; provide link below

You must be joking - it is a quote from the linked article. How did that escape notice?

Evolve or die replaces grow or die?

"Matterport, a Californian firm, says its 3D cameras are selling like loo rolls."

LOL. "loo rolls" I feel like I'm in a Harry Potter book.

"Bog roll" is hilariouser.

What does this suggest for business: don't engage consultants because they are a waste of money. Of course, business already knows consultants are a waste of money, so why do they? Two reasons: the revolving door and deflecting responsibility. We usually think of the revolving door as being applicable to government and businesses that do business with government, but it also applies to businesses and consultants. Deflecting responsibility has always been a favored strategy for business, but with Trump in the White House, deflecting responsibility has become national policy.

You only hire business consultants when you already know what you want them to find out and say.

Bain Capital saying "ditch your managers and let us run business analyses instead" hahahaha

"Weighed down by legacy assets and protected by oligopolistic profits, many big firms are not natural innovators. Most corporations that have them relegate geeky innovationistas to skunk works that besuited types steer from the C-suite. "

That's the key excerpt. Big companies wait for bailouts from their cronies in Congress. The real innovators roll up their sleeves.

Of course, our host has affection for big business. Or he did. Something that has been exposed by the economic lock-down is that big business (near monopoly) is at risk of failure. And absent competitors that are alternative sources of supply, it creates a domino effect.

Governments did jump on this unique very low road traffic opportunity to fix all the potholes and refresh all the road striping, right?

Much of that had already been done around my area during the past few years when localities were rolling in money. If you think that considerations of convenience for drivers figures into local government planning, I suspect you'll be disappointed.

My engineer's view is that this Economist article is legit, and is pretty much what I see among the professional and amateur design communities.

The biggest "Covid-induced innovation" over the coming year will be purging 60+ year old's from the ranks of business, academia, government and the judiciary.

Most of it will be self-selection as bloviating, geezer execs, like Eiger, now realize that every fall, there is a good chance they will die. So most will retire. Others will be forced out, as people in hiring positions will view Boomers as a giant liability.

Adios.

The government office that I work for has been scrambling over the past few weeks to streamline and bring online any number of workflow processes. These are changes that could have been made incrementally over the past ten years, but there was never time nor incentive until maximum telework forced the issue.

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