How can I use data to understand my organisations situation and performance?
From 2006 – 2010 I taught a Quantitative Methods course at ESCP Europe. I enjoyed it immensely and got great feedback from students. Since then I’ve continued to gather material but realise that no-one gets to see it. So I’ve created an online course.
The course should be of use to anyone with an interest in an MBA level education, and I have attempted to supplement my own presentations with links to some exceptional online resources.
The rest of this page contains some further resources and links.
If you want to start at the very beginning then take my Numeracy Skills Bootcamp, which covers Fundamentals of Mathematics, some Practice Tests, and a discussion of Gender Differences & Mathematics. I also suggest my content on Collecting and Presenting Data.
Textbook
I hope you find the online course useful, but I am also a fan of the old fashioned way. The course ties in to the following textbook:
It is a very good one: well written, full of examples, and plenty of opportunities to test yourself. You could do a lot worse than simply order it now and then work your way through it.
I’m also intrigued by “Calculus Made Easy“, by Silvanus Thompson. It’s antiquated in format but highly directed toward simplifying concepts and engaging with the reader. Statistics Done Wrong also looks fun.
Pop analytics
I believe that a good way to prepare for a subject is to read a book that is captivating. Something that stimulates your interest and encourages you to dig deeper. There are lots of bestsellers that have attempted to communicate mathematical ideas to the educated layperson. My favourite 6 are these:
If you really need to develop your QM skills then I would recommend you follow the HBS one instead of mine. However I found it pretty dull and failed to complete it. I’m hoping that by providing a mixture of content you will find mine more enjoyable.
Daniel Kunin has a wonderful website called “Seeing Theory“, which allows users to visualise basic concepts in statistics. I’ve integrated links into the course below.
I believe that the best way to internalise the key concepts in this course is to conduct a replication exercise. These have become increasingly common as ways to apply the concepts covered, and test a students knowledge retention. To be honest though I am yet to find any really good examples of statistical tests that companies have utilised, and for which the underlying data set is available.
In their textbook, “Modern Principles: Macroeconomics”, Tyler Cowen and Alex Tabarrok present a good exercise to replicate a Solow Model. My (flawed) attempt to combine two of their problem sets is here:
Whilst I continue to look for potential replications, one option is to focus on some controversial statistical debates. These are also good ways to go deeper into the theory, and fully appreciate the link between theory and practice.
You should now be a savvy consumer of statistical analysis and passionate about good data management. I recommend that you treat yourself to the following tome:
The scenario method is a useful, creative, and increasingly popular way for managers to reframe their perspective and improve their organisational resilience. The course shows how to recognise the driving forces that will affect the future business context and consider the present-day implications. By building detailed and imaginative narratives, participants will learn how to confront uncertainty and become more confident in conditions of change. The lecture content contains the cutting-edge practice of the scenario method and the blended approach permits flexibility, agility, and collaborative project work.
You probably don’t want to take movie recommendations from me, but if you wanted to watch something before the course that will help your understanding of key learning outcomes, I recommend: Children of Men (2006)
Oxford Scenarios Programme, Webinar, September 2017 – this provides an excellent overview of two fascinating case studies: Rolls Royce and the Royal Society of Chemistry.
For my report on SMRs see here. For my analysis of the situation in Belarus see here.
Before using my flight from Lebanon as an example of the instinctive (but anxiety inducing) desire to assign probabilities to uncertain events, I used the example of Everton’s 2023 relegation battle. To learn about that, see these two articles:
Here is a recording of my webinar from December 2022 on Scenario Planning for the Energy Industry:
In 1997 Wired published an article called “The Long Boom” in which Peter Schwartz and Peter Leyden provided a “history of the future 1980-2020”. You can read it here.
Learning Objectives: Build and use scenarios. Think creatively about alternate futures. Link scenario planning to strategic issues.
Why is the scenario method so important? Because, as Adam Martin mentioned in his interview with Peter Boettke, in economics the emphasis on choice is because we live in a world of scarcity. The conditions of uncertainty, however, also means that we require imagination. Scarcity and uncertainty are the context. Choice and imagination are the consequence.
How can we identify, understand and solve the ethical dilemmas that emerge in a business situation?
This is a short course that surveys a number of frameworks and models that can be used to cope with moral and ethical dilemmas. Famous cases will be used to provide a realistic grounding to the content, and participants will be tasked to apply those concepts and discuss their insights. The course is heavily group-focused and includes case discussion and role playing activities.
Preliminary tasks
Before attending the module you should read about these mini cases:
“Who’s Responsible for the Drawbridge Drama?” by Mueller, U., and Schaefer, U., European School of Management & Technology, 2010Learning objective: The case introduces students to topics such as “responsible leadership” and “responsible business”. It also provides an engaging illustration of how people look at the same context or phenomenon, but reach very different interpretations and judgments.
Additional cases (for 2 day version)
Healy, P., and Soltes, E., “Rajat Gupta” Harvard Business School case no. 9-117-004, January 2018
Waytz, A., and Kilibarda, V., 2014, “Through the Eyes of a Whistle-Blower”, Kellogg School of Management
One of those most famous cases of insider trading is Martha Stewart. This podcast episode doesn’t go into detail on the issue (it points that that ultimately she was jailed for obstruction of justice and not insider trading) but I found it an enlightening explanation of her life, her business model and how that relates to shifting cultural dynamics in America. Stewart was entirely self made and provided a wholesome service of showing people how to make beautiful crafts, or – more likely – give them pleasure from watching her make them instead. The claim made in the podcast is that Stewart’s wealth was a function of being personally underestimated and capitalising on how neglected the value of domestic labour and household management had become. Both of these have a clear gender angle. The podcast host is clearly sympathetic to Stewart, but laments the necessity of having to embrace capitalist institutions for her talents to be recognised and rewarded. (Personally I would use this as evidence for the triumphs of capitalism, and how it liberates women from servitude). Regardless of whether Stewart knowingly dumped shares, or whether she was scapegoated and being made an example of (by men!) to bring her down a peg, her story is a fascinating one to reflect on.
This episode attempts to explain the low rates of prosecution and conviction for “white collar crime” in the US. It provides an interesting discussion of the discovery of lead paint in Mattel’s children toys, as a result of an outsourced supply chain with inadequate monitoring, and lack of US consumer protection checks. The data it provides on the lack of resources at the disposal of the government is incredible. One thing I believe it misses is the assumption that “corporate wrongdoing” necessarily involves individual (and criminal) wrongdoing. In many cases executives were making decisions under conditions of uncertainty with genuine conflict over the amounts of risk that people were exposed to. I believe that the systemic problems are due more to the regulatory system than any individual or particular corporation behaviour. We should also consider why limited liability exists and what would be lost if we erred on greater flexibility to use individual scapegoats. (Just because some communities lack the resources to adequately defend themselves, and just because society seems willing to make examples of certain types of criminal, does not make that a model to apply more broadly). For further resources on the financial crisis see here.
Textbook
Crane, A., Matten, D., Glozer, S., and Spence, L., 2019, Business Ethics (Oxford University Press, 5th Edition)
I would add that a key aspect of how we deal with Nazism is to recognise how efforts to deal with the legacy drew upon “the very same mental habits, social disciplines and cultural appeals”; “those fateful ‘secondary virtues’ – duty, loyalty, punctuality, cleanliness, hard work.” (Garton Ash, 1997, p.201)
Dando was killed (and at first it was thought to have been a stabbing) in a seemingly random attack, and police arrested the local “madman”. More recently, there is a theory that her murder was a hit ordered by Serbian warlord Arkan, in retaliation for the NATO bombing of Belgrade. The main argument against this, however, was that he was meeting BBC journalist John Simpson on the same day, which would have presented a more obvious and much easier target . I think Barry George is our best suspect, but it seems clear that he was initially apprehended and convinced on very weak evidence in part because he served as an easy target. As soon as police found a weird loner the desire for a simple explanation – a scapegoat – appeared very strong.
An Inspector Calls is the classic literary depiction of how responsibility can be shared among many people. Although I find the social commentary to be frustratingly simplistic, there is a 2015 BBC Drama version that you may find worth watching. The 2017 Netflix Series, ‘13 Reasons Why‘ explores similar themes, but I haven’t watched it.
The 1957 movie, ‘12 Angry Men‘ is a classic. It shows how a natural drive to reach consensus can mask important insights, and that the role of Devil’s Advocate can be important in team settings.
The 2022 Netflix documentary “Downfall: The Case Against Boeing” is a compelling account of how the company attempted to pass blame for the crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 on pilot error, instead or recognising the risks caused by modifications to the aircrafts autopilot (which were underplayed in order to avoid additional and expensive pilot training). The trailer is here:
For more on “Dieselgate” see this BB article and this YouTube video:
For more on Theranos see here:
I didn’t include Carlos Ghosn’s actions at Nissan as an example of corporate wrongdoing because the accusations about him imply that the company was being wronged. Such cases of fraud and embezzlement are not a key part of our course, but there is a good Netflix documentary about Carlos Ghosn here.
Here is the DuPont Conaco Double-Hulled Oil Tankers Seal Clapping Commercial (1991), here is a discussion of Cecil the lion, and here is the Wikipedia article about Harambe. This article provides a list of greenwashing. I used to accuse L’Oreal of greenwashing in the lecture because they claim to be “natural” while using carcinogen ingredients (e.g. Titanium dioxide in eye shadow; formaldehyde-releasing preservatives in kids shampoo). Technically those ingredients are “natural” in the sense that they exist in nature, and in low doses are not considered to be particularly harmful. I think the main point is that it is harder to remove trace amounts of cancer-causing chemicals from bananas than it is to just stop using them in cosmetic products. But still, much of the campaign against L’Oreal may be over the top. Judge for yourself.
Examples of ridiculous occupational licensing include (h/t Russ Roberts):
Interior designers in Florida need 6 years of education or experience (source)
Cosmetologists in New York need 2,100 hours of training (source)
Florists in Louisiana need to be licensed (source – which also shows which other professions need licenses)
Eyal Press’s 2012 book ‘Beautiful Souls: Saying No, Breaking Ranks, and Heeding the Voice of Conscience in Dark Times‘ is a rich and engaging collection of stories about people refusing to adhere to authority. It shows how whistleblowers are not typically anarchists who enjoy flouting rules, but people who value those rules so highly they insist on holding their superiors to them. It includes the story of a Serbian man who, in 1991, risked his own life to protect captured Croatians from execution, as well a Swiss police official who broke the law by giving entry permits to Jewish refugees in 1938.
In Episode 2 of Season 5 of Fargo, Sheriff Roy Tillman provides a strong argument against being driven by the “law”, as opposed to a constitutionally infused sense of right and wrong (it takes place around 20 minutes, as he’s getting out of the hot tub!)
Regarding the importance of involving the local community in a company’s strategy, see Steve Jobs; testimonies to Cupertino city council, in 2006:
…and again in June 2011
For a contrarian view on sweatshops, see here:
My favourite documentary on Lance Armstrong is ‘The Armstrong Lie‘ (2013)
Learning objective: The case helps students to gain experience resolving ethical dilemmas in which two values may conflict, such as professional duty and personal ethics. It enables students to identify behaviors that help a whistle-blower be effective and discuss how incentive structures, management, and culture play roles in promoting or hindering ethical behavior in organizations.
I define whistleblowing as “the unauthorised revelation of wrongdoing”. The German Spy Museum define it as “someone who reveals confidential information about the illegal or immoral practises of their employer.”
The most famous whistleblowing case of recent times is Edward Snowden. Here is a nuanced account of Snowden’s actions and motivations, and the key part is “I found it hard to determine when, in Snowden’s own mind, he graduated from being the emotionally immature and naive person he disdainfully describes himself as at the beginning of his development to being the sophisticated person who could make sound decisions about what is good for humanity he claims to be when he takes the NSA documents.” Citizenfour is a critically acclaimed documentary:
“Reality” is a slow paced but engaging drama that uses the actual FBI transcripts to reveal the case of former NSA translator Reality Winner.
“Official Secrets” is based on a true story, featuring whistleblower Katharine Gun. I found it interesting that she made no attempt to escalate issues internally before going outside the organisation. The fact that she worked for the UK security services added more weight to the magnitude of her actions, but also calls into question whether we should treat people with security clearance differently to dissent in other contexts.
Insider trading
“Rajat Gupta“, by Healy, P.M., and Soltes, E., Harvard Business School, 2019
Learning objective: The case explores how a prominent and successful executive can engage in misconduct. In addition, the case explores the nature of illicit insider trading.
In 2011 Raj Rajaratnum was given an 11 year prison sentence for insider trading. According to Philip Mirowski (2013) this makes him just one of two people (the other being Bernie Madoff) to have gone to jail for their roles in the 2007-08 global financial crisis. Martin Wolf (2023) claims that the only banker to go to prison from wither the US or the UK was Kareem Serageldin (whereas in Iceland 25 bankers were convicted, 11 in Spain, and 7 in Ireland.
Here is a New York Post article explaining how Nancy Pelosi (and her husband) have benefitted from trading off the stocks of companies that she regulates, and why she is resisting efforts to stop Congressional lawmakers from being able to continue to do so. You can track her trades here. Here is a funny halloween costume.
Here is a case that links insider trading with working from home – a man bought stock in a company that BP were intending to buy and made a $1.8m profit after they did so. His wife worked in M&A at BP, and had been discussing the deal on zoom calls within the family home. For more see here.
Quiz
Finally, you can test your understanding of the content, and provide me with useful feedback, by completing this quiz:
Course introduction
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