In a world with monumental forces at play, we have to re-conceptualize our roles as leaders.
I go back to the wisdom of Buckminster Fuller, who reflected on what one person can do:
“Something hit me very hard once, thinking about what one little man could do. Think of the Queen Elizabeth — the whole ship goes by and then comes the rudder. And there’s a tiny thing at the edge of the rudder called a trim tab. It’s a miniature rudder. Just moving the little trim tab builds a low pressure that pulls the rudder around. Takes almost no effort at all.
So I said that the little individual can be a trim tab.
Society thinks it’s going right by you, that it’s left you altogether. But if you’re doing dynamic things mentally, the fact is that you can just put your foot out like that and the whole big ship of state is going to go. So I said, ‘Call me Trim Tab.’”
Can you be that trim tab for your organization?
Can you be that trim tab for something you want to create?
Can you be that trim tab for what this nation — and the world — needs now?
Will you lead fully?
Luca and co-author Susan Athey, the economics of technology professor at Stanford Graduate School of Business and a pioneering tech economist herself, delve into the phenomenon in their paper Economists (and Economics) in Tech Companies, forthcoming in the Journal of Economic Perspectives.
“Inside tech firms there’s a huge competition for talent right now,” Athey says. “There are fairly junior PhDs making in the high six figures or even seven figures because their expertise is just so valuable.”
What does a digitization/tech economist do every day? Problems they work on include:
Online advertising design. Advertising inventory on search engines is often sold via auction. Economists help companies design those auctions, advising on everything from the type of auction to run to where to set reserve prices. “Tech firms have also hired economists to solve challenges relating to the choice of outcome of advertising, such as pay-per-click versus alternatives,” the paper states.
The role of ranking and incentives in marketplaces. The way marketplaces and intermediaries rank offers from sellers or service-providers can be thought of as an incentive system. Economists are well positioned to analyze issues such as short-term user behavior and the equilibrium impact on the marketplace as a whole.
Estimating advertising returns. Digital advertising provides marketers with renewed opportunity to measure advertising effectiveness. Economists draw on both existing theories of advertising and the tools of econometrics to test and evaluate advertising effectiveness.
Designing review and reputation systems. Platforms like Yelp and TripAdvisor contain hundreds of millions of consumer reviews; online marketplaces also rely on reputation systems to facilitate trust between strangers. Economists help companies design reputation systems, “focusing on understanding the systematic biases that can occur in review ecosystems, and the design choices that might mitigate these biases,” according to the paper.
Acquisitions, exclusive deals, and strategy. Economists draw on economic theory and empirical methods to value exclusive deals in gaming platforms; analyze whether a market can sustain a new player; and how banks should consider potential partnerships with, say, Apple Wallet.
Price setting. At Uber, a team of economists work on how to design and fine-tune its surge pricing system, which changes fares in real time and increases prices during peak hours
Feelings are biochemical mechanisms that all mammals and birds use in order to quickly calculate probabilities of survival and reproduction. Feelings aren’t based on intuition, inspiration, or freedom. They are based on calculation. When a monkey, mouse, or human sees a snake, fear arises because millions of neurons in the brain swiftly calculate the relevant data and conclude that the probability of death is high.
—Yuval Noah Harari, 21 Lessons for the 21st Century