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Soft o hard: ¿qué es qué?

La densidad de asuntos relacionados con el fin de Fenareta va en aumento (o quizá es que estamos más pendientes de dichos asuntos ahora que antes de ponernos en camino: la relatividad no descansa).

El caso es que hoy tuvimos una provechosa reunión con tres ejecutivos de empresa, uno de los cuales, afamado gestor de empresas públicas, y ahora presidiendo una empresa privada con 4.000 clientes, nos hacía una reflexión al hilo de los primeros pasos de Fenareta en el mundo empresarial: encontraréis dificultades en el camino, porque el empresario español maneja bien lo “hard” (los números, las estadísticas, los modelos de medición…) pero en lo “soft” (la intuición, las apreciaciones personales, la formación humanística, la psicología…) se mueve como elefante en cacharrería: con poca pericia.

Llegamos después a la oficina (muy ilusionados ante la fenomenal perspectiva de poder acercar la metodología filosófica Fenareta a tantas empresas) y es de nuevo Financial Times quien parece que ha escuchado a nuestro interlocutor esta mañana.

Adjuntamos el artículo para reflexionar sobre este asunto.

Nothing beats the exercise of judgment

By Philip Delves Broughton

Published: September 6 2010 23:30 | Last updated: September 6 2010 23:30

The phrase “paradigm shift” should be enough to send chills down any manager’s spine. It is what consultants say when they don’t know what else to recommend. Or economists, when all their predictions have just gone up in smoke. “What you need now, dear client, is a ‘paradigm shift’. Here’s my bill and I’ll be off.”

But since the failure of many financial institutions to predict or manage through the economic crisis, this is what many economists and business academics are calling for: a “paradigm shift” in how we think about the balance between human judgment and the efficiency of scale in running a profitable business.

In a recent piece in the Harvard Business Review, Amar Bhidé blamed the financial crisis “judgment deficit” on too many black box computer models and too few humans making decisions for themselves.

In this newspaper, the economist Joseph Stiglitz recently blamed markets and regulators for placing too much faith in the efficient markets hypothesis and assuming that market prices reflected fully all relevant information.

What is missing from this debate is the voice of the manager, the person who more than any economist or academic, understands this problem intuitively. Because in any business, large or small, financial crisis or none, this problem comes up every single day. Do you prefer to trust people or processes in running your business? In difficult moments, do you put your faith in the seemingly clean, dependable data or the executive who says she feels uneasy about the decision they are leading to?

A few years ago, economists were briefly fascinated by the distinction between hard and soft information. Hard information includes numbers, charts and empirical data. Soft information includes intuition, or personal judgments about people and situations. George Soros once said that he dumps positions when his lower back starts to ache. That’s the soft signal that might support a hard judgment on the direction of the euro versus the dollar.

In hiring, a CV contains hard information about degrees obtained and jobs done. Personal references are the soft stuff, which help an employer distinguish between the blithering gasbag with blue chip degrees and the diligent genius with only a high school education. All big decisions require a balance of soft and hard information.

The other part of this problem is how you grow. Businesses requiring endless individual judgments are not nearly as scalable as those built on technology platforms. The reason banks came to depend on credit scores to make loans was that it simplified the process to the point where they could make more loans, faster, with what seemed like a satisfactory level of scrutiny.

The blow-ups of the past three years aside, it’s hard to see this model fundamentally changing. Some may pine for the traditional bank manager tyrannising a local lending system, but the efficiency and profitability of scale lending is not going away.

Furthermore, it’s not as though depending on soft information in finance is any protection against disaster. The success of micro-lending in the developing world may seem to justify extending credit based on soft information, the observation that people without any financial history will work hard to fulfil their obligations to their families and communities.

But then Bernie Madoff’s scam was a victory of soft over hard information. The whispered remark in Palm Beach, “this Madoff’s a genius”, was valued more than any proper look at what Madoff was doing.

The slow growth of person-to-person lending may in part be because most of us still value the impersonal lending processes of large institutions.

Bo Burlingham’s excellent book Small Giants – Companies that choose to be great instead of big – describes several US companies that faced similar challenges to the ones that economists are now debating. Given the opportunity to become bigger, do you seize it? Or is there something magical about staying small? What are the pitfalls of size? At what point does a manager go from being a manager of people to an implementer of organisational processes? And what gets lost if that happens?

I know the chief executive of a Midwestern company with 90 employees who believes firmly that going beyond that would change the nature of the company for the worse. He frets that his employees would lose their sense of purpose, the sense that their work and the decisions they make matter. It means passing up opportunities to scale what he does, but he believes that preserving the human dimension of his company is worth it.

This is not to say there is virtue in staying small. But rather that for the right manager and company, there is value – just as there is value for others in being large. It comes down to what economists struggle to model and managers grapple with all day: judgment. No paradigm shift required.

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Copyright The Financial Times Limited 2010.