Hapeman began to publish help desk metrics in response to the “quantify your quality” priority.  Increasing revenue was a bit more challenging.  High argued that IT should align their budget with the business, but how could a non-revenue department demonstrate value?  Hapeman’s take: 

       When we talk about adding to the bottom line, and contributing to the margin by IS, we’re not (considered) a revenue driven center.  I’ve always dismissed that.

Hapeman introduced the concept of revenue equivalency.  Revenue equivalency is the opportunity cost of lost revenue when compared to the businesses’ profit margin.  Hapeman explained that after all the bills were paid, there was about a 5% profit margin on every dollar brought in:

ORP Budget
Wages & Benefits	$0.60
Expenses, "Stuff"	$0.25
Management (IT, Accounting, HR)	$0.10
Margin	$0.05

Hapeman elaborated: 

   If you consider this, for every $1 generated, you end up with a 5¢ profit margin.  $1 million in new revenue translates to $50 thousand in new margin.   

   What if I save $50 thousand?  What if I spend less or do something more efficiently to save $50 thousand?  That is a revenue equivalency of earning $1 million.  I would have to bring in $1 million in new revenue in order to accomplish the same thing I did by saving $50 thousand.  

   By simply buying the Microsoft Academic licensing for our schools, over 3 years, we’re saving over $200 thousand.  If you do the revenue equivalency of that, that’s $4 million.  We would have had to of gone out and found new ways to bring in $4 million dollars; to accomplish the same thing from a margin standpoint, as we did by simply changing the way we buy licensing.   

   Think about that.  That is powerful!

Hapeman also discussed information flow within his department.  A particularly touchy subject was the concept of cubicles.  Hapeman’s office was situated near the entrance of the IT department.  The majority of his staff worked in a shared common space separated by partitions.  Hapeman weighed the pros and cons of the situation:  


  Hapeman also shared his thoughts on how direction is set: 


References

Don’t be discouraged by the cover of The Adventures of an IT Leader.  The motif is a cross between a Marvel comic book and Japanese animation.  I was immediately drawn to the story precisely because of the unique style of the cover.  The story also provided a welcome relief from both work and studies.  There were a number of times I laughed out loud as I read about situations that mirrored my professional experience (minus the part of the main character as the CIO).

Adventures of an IT Leader Q&A

1. Full disclosure.  Admit publicly that IVK wasn’t prepared but will rectify the situation.
2. Partial disclosure to customers that may have been affected by the outage.
3. No disclosure at all.  This strategy could work but it was a gamble.

     In 1997 computational history was made when IBM super computer, Big Blue, defeated world chess champion Gary Kasparoff (Gustin, 2011). The accomplishment was a milestone of wit because human beings had always been intellectual kings. The feat demonstrates that humans may need to make room at the top of their pneumatic ant hill.

    Big Blue's chess victory may testify to the superior intellect of computers.  Ultimately, the intellectual victory may belong to humanity.  Consider the Internet as a synthesis of communication, information, and intelligence:

• Communication is the exchange of information.
• Information is the communication of knowledge or intelligence.
• Knowledge is information acquired through experience or education (i.e., communication).
• Intelligence is the ability to acquire and apply knowledge and skills. 

     The United Nations held the World Summit on the Information Society (WSIS) in 2003.  The WSIS defined the digital revolution (WSIS, 2013):

 The rapid growth of Information and Communication Technologies and innovation in digital systems represent a revolution that has fundamentally changed the way people think, behave, communicate, work and earn their livelihood. This so-called digital revolution has forged new ways to create knowledge, educate people and disseminate information.

     WSIS specifically included the terms "information", "communication" and "knowledge".  Intelligence may be the Internet's missing link.
 
     Intelligence exists throughout nature and science. Tom Malone, professor of management at MIT, dedicates his research to the concept of collective brain power. Malone helped establish the MIT Center for Collective Intelligence. Their mission is to understand how people and computers can connect, so they collectively act more intelligently than any individuals, groups or computers have ever done before. (http://cci.mit.edu, 2012).




     Malone’s Intelligence Genome model maps the various aspects of interconnected intelligence. Single cells that work together to function as complete organs, swarms of bees, and the Internet are all potential intellectual processes. For example, Big Blue is an artificial intelligence subset of cognition, which participates in the collective intelligence group.

     Malone’s research identified four “genes” that are the building blocks of collective intelligence (Malone et al. 2010):

1. What is being done? 
2. Who is doing it? 
3. Why are they doing it? 
4. How is it being done? 

     These four genes are, according to Malone, “the genes from which individual organisms develop, these organizational genes are the core elements from which collective intelligence systems are built.” (Malone et al. 2010). Malone’s four collective “intelligence genes” roughly translate to incentive, cooperation, collaboration and cognition.


     Synchronicity in nature provides a uniform intelligence to groups of all size. Steven Strogatz, professor of mathematics at Cornell University, discusses synchronicity on Ted.com (Strogatz, 2008). When a crowd of people begin to clap, the sound quickly becomes synchronized. A single heart cell must work with 10,000 other “pace-maker” cells to make the ventricle pump synchronized. Storgatz’s best examples are birds that flock together or fish that swim in organized schools. Strogatz explained the three steps involved in their synchronous behavior:


1. All individuals are only aware of their nearest neighbors.
2. All individuals have a tendency to line up.
3. They are all attracted to each other and the try to keep a small distance apart.

     Fish schools and bird flocks are based on these rules. There is also a forth rule: When a predator attacks, get out of the way! When a single bird is in flight, and part of the flock, the bird has added intelligence. For instance, when a bird is part of a swarm, the odds of getting its goose cooked by a predator are greatly reduced.

     There are also more eyes to spot danger. When a hawk is about to attack a flock of starlings, waves of panic propagate through the group, sending messages over great distances. Avian information can be sent over a half a mile with the synchronous communication network. Whether it’s a single cell organism or a herd of buffalo, when connected and working as a group, the individual becomes part of the collective intellect.

     The Internet has a collaborative influence on the herd mentality of humanity. Examples of digital synchronicity include viral YouTube videos and flash mobs. Synchronicity can also affect the ICT process of diffusion. Employees may accept or reject an innovation based on the critical mass of public group feedback. Synchronicity can also be used as an online warning system. Twitter alerts the online herd about atrocities, disease outbreaks, and threats from unexpected weather.


     Collective Intelligence is also found outside the flock and in other parts of the animal kingdom. Thomas Seeley, a biologist from Cornell University (Zimmer, 2012), makes a compelling discussion that links the behavior of ordinary honey bees to the human brain. Seeley demonstrates the secret world of bees and how decisions are made by the members of the hive.

     Seeley explains that when a hive grows too large, worker bees are sent to find a new home. The search for new real estate may take a few hours or a few days. After a scout finds a possible home the bee alerts the hive. The bees communicate by a process of dances, their degree of enthusiasm, and head-butts. The enthusiasm attracts the attention of other bees; the dance provides the exact coordinates of the potential home; and the head-butts are used to quiet other bees assigned with a similar task (competition).

     Seeley describes the hive as an exposed brain. “Both swarms and brains make their decision democratically” (Zimmer 2012). The hive uses thousands of bees, and a brain uses millions of neuron signals. Seeley’s analogy can be further extended as a living example of how the human hive of the Internet operates and is part of the cooperative gene pool that makes a collective intelligence.


     The Internet may be the world’s largest brain. Through the use of incentives, crowdsourcing takes its over-sized brainpower to tackle giant problems. There are hundreds of millions of people that interconnect by using the Internet. Those people represent an opportunity cost in potential mind power. The goal is to bring together as many professionals, enthusiasts, and hobbyists as possible and focus their collective reasoning to solve otherwise impossible problems. Crowdsourcing combines collaborative, cooperative, incentive and cognitive collective intelligence.

     Jeff Howe explores crowdsourcing in his article, The Rise of Crowdsourcing, Howe explained how the pharmaceutical maker Eli Lilly, was able to harness the power of crowdsourcing. In 2001 the company launched InnoCentive.com as a means to expand their research and development (Howe, 2006).

     InnoCentive.com expanded its role and invited other firms to take advantage of the new collective intellect (for a fee). According to Howe, “Companies like Boeing, DuPont, and Procter & Gamble now post their most ornery scientific problems on InnoCentive’s Web site; anyone on InnoCentive’s network can take a shot at cracking them” (Howe, 2006). The hodgepodge online crowd is motivated by serious financial reward. An InnoCentive solution is worth over $100,000.

     Amazon started a separate crowd source web site called Mechanical Turk. The site allows anyone with an Amazon.com account to search through HITs (Human Intelligence Tasks) and receive compensation for completing simple online jobs.

     Although financial incentive is a powerful motivator, it’s not the only reason the hive cooperates. MIT’s Center for Collective Intelligence reports that collaboration is also accomplished for Love and Glory (Malone et al. 2010). For instance, the popularity of Linux is attributed to the continuous improvements made by a gaggle of programmers. The software is free and anyone is allowed to change and improve upon it. The freelance developers are not paid for their efforts but they continue en masse because of their passion for Linux (Malone, et al 2010). The prides of programmers develop for their pride!



     Synchronicity and the hive are examples of online coordination and cooperation. However, Malone’s Intelligence Genome theory require a decision making process, in order to demonstrate cognition. In the Big Switch, Harvard professor Nicolas Carr explained, all living systems can be reduced to a process of control. There are two foundations that are involved with the control process (Carr, 2010):

• Measurement: The current state is observed and leads to the desired state. 
• Communication: The network and energy that is used to achieve the desired state. 

     The mechanics of control establish a cause and effect; that provide for digital cognition. Online intelligence can therefore produce predictive applications (good decisions).

     Manipulation of the financial markets is an example of cognitive intelligence by means of artificial decisions. Software engineer, Gerd Häußler, explained the practice of hedge fund trading. The process is dependent on software algorithms that executed “elaborate decisions to initiate orders before human traders are capable of processing the information they observe” (Carillo, 2012).

     The concept is similar to IBM’s Watson competing on the TV game show Jeopardy (Krauthammer, 1997). Watson’s superior reflexes determined an answer before a human could comprehend the question. Likewise, climate change models are based on predictive intelligence (Malone, 2011). The super computers use language processing, computational linguistics, machine learning, and statistical analysis to evaluate evidence (Gustin, 2011). Online cognition is more than a collection of data; it’s a process of manipulating information to make new conclusions.



     Carr also explains that the control concept is a cyclical process that cycle between periods of liberation and reestablished control. Because the control process is something used by all living organisms it can be compared to collective intelligence. Following Carr’s logic on the control process, it can be argued that collective free will is similar to that of an individual. Collective desire may be at odds between instinct and ethics.

     Consumerism, pornography, and narcissism are the Internet’s id (the Internet is mostly id). Bureaucracy, regulation, and digital entrepreneurism are the ego. Privacy, independence, and liberation may be the super-ego. Sigmund Freud discussed the concept of a cultural super-ego and the concept can be extended to the Internet’s collective (Lemert, 2009).


     Perhaps the hive mind is without ego altogether? It’s easier to consider the Internet as either the “the one who thinks” or “one who feels and acts” (Chard, 2010). Psychologist Philip Chard discussed the concept of “pure being” (Chard, 2010):

When an individual is stripped naked of their ego all that remains is a profound sense of oneness. There is no longer a separate individual, meaning your consciousness merges with the all-encompassing unity. We get a little taste of this when we totally lose ourselves in some engaging activity, like reading a book, listening to music, watching a film or any other “in the flow” experience.

Although Chard is discussing the transformation of death, the reference pervades into the collective’s soul.



     How many women does it take to change a light bulb? If Malone’s research is right, the correct answer is, as many as possible! Studies indicate that there is a “genetic makeup of collective intelligence” which improves when women participate (Garber, 2011). The concept is a cognitive branch from the tree of collective intelligence. Collective decisions establish the controlled communicative process; and collective cognition uses control measurements to establish a collective IQ. The same IQ tests applied to individuals are used to measure group intelligence.


     In Malone’s research, how well a group scored was not dependent on individual IQs. The best group scores are determined by factors such as individual’s age, equal input from all members and as mentioned, the number of female participants. The group DNA is mostly influenced by social interactions and emotional intelligence. This is an important concept because, while an individual’s IQ is static, a group’s IQ can be manipulated. There is evidence that the collective intellect will expand.