440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700

Date: Thu, 14 Oct 1999 03:58:50 -0700

03 00050 61 99101401

Mr. Morris E. Jones
Business Unit Manager
Cable Network Operation
Intel Corporation
350 East Plumeria; Mail Stop CHP3-105
San Jose, CA 95124

Subject:   Risk Management, New Math

Dear Morris,

Thanks for the address update, and congratulations on getting your new initiative underway. Seems like it has had some visibility in the news lately. A lot of people have high hopes.

Your point (1) needs review. The developer cannot bear the entire burden of "proof" for a new concept, because by definition of "new," the "proof" of efficacy comes from future experience. Recall Einstein's point that all knowledge comes from experience. Burdens, as well, are borne by those who stand to benefit and to lose. Who has value at risk that needs protection? Who benefits from avoiding mistakes that crash vehicles on Mars, delay release of product, kill patients on the operating table, all due to lack of alignment with requirements?

According to Drucker, Stockholders and employees expect management to invest a reasonable portion of sunshine profits to investigate new concepts, processes and tools in order to maintain a competitive posture in the new realities of changing markets, lest they come to late to the "party" and miss the future, per Christensen. Part of "investigating" entails gaining some experience in order to make reasoned judgments about "proof." Only the willfully blind can ignore this dynamic.

Your point (3) is pretty well stated, except it overlooks that no one is aware that the biggest risk in all forms of enterprise is communication, and that the only solution is adding a "business metric" to the process, because technology has created a new reality of information overload that has shifted the balance in human affairs at the dawn of the 21st century, noted by Grove. People can ignore new realities, but cannot escape the consequences. You must adjust. Adjustment means change and the change that is needed is a new ingredient to maintain alignment in order to avoid meaning drift.

You need "intelligence" both for new math and for Gutenberg -- it is quite an interesting point, along with much else that is missed in the absence of "intelligence," --- check it out...

Incidentally, a powerful point on mistakes that is, also, easy to overlook, because the mind constantly does it in the background, is tracking sequence, also, chronology. This gives rise to Einstein's formulation that all knowledge is derived from experience. When sequence is tracked rigorously, as in SDS, complexity that is otherwise hidden to the conscious mind, becomes evident, and it seems overwhelming. The risk of guess and gossip using feel good management is devastating. The conscious mind rebels, because it wants simple sequences, preferably a binary sequence, yes no, right wrong, 0 1, experiment, developer pays, etc. SDS tracks sequence well, better than any method ever devised. Ignoring, or losing track of sequence crashes things on mars, causes late delivery of product, etc. This is another way to explain SDS and Com Metrics, but admittedly it is a little complex. "Intelligence" or your formulation of "memory" sort of sums up the idea. Keep trying.



Rod Welch