Doncqueurs' Wall

The winning team: men and machine. While that is a powerful combination a critical aspect is missing and that is a superb way of using the two together. Grandmaster Gary Kasparov highlights this in an article the New York Review of Books. I found this article via a post by Professor Andrew McAfee.

The story line of Mr. Kasparov’s article is about a period a bit longer than a decade during which he went from beating chess computers without too many problems to the point where he had no chance against them. Over the scope of this decade the computers became soo much ‘better’ (read: more powerful to calculate everything) that it could compensate for the absence of human intuition and creativity. This resulted in machines that become unbeatable by humans.

The most interesting part of the article is that he describes chess tournament, which was helt after he was made ‘irrelevant’ by computers. The appealing aspect of this tournament was that the competitors were free to create teams of humans and computers; by now desktop based chess computers became powerful enough to beat most humans (including grandmasters). The participants of the tournement included both grandmasters and amateur chess players assisted by computers. Let’s quote Gary Kasparov about the conclusion of this tournament:

“The surprise came at the conclusion of the event. The winner was revealed to be not a grandmaster with a state-of-the-art PC but a pair of amateur American chess players using three computers at the same time. Their skill at manipulating and “coaching” their computers to look very deeply into positions effectively counteracted the superior chess understanding of their grandmaster opponents and the greater computational power of other participants. Weak human + machine + better process was superior to a strong computer alone and, more remarkably, superior to a strong human + machine + inferior process.”

The interesting take-away of the whole article is that average people in combination with machines and good methods of interfacing between computers and people are performing better than the competition. In the summer of 2008 I was introduced to advanced planning and scheduling software solutions that are used by some companies in the maritime industry; in fact this type of solutions are used in many industries where you find complex planning and optimization problems. During the evaluation process of these solutions, I have seen three type of solutions that organizations deploy to maximize the performance by planning.

The first approach is the traditional approach in which human planners are utilizing their ability to take advantage of their intuition and ability to make judgements on the basis of casual dependencies, which are in many cases are not mathematically defined. The planning and scheduling is often done on a whiteboard or in a spreadsheet program. To revert to the chess metaphor: grandmasters competing which each other is the best-of-breed you get in this solution.

The second approach is a more what I would call “hit-the-button-calculators” (MarinTek, Route66). This approach basically works as following. The humans line up the input of the model and once they are ready they hit the button and algorithm outputs the optimal planning. To many users this is somewhat of a black magic. Furthermore, they have little ability to alter the output without making changes to the input and running the algorithm again.  To revert to the chess metaphor: this can be looked at as the Deep Blue (IBM’s chess computer that won against Kasparov).

The third approach I evaluated was an interacting approach between human intuition and brute calculating power (Quintiq). The main idea behind this solution was that humans could make changes and see immediate response from the algorithm. This approach facilitates a iterative cycle when it comes to creating schedules and adjusting them when the knowledge of the future becomes more precise or unexpected events occur. Of course this type of solutions include a “hit-the-button” function, but if I recall correctly none of their customers ever used this.

After reading the above quoted text, I realize that they will never use it either. Firms that want to lead the industry by creating sustainable competitive advantage need to combine human intuition and creativity and brute computing power to eliminate human errors. Companies that manage to find the right interaction between the two will outperform their competitors that depend solely on humans or computers, or those that depend on the combination but did not manage to get the interaction between the two right.