Just Seven Things

Exploring why and how we do what we do, and how we can do it better

Archive for the tag “Goldman Sachs”

Collective Intelligence as a ‘Killer App.’: Goldman Sachs

A few years back I read an unauthorised article on Goldman Sachs that highlighted one of their core strengths as their management information systems. I’ve been a little obsessed by them ever since, and was delighted to read the Sunday Times magazine 8/11/9 feature article ‘Inside the goldmine’. Of particular interest was the journalist, John Arlidge’s, observations on how the people inside Goldmans work together.

The importance of all specialist and management information systems to the firm is undoubted from a review of the Technology section of their corporate site.  ‘We think we make better decisions’, Liz Beshel Goldman’s Global Treasurer is quoted as saying ….. with $1 trillion a day flowing across the balance sheet. The “mark to market” pricing of the bank’s assets on a daily basis highlighted a trend that led to the decision by the bank to reduce its exposure to the housing and mortgage markets in advance of most other players. Its losses from the mortgage sector following the credit crunch were $1.7bn – lower than any other investment bank.

Arlidge notes however that Goldman is not about individual benefit: “it’s a team effort”. ‘When Goldman gets behind something, everyone in the giant hive wants a piece of the action’.

This reference to giant hive led me to Dušan Teodorović and Mauro Dell’ Orco’s paper on ‘Bee colony optimization – a cooperative learning approach…’ where they note that ‘various natural systems teach us that very simple individual organisms can create systems able to perform highly complex tasks by dynamically interacting with each other’, contrary to ‘a great number of traditional engineering models and algorithms used to solve complex problems [that] are based on control and centralisation.’

Obviously not composed of simple individual organisms, the conclusion that ‘these communication systems between individual insects contribute to the formation of the “collective intelligence” of the social insect colonies’, seemed to tie in to Arlidge’s observations. Read more…

Post Navigation

%d bloggers like this: