President of Harvard Speaks like an Operations Researcher and the Radcliffe Institute is Celebrating its 10th Anniversary

Yesterday, I listened to the President of Harvard University speak on the state of the university. The speech that President Drew Gilpin Faust made was also videotaped on September 24, 2009 and you can view it and listen to her speech on the following link:
http://post.harvard.edu/links/link.cgi?l=827124&h=1712253&r=HAA-20090928171015

Alternatively, you can read about her speech in the Harvard Magazine here:
http://post.harvard.edu/links/link.cgi?l=827125&h=1712253&r=HAA-20090928171015

I was contacted by the Radcliffe Institute for Advanced Study at Harvard about her speech. I was a Science Fellow at the Radcliffe Institute in 2005-2006. I wrote about my incredible year in an article that appears on the Radcliffe website and was also printed in ORMS Today.

In listening to President's Faust speech, I could not help but note how she sounded not only as the historian that she is but also like an operations researcher. She spoke about the challenges of constraints, the allocation of resources, and the serious effects of the economic crisis on Harvard's endowment. She also mentioned risk and how Harvard's decentralized decision-making will have to be more collaborative. There are incompatibilities in Information Technology across some of the schools and colleges and that such hurdles need to be overcome. She spoke on the new General Education requirements at Harvard and how painful it has been to let go of staff and personnel. She emphasized that the crisis will not be over soon and that Harvard has to focus not only on having faculty and students of the highest caliber but that efficiency has to also be a theme in operations.

Having spent a year at Harvard recently, and now being officially a Harvard alum (all Radcliffe Institute Fellows become alums of Harvard) I was very impressed by President's Faust sincerity. Dr. Faust was the Dean of the Radcliffe Institute when I was a Fellow and above I share with you some photos of the reception held in our honor on May 24, 2006. You may recognize in the photos some Pulitzer prize winners, President Faust, and others.

Radcliffe soon is holding a symposium to mark its 10th anniversary. You may find the full listing of events and activities here. I won't be coming to the events in early October since I will be going to the INFORMS National Meeting in San Diego to present a paper, to give the 2009 Women in Operations Research and the Management Sciences (WORMS) Award, and to also attend various professional society meetings and award ceremonies. Plus, I will be the subject of a podcast.

I wish the Radcliffe Institute a very happy 10th anniversary!

Reforming Business Schools

The September 26-October 2, 2009 issue of The Economist has an article on reforming business school education. The article argues that business schools should teach more of economic history (I always tell my students the origins of the ideas that I teach, the context and setting of the ideas, and even hand out some of the original papers in which the ideas and innovations have appeared in). In addition, I bring the material to life by including news and events on topics in my lectures. For one thing, if we know the history as well as the scholarly literature, we won't be reinventing the wheel!

In addition, the article emphasizes that business schools need to change their tone and to foster both scepticism and cynicism. In my field, we always state the assumptions underlying the models that we are using. If the problem at hand satisfies the assumptions, then one brings to task the appropriate tools and methodologies.

The article goes on and states rather stridently that It is worth noting that such scepticism is second nature to the giants of financial economics, as opposed to the more junior propellerheads. It then singles out Professor Andrew Lo of MIT (who, by the way, will be speaking this Friday in our Speaker Series in Operations Research / Management Science at the Isenberg School. His talk is co-listed with the Finance Seminar Series).

According to the article, Andrew Lo, of MIT's Sloan School of Management, was fond of pointing out that in the physical sciences three laws can explain 99% of behaviour, whereas in finance 99 laws can explain at best 3% of behavior.

We can hardly wait to hear Professor Lo's talk on Friday, October 2, 2009, at the Isenberg School. The title of his talk is: Kill All the Quants?: Models vs. Mania in the Current Financial Crisis. Additional information on his talk with abstract can be found here.

It Rained on Our Parade -- Amherst Celebrates 250 Years

Today, the town of Amherst celebrated its 250 years as a town with a parade. Although it rained during most of it, the groups that marched as well as the spectators enjoyed this very special birthday. Not only did the Chancellor of UMass Amherst march with his family but the Dean of the Isenberg School also did with his older daughter and many of our neighbors and friends.

The UMass Amherst Marching Band was resplendent in uniform as were the smaller marching bands, town groups, and a variety of floats, including a Zamboni, as well as animals (from horses to chickens and even a turkey in a cage complete with an umbrella).

I leave you with some photos of the parade above.

A Brilliant Lecture by George W. Siguler on a Gorgeous Day

Yesterday, the Isenberg School of Management had the privilege of hosting Mr. George W. Siguler, the founding partner of the investment firm, Siguler - Guff, in its Finance Seminar Series. Mr. Siguler is a graduate of Amherst College and has an MBA from Harvard University. I had the pleasure of meeting him when he was speaking with Dr. Tom O'Brien, our former Dean of the Isenberg School, who served as Dean for 19 years. I then heard the story, as they related it to me, that Mr. Siguler, while on a flight with Ms. Jaymie Chernoff, suggested to her that the next Dean of the School of Management should be Dr. O'Brien, and since she was on the search committee, the contact and history were made.

Mr. Siguler shared with me that, among a spectrum of fascinating initiatives, he was responsible for the introduction of MTV to Russia in 1998!

The timing of his lecture on distressed debt markets was perfect. As I mentioned in a blog post yesterday, I was hosting Italian academics who work in finance, so I was able not only to introduce them to Mr. Siguler and Dr. O'Brien, but they also joined, after lunch, the large group at the Isenberg School for his seminar.

In his lecture, Mr. Siguler provided us with a historical perspective of the subject of distressed debt from his unique vantage point as a true expert and extremely successful practitioner. He discussed arbitrage, bankruptcies in the US over several decades, and even interwove automotive suppliers, oligopolies, and the impacts of the lack of regulations. In discussions, he noted the importance of fiduciary responsibilities and that there was no institute or organization that was tracking the pending financial crisis. (He also mentioned names of so-called leaders in economics and finance who were unaware of the crisis until it came barreling down.)

I asked him the question as to what kinds of skills should we, as educators, be imparting to our students, so that they may be a fraction as successful as he is. I loved his answer. He said that to be successful, one needs to know the theory and also to take advantage of one's intuition. One without the other is not sufficient.

Next Friday, we will be hosting Professor Andrew Lo of MIT, whose seminar is co-listed in the UMass Amherst INFORMS Speaker Series and the Finance Seminar Series. His talk is sure to also attract a large audience. Hosting speakers takes time and effort, plus appropriate attention to logistics and details, but the education that takes place and the knowledge gained are invaluable.

The intellectual void that would be left without seminars and speakers at the Isenberg School would leave a huge black hole.

Hosting Italian Academics and a Funeral

Today we will be hosting two female academics from Italy, one of which works in applied mathematics and the other in behavioral finance. They are collaborators and are now in the US prior to going to a conference in Toronto. I have known about this visit for months now and am reciprocating, in part, the hospitality extended to me when I gave a plenary talk in Rome at the NET2009 conference last May. There was no way in which to reschedule this visit.

I have written before how academics have to be very adaptable since no two days tend to be alike, even with a regular teaching schedule.

Last Saturday, a colleague of mine in the Finance and Operations Management Department at the Isenberg School of Management died while walking his dog and his wife saw it happen. Yesterday evening I went to his wake. The day before he died he was at school. Today is his funeral but I am obligated to host international visitors, who are scheduled to arrive precisely at the same time as the funeral. His death also brings to light all the other activities he was involved in, over and above teaching several courses in finance as a senior lecturer. The administration managed to find quickly how to cover the courses, which is something that is essential since one can't reschedule courses either. The programmatic and cross-college activities that he was involved in will be much tougher to fill.

Faculty are now doing more and more with less and less (support). Teaching and research should come first but it is service that ties all the components together.

Healthcare and System-Optimization Flow Management

Students in my Transportation & Logistics class at UMass Amherst do an end of the semester project and the projects have been as varied as studying pedestrian crosswalks and safety, bicycle transportation, PVTA bus scheduling and routing, pizza delivery routes, congestion management at large entertainment venues, and even paper flow management in university administration, traffic management in New Delhi, and flow management in a local hospital. The students are asked to apply concepts learned in the course to topics of interest to them.

The hospital flow management model project was done by a student who is also a nurse and involved data collection at the Cooley Dickinson Hospital in Northampton. She constructed a system-optimization model, which we had learned about in the class, and which had been used for years in transportation planning. Consider a transportation problem, for example, in which there is a central controller (think freight routing) of the network as opposed to user-optimization (in which individual agents act selfishly to determine their own best choices). She included the various links in the network and the corresponding activities associated with patient preparation, surgeries, etc.

Interestingly, I was reading recently in the Boston Globe about the work of Professor Eugene Litvak, who works in healthcare operations management at Boston University and who has been applying flow management successfully to optimizing hospital operations. His greatest success, to-date, is the savings incurred at Childrens Hospital, which has been estimated at $100 million (since 100 hospital beds did not need to be built due to more efficient allocation of flows given the capacities). You can read the full article: Boston.com

The article also notes that Professor Litvak is from the former Soviet Union. He worked in Kiev, Ukraine before coming to the US in 1988. Hence, his emphasis and appreciation of central control and efficiency may be more natural to him. I recall that while I was at the World Science Festival on the Traffic panel, our moderator, Robert Krulwich of ABC and NPR, teased us and said whether we were Communist in promoting system-optimization.

Clearly, as in the case of hospital operations, when the system is at stake (and peoples' well-being) if one can optimize flows, lives can be saved.

What could be more rewarding in education than seeing that research and education can be put into outstanding practice!

MacArthur Fellows, Designing Bridges, and an Uncle who Turns 90 Today

The John D. and Catherine T. MacArthur Foundation has announced the 2009 Fellows, each of whom will receive $100,000 a year for the next 5 years to pursue their work without any strings attached. The information on the awardees, which includes 4 recipients from Massachusetts, can be found on the MacArthur Foundation website. There are scientists, an engineer, an applied mathematician, an economist, lawyers, and creative artists and writers on the list. The recipients range in age from 32 to 69.

Theodore Zoli, who received his BS degree in Civil Engineering and Operations Research (one of my major areas of expertise) from Princeton University, is among the twenty-four 2009 MacArthur Fellows. He designs bridges to withstand disasters, a topic dear to my heart, since infrastructure planning and its resilience is one of my research areas. Plus, my uncle, Stanley Jarosz, who turns 90 years old today, still works in Manhattan as a bridge designer and has garnered numerous awards for his bridge designs, including the Roebling Award in 2001.

L. Mahadevan, a Professor of Applied Mathematics at Harvard, and another 2009 MacArthur Fellow, who applies mathematics to problems ranging from the wrinkling of skin to tightrope walking said it well in today's Boston Globe when discussing his research interests: In the end ... it is driven by what drives all of us -- curiosity.

Congratulations to all the 2009 Fellows and Happy 90th Birthday to my amazing uncle!