David G.W.Birch recently posted a very thought-provoking contribution Badges? We Don't Need No Linkedin Badges on the Harvard Business Review Blog Network. In it, he argues that social networks are beginning to replace other intermediaries (hacks) in the trust networks that we use to build efficiencies in society. These hacks are such things as credit ratings, badges, dress codes, and (most pertinent for this post) diplomas - they increase our confidence that we understand the characteristics of people with whom we interact. However, through social networks, which enable everyone to contact everyone else instantaneously, we can now get real information about the actual knowledge, productivity, etc of an individual. As a result:
As social capital (the result of the computations across the social graph) becomes accessible and useable, the hacks will fade. A college degree will be worth less than it is now. Using hacks instead of real data is just not good enough in a connected world. Google was famous for its rigorous hiring criteria, but when its analysts looked at “tens of thousands” of interview reports and attempted to correlate them with employee performance, they found “zero” relationship. The company’s infamous interview brainteasers turned out not to predict anything. Even more interesting: Nor did school grade and test scores. As job performance data racks up, the proportion of Google employees with college degrees has decreased over time.
Birch's comments regarding Google come from a New York Times interview by Adam Bryant of Lazlo Bock, Vice President of People Operations at Google. In this interview,Bock discusses uses of big data in running a business. Businesses can now begin to analyze the actual importance of GPA, specific college and degree, etc in predicting who will perform well in a particular role. At least for Google, ti turns out that these traditional metrics aren't all that useful.
A follow-up interview in the NYT of Lazlo by Thomas Friedman added a few additional insights:
Too many colleges, he(Lazlo) added, “don’t deliver on what they promise. You generate a ton of debt, you don’t learn the most useful things for your life. It’s [just] an extended adolescence".....
...Beware. Your degree is not a proxy for your ability to do any job. The world only cares about — and pays off on — what you can do with what you know (and it doesn’t care how you learned it).
An example of the ways that this new approach bypasses the traditional surrogates for quality is found in a post on UndercoverRecruiter:
A startup called Gild has garnered a great deal of attention for its combination of data aggregation technology and a proprietary algorithm to analyze developers’ code and professional contributions. Gild says that it “goes where developers hang out” on the Internet and scores developers on the quality of their public code and professional knowledge. It then scores these developers—and has done so millions of times—to offer recruiters a deeper look into a candidate’s true skills. This eliminates some of the guesswork and blind faith that recruiters who don’t happen to be developers must employ. In addition, Gild also gathers social media activity for each candidate to help you determine culture fit.
Again, the world only cares about what you know and what you can do about it (and doesn't care how you learned it).
Reading all this, I thought about an earlier post I had written: The financial return from attending a more selective college. In that, I discussed an article by Stacey Dale and Alan B. Krueger (until recently, Chair of the White House Council of Economic Advisors) that used Social Security earnings records to track financial success of various student cohorts. When they factored in all of the measured student characteristics, and adjusted for unmeasured ability, they found that for most students, the financial return for college selectivity was essentially zero. In other words, two students with equal abilities would make the essentially the same income no matter where they went to college. Although this study looks at college graduates, the results seem consistent with what Google is finding using a Big Data approach to their own business- success depends on your ability to work with your knowledge, no matter how or where you get it.
If Birch's vision is correct, and college degrees begin to lose value because one no longer needs a signaling device when actual performance can be determined through social networks and analyses like those of Gild; and if Dale and Krueger are correct that where you go to college has little impact on your success - we have the makings of a real disruption of the status quo of higher education.
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