1. One could say that you are the creator of
dynamic ideas — both literally and figuratively.
I started a company called Dynamic Ideas in 1999 to build asset management software using optimization methods. We built a fairly sophisticated financial optimization application. Basically, what we did was develop our own methods for managing money. Dynamic Ideas quickly grew and drew many big clients. Then American Express bought the company.
2. How will American Express use this
I took a sabbatical to help them integrate these innovations into their company. I formed an asset management research group there that manages more than a billion dollars using quantitative methods. This project involves building an optimizer that helps customers plan their entire financial life. It maximizes the ability of American Express to help customers achieve their life goals.
3. Speaking of dynamic ideas, could you talk
about your project on the Panama Canal?
In 1999, I was involved in reconfiguring the traffic on the Panama Canal. At that time, the canal was in the hands of the United States government. Because the U.S. knew it was relinquishing administration of the canal, it instituted a study. Thirty percent of the world's big vessels move through the canal, forty-seven vessels a day. It's a pivotal intersection for the shipping industry. But the delays for passage were running 18 to 24 hours, so we built an optimizer that would improve the flow through the canal by six or seven ships per day.
4. As I recall, the plan was never
It was a very interesting situation. The plan was scheduled to be implemented, but when the stewardship changed, the new leadership did not want to use a U.S. model.
5. What are you working on now?
For one thing, a data-mining project. I have been involved with the Dell Web site, collecting data on navigation. I’m working with Unilever to improve the results of their marketing campaigns. And I’m working with an airline company to figure out how to price airline tickets and how to distribute seats.
6. I remember reading in BusinessWeek that
you were making real strides in airport congestion?
Yes, a few years ago I was involved in an optimization project to minimize airport congestion. If there's bad weather in Boston, how do you reroute air traffic to minimize congestion and maximize safety? How do you optimize the whole network? The FAA implemented it.
7. You also wrote a pioneering book on
Yes, that's the book we use in the classroom now. It provides spreadsheets and quantitative models that can be used by students and managers. Many other universities have adopted the book and the philosophy. Five years ago, it was not that common to use spreadsheets in this way. I also wrote an optimization book used by 30 or 40 schools across the country. It's the definitive book for doctoral-level optimization classes. I am working on another book at the moment — one called “Optimization over Integers.”
8. Why is “interdisciplinary”
such a buzzword right now?
One of the key strengths of MIT Sloan is to solve business and government problems using an interdisciplinary approach. I’m a member of the 50-year-old Operations Research Center-the oldest interdepartmental program at MIT and the birthplace of operations research (OR) in the United States. It involves people working in fields from engineering to math to management to operations research. OR deals with the application of scientific methods to decision making. It draws upon ideas from engineering, management, mathematics, and psychology to contribute to a wide variety of application domains. Several MIT departments are involved in the OR Center: MIT Sloan School, Department of Electrical Engineering and Computer Science, Civil and Environmental Engineering, Mathematics, Aeronautics and Astronautics, Urban Studies and Planning, Ocean Engineering, Mechanical Engineering, and Nuclear Engineering. The goal is to bring together the right mix of experts to solve the problems of the world using qualitative and quantitative methods.
9. Do you think that the emphasis on the
quantitative is unusual in a B-school?
In certain areas quantitative methods have proved their worth. For example, in the areas of asset management and revenue management, quantitative methods (statistics, optimization, and simulation) have been very influential. Quantitative methods are a key differentiator for MIT Sloan. MIT Sloan is about measurable things. Probably because it is a part of MIT and MIT is the leading engineering school in the country. An engineering school is much more oriented toward the quantitative, toward measuring results and success. The top schools have similarities, but at very few of them will you see a quantitative class as one of the three or four core classes, which is the case at MIT Sloan.
10. MIT Sloan is known for having a
And a great spirit of entrepreneurship, too. At the root of it, MIT Sloan is a lot of hardworking people who roll up their sleeves and say, “Let's solve a problem!” That can-do reputation is well known, and frankly, I’m proud of it.