The Silo Effect

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The Silo Effect Page 30

by Gillian Tett


  4. Cosgrove, The Cleveland Clinic Way, p. xi.

  5. To Act as a Unit: The Story of Cleveland Clinic, Cleveland Clinic Foundation, 2011, p. 129.

  6. Cosgrove, The Cleveland Clinic Way, p. 109.

  7. Ibid.

  8. Alison Van Dusen, “America’s Top Hospitals Go Global,” Forbes.com, August 25, 2008.

  9. Cosgrove, The Cleveland Clinic Way, p. 110.

  10. “King Abdullah to Open Jeddah’s International Medical Center Tomorrow,” news release, Saudi Embassy archives, October 28, 2006.

  11. “Cleveland Clinic: A Short History,” Cleveland Clinic official website, www.clevelandclinic.org, p. 1.

  12. “Bill of Sale: From Estate of Dr. Frank J. Weed to Dr. Frank E. Bunts and Dr. George Crile,” Cleveland Ohio, April 10, 1891, reprinted in John D. Clough, Peter G. Studer, and Steve Szilagyi, eds., To Act as a Unit: The Story of Cleveland Clinic. 5th ed., (Cleveland: Cleveland Clinic, 2011), p. 15.

  13. Clough et al, To Act As A Unit, p. 16.

  14. Ibid., p. 12.

  15. Ibid.

  16. “Cleveland Clinic: A Short History,” p. 2.

  17. Kate Roberts, “Mayo Clinic: History,” Minnesota Historical Society website, 2007.

  18. The Cleveland Clinic Way, p. 7.

  19. Thomas Bausch et al., Economic and Demographic Analysis for Cleveland, Ohio (Cleveland: Cleveland Urban Observatory, 1974).

  20. “Cleveland Clinic: A Short History,” p. 5.

  21. Ibid., p. 6.

  22. Ibid., p. 7.

  23. Ibid., p. 8.

  24. Ibid., p. 7.

  25. To Act as a Unit, pp. 168–69.

  26. Ibid., p. 129.

  27. “Cleveland Clinic: A Short History,” p. 8.

  28. Clough et al, To Act as a Unit, p. 129.

  29. Ibid., p. 119.

  30. Cosgrove, The Cleveland Clinic Way, p. 33.

  31. Jerry Adler, “What Health Reform Can Learn from Cleveland Clinic,” Newsweek, November 26, 2009.

  32. Clough et al, To Act as a Unit, p. 109.

  33. Ibid., p. 110.

  34. Ibid.

  35. Solov, “From C’s and D’s to Clinic’s Helm: At the Age of 63, Delos ‘Toby’ Cosgrove, Surgeon, Inventor, Go-to Guy (and Dyslexic), Finds the Job and Opportunity He’s Been Looking For.”

  36. Ibid.

  37. Bob Rich, The Fishing Club: Brothers and Sisters of the Angle (Guilford, CT: Lyons Press, 2006), pp. 220–21.

  38. Ibid., pp. 222–23.

  39. Ibid., pp. 225.

  40. Ibid., pp. 228–29.

  41. Ibid., p. 231.

  42. Solov, “From C’s and D’s to Clinic’s Helm: At the Age of 63, Delos ‘Toby’ Cosgrove, Surgeon, Inventor, Go-to Guy (and Dyslexic), Finds the Job and Opportunity He’s Been Looking For.”

  43. Cosgrove, The Cleveland Clinic Way, p. 90.

  44. Ibid., p. 91.

  45. Ibid., p. xi.

  46. Ibid., p. 91.

  47. Ibid.

  48. Ibid.

  49. Cosgrove, The Cleveland Clinic Way, p. 119.

  50. Ursus Wehrli, “Tidying Up Art,” Talk Video, 2006. www.ted.com. See also Penelope Green, “The Art of Unjumbling,” New York Times, March 27, 2013, or Ursus Wehrli, The Art of Clean Up; Life Made Neat and Tidy (San Francisco: Chronicle Books, 2013).

  51. Clough et al, To Act as a Unit, p. 132.

  52. Cosgrove, The Cleveland Clinic Way, p. 22.

  53. Accenture, “Clinical Transformation: New Business Models for a New Era in Healthcare,” September 27, 2012.

  54. Cosgrove, The Cleveland Clinic Way, p. 4.

  55. Clough et al, To Act as a Unit, p. 155.

  56. Ibid., p. 133.

  57. Ibid., p. 134.

  58. Ibid.

  59. “Abby Abelson, MD, Named Chair of Department of Rheumatology at Cleveland Clinic,” Cleveland Clinic News Service, April 6, 2011.

  60. Clough et al, To Act as a Unit, p. 136.

  61. “A Common Purpose: Kate Medoff Barnett and Amy Belkin,” Harvard Business School Alumni Magazine, June 5, 2013.

  62. “Seth Podolsky, MD,” Official Biography, Cleveland Clinic website.

  63. “James Merlino, MD,” Official Biography, Cleveland Clinic website.

  64. Cosgrove, The Cleveland Clinic Way, p. 119.

  65. Ibid., p. 126.

  66. ibid., p. 114.

  67. Ibid., p. 124.

  68. Ibid., p. 114.

  69. Ibid., p. 33.

  70. For data on patient satisfaction see the US News & World Report surveys on hospitals. 2012–2015, http://health.usnews.com/best-hospitals/rankings. See also the HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) survey at www.cms.gov.

  71. For some comparative data on healthcare costs see 2014 Hospital Costs Reports from the American Hospital Directory at www.ahd.com.

  72. Clough et al, To Act as a Unit, p. 127.

  73. Ibid.

  74. Ibid., p. 159.

  8: BUCKET-BUSTING

  1. See “JPMorgan Chase Whale Trades: A Case History of Derivatives Risks and Abuses,” Majority and Minority Staff Report, Permanent Subcommittee on Investigations, United State Senate, March 15, 2013, www.hsgag.senate.gov. This provides a comprehensive account of this saga.

  2. The estimates of losses are drawn from the Senate 2013 report, www.hsgag.senate.gov.

  3. Anthony Effinger and Mary Childs, “From BlueMountain’s Feldstein, a Win-Win with JPMorgan; After Betting Against, and Beating, the London Whale, Feldstein Did More than Just Make Money,” Bloomberg, January 20, 2013.

  4. Farah Khalique, “The Whale,” Financial News, December 7, 2012; Farah Khalique, “Unwinding the Whale Trade,” Financial News, December 12, 2012.

  5. See “JPMorgan Chase Whale Trades: A Case History of Derivatives Risks and Abuses,” Majority and Minority Staff Report, Permanent Subcommittee on Investigations, United State Senate, March 15, 2013, www.hsgag.senate.gov.

  6. Gillian Tett, Fool’s Gold (New York: Simon & Schuster, 2009).

  7. Ibid. See also Dan McCrum and Tom Braithwaite, “Restraint Pays Off for BlueMountain Chief,” Financial Times, March 14, 2013.

  8. John Seely Brown, “New Learning Environments for the 21st Century,” www.johnseelybrown.com/newlearning.

  9. I explain this story in great detail in my book Fool’s Gold.

  10. Donald MacKenzie, “The Credit Crisis as a Problem in the Sociology of Knowledge,” American Journal of Sociology, May 2011.

  11. Ibid.

  12. Jonathan Shapiro, “Exploiting Inefficiencies,” The Australian Financial Review, June 6, 2013.

  13. Effinger and Childs, “From BlueMountain’s Feldstein, a Win-Win with JPMorgan; After Betting Against, and Beating, the London Whale, Feldstein Did More than Just Make Money.” See also Tett, Fool’s Gold.

  14. “The Whale,” Financial News, December 7, 2012.

  15. David Rubenstein, BMCM, interview, Global Investor, September 1, 2013.

  16. “JPMorgan Chase Whale Trades: A Case History of Derivatives Risks and Abuses,” Majority and Minority Staff Report, Permanent Subcommittee on Investigations, United State Senate, March 15, 2013, p. 3.

  17. Ibid., p. 260.

  18. Ibid., p. 7; “JP Morgan Chase Whale Trade: A Case History of Derivatives Risks and Abuses,” Senate committee investigation, p. 260, www.hsgag.senate.gov.

  19. Stephanie Ruhle, Bradley Keoun, and Mary Childs, “JPMorgan Trader’s Positions Said to Distort Credit Index,” Bloomberg, April 6, 2012. See also Shannon D. Harrington, Bradley Keoun, and Christine Harper, “JPMorgan Trader Iksil Fuels Prop-Trading Debate with Bets,” Bloomberg, April 9, 2012; Gregory Zuckerman and Katy Burne, “London Whale Rattles Debt Markets,” Wall Street Journal, April 6, 2012.

  20. “JPMorgan Chase Whale Trades: A Case History of Derivatives Risks and Abuses,” Majority and Minority Staff Report, Permanent Subcommittee on Investigations, United State Senate, March 15, 2013. See pages 3–19 for a complete account of this.


  21. MacKenzie, “The Credit Crisis as a Problem in the Sociology of Knowledge.”

  22. “Innovation and Collaboration at Merrill Lynch,” Harvard Business School case study, March 26, 2007, p. 4.

  23. Ibid., p. 7.

  24. “Innovation and Collaboration at Merrill Lynch,” p. 16.

  25. Ibid., p. 19.

  26. http://www.hanes.com/corporate.

  CONCLUSION: CONNECTING THE DOTS

  1. Marcel Proust, Remembrance of Things Past, Volume 5, The Captive, Chapter 2, trans. C. K. Scott Moncrieff (New York: Random House, 1935).

  2. To see a description of this from Lauren Talbot: https://www.youtube.com/watch?v=S6EvneIRiTo.

  3. Douglas Thomas and John Seely Brown, A New Culture of Learning (CreateSpace Independent Publishing Platform, 2011). See also www.johnseelybrown.com/newlearning.pdf.

  4. Fareed Zakaria, In Defense of a Liberal Education (New York: W. W. Norton, 2015).

  Index

  A note about the index: The pages referenced in this index refer to the page numbers in the print edition. Clicking on a page number will take you to the ebook location that corresponds to the beginning of that page in the print edition. For a comprehensive list of locations of any word or phrase, use your reading system’s search function.

  Abelson, Abby, 209, 215

  Accel Partners, 170

  Ackman, Bill, 226

  Adoboli, Kweku, 105

  AIG, 103

  Algerian Civil War, 20, 26, 33–35, 39, 41

  Algiers, University of, 39

  Allied Bank, 103

  al Qaeda, 15, 145

  American Board of Medical Specialties, 210

  American Board of Surgery, 210

  animals, classification of, 31

  anthropology:

  beginning of, 35–36

  Bourdieu’s conception of, 48

  cultural (social), see cultural anthropology

  Darwinism and, 36

  Malinowski’s revolution in, 37

  physical, xin, 38

  Apple, 54, 72, 187, 222

  “concurrent engineering” at, 65

  innovation and creativity fostered at, 63–65

  iPod of, 54, 65–66

  iTunes store of, 65

  share price of, 66, 77

  single P&L at, 64

  Sony eclipsed by, 77

  Apple Mac, 65

  architecture, 40–41

  Argonauts of the Western Pacific (Malinowski), 37

  Arnold, Jonathan, 237

  Aron, Raymond, 41

  Arrow, Kenneth, 112

  Austen, Jane, 111

  Bank of England, xi, 17, 106, 108, 109, 110, 123

  FSA overseen by, 132

  history and role of, 111

  market surveillance division of, 114–15, 117–18, 120

  monetary policy set by, 115

  new financial investments as outside mandate of, 119

  silos at, 196

  2014 restructuring of, 133

  banks, see finance industry

  Barnett, Kara Medoff, 193, 197, 210–11

  Barra, Mary, 15

  Battle of Algiers, The (film), 41

  BBC, silos at, 79

  Béarn, France, 25–28, 32

  behavioral finance, 132

  Bell, Geraldine, 47

  Bell Laboratories, 57

  Benedict, Ruth, 37

  Berlin, Brent, 30

  Bernanke, Ben, 126

  Berner, Richard, 133

  Besley, Tim, 130

  biodiesel recycling, 11–12

  blindness, mental, see mental maps; tunnel vision

  Bloch, Maurice, 37

  Bloomberg, Michael, 2, 41, 159, 245

  Bloomberg administration, xi, 159

  illegal activities identified through data mining by, 7–12

  open office plan of, 6

  Prospect Ave. fire and, 2

  silo-busting in, 3–4, 6–12, 245, 246, 250

  BlueMountain Capital, xi, 18, 135

  as beneficiary of London Whale trades, 220–21

  CDO trading strategy of, 225–28

  collaborative structure of, 238–41

  equity portfolios of, 237–38

  and financial crisis of 2007–8, 229–30

  founding of, 222, 223

  HanesBrands investment of, 238–41, 242

  IG9 price distortion and, 230–31, 232–33

  informal culture at, 223

  paper losses at, 233–34

  pay and incentives at, 238

  silo-busting by, 218–44

  2014 investors conference of, 241–42

  and unwinding of London Whale holdings, 234–35

  BMG, 53

  Boas, Franz, 20, 36

  Borden, Bradford, 216

  Borio, Claudio, 119

  Bosworth, Andrew “Boz,” 174–75

  Facebook Bootcamp created by, 174–76

  Bourdieu, Pierre, 20–21, 25–26, 32–33, 62, 93, 113, 143, 169, 212, 254

  in Algerian Civil War, 20, 26, 33–35

  anthropology as understood by, 48

  dancer/nondancer phenomenon observed by, 26–28, 109, 224

  French villages studied by, 41–42, 109

  influence of, 46–48

  Kabyle studied by, 39–41, 42, 55, 69, 92

  key concepts of, 43–46

  in switch to anthropology, 35, 39

  Bowman, Locke, 144–45

  Boyd, Danah, 47

  BP, x

  Gulf of Mexico explosion and, 14–15

  silos at, 15

  Brabandere, Luc de, 29

  Bratton, Bill, 146, 147

  broad money (M4), 122

  2006–7 expansion of, 120–22, 123–24

  Bronx, N.Y., 1, 7

  Brown, John Seely, 221, 252

  Browning, Candace, 236

  buckets, see silos

  Bunts, Frank, 197–98, 200

  Burge, Jon, 158

  business, 188

  hierarchies in, 183

  profit-organization in, 60

  silos in, x, 60

  “Butterfly Defect,” 12

  Cabiallavetta, Mathis, 86

  Calomiris, Charles, 117

  Carnegie Mellon University, 153

  Carney, Mark, 130, 132–33

  Carter, Robin M., 30

  Castor, John, 202

  Casualty Staging Flight Center, Da Nang, 202

  CBS, Stringer at, 67, 69–70

  CBS Evening News with Dan Rather, 70

  CBS Records, 63

  Cedano, Dominic, 2

  central banks, ix, x

  see also Bank of England; Federal Reserve, U.S.

  Chang, Sea-Jin, 59

  Chase Manhattan Bank, 223

  Chatter, 188

  Chevrolet Cobalt, 15

  Chicago, Ill., 141, 159

  city government of, see Emanuel administration

  gangs in, 151, 154

  racial issues in, 161

  silo-busting in, 160

  WindyGrid interactive map of, 159–60

  Chicago, Ill., murder-rate in, 151–52, 157, 250

  Goldstein’s analysis of, 153–58

  shifting gang territories and, 154–55

  Chicago Police Academy, Goldstein at, 147–49, 152

  Chicago Police Department, xi

  centralization of information flows in, 155–56

  Goldstein as patrolman in, 149–50

  Goldstein’s desire to join, 141, 144

  Mobile Strike Force of, 151–52, 155–56, 157

  murder map of, 155–56, 157, 160–61

  murder map program canceled by, 161–62

  scandals in, 141, 144, 151

  silo-busting in, 17, 135, 154, 155–56, 157, 160–61

  tribalism in, 144, 156, 158

  Chicago Sun-Times, 152

  Chubachi, Ryoji, 67, 68

  as silo-buster, 72–73

  CIA, 15

  silos at, 145, 147

&n
bsp; Citigroup, 103, 135, 219, 223

  City of London, 116, 120, 122, 133

  classification, as intrinsic human behavior, 28, 30, 142

  classification systems, 18, 169

  cultural anthropology in study of, 19–20, 25–50

  of economists, 118–19, 121–22, 127, 196

  in finance industry, 92–93, 97, 101–2, 235–44, 249

  as means of dealing with complexity, 28–29, 224

  in medicine, 196, 204, 210, 217

  reimagining of, 45–46, 197, 204, 217, 249–54

  seen as natural and inevitable, 235

  silos as, xii, 14, 18–19, 142, 247, 252

  social interaction and, 29–30

  social norms as, 30

  tunnel vision and, 127

  see also cultural norms; mental maps

  Cleveland, Ohio, postwar economic decline of, 199

  Cleveland Clinic, xi, 135, 247, 248, 249

  Abu Dhabi branch of, 207

  bureaucracy at, 200–201

  Cosgrove appointed CEO of, 193, 201

  Cosgrove’s revolutionary reorganization of, 197, 204–10

  cost of care at, 214–15

  cutting-edge logistics at, 200–201

  departmental organization of, 194, 196, 206

  Emergency Services Institute of, 211, 216

  expansion of, 199–200

  first coronary artery bypass performed at, 199

  Heart and Vascular Institute of, 216

  hierarchy of, 206

  history of, 197–98

  Institutes Planning Group at, 208–9

  Neurological Institute at, 208

  1929 fire at, 198–99

  Orthopedic and Rheumatology Institute at, 215

  patient satisfaction and, 213–14

  pay and incentives at, 205–6, 214, 217

  redesigned entrance of, 212–13

  silo-busting at, 18, 192–217

  specialist silos at, 201, 205, 207, 209

  thoracic and cardiovascular surgery department of, 201–2

  turf wars at, 207

  Urological and Kidney Institute at, 215–16

  Cline, Phil, 144

  Clooney, George, 78

  collateralized debt obligations (CDOs), 88–93, 96–103, 118, 121, 122, 123–24, 219

  BlueMountain’s trading strategy for, 225–28

  classification of, 97, 101–2

  credit ratings of, 90–91, 225, 227n

  price distortions in, 225–30

  rating of, 119

  super senior, 91–92, 99, 101–2

  tranches of, 225–26, 227n, 229, 231

  collisions, silo-busting and, 171, 253

  colonialism, 35

  color, classification of, 30–31

 

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