Tuesday, October 29, 2019

All your data are belong to us

I'm riffing today on an old meme - "all your base are belong to us" - the poorly worded alert in a game that was released years ago.  The message was meant to inform the player that all of his or her bases were lost to the enemy.  The statement became a rather interesting theme in the gamer community, and was often seen on T-shirts back in the day.  Perhaps even today?

But what happens when all of your data belongs to someone else?  Doesn't Apple, Google, Facebook and many other firms already own a significant portion of your data, at least what you generate in your transactions through these platforms?  When you add up what data you are giving away for no cost to these social and online platforms, and combine it with what your credit card and financial service vendors know about you, and the amount of data you can obtain about anyone by scraping the internet, pretty soon it will be you who is receiving the notification that "all of your data belong to us".  It might not be surprising to have to pay for your data to be removed or made private.

The right of privacy that we give away

It's interesting to think about the rights we possess.  While not explicitly granted in the Constitution, a right to privacy has always been inferred, and valued by citizens in the United States.  What we are increasingly doing is giving up that right, in fact allowing ourselves to be fully known and our data and records easily obtainable, losing any control or power over the right to privacy.  Your data is increasingly a commodity that larger corporations use, sell and trade to each other to better target you with advertising, to make predictions about what you want or need, where you want to live, how you will vote or even what you want to eat.

The question becomes: does it matter if we sacrifice privacy for convenience?  Isn't the argument that giving up some privacy means we have more convenience, because Facebook, Google and others can customize our information and experiences based on what they know about us?  Certainly these services make our lives a bit easier, and provide more information at our fingertips that is more aligned to our needs and expectations.  But in this I think of an earlier warning, from one of our founding fathers.

Sacrificing privacy for convenience

Benjamin Franklin was confronted by other colonists who were willing to make compromises, willing to give up some freedoms for more security and predictability.  His response was that people who sacrifice liberty for security deserve neither.  In fact he was suggesting a slippery slope.  The more you get comfortable giving up a little liberty for security, the more comfortable security becomes, and you may be willing to give up more liberty for more security.

Likewise, if you give up a little privacy for low cost and convenience, you are more likely to give up all privacy for free goods and total convenience.  However, those "free" services come at a price - either limited, controlled information that the providers want you to see, or the sale of important data assets that by rights should be yours that you've traded away for more convenience.

Understanding the true cost of free services

What is the cost of giving away your data?  Initially, the tradeoff is simple.  At no cost to you, companies take or harvest data from you while you use their products or social media.  Google analyzes your search terms, Facebook analyzes your network and your commentary.  We give them this right by accepting their terms, in exchange for "free" services.  However, as more and more data is captured about you in more and more places, making connections between that data and learning more about you than you intended is relatively simple.  This is why so many ID protection firms are now able to sell us identity protection services.  From what I can see, the value of your privacy and peace of mind is something many people will pay Lifelock and other companies approximately $10/month.  But what happens as the people who have this data become more sophisticated?

The future is full of offers and recommendations

We are bombarded with offers, information and ads today based on relatively unsophisticated technology and fragmented communication channels.  As IoT, machine learning and ubiquitous connectivity emerge, we will enter a phase of mass customization in messaging and targeting unlike anything we've seen to date.  If you recall the movie Minority Report, in which the public display ads are configured and delivered directly to individuals, then you'll begin to understand what I mean.  The more we share information about ourselves, and the more that data is aggregated and analyzed, the more often and more targeted will be the attempts to communicate to us, influence us and sell us things that seem tailored to our needs.  In the not too distant future your devices, your kitchen appliances, your clock radio, even some of your consumables will all be smart and connected, and will all make offers and recommendations to you that are tailored to your needs, or at least what their producers believe are your needs.  If you think having one child following you around all day asking questions can be annoying, wait until many devices in every room, in your car, in retail establishments and public settings do this all the time.  What will your peace of mind and privacy be worth at that point?

Make no mistake, your data is valuable.  Data about what you do, what you buy, what your preferences are, how you will vote and many other factors about how you live, work and spend are valuable.  If you are going to trade them away, do so for real value, and understand the longer term implications.  While European citizens at least have the expectation of the "right to be forgotten" which is relatively dubious, we in the States have no such opportunity.  While Europeans may believe this right to be forgotten is powerful, in effect it means that a citizen must ask and confirm that every company that has their data legally must be contacted and must remove the offending data.  As long as one company has data, there are opportunities for it to proliferate again.  And that doesn't begin to consider those organizations that possess data illegally.

A couple of predictions

I think there will come a day, relatively soon, where people take back ownership of their data.  In fact we could see several things emerge.  First, a backlash against all of our data so widely shared and distributed, where the individual has little or no control of their data. GDPR is a first, but very watered down attempt at this. Second, an emerging opportunity for insurance to protect and defend our data and the record of our lives against people who would use our data for illegal or what we may consider illegitimate purposes. How will you feel when you are rejected by life or health insurance companies based on information they can collect and analyze about you before you apply? Third, an emerging standard where individuals complete a form that shares data that they themselves create, publish and maintain, and sell on to companies for a profit.  What better source of information about a person than the individual themselves, with an incentive to share more data based on the ability to rent or sell that data themselves?  What could emerge is a single, trusted source that allows people to post as much data about themselves as they wish to share, and for the individual to be responsible for policing and updating the data, so bigger companies can market to their exact wants and needs.

Then, most but not all of our data will belong to us, and individuals will gain more control over the development, publication and use of their data, and the financial benefits associated with the data.  I think we'll all be better served when more people understand the true value of their data, understand how much data is currently available about them and what companies can do with that data, and decide to take back the power to control their data themselves.
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posted by Jeffrey Phillips at 5:35 AM 0 comments

Monday, October 21, 2019

Data-driven or insights inspired?

As the phenomenon of digital transformation continues to unfold, we need to be wary of certain absolutes that will work their way into our language, our thinking and our consciousness.  It's common, especially in the early stages of any emerging trend for new ideas and new thinking to take on more meaning than is intended, and eventually to become accepted facts rather than the conjectures or ideas that they really are.  Later, the concepts or theories unfold, these ideas or concepts are demonstrated to be what they always were - early attempts to define or to provide context that provided some insight, but were not complete or holistic.  Such is the case with digital transformation today.

Data Driven

No phrase worries me more than what I hear repeated regularly as a mantra by our customers and prospects.  Everyone wants to be "data driven", which on the surface is an excellent idea.  If by "data driven" they mean making decisions based on data rather than conjecture or opinion, that's good.  If they mean allowing machines and processes to make decisions based on rules driven by high quality data, that's also good.  If they mean managing end to end processes that are highly connected and integrated and most of the work is done based on good data, rules and systems, so much the better.

But here's the thing:  data is for systems.  Data is not for people.  People need insights or knowledge derived from the data.  So if your business is going to be data driven, you are talking about a layer or two below the human element - stuff you can run automatically or in the dark.

Insights Inspired

I'd prefer to focus on being inspired by the insights from the data.  This is where humans add real value, in interpreting the data and obtaining insights or making discoveries based on information from the data.  We can be informed by these insights and even inspired to create or imagine new products, services and business models from insights gleaned from the data.  Our goal as business leaders should be that what can be automated and data driven should be, and we should turn our attention to interpreting the insights that come from the data and building new offerings, solving unmet needs and creating new channels, relationships and business models based on inspiration from what we can glean from the data.

The problem with data

Being data driven at an operational level will become a necessity, because most companies will want to eliminate inefficiencies and cut costs.  Replacing people with machines or automated processes will make a lot of sense if and when the data is right.  However, almost anyone involved in artificial intelligence and machine learning will tell you that the biggest challenges to using these tools effectively are:  1) enough data 2) of high enough quality and 3) with enough access to the data.

In other words, simply having data can't and won't make your organization a "data driven" company.  You need to focus on improving the data to provide higher quality data with greater consistency.  You need to have enough data for the machines to draw logical conclusions and define consistent rules.  You need to aggregate and provide access to data in order to make it usable.

Having a lot of data doesn't necessarily make it easier to be data driven, and the more sources and the larger the number of "types" of data make it even more difficult to normalize the data.  In fact it may be easier to become an insights inspired company rather than a data driven company, especially if you operate in a large legacy organization with a large number of IT systems which don't share data effectively.

The real point of this blog

So, violating all the rules of blog writing, I've left the "bottom line" statement till the end.  The real point of this blog is that being data driven is difficult but not impossible, but only a short term target and not really all that interesting.  Data driven companies will solve operational challenges - they'll optimize systems and cut costs through automation if their data is good and systems are integrated.  What we should be striving for is making better use of data by converting it into information which provides insights, which inspires companies to create new products, services and business models.  We ought to hope for, to aim for, using data in such a way that it impacts our strategic thinking, that the data inspires people to create new offers and new products.  Anything less is yet another attempt to improve efficiency and cut costs, and misses a huge opportunity for growth and differentiation.
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posted by Jeffrey Phillips at 6:42 AM 0 comments

Thursday, October 03, 2019

Book Review: What about the Future? by Fred Phillips

I'm returning today to one of my favorite activities - a book review.  Good books are simply too rare, and good books about topics important to innovators are unfortunately even more rare.  However, I'm happy to say that I've just read a book about understanding the future that should be read by anyone interested in foresighting, forecasting or scenario planning.  If you are an innovator, or hope to create meaningful, viable products or services for customers, attempting to understand the future is vital to creating new products.

The book I'm reviewing today is entitled What about the Future?  It was written by Fred Phillips, who is a professor and also the editor of the journal Technological Forecasting and Societal Change.  In full disclosure Fred was also one of my favorite professors when I took his course on technology adoption at UT-Austin's MBA program.

The Book

Fred has written a book that I really liked, and to be honest I had a difficult time putting into a specific context.  It combines some rationale for examining the future, some discussion on different approaches for examining the future and several philosophical discussions about complexity and uncertainty.  It is a book that challenges your assumptions, provokes your thinking and provides some really excellent points about anticipating future change. 

In short, this is not a "how to" book, but a book that takes on the larger questions about what the future is, how uncertainty and complexity should influence our thinking and planning.  Ultimately I think Fred captures the purpose of the book in the statement from the introduction that reads "They need the skills for forming a fundamental perspective about the future".  And that's what this book seeks to provide.

Fred's approach

Fred lays out the book in an interesting sequence of chapters.  Early in the book he grounds the reader on concepts like risk and uncertainty.  He notes that while we are uncertain about the future we often are overly certain about the past, and provides illustrations why even the past is often a bit uncertain.

The middle chapters deal with why we might want to understand the future and the impacts to decision making and organizational structure if we have a better understanding of the future.

The closing chapters become a more philosophical discussion about the future and our ability to understand the future and, having reached conclusions about the future, the impact on business and public policy.

Fred brings a systematic way of thinking about the future, using many examples that will be familiar to those who conduct work in foresighting, forecasting or scenario planning.  He includes a number of charts, graphs and illustrations that help detail his approach and thinking.  His writing is crisp and his arguments are very incisive, so the text is easy to read yet thought provoking at the same time.

One of my favorite arguments he makes in the book is that "the purpose of forecasting is not to be right, but to be ready".  This is reminiscent of the adage that plans are nothing but planning is everything.  We can't possible get our predictions of the future exactly right, but we can exercise our understanding of potential futures to be ready as they occur.

Interesting ideas and arguments

A couple of ideas that Fred presents I found especially interesting include:

 - which is changing faster, technology or society?  The general response is that technology is changing faster than society, but Fred makes an argument that society is changing faster than technology.  He makes the argument that technology innovation is actually slowing, while factors like shared values are changing or disintegrating faster than ever.  What impact would a culture or society that's morphing faster than technology have?

 - Fred argues that the two most reliable ways to predict the future are demographics and the Kondratieff wave.  He makes the point that demographics is destiny, and by understanding demographic change we can anticipate other societal, technological and other demands. 

 - I was not familiar with Kondratieff but the ideas from this Russian economist make sense - they are based on cycles of economic expansion and lassitude.  Kondratieff projected 30 year cycles of increased innovation followed by 30 years of exploitation of the previous innovative period.  This idea of cycles of innovation and cycles of consumption make sense to me.

Other ideas

Later in the book Fred talks about the difficulty of imagining the future, using what he calls the Captain Cook problem - one of almost willful blindness.  He notes that the Tahitians failed to acknowledge or even recognize Cook's flotilla because they had become accustomed to identifying items on the ocean as flotsam, whales or canoes.  They could not see or understand what was directly in front of them because their mental models did not include an option for these new things.  Likewise, many people who want to understand the future may not recognize that aspects or artifacts of the future are already present.  Here we can borrow from William Gibson and note that the future is already here, just not widely distributed.

My favorite chapter

Chapter 11 is perhaps my favorite, because Fred provides a significant number of examples of trends that reach a tipping point, and thus move from potential change to accepted change.  He calls these "Crossovers" and the ideas behind the crossovers and what these crossovers tell us can help shape how we think about understanding the future in the future.  This chapter alone and the crossovers Fred documents are worth the price of the book.

Review and takeaway

This is an excellent book and should be read by a wide audience, especially those who have an interest in understanding how to approach the future.  Individuals in industry, government, public policy and other functions should have a better appreciation for the future and the interwoven aspects of complexity and uncertainty as Fred presents.

If I have concerns with the book it is because I am always seeking really definitive, practical tools and methods.  Fred hasn't written a "how to" book, he has written a "how to think about" book, and this gives the book a wider audience and a more philosophical bent than I expected.  If only more people in more companies and more positions of power in public policy and in government agencies spent more time thinking about and trying to understand the future, I think we'd all be far better off and far better prepared for what the future holds.

I'd highly recommend this book, not for the specific answers it provides but for the questions and thoughts it should provoke.
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posted by Jeffrey Phillips at 6:55 AM 0 comments