Friction, hypereconomics, and social intercourse

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Friction is one of the more important concepts in the world. Many things are either made possible or impeded by friction.

Strike a match and the friction creates a flame. Yet that same kind of friction stops other things from flowing smoothly.

Perhaps the best description of the challenges that arise from friction is from the well known military strategist, Clausewitz:

“Everything is very simple in War, but the simplest thing is difficult. These difficulties accumulate and produce a friction which no man can imagine exactly who has not seen War . . . in War, through the influence of an infinity of petty circumstances, which cannot properly be described on paper, things disappoint us, and we fall short of the mark.”

From: Clausewitz, On War, Book I, Ch. VII

Recently Mark Pesce asked “What happens after we’re all connected?“, and he came up with the answer: “hypereconomics”.

Economics, fuelled by hyperconnectivity and enabled by the removal of friction in processes between people, equals hypereconomics.

And it is this removal of friction in processes, enabled by the internet and mobile technology, that creates the next frontier of opportunities for business.

The combination of mobile accessible applications and peer-to-peer social networks offers an astonishing array of new business opportunities.

In the Arab Spring and Occupy movements we have already begun to see the social and political shifts that are enabled when citizens can communicate and organize effectively through use of mobile technology coupled with social media.

The impact of these political and social movements will necessarily flow on to economic structures. This will create a gap for development of new business models based on removing friction and leveraging peer-to-peer capabilities offered by mobile devices.

Also people are getting used to helping themselves and each other, and the technology is enabling them to act collectively without a great deal of effort. This is the big shift.

We can now collaborate and act collectively even though separated geographically. No longer do we need to meet face-to-face to act. Collective action is enabled and made more efficient with mobile technology in so many hands. And it even facilitates better face-to-face meetings and action (viz. Occupy and the Arab Spring).

I am expecting to see a lot of disintermediation – shifts in the supply chain that that remove some existing intermediary players.

One of the first areas I expect to see this in is new mobile and online peer-to-peer payment models. Another area is aggregation of service providers and potential customers. Up until now aggregating those types of services required large capital investment, but now it just needs a peer-to-peer smart phone application.

If you are an existing economic or financial intermediary it’s time to start planning for this new reality. If you don’t then the dispersed peer-to-peer linked mob might just eat your lunch.

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Navigating the New World of Hyperconnectivity

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This week I spoke at the Recruitment Technology Evaluation Convention in Sydney. The topic was navigating the hyperconnected world from a recruitment and human resources perspective.

The key issues facing businesses now include:

  • Hyperconnectivity and the digital revolution
  • New rules for engagement and recruitment
  • Why community matters more than ever

The proliferation of social computing and huge growth in smart phones means that the communication landscape is changing. No longer are people tied to desk to access applications and the internet. And the high usage of social networks is driving different expectations in our user communities.

Further, there is an increase in social recommendations as an engine of business. The workplace is changing. We are changing both the physical experience of the workplace, with creation of collaborative spaces for people to gather in as well as traditional work stations. Along side the changes in the physical work spaces we are seeing a rapid evolution in social business practices and platforms that mirror the experience of public social networks.

The challenge for businesses today is how to engage and retain staff, and to build a culture that supports the creation of value for all stakeholders. Maintaining relationships with current and former staff members (through alumni communities) and other stakeholders is becoming critical. This is where community management becomes increasingly important.

Also, for many years, employers have taken it as their right to undertake surveillance of various kinds in respect of their current and potential employees. Now we are seeing the rise of sousveillance or ‘inverse surveillance’, where the watchers become the watched.

This phenomenon of sousveillance is merging with the trend towards social recommendations to create reputation networks that not only encompass the personal brands of individuals, but also include corporate brands. This is changing the rules of engagement for all parties. Employees are increasingly likely to bring with them a fully fleshed personal brand and a propensity to use social media as part of their daily lives.

Companies are increasingly demanding that their employees participate in social media on behalf of their brands. This means that the boundaries between personal and corporate brands are likely to blur, and we can expect to see skirmishes along those boundaries. Questions such as who really owns the contacts made via social media that an individual has made during their employment will need to be resolved. We are already seeing legal cases testing this question.

The big challenges that I see (from a company perspective) within the new hyperconnected landscape include:

  • the need to master complexity;
  • finding ways to deal with shifting or blurred boundaries between the public and private or between business and personal;
  • the need to remove friction in processes across silos and boundaries;
  • continued demands to deliver value to all stakeholders; and
  • the increased need to build and maintain relationships and the growing visibility of those relationships via social channels.
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When robots rule the world – the future of jobs in a hyperconnected world

UNSW CSE robot
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Steve Hopkins was telling me recently about an interesting law firm he’d come across in San Francisco – it’s called Robot. Where lawyer and junior partner Tim Hwang and his senior partners, Apollo Cluster and “Daria” XR-1029, work to merge legal and technical systems.

It was this law firm, and an interesting conversation Steve had with Tim Hwang, that sparked the idea for Steve’s session at last Saturday’s Social Innovation Unconference at Barangaroo.

We discussed the time in the future when robots run everything. And it got me thinking just how much robots already do for us. For most people the robots that run things are unknown and operating below their level of consciousness.

But let’s consider some of the work that robots already do for our society:

  • manufacturing – e.g. assembly lines for things like cars and packaging, quality control, building electronics components such as circuit boards
  • call centres – e.g. automated voice response systems
  • financial services – e.g. business decision support systems, straight-through-processing trading systems
  • the internet – e.g. search engine bots or those annoying Twitter bots
  • military – e.g. unmanned combat air vehicles (aka drones)
  • home and industrial cleaning – e.g. vacuum cleaners

I’ve been personally involved in developing and implementing intelligent business systems for a long time. Starting in the early days of voice automation and straight-through processing of financial transactions in the 1990s, through to the present day.

A large part of my work during the late 1990s and early 2000s was automating business processes and removing human beings from business processes. It was a huge shift in labour from human beings to robots. Those were mainly clerical jobs where a computer with a decision engine could easily replicate the work done by people.

Consider the productivity savings achieved by many of those projects; for example one project halved the number of call centre operators through the use of automation. That saving was achieved by addressing throughput constraints in both the inbound and outbound queues.

Firstly savings were achieved through the use of automated outbound calling technology – not waiting for the humans to dial a number but rather having the system start making the new outbound call while the earlier call was finishing. It also improved throughput by automatically bringing up the data entry screens for the call centre staff.

Secondly savings were achieved by adding customer self help options at the start of the inbound call process and by providing support to move customers to online self service. Instead of a human being tied up on the phone for 2-5 minutes with a customer trying to ascertain their needs the IVR and the customer did that work thus freeing up the operators to take more calls.

Arguably these improvements through increased automation were not as good for customers as they were for the bottom line of the companies, nor were they very good for the call centre staff that became redundant. And many would argue (as do I) that shifting the business processing efforts to consumers does not always make for excellent customer experiences. But cost and process optimization is a fundamental business practice.

It’s interesting to consider what other jobs will be removed from people via the next rounds of automation. The jobs that will go next are most likely to be middle class and white collar jobs.

The jobs that could go include: journalists, lawyers, managers and supervisors, warehouse personnel, sales staff (if the sales are all online how many do you need in a store?). Fundamentally, if your job or substantial parts of your job,  can be defined by means of a decision tree then your job is at risk of a robot taking over.

Welcome to the brave new world of work. What’s your plan to survive when robots rule the world?

Note: I’ve left out the entire area of robots for health since I don’t know much about it – but I reckon that will be huge too.

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Welcome to the panopticon

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Tonia Ries has just published an article titled Privacy Fail: Klout Has Gone Too Far, which outlines how Klout is indexing social networks and creating/measuring user profiles, even if they have never registered with Klout.

About the same time Facebook was accused of creating ‘shadow profiles’ on users and nonusers.

As I said recently, welcome to the panopticon.

When Jeremy Bentham originally came up with the idea of a panopticon he introduced it saying:

“Morals reformed – health preserved – industry invigorated instruction diffused – public burthens lightened – Economy seated, as it were, upon a rock – the gordian knot of the Poor-Laws are not cut, but untied – all by a simple idea in Architecture!”

Source: Bentham, Jeremy The Panopticon Writings. Ed. Miran Bozovic (London: Verso, 1995). p. 29-95

And thus it is, that by the beginning of the twenty-first century, we have (well most of us) willingly and freely chosen to become part of an electronic panopticon.

Privacy is now only possible by a steadfast refusal to participate in digital society in any way – by becoming like the Unabomber and moving to a shack in the woods. And even then, if others who participate in the electronic society mention your name or activities online, you are still caught up in the net.

Global surveillance has been made easy, simple, and ubiquitous. The very devices – laptops, tablets, mobile phones – we all carry enable this constant geophysical tracking via the SIM cards and wifi connections.

However, as we are seeing with the various #Occupy movements around the world, these same technologies that enable surveillance of us by the authorities, also enable sousveillance of the authorities by us.

This is one of the interesting things about living in an electronic panopticon. Unlike Bentham’s inmates we are not physically constrained to cells. We can move about freely (for the most part).

And we can also co-opt the same technology to create our own networks. Those networks can become peer-to-peer and frictionless. They can enable us to organise into groups very easily and to share information and ideas in ways that used to be hard.

The panopticon is here, it’s time to turn it to our own ends.

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Social media, radical transparency, insights, and klout

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One of the various social media influence scoring platforms – Klout – has just changed its algorithm and overnight many people’s Klout scores have dropped.

This has caused one of several reactions:

  1. complete indifference
  2. refutation of the importance of social media influence measurement
  3. howls of pain at the destruction of hard work in achieving high Klout scores
  4. humour like that of @jason_a_w
  5. even an #occupyklout movement

All very amusing  to someone like me.

But the really interesting thing is that we have entered an age of radical transparency.  Now our social connections and interactions are open to analysis because of our increasing use of social networks and social  media.

If the data is there and publicly available then it will be analysed.  There is little we can do to stop this phenomenon.  As users of social networks we are fair game due to the public nature of our social discourse.

However, as  a marketer, I’m often on the other side of this equation. In our businesses we seek to understand who the relevant influencers are for our particular niche or geography.

Social media is the new focus group.  And it is far richer than any focus group we ever had in the past. Now brands can engage with people in realtime and adjust strategy and products in response to feedback.

We need to find ways to cut through the enormous bolus of information that is there to be digested. And we need to make some kind of sense of the new landscape we all inhabit.

Mechanisms to measure people’s influence have always existed. Clothing, manners, motor vehicles are only a few of the ways we’ve judged people’s status and influence in the past.

Social media influence measurement and monitoring is only just starting.  Our lives are now lived in plain view and the data is open to analysis.

Welcome to the panopticon.

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Riots, desire, consumerism, community and values.

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Want is a funny word. It can mean different things, such as:

“absence or deficiency of something desirable or requisite” or
“to be lacking or absent, as a part or thing necessary to completeness”, or
“to feel a need or a desire for; wish for”, or
“to wish, need, crave, demand, or desire”
(Source Dictionary.com)

The scenes in the UK of rioters and looting were awful on many levels. But one scene that was repeated that was especially revelatory was the looters trying on goods in the stores before they stole them.

That behaviour spoke to me of want.

In the past, usually riots were because people lacked some necessity – food, freedom, the right to vote. That is, the rioters acted in response to want in the sense of absence or lack of something. This is the kind of rioting we have seen in the middle east in recent times, places like Egypt and Syria.

But in the UK we saw rioters, unfocused on anything except inflicting damage on property and helping themselves to goods for which they had a desire. That is, acting in response to want in the sense of desire for something. And that something wanted was material goods rather than aspiration to freedom or truth.

This is different. It is about people who have learned to desire those things for the acquisition of which they do not have sufficient economic resources. And yet, they do have the means – through a collective act of will – to achieve access to the goods they desire.

The looters have achieved their want, they now have the material goods that they sought. However, in achieving those goods they have destroyed the community facilities upon which they and many others rely. They have reinforced their other-ness. They have achieved a short term goal while simultaneously creating the platform for increased levels of dissatisfaction.

I suspect that material goods will not really fulfil the wants of the rioters and looters in the UK. Their anomie will remain. And they will recall the power of their collective action. They will also recall the powerlessness of the authorities in the face of that collective action.

It might be as Winston Churchill once said (in slightly different circumstances):

“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

Source: Sir Winston Churchill, speech at Lord Mayor’s Luncheon, Mansion House, London, November 10, 1942

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Protecting babies: whooping cough vaccination boosters for adults

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Many people who were vaccinated as children do not realise that by the time we’re all grown up some of our protection no longer works.

In the case of whooping cough, or pertussis, the protection can wane in as little as six to ten years. This means that many of us are wandering around at risk of catching whooping cough ourselves or asympomatically transmitting it to others. This is not so much of a problem for adults we might run into, but for little babies this can mean exposure to a life threatening illness.

Whooping cough is a disease that does not evoke fear in our generation as it did in past generations. It used to be a terrible killer for children before the advent of the pertussis vaccine.

“Whooping cough is a relatively mild disease in adults but has a significant mortality rate in infants. Until immunization was introduced in the 1930s, whooping cough was one of the most frequent and severe diseases of infants in the United States.”
Source: Kenneth Todar, Ph.D. Textbook of Bacteriology

Now many parents are refusing to vaccinate their children against whooping cough and this makes things more dangerous for very young babies. This is a real networked world problem. One person’s decision not to get vaccinated can have implications for the health of those around them.

In Australia the adult booster vaccine typically includes diphtheria, tetanus and pertussis. I had one of these booster shots recently because I knew that I would be spending time with some newborn babies and wanted to ensure they were protected.

Check out this video … and consider consulting your doctor and getting an adult booster shot.

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Truth, transparency and consequences

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Truth is said to be a double edged sword. Yet truth is only a problem if one is trying to hide something. The Wikileaks saga shows how difficult is has become to keep secrets in our hyperconnected world.

In a time of universal deceit, telling the truth is a revolutionary act. – George Orwell

Amusingly I noted a newspaper article announcing that governments around Australia are planning to ban access to web based email services like Hotmail and Gmail:

Bureaucrats could also use unmonitored emails to leak sensitive documents. “The recent WikiLeaks release of government electronic information has demonstrated the importance of maintaining appropriate protective security frameworks and the risks of failing to adequately protect electronic information,” the report said
Source: Public servants face web bans to minimise risk of password cracking

I was amused because only yesterday I noticed that you can buy a “compact 32GB USB flash drive with 2 year warranty” for $65 at JB Hi Fi.

Blocking all the potential sources of leaks is getting rather difficult in this hyperconnected and wireless world.

These attempts to block all potential leakages of data are ultimately doomed to failure. If someone wants to leak then it will happen. Even now that we have the example of what bad things might happen – in the person of the unfortunate Bradley Manning, who is apparently being treated inhumanely in custody of the US military – there are some people who will put themselves on the line to get the truth out. For some people negative personal consequences are a price they’re willing to pay to share their truth.

Also we need to acknowledge that most of our important business information walks out the door every night in the heads of our people.

But an important question for all organisations to ask is how many of the things we keep secret really need to be secret? What would happen if we were transparent about some business information?

Salaries is one area that is subject to secrecy in many organisations. What would happen if you simply published the list? It already happens if you work for the government – it gets published in the Government Gazette – and the sky does not fall. What other things can we be more transparent about?

Obviously not everything a company does can be public. But making more rather than less of what we do secret might just make it easier to keep our more important secrets. Perhaps that is the contradiction of openness versus secrecy? Less is more.

In any case the digital genie is out of the bottle and the technology to liberate information is in everyone’s pocket. We need different solutions to locking things down and making people’s jobs more difficult. New solutions for a new age. I wonder what they will be?

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Why the revolution might not be tweeted; or why Gladwell was right but for different reasons

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Malcolm Gladwell obtained the ire of many social media folks when he argued Why the revolution will not be tweeted back in October 2010.
I thought he was wrong then, and I still think he’s wrong in his analysis. However, in the light of two recent events I think he might actually be right in his conclusion, but for entirely different reasons. The two events are:

  1. The editor-in-chief of The Australian accused a journalism academic of defaming him by her live tweets reporting what a third party said – this is being tracked on Twitter under the hashtag #twitdef.
  2. The release by Wikileaks of a large quantity of US diplomatic cables (their domain used to be http://wikileaks.org but this is unlikely to work any longer) – this is being tracked on Twitter under the hashtags #wikileaks and #cablegate.

Gladwell attributed the non-tweeting of the revolution to his notion that real revolutions only happen offline and that new recruits to activism are brought in solely by people they know in real life. He seems that believe that only offline interactions can build “strong tie” commitment required for “high risk activism”. Gladwell seems unaware that loose tie interactions, like those afforded by Twitter, can give rise to extremely strong ties offline. In my experience Twitter has led to the development of many “strong tie” relationships that commenced with the loose ties typical of social networks.

Why I now think he’s right in his conclusions, but for entirely different reasons, has to do with the two examples mentioned above.

For a few years now the world of web 2.0, social media and social networking have been a ferment of new ideas, new ways of connecting and new systems of almost utopian belief in a good and great future enabled by the web. But that was before the internet of web 2.0 (what I refer to as the ‘social web’) was big enough to matter. Now, with the Wikileaks cable release going global and the ongoing anti-Twitter activism of some mainstream news media organisations, we can see that the social web matters.

It matters enough now that state actors are likely behind the moves to cut Wikileaks off from web hosting, DNS, money, and thus removing from them the ability to communicate further information.

We have seen the organisations that power much of the social web (like Amazon or PayPal) suddenly reviewing their Terms of Service and deciding that Wikileaks is in breach thus requiring them to withdraw access to their services. For example:

PayPal statement regarding WikiLeaks
DECEMBER 3, 2010
PayPal has permanently restricted the account used by WikiLeaks due to a violation of the PayPal Acceptable Use Policy, which states that our payment service cannot be used for any activities that encourage, promote, facilitate or instruct others to engage in illegal activity. We’ve notified the account holder of this action.”

The other matter that grabbed my attention recently was the defamation claims by Chris Mitchell against Julie Posetti (Crikey is curating a list of references to #twitdef).

Here we see a traditional news media organisation fighting a rearguard action against new kinds of media, like Twitter. But we see many mainstream media organisations simultaneously arguing that Twitter is not publishing, nor is reporting of news possible by means of Twitter, yet they use Twitter for that very purpose. We are still evolving our ideas as a society as to what media like Twitter are; and Stilgherrian has summarised some of the tensions nicely on Crikey.

Another salient fact in my ruminations is a discovery today that trending topics on Twitter are not a simple first past the post system. Apparently they are managed by an algorithm that rivals Google’s in complexity. According to Angus Johnston, who asked the question Why Isn’t #Wikileaks Trending on Twitter, and Should We Care?:

“It turns out it’s tougher than you’d think to put together a trending topics list that really means anything. If you just go by the raw frequency with which words appear, you’re going to wind up with stuff like “the,” “and,” and “RT” at the top of the charts forever. And even if you exclude words like those, you’re still going to wind up with “lunch” trending every lunchtime and Glee trending every Tuesday. “

It all starts to come together for me. The social web is going mainstream, that means that incumbent media players are finding that their power base is shifting (along with their revenue base); and that they’re not happy about this.

In most businesses and startups distribution is one of the key challenges to be overcome. And for the social web distribution remains the challenge. The social web is dependent upon cloud providers for hosting, DNS, payments etc. Thus producers of content do not really own the means of production AND distribution in the same way that people could in the past (e.g. where they could purchase and setup their own printing press – it’s worth noting that this model tended to have distribution constraints). Modern content producers are reliant on third-parties who, based on the Wikileaks experience, might not always be there to distribute their content.

Further, the enormous quantity of data flying around the social web means that, even with the best will in the world, we might not be able to find out about something significant. Thus the case of Twitter trending topics and #wikileaks and #cablegate it appears that, without any particular malice, the algorithm does not find these hashtags interesting enough to include as trends.

It seems to me that the convergence of these trends might mean that it is quite possible that the revolution will not be tweeted.

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