[10] How do you balance the benefits and costs of privacy vs security?

Achieve Data Security and Regulatory Compliance without Breaking the Bank

[9] Why is it every time I come up against this guy, I lose?

The Great Debate: Privacy vs Security

[8] My privacy was protected!

Apple vs. FBI – Privacy vs. National Security

[7] Apple vs FBI speaks to a much broader issue

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It's hard to know whether Apple, or CEO Tim Cook in particular, truly believes in the sanctity of privacy.  What's the likely to be the case is this:  Cook has to protect its customer base, and market in general, and any semblance of fear that Apple will compromise, or otherwise sell out, its privacy may jeopardize that very life blood.

[6] Where do you weigh in on security?

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[5] Where do you weigh in on privacy?

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[4] Privacy vs Security - Edward Snowden on exploration and creativity

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[3] Privacy vs Security - Edward Snowden on the right to privacy

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[2] Privacy vs Security - Edward Snowden on who we are

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CEO Reflections (3) People Analytics

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At McKinsey, we’ve been developing our own approach to retention: to detect previously unobserved behavioral patterns, we combine various data sources with machine-learning algorithms. We first held workshops and interviews to generate ideas and a set of hypotheses. Over time, we collected hundreds of data points to test. Then we ran different algorithms to get insights at a broad organizational level, to identify specific employee clusters, and to make individual predictions. Last, we held a series of workshops and focus groups to validate the insights from our models and to develop a series of concrete interventions.

The insights have been surprising and at times counterintuitive. We expected factors such as an individual’s performance rating or compensation to be the top predictors of unwanted attrition. But our analysis revealed that a lack of mentoring and coaching and of “affiliation” with people who have similar interests were actually top of list. More specifically, “flight risk” across the firm fell by 20 to 40 percent when coaching and mentoring were deemed satisfying.

Reference: Power to the new people analytics.

My intent in this article is neither to summarize it nor even comment on it.  Rather, I mean to prompt CEOs and their leadership teams to pause and reflect on their business and industry, their market and competition, and their people and resources vis-a-vis the advent of people analytics.

• How do you understand what is going on within and outside your company, and what is your experience of it, both individually and collectively?
• What are gaps in your understanding, which require bridging, and what haven't you experienced, which require experiencing?
• What meaning can you draw from such reflection and understanding, that is, in relation to the vision, the purpose, and the values that are at the heart and soul of your business? 
• Besides your analytic or rational thinking hat, what does your intuitive, creative or non-rational brain say about all of this?  
• What diverse or critical points of view do you need to engage in this reflection, that is, from your people, networks, advisers, competitors, customers, and resources?
• What would you like to do about it, or more pointedly what do you need to do about it; that is, what is it that you aim to accomplish?
• How can you best accomplish what you want and need to accomplish, given the capability, motivation and energy in your current and prospective people?
• What other reflective questions do you need to ask yourselves?

So, instead of a summary from me, CEOs can read this short article themselves and come up with their own unique, relevant commentary.
 

CEO Reflections (2) Digital Value Chain

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Digital manufacturing and design are drawing attention from innovators and investors alike. Sometimes referred to as “Industry 4.0” (especially in Europe) or as the “Industrial Internet” (General Electric’s term), these labels reflect a basket of new digitally-enabled technologies that include advances in [a] production equipment (including 3-D printing, robotics, and adaptive CNC mills), [b] smart finished products (such as connected cars and others using the Internet of Things), and [c] data tools and analytics across the value chain.

These technologies are changing how things are designed, made, and serviced around the globe. In combination, they can create value by connecting individuals and machines in a new “digital thread” across the value chain—making it possible to generate, securely organize, and draw insights from vast new oceans of data. They hold the potential for disruptive change, analogous to the rise of consumer e-commerce. In 2010, when some two billion people connected online, the Internet contributed approximately $1.7 trillion to global GDP.  What’s in store when 50 billion smart machines—deployed across factory floors, through supply chains, and in consumers’ hands—can connect with one another?

Reference: Digitizing the value chain.

My intent in this article is neither to summarize it nor even comment on it.  Rather, I mean to prompt CEOs and their leadership teams to pause and reflect on their business and industry, their market and competition, and their people and resources vis-a-vis the advent of digital value chain.

• How do you understand what is going on within and outside your company, and what is your experience of it, both individually and collectively?
• What are gaps in your understanding, which require bridging, and what haven't you experienced, which require experiencing?
• What meaning can you draw from such reflection and understanding, that is, in relation to the vision, the purpose, and the values that are at the heart and soul of your business? 
• Besides your analytic or rational thinking hat, what does your intuitive, creative or non-rational brain say about all of this?  
• What diverse or critical points of view do you need to engage in this reflection, that is, from your people, networks, advisers, competitors, customers, and resources?
• What would you like to do about it, or more pointedly what do you need to do about it; that is, what is it that you aim to accomplish?
• How can you best accomplish what you want and need to accomplish, given the capability, motivation and energy in your current and prospective people?
• What other reflective questions do you need to ask yourselves?

So, instead of a summary from me, CEOs can read this short article themselves and come up with their own unique, relevant commentary.
 

CEO Reflections (1) Hyperscale Business

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At the extreme are hyperscale businesses that are pushing the new rules of digitization so radically that they are challenging conventional management intuition about scale and complexity. These businesses have users, customers, devices, or interactions numbered in the hundreds of millions, billions, or more. Billions of interactions and data points, in turn, mean that events with only a one-in-a-million probability are happening many times a day. 

Taken individually, each of these businesses seems like a special case. After all, how many companies can be like Google, which processes around four billion searches a day; Twitter, handling 500 million tweets a day; or Alibaba, the world’s largest e-commerce market, which facilitated 254 million orders in one day?

Reference: Competition at the digital edge: 'Hyperscale' business.

My intent in this article is neither to summarize it nor even comment on it.  Rather, I mean to prompt CEOs and their leadership teams to pause and reflect on their business and industry, their market and competition, and their people and resources vis-a-vis the advent of hyperscale business.

• How do you understand what is going on within and outside your company, and what is your experience of it, both individually and collectively?
• What are gaps in your understanding, which require bridging, and what haven't you experienced, which require experiencing?
• What meaning can you draw from such reflection and understanding, that is, in relation to the vision, the purpose, and the values that are at the heart and soul of your business? 
• Besides your analytic or rational thinking hat, what does your intuitive, creative or non-rational brain say about all of this?  
• What diverse or critical points of view do you need to engage in this reflection, that is, from your people, networks, advisers, competitors, customers, and resources?
• What would you like to do about it, or more pointedly what do you need to do about it; that is, what is it that you aim to accomplish?
• How can you best accomplish what you want and need to accomplish, given the capability, motivation and energy in your current and prospective people?
• What other reflective questions do you need to ask yourselves?

So, instead of a summary from me, CEOs can read this short article themselves and come up with their own unique, relevant commentary.
 

Above All Do Good

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I admit to simplifying a very sensitive, complex issue in our increasingly internet-driven world. I am doing so, because I believe it gives us a measure of calm, control and resolution on this. What is the issue? The Wall Street Journal reports in Secret Order Targets E-mails that as part of the WikiLeaks criminal investigation, the US government requires (required) companies like Google, Sonic and Twitter to release information about a certain volunteer and his activities online, especially e-mails.

We can insist on strict policy adherence and demand sophisticated security tools, and I argue that privacy will remain an essentially elusive, maybe even illusory thing. 

If you’ve watched The Matrix trilogy, you know that you always have someone or something that knows what you’re doing. Your shipmates aboard the Nebuchadnezzar may not know, but the Oracle, the Maker, sentinels and agents do. Google+ has cool circles to segment your friends and colleagues, so one circle isn’t privy to personal information that another circle has access to. Regardless, Google tracks what you’re putting on its site, and it captures what you’re sending and receiving via e-mail if you’re part of this system, too.

Regulators, lawmakers, politicians et al. can hardly keep up with the warp speed of media and technology. 

They’re keen to establish privacy (and access) rules, policies and penalties in this brave new world. While I believe these are all crucial for a civilization such as ours to protect its citizens, I also believe they miss a central point. They often neglect to emphasize a lesson, that is, above all do good, talk good, and BE good! Be as critical, incisive or disagreeable as you want, but keep it constructive, discreet and ethical. Avoid acting criminally. Avoid doing anything that might humiliate you down the road or land you in ‘hot water.’

No one is perfect, of course. 

We all make mistakes, and end up doing something bad. But if we keep these downside things to a minimum and follow my guidance above on this, then privacy isn’t as much of an issue. We can write as many e-mails as we want, upload photos to our heart’s content, tweet from our smart phones etc every minute, and we ought not have any problems. Should the government order the Googles of the world to cough up our information, then we’re clean as a whistle.

Note: I wrote this article on October 13th 2011 for an old Media & Tech blog.

Authors Guild vs Amazon

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The Authors Guild recently sent a sharply worded message to Amazon about the online retailer’s lending program: Contracts on Fire: Amazon's Lending Library Mess. It’s a complex question of economics and content, in light of the ongoing (r)evolution of online retailing and digital publishing. But I hope I can add a bit of clarity here.

If in fact there has been a breach of contract, as the Authors Guild contends, then obviously Amazon has to be held accountable. Beyond this, however, I wouldn’t advise taking an adversarial approach. The battle over content is sometimes waged as creators vs. aggregators vs. distributors (and sometimes vs. consumers, too). Because they all need each other, and are therefore intricately linked, defeating one constituency in this battle sends negative ripples across the whole pond.

So, how to go forward?

Well, the concern by major publishers over Amazon’s lending program is the impact on sales, as the Wall Street Journal reports in Amazon, Now a Book Lender. But such concern ought not result in categorical refusal to participate. Rather, it ought to prompt continued efforts at finding alternative options, workable strategies, and better economics. Perhaps the preferred option by one party isn’t realistic in this scenario, but I am certain there are more outcomes that are reasonable and agreeable.

To this end, consider the following:

Despite concerns among major publishers about the potential impact on sales of the program, some see it as a positive. Arthur Klebanoff, chief executive of RosettaBooks LLC, an e-book publisher that is making Mr. Covey’s title available under a flat-fee arrangement, said he did so because he believes it will spur sales of Mr. Covey’s other works.

“I’m attracted to the incremental promotion/visibility for participating titles,” he said. “All site promotion, especially of backlist titles, drives sales in the Kindle Store.” Mr. Klebanoff said that he’s providing about 200 titles in all.

Whether the Authors Guild likes it or not, Amazon has amazing reach to those coveted content consumers. By playing hardball like this, it positions itself to win the (contractual) battle but risks losing the (market) war. Again, because they fundamentally need each other, effective collaborations at least offers them the opportunities that Klebanoff is eyeing!

Note: I wrote this article on November 16th 2011 for an old Media & Tech blog.

And your numbers are...

Here was my LinkedIn Today headlines, and I clicked on the link that asks ‘What’s your number?’

  

I enter my birth date, and below are my numbers. Feel free to enter yours as well.

 

Now, if I’ve understood this correctly, then I was approximately the 3 billionth human being in the world, at the time I was born.

Obviously every time a baby is born, he or she adds to the population. Therefore a newborn is always at the leading edge of population growth. That’s quite a heady thought, I’d say. So at some point in time, we were each that leading baby, if only for a second. Remember, several other babies are being born at any given stretch of time.

Of course I’m super curious as to how this figure was arrived at. Well, the results above conveniently offer a link to ‘How did we calculate that?’ This is the brief explanation:

I was also approximately the 77 billionth to have ever been born, since the beginning of humankind. That beginning was in 50,000 BC, as Carl Haub with the Population Reference Bureau estimates in How Many People Have Ever Lived on Earth. There have been about 108 billion human beings born since that time.

PRB informs people around the world about population, health and the environment, and empowers them to use that information to advance the well-being of current and future generations. Find out more about PRB at our website www.prb.org.

The question of how many people have ever lived on Earth is a perennial one among information calls to PRB. One reason the question keeps coming up is that somewhere, at some time back in the 1970s, a now-forgotten writer made the statement that 75 percent of the people who had ever been born were alive at that moment. This factoid has had a long shelf life, even though a bit of reflection would show how unlikely it is. For this "estimate" to be true would mean either that births in the 20th century far, far outnumbered those in the past or that there were an extraordinary number of extremely old people living in the 1970s. But if we judge the idea that three-fourths of people who ever lived are alive today to be a ridiculous statement, have demographers come up with a better estimate? What might be a reasonable estimate of the actual percentage? In this video, PRB senior visiting scholar Carl Haub, with some speculation concerning prehistoric populations, approaches a guesstimate of this elusive number.

Two points, as we step back from this and weigh the meanings and implications:

First, while it’s really cool to get such particular numbers, we have to remember that this is all extrapolation from available data. We simply don’t have population figures for much of the 52,011 years that we human beings have been around. What would’ve been better actually is to have had an error range, from the lowest reasonable to the highest reasonable figures for each statistic. But this is the sort thing only analytic types like me would ask for. No doubt, the vast majority of people prefer ‘clean’ figures, so as to harbor perhaps the illusion of accuracy in an imprecise, uncertain world.

Second, with a background in political science and demography, Haub cautioned us about this in his article and he openly detailed the steps he took to do this. As all true scientists ought to do, he admitted to the possibility of being wrong and invited other scientists to offer alternative methods for such population extrapolation. I cannot emphasize enough how commendable and critical this is. Media as a whole has done a great job of bringing scientific findings to the public, instead of keeping these cloistered in the hallowed halls of academia or research labs. But as I’ve tried to argue here, such findings always have a degree of error to them and this degree may be large in some cases. Unfortunately, media often reinforces that illusion of accuracy by failing to include the caution that Haub offers. So it was good of BBC News, the source of that first link I followed, to have provided reference links that explain more of how these figures were arrived at.

Note:  I wrote this article on October 27th 2011 for an old Media & Tech blog.

Digital Strategy: How Digital Winners Think

Paul Willmott is a Director at the McKinsey London Office.

Transcript

Digital winners are thinking broadly about whom to collaborate with. In some cases, that may include collaborating with firms that would have been considered competitors historically—or, at the very least, collaborating with firms that can share data with you.

Digital winners are also creating the right scale of investment in their IT infrastructure. It’s very hard to keep up with the pace of evolution in the digital world unless you have a flexible IT infrastructure and one that can plug and play products and services from other places. Some renovation is required in many companies.

Reference: Digital Strategy.

As I suggested in the preceding article, a graduated, step by step approach may be quite a reasonable tact in your digital strategy.  But this is so, only if you have clear line of sight on where your company needs to be, say, at the end of one year, three years, or five years.  The flexible IT infrastructure is something I don't hear very often among technology firms and management consultants, as many of them seem to push for and advise on an entire (i.e. inflexible) IT infrastructure.  Otherwise what Willmott points out can be a way to manage activity, costs and risks of executing your digital strategy.

Digital Strategy: The Future Is Now

Paul Willmott is a Director at the McKinsey London Office.

Transcript

Companies need to make several key decisions around how they’re going to address digital. [1] The first one is “are they in the right businesses to start with?”

It’s true that companies have been using technology for many decades. But a few things have changed. First of all, customer expectations are very, very different now. We know that around 80 percent of purchases are researched online before a customer goes into a store. Indeed, many customers now prefer to complete the purchase online. Even in groceries, over 10 percent of customers in the UK now will shop online and actually make the purchase.  In banking—in this country, in the UK—it’s over 30 percent.

[2] The second thing that’s changed is that the cost of delivering high-end IT solutions is reducing all the time. Historically, it would have been very expensive, and a lengthy process, to deliver a highly functional technology solution that customers would want to use. That’s no longer the case—it can sometimes be done now in just weeks or months.

Digital is fundamentally shifting the competitive landscape in many sectors. It allows new entrants to come from unexpected places. We’re seeing banks get into the travel business in some countries. We’re seeing travel agents get into the insurance business. We’re seeing retailers go into the media business. So your competitor set is not what it used to be.

One thing that digital allows is what I call “plug and play dynamics”—meaning that companies can attack specific areas of the value chain rather than having to own the whole thing. This is because digital allows different services to be stitched together more quickly and cheaply.

Reference: Digital Strategy.

Software and technology firms may push you as the CEO toward systemic and process solutions, which are of course more involved, costly and risky.  It doesn't mean that you ought to wholly accept or dismiss such sales efforts, but it does mean that (a) you are clear on what you're trying to accomplish for your business and (b) you have line of sight on your whole value chain, especially as it relates to your aims.  Then "plug and play dynamics" makes sense as a means to titrate involvement, control costs, and manage risks.

Internet of Things: What You Should Do

James Heppelmann is the CEO of software company PTC.

Transcript

Manufacturing executives are very intimidated by what’s happening. If I were the head of a company that’s been making diesel engines for the past 100 years, my company would know diesel engines. But the definition of what is a diesel engine is now changing quickly. In the past ten years, we had the inclusion of embedded software and electronics. But now, when we step across the line from a smart engine to a smart, connected engine, suddenly there’s an explosion of new technological opportunities and concerns. I’m going to need a device cloud and big data and integration and security and applications on smartphones and tablets—and wow!

Who in our engineering department understands that technology stack? You know, not many. Maybe you turn to your IT department; it’s actually more like what they do. Maybe you’re going to have to get your IT department involved in engineering your next-generation product. My advice would be to try to understand the layers of the technology stack, try to get to the point where you are going to really add value. Putting sensors in your products, collecting data within your products—you can add a lot of value there.

You’ll probably then want to connect that to some type of a cloud solution you probably need to purchase—a device cloud of sorts. You’re probably going to need some big data analytics, and you’re going to need some investments in big data technology. You’re going to need security and integration technology and, again, that probably needs to come from the outside.

But when it comes to the applications that help you to operate and service and create feedback loops, you’re going to want to get involved again because who knows diesel engines and how to operate them better than the company that’s been making diesel engines for 100 years?

Reference: How the Internet of Things could transform the value chain.

Before you plunge yourself into what technology stack means, be sure you are as crystal clear as possible about what you as the CEO are trying to accomplish for your company.  2015 business goals are undoubtedly front and center in your mind, but what are the essential purpose, values and aims that course in the veins of your people over the long run?  That's Step 1 of The Core Algorithm: Begin with the end in mind.  Step 2 is Walk backwards to map pathways from there and then to where you are here and now, the intent being to lay out all that what you need to reach that end.  What Heppelmann more implicitly emphasizes is: You as the CEO must have solid enough understanding of what you need to do and how you need to do so, and you must have members in your leadership team who have deep grasp in how technology stack can truly add value vis-a-vis your goals and purpose.

Internet of Things: Three Big Risks

James Heppelmann is the CEO of software company PTC.

Transcript

I probably would put the biggest risks in three buckets. [1] The first risk is that I do nothing and somebody leapfrogs me. That’s a big problem, and we’ve seen a few examples that have been pretty dramatic.

[2] The second risk is that I do something and it doesn’t work. I overestimated the capabilities of my internal engineering and IT departments. I invested a lot of money, and it didn’t really produce a successful product. It didn’t scale, it didn’t perform, it didn’t work.

[3] And the third risk is the risk of unintended consequences. I built something. I began to collect data. That data got hacked and compromised. We’ve all seen examples—when credit-card numbers get stolen and so forth. The company who gets blamed actually was a victim, but the customers say, “I’m still going to blame you because if you’re going to take that type of information from me, then you have a duty to protect it, and you failed in that duty.”

The mitigation for not doing anything and for being leapfrogged is that you need to move forward with a strategy and a technology investigation and a prototype and then plan what you are going to do. And I’d say if you’re not already doing that, you’re already vulnerable because a lot of companies are deep into that process for sure.

On the risk of doing something and it doesn’t work, it’s like any other big, new-product project you’re trying to do. You have to make sure that you actually have the capabilities to do this and that you understand how you’ll create value by doing it.

And on the third item—unintended consequences, particularly around security and availability—I think you need to find some good outside partners. Because, to be frank, most manufacturing companies are not really in a position internally to solve these problems.

Reference: How the Internet of Things could transform the value chain.

Taking advantage of the Internet of Things for your business, and thus creating smarter products, processes and tools, is, from my point of view, a second step.  The first being à la The Core Algorithm is begin with the end in mind.  What is it that you're trying to accomplish for your business, and what are challenges, obstacles or threats to you're doing so?  Being as crystal clear as possible on your aims and purpose will help you identify risks accordingly and manage them effectively. 

Internet of Things: The Value Chain

James Heppelmann is the of software company PTC.

Transcript

I think the idea of smart, connected products will have a dramatic impact on value chains because we’ve always thought of the value chain as being around the product and that the product was just a dumb stone, if you will, moving through some smart value chain. But now, the product’s actually a first-class participant in its own value chain. It’s talking to its creators in engineering and manufacturing. It’s talking to the people who are supposed to service it. It’s talking to its operators. It’s even talking to the sales and marketing department about what the customer is thinking.

The product becomes, for example, a sensor in the relationship with the customer. And this challenges the conventional concept of CRM. The idea of customer-relationship management is that customers will talk to you about their feelings about your product. And now, in this new world, we’re going to have products that are early-warning devices that tell us about what value the customer is getting or not getting. What’s the degree of utilization? What kind of problems are customers having? What are the opportunities for upsell? When are customers going to need a replacement product, a consumable? You name it. The product becomes a sensor in the relationship with your customer. That will change a lot in terms of how things are created, sold, serviced, operated, and so forth.

Reference: How the Internet of Things could transform the value chain.

To the extent your customer is fully apprised, trained and supported on your smart products, then you are on the way toward building an ethical, responsible relationship and utilizing technology developments for a common good.  The value for your customer, among a number of things, is more effective, real-time communications and more efficient, reliable processes.