Work, business & professional services

People 2 People Power

The first examples of P2P or peer-to-peer distribution were illegal downloads of music and, while it upset the music labels, it brought in a new form of distribution and a new distribution of power. The same happened in publishing, as blogs, YouTube and Flickr dared to walk on the turf once owned by Big Media. It was a daring combination of consumption and creation. We wrote it, we read it, and we passed it on. Now the same concept is finding its way into other hallowed halls – banking, energy, and cars. Already, financial services are going P2P with websites like kiva.org, prosper.com and lendingclub.com, which offer microbanking to people in developing countries. This makes it easier for them to raise small amounts of capital from the people they know and trust. It is akin to using your local credit union with the social networking abilities of Facebook.� We may even see ‘personal currencies’ where people trade their own currencies based on their own status and level of trust within the network.The energy industry might be next. Already, people can install solar sources of energy that, when unused, can be sold back to the grid. Some companies even use their roofs for installations that allow them to be net power producers. In a similar vein, hybrid cars can generate electricity during braking and use it to fuel motion, so why not build on this capability so all cars can sell excess energy back to the grid? P2P not only makes the system more efficient, but offers a more sustainable equilibrium. It is a complete redistribution of people power, let alone energy. Watch for protest from the powers-that-be.

The Metaverse is the New World

When radio first began, nobody thought it would have such large and avid audiences. It stuttered along for a while and then finally found its way. TV followed the same trajectory, starting as little more than visual radio, then building on its strengths as a strong, vibrant communicator. We should not be surprised if the Internet is having equally humble beginnings and there is no question that what we see now is not what we will see tomorrow.In less than five years time, rather than looking at a website, we will be looking at a metaverse, perhaps the TV of the future. It will be an alternative world, like Second Life, where avatars will be able to browse, chat and discover products and services as if they were in the real world.IBM is already working on ways to move avatars from one metaverse to another. Other companies should be preparing for this new world, because the first movers will be able to poach customers. The technology still needs refining, and regulators will be challenged to have them working fairly across borders.People who are familiar with Second Life know what it means to be an avatar in a virtual world. It is crucial to have others present and users want to be able to fully express themselves to others. This is why expressiveness is becoming so important. Technologies are being developed so that avatars can choose their social style according to the moment. They can be wholly candid, socially involved, or merely polite (termed the ‘veracity continuum’). Users will be able to choose commands that express their preferred style and experimental systems will even read the person’s expressions to replicate them online.Such expressiveness will help to build trust. It will aid cooperation for teams working together, or even improve competitive situations, such as a business negotiation. These technologies will make the metaverse much closer to the universe that we know and as people go there, others will follow. After all, it is the presence of other people that makes us who we are.

 

Some Things Can’t be Copied

The digital world is the ultimate photocopier because everything gets copied so many times. But in a world of copies, value comes from the things that can’t be copied. Kevin Kelly calls these values ‘generatives’. A generative value must be generated, cultivated and nurtured, uniquely in place and over time and, in some ways, these intangible values are better than free. They are: immediacy, personalisation, interpretation, authenticity, accessibility, embodiment, patronage, and findability.Immediacy describes how something new, delivered straightaway, has value even though people can get it later on for less, such as a movie. Personalisation is what makes a product seem as if it is just for you, such as a custom-edited book. Interpretation makes the free stuff valuable, such as a paid-for manual to more effectively use free software. Authenticity describes an original version of, say, a rock concert, rather than inferior reproductions. Accessibility is the ability to access movies, music, books or TV shows, without having to own and store them. Embodiment is making a service or product more experiential, for example, the difference between an MP3 and a holographic display of the band playing. Patronage is where fans can reward their favourite artists, such as Radiohead’s offer to fans to pay what they thought it was worth. Findability is the ability to be found on the Internet, via aggregators like Amazon or Netflix, and even the much-maligned studios and labels.These values all demand new skills, different from those required for the world of patents, exclusive distribution or scarcity. In fact, the abundance of free needs a mindset of generosity, or sharing, and it follows the path of attention. This may come from advertising or it might not, but these values will gain attention, and my or your attention can’t be copied either.

 

Why CSR is Good for Business

It was Milton Friedman who said, ‘the social responsibility of business is to increase its profits’ and any company that embraces that opinion is looking for trouble. In today’s socially-aware society, companies are under pressure to do good in as many ways as they can. Even so, the active advocates of corporate social responsibility (CSR), like Marks & Spencer, GE, Patagonia and TNT, are still relatively few considering the amount of attention given to CSR. What is going wrong? First, there is no common understanding of what CSR means, or even if that is the right term. Second, the range of activities that fall under that heading is so wide that companies struggle to choose where they will act. Third, some say it is nothing more than traditional philanthropy, and good management of risks (such as not employing child labour) and opportunities (giving women in developing countries employment). Others claim it simply diverts attention from establishing rules that advance the common good, which is the job of governments and NGOs. Despite the boom in CSR, there is still a large gap between what the public expects and what companies are prepared to deliver. It is very challenging to make promises about the activities of a long chain of suppliers (and 60% of companies in a recent survey did not enforce a code of conduct). Cynicism abounds. Even Toyota, much admired for its trendy hybrid, lobbied with others against a tough fuel-economy standard in America.However, TNT illustrates the possibilities of corporate philanthropy and claims it is ‘providing a soul for TNT’.

First, it collaborates with NGOs who are relevant to its business; second, what used to be local community work has now become global; and third, once formal programs are in place, they are more likely to continue. Perhaps the best kind of responsibility is just enlightened self-interest, which far from being an inconvenient truth, is how most individuals live in the world. If the link between a company’s social and financial performance appears weak, companies will surely benefit over time from employing people and attracting suppliers who share their values. Some companies, like the pharmaceuticals, have had to learn the wisdom of a good reputation, by supplying cheap drugs to developing countries.The recent trend for sustainability and being green simply brings CSR up to date. Sometimes, it basically looks like cutting costs, but Coca Cola claims ‘it’s what survival will be about in the 21st century’. Stuart Rose of M&S believes that companies should not get too far ahead of the customer on this: ‘Much more, and you won’t sell. Any less, and you won’t lead’. [Suggest delete, a bit disconnected /confusing] At the same time, an economic recession might take the shine off CSR, particularly if it is seen as an unnecessary cost. It will sort out the companies that truly believe it (and execute it) and the ones that just want to talk. More important, it is up to customers – you and me – to support the companies that look like they mean it.

 

When Green Won’t Wash

We are bombarded with green claims wherever we go, so it is sobering to read that 99.9% of them are bogus or misleading. According to TerraChoice Environmental Marketing (US), of 1,018 so-called green products, all but one had committed one of the ‘six sins of greenwashing’. These are: Sin of the hidden trade-off (eg, mentioning recycled content but not mentioning manufacturing intensity or travel costs); Sin of no proof (eg, not tested on animals); Sin of vagueness (eg, chemical-free); Sin of irrelevance (eg, CFC-free window cleaners); Sin of fibbing (eg, organic bottle water); and Sin of the lesser of two evils (eg, organic tobacco).One might argue that it is unfair to judge any product by these standards, since most of them would fail. But people willingly make trade-offs in their purchasing, for example, buying no-cholesterol chips or buying a beer after going to the gym. Rather than deciding which recycled copy paper to buy, perhaps companies should provide car pooling, or free bus tickets.
Are we willing to make the ultimate trade-off and just stop buying so much stuff? David Roberts suggests adding a simple label: ‘You don’t really need this’. Greenwashing is just a symptom of the fact that we don’t really want to change our behaviour: we want a good excuse to stay the same. Surprise! Companies do too.

 

Peak Connectivity

It is commonly believed that the Internet levels the global playing field or, as Thomas Friedman claims, ‘you can innovate without having to emigrate’. It’s a catchy phrase but it’s not true. This is because, out of 170,000 patents granted in 2003 in the US, almost 80% went to Americans, Germans and Japanese. The next 15% came from Taiwan, South Korea, Israel, Canada and parts of Europe, while India and China were granted only 0.4%. It might be tempting to assume that India and China are not creative. But this is not true either since entrepreneurs from those nations founded or co-founded 30% of Silicon Valley startups in the late 1990s. What does it mean? It means the world is not flat, but spiky. There are the innovators – the few who generate the most ideas; the producers – who produce goods and services using the ideas of innovators (Dublin, Seoul); the global slums – densely-populated areas with little economic activity; and big valleys – rural and remote places with little activity. Innovators tend to cluster together, because that gives them productivity advantages, economies of scale, and attracts others there to share their ideas. Often, there are more similarities between those in each group, than there are between people who live nearby. Unfortunately, it means that outsiders who are trapped in the valleys feel envious of those in the peaks. So, while the peaks may be connected, the valleys are in danger of feeling increasingly disconnected and discontent.

 

When Experts Beat Computers

Experts have suffered a beating in the digital economy, not because they know any less, but because information is available to everyone. It might be tempting to think that a computer can take the place of any expert, or more recently, the ‘wisdom of crowds’. However, it’s a mistake to dump experts or rely on crowds. It just depends on the type of problem. Computers, for example, are brilliant at solving low-freedom, rule-based problems, such as credit scoring or medical diagnosis. Crowds are best at solving high-freedom, probability problems, such as stockmarket investing or sales budgets. Where does this leave experts?Experts can outperform computers and crowds when given high freedom, rules-based problems, such as innovation, strategy formulation, and troubleshooting. Their experience is invaluable for going beyond the rules, while having a good understanding of them. Computers are not free, because they cannot make connections between thoughts the way people do, and crowds tend not to have the rules-based knowledge unless they specialise. The so-called ‘expert squeeze’ is only temporary. Experts should soon realise they can’t be usurped yet. They can still beat computers.