“I predict a(nother) riot” – The Good and the Bad School Master

Few had thought the 2004 hit “I Predict a Riot” by Kaiser Chiefs to be prophetic. Energetic – yes, melodic – yes, but prophetic – no way. Never the less, the riots in England the past few weeks have shown that it does indeed have divinatory qualities. However, the clues to the understanding and solution seriously predates Kaiser Chiefs. They can be in a 500 year old old book written in Latin by a British author.

The riots and lootings were hard to comprehend for brits as well as for foreigners. Indeed the rioters did not seem to follow any common agenda. Some seem to have taken the chance to demonstrate against the governments cut down on well fare, while others were indulging in anarchistic joy and yet others sought to enrich themselves.

After the riots Prime Minister David Cameron made it very clear that the cause of the riots was criminality pure and simple. He promised severe punishment to anyone who had participated in the riots and would use any means to come down hard on rioters in the future. Deputy Prime minister Nick Clegg made clear that it was a top priority to punish the criminals, and he would also consider longer terms for rioting.
But are these riots just caused by criminality pure and simple and would more severe punishment actually help?

The question is far from new in British political thought. The philosopher Thomas More touched on this problem in one of the classics of political philosophy “Utopia” already 500 years ago. Utopia is hailed as one of the key inspirations of the modern well fare states, such as the British. In the book utopia is an island just recently discovered with a very just society. Many interesting thoughts on the constitution of society can be found here. It is however not in the description of Utopia that we find the key. It is actually before the description of Utopia in the first book. Here we find a dialogue about the present state of the British society under King Henry the Eighth. the subject under discussion was theft. Allow me to quote the passage in full here:

“It happened one day when I was dining with him there was present a layman, learned in the laws of your country, who for some reason took occasion to praise the rigid execution of justice then being practised on thieves. They were being executed everywhere, he said, with as many as twenty at a time being hanged on a single gallows. And then he declared he could not understand how so many thieves sprang up everywhere when so few of them escaped hanging. I ventured to speak freely before the Cardinal, and said, “There is no need to wonder: this way of punishing thieves goes beyond the call of justice, and is not in any case for the public good. The penalty is too harsh in itself, yet it isn’t an effective deterrent. Simple theft is not so great a crime that it ought to cost a man his head, yet no punishment however severe can restrain men from robbery when they have no other way to eat (..) you (..) seem to imitate bad schoolmasters, who would rather whip their pupils than teach them.” (p. 15-16)

While I don’t intend to push the analogy too far (rioting is obviously different from simple theft), there are some interesting observations that can be extracted from this passage:
1) No matter how hard you punish, there will still be this crime.
2) People commit this crime because they are pushed towards it by circumstances in their lives.
3) It feels better to punish the offender than to educate him.

I think the reaction of Cameron and Clegg shows that they have not realized any of these three points made by their compatriot 500 years ago. They call for harder punishment and do not accept that there is a deeper reason for these riots and most notably: they do not look to measures that could improve the situation. They take the stance of the bad school master who would rather whip than teach. So, maybe Cameron and Clegg should pause for a moment and look to the good school master instead and turn their attention to educating the people. Only thus can we strip the tune by Kaiser Chiefs of its prophetic qualities and merely succumb to the energetic and melodic qualities.

The New Face of Marketing

The traditional role of marketing was to push information about products to customers in order to maximise the probability that the salesforce would sell this product at customer touch points. But that role is changing. A recent McKinsey report reveals that this picture is one of the past, especially for companies that focus on customer intimacy.

Pushing marketing material down the throat of your customers is not how you build loyalty with your customers. Not even if it is very well targeted and on email or through an app (although it may help under certain conditions).
It is not either through superficial utilization of web 2.0 utilities, such as a fan page on facebook, a twitter account or a channel on you tube, where you can demonstrate your company’s awesome products and how they address your customers needs (although it may help under certain conditions).
Marketing is not either an onslaught of cross channel sniper attacks, where you will incessantly be bombarded with just the right offer for you (although it may help under certain conditions).

Now, how “may these things help” “May” is an auxiliary verb used to express a possibility. What are the conditions that transforms the possibility into a reality? The basic condition is that marketing should depart from a customer problem. But how do we find them?

The McKinsey report states that you must understand the customer “buy cycle”. I believe this is a key observation. We need to focus on the steps a customer goes through when he or she makes the decision to buy to understand the problems they are facing. Let us look at what such an understanding of the buy-cycle may reveal about their problems.

In food retail we know that most customers have not made up their mind about what to buy for the most part when they enter a store. So, let us understand what sort of problems they may have when they enter. Peter enters the store with his children after work and needs to find some cheap food to cook quickly (less than thirty minutes). Ethel is arranging a dinner party and need inspiration for the menu and find the right wines to match it. Those are surely not the same problems and cannot be addressed through the same marketing mechanisms.

How would future marketing proceed from such a list of problems? You could develop the capability to advice the customer on dinner options based on relevant criteria (cooking time, meal type, dinner for guests/everyday dinner and price). You may even make that into an app on facebook or on your web page, but then you still wouldn’t solve the customers problem. They are in the store now. You need to make it accessible at the moment the problem arises for example through an app for iphone. You can even put up QR codes in the store so people can download the app in the store the moment they are facing the problem. You could also make in-store information points with touch screens made of tablet computers running you webpage.

When a suggestion for dinner menu pops up Peter would appreciate a good offer on some of the ingredients and Ethel on the wine. Suddenly shopping has been a good experience for Peter and Ethel and marketing has helped solve one of their problems. When the customer pulls marketing information in order to help him/her solve a problem it is much more efficient and less invasive.

The call for action is therefore to go a new way in understanding the customer buy-cycle and pick out key problems that are un addressed presently. This understanding of the buy-cycle is anthropological in nature and may be more complicated than just conducting interviews and focus groups, which is the traditional methods of marketing research. The anthropological method of participant observation is probably more suited for this. If an anthropologist lived with a a group of subjects, such understanding of their problems would be more forthcoming and thus the new face of marketing can become a helpful face instead of an intrusive one.

Robbed by Your “Friends” on Facebook – The Danger of the Social Blind Spot

My daughter who is twelve years old is, like most teens and pre-teens, addicted to facebook and social services on the internet. Just as she communicates any- and everything to her friends, she also posted on her status bar that she was going on vacation to Bulgaria next week. Luckily my wife and I are friends with our daughter (at least) on facebook, so we spotted this and told her that it was not a good idea to communicate to the world that our house would be empty and open for burglary next week. Her reply was as logical as it was naive, she said ”but it is just my friends who see it”. By friends she meant the 10 to 20 REAL friends she frequently communicates with on her profile, not the remaining 200 ”friends”, who are a motley collection of acquaintances, fan sites and whoever is behind the countless applications she has installed. The reaction however is a symptom of what I call the ”Social Blind Spot”.

When you drive a car and you want to make shift lanes it is not enough just to look at what is right in front of you. You orient yourself and look behind to see whether another car is there. But there is a blind spot in which you cannot see other cars although they do see you. Similarly when you communicate to an audience on facebook you look at who is in front of you. But on the internet everything is virtual and nobody is really in front of you. So your minds eye conjures up an image of you in a conversation with your 10 or 20 REAL friends. You communnicate as if they were in front of you, but the social blind spot doesn’t let you see the remaining 200 other people who are also ”in the room”.

That may or may not be a problem depending on what you are communicating. But it may be a risk you are not aware of. Just as driving without checking the blind spot most of the time goes well, because no one was there, it is mostly harmless to communicate on facebook. But sometimes it does go wrong. One example of this are burglaries committed on the basis of status updates from facebook another is this Israeli woman who put a photo of her posing in front of palestinian prisoners with the text “The army, the best time of my life.” her 10 or 20 REAL friends would understand; not so the rest of the world…

When you take driving lessons you are trained to be aware of the blind spot and learn how to avoid infelicitous encounters with other motorists. But noone necessarily teaches you about the social blind spot. Thus you are not trained to avoid infelicitous encounters with burglars, the media future employers or what have you.

We need to create awareness about this potential risk and learn techniques to accomodate them. It may be that social services like facebook should find ways to show you who you are actually communicating to and take steps to help people acknowledge the social blind spot.

The Future of Cloud Computing – Cloudy with a Chance of Spaghetti

Working in the IT industry, every now and then I go to seminars. Recently I went to one hosted by a large international technology company. The invitation had indicated that we would hear about Application Lifecycle Management, which has my interest. Come the day of the seminar and lo and behold: an extra track has been added concentrating on cloud computing  (if you are unfamiliar with the term it refers to running your programs on the internet (like google docs) as opposed to running it from your local computer (like Microsoft Word)). It seems that the kind host had suddenly remembered that there was this other thing, totally unrelated to application lifecycle management, that they also happened to be selling. This experience has not been unique the last couple of years. Actually I cannot remember any seminar or conference this year that has not had some inclusion of cloud computing. It seems to be a general pattern that cloud computing is hailed as the answer to every- and anything (mostly by suppliers of cloud computing).

To understand this let us look at how cloud computing works. If we look at the most prominent verison of cloud computing: Software as a Service or SaaS, chances are that most people are using it in one version or another already. Examples for private persons are Google docs, hotmail, dropbox and flickr. Enterprise wise prominent examples are salesforce.com, surveymonkey and responsys. SaaS solutions are popular and current fashion dictates that every system must have a SaaS deployment option. It is easy and convenient, you don’t need to maintain the systems or the servers, you have little investment and just pay as you go.
It is no problem making use of a few SaaS solutions for well defined and isolated areas. The problem will arise when the few turns into many, and the isolated areas become “dis-isolated” and  need integration with other areas. Suddenly it is necessary to move data from here to there. More and more point to point integrations will be necessary, but they will be more difficult because every integration point has its own rules. Cloud computing is so new that no agreed upon standards are in place. It is not a big problem to integrate from one point to another, but the problem is that if nothing is done the integrations needed increase linearly: the first system (B) is one integration: from present system (A) to B. The next system (C) also needs t be integratedso we build two new integrations A to C and B to C. no sweat! Then comes the third new system (D) and suddenly we have four integrations: A to D, B to D, C to D
So, quite literally the forecast is spaghetti if no structured approach to cloud adoption is in place. Add to this the volatility of SaaS providers where one supplier may be out of the market in a couple of years. If this happens you need to untangle all your spaghettis and put them somewhere else.
I therefore predict that in 2-5 years time we will see cases of cloud extraction, where companies have to redesign large parts of their cloud architecture, because it has become so entangled that further development is not possible. We are still among the first adoptions where you can afford to build ad hoc integrations.
What to do about this. Well, industry wise I would recommend development of industry wide standards, and portability. Neither is something the industry has a natural proclivity towards.  As for the customers I recommend the development of architectural guidelines addressing integration and portability demands and the guts to say no to a splendid system if it does not live up to these demands, but excells in all the other areas.

Epilogue – the cloud ucovered

This cloud buzz made me want to explore the magnitude of the hype. So, I went to google trends. Here I had to find some sort of reference in order to understand the magnitude of the buzz. I thought that David Beckham would be a good comparison. I also chose spaghetti since I realized that an even more universal comparison would be appropriate, and because it is related to the other point I made. The analysis showed that In january 2011 Cloud Computing was more frequently typed in searches than David Beckham, but still less than one third as frequent as spaghetti. According to my calculations, assuming present rates, Cloud computing will not “out-hype” spaghetti until 2233. That made calm down a bit. My long term forecast, however, is still that the clouds will already meet spaghetti already in 2015.

Giving Away your Money for no Good Reason

In Sweden a new trend has emerged. It is called Champagne wash. You pay to have an expensive bottle of champagne poured into the sink. This has spread to the internet, where there are services that will let you burn between 20 and 3000 Swedish Crowns (3 and 470 dollars). You would think that there was some sort of charity involved, but no! as the terms on one website has it: 

Du samtycker till att vaskade pengar inte, under några omständigheter kommer att användas till välgörenhet,
solidariska aktiviteter för socialbidragstagare och arbetarklass, eller något, som på något sätt lämnar eller kan uppfattas lämna ett socialt och / eller ekonomiskt positivt avtryck för medelklass och underklass.

In English translation: “You agree that the washed money will not under any circumstances be used for charity, solidarical activities for people who collect social benefits and the working class, or anything that will in any way positively affect or be seen as affecting the middle or lower class economically”

Critical comments have not lacked. Accusations that it is a meaningless waste of money and idiocy have been the unanimous reaction by commentators. I will not argue that it is not, but just that it is not meaningless and that it may be slightly hypocritical.

This phenomenon is well known in anthropology under the name of Potlatch. A potlatch is a kind of feast traditionally held by North West Coast Indians of Canada and the US. Sometimes as part of these feasts rival chiefs would burn expensive property on a bonfire. This practice also appeared meaningless to contemporaries and was banned for periods by the colonial powers.

In his classic study “Essai sur le Don” or “The Gift” in English, this is what starts Marcel Mauss off investigating the nature of gift giving. According to Mauss the nature of the Potlatch is a competition, where the destruction of expensive property signals superior status compared to the rival chief.

Consequently, if the purpose of the potlatch is not meaningless, but rather to signal superior status in the face of a competing chiefs, Champagne wash is not either. It may just be a way to signal superior status, maybe not between competing chiefs, but definitely between people of high status.

So, is burning off money just something for people of high status? Maybe not. Consider buying a Louis Vuitton bag. It’s utility is to carry stuff. If you buy a Louis Vuitton bag like this one you will spend 2000 dollars. Buy a Hello Kitty bag like this one and it will cost you 40 dollars.
I know you will say that the “Louis” one is of far superior quality and lasts longer. Let’s say it lasts 5 times as long as the Hello Kitty bag. Then the total price of the same utility of the Hello Kitty bag is 200 dollars. That is still 1800 dollars less than the Louis Vuitton one. Consequently, If you buy this one, you will burn 1800 dollars, that is, about four times as much as the champagne wash. These 1800 dollars similiarly carry the guaranty that they will not “(..) under any circumstances be used for charity, solidarical activities for people who collect social benefits and the working class, or anything that will in any way positively affect or be seen as affecting the middle or lower class economically”

So, if you subscribe to the view that a champagne wash is meaningless, then buying a Louis Vuitton bag is 4 times as meaningless.

Free or Just not Paid in Cash? – The Deep Powers of the Hidden Capitals of Human Economy

To many, especially younger people, the internet is the Land of Free where idealist open source developpers, nihilistic software pirates and shrewd wikinomic capitalists work apparently for free to bring the best to humanity. Marvel has been bestowed on the novelty of the free products available on the internet. But is this really something something completely new that the internet generation has given to humanity?

I’m not so sure. Let me quote Ecclesiastes on that:

What has been will be again,
what has been done will be done again;
there is nothing new under the sun.
(Ecc. 1.9)

(a quote which is a few thousand years old – can you smell the irony?). Anyways, I do believe “There is nothing new under the sun”.
Why I think, so can be explained in a few steps.

First let us look at the concept of free: Chris Anderson in his enlightening book “Free” has distinguished four types of free:
1) Direct Cross-Subsidies, where you get one product for free when you buy another.
2) The Three Party Market, is where a third party participates. The prime example is radio and TV where the content is free, because a third party (advertisers) pays to be exposed to the recipient
3) Freemium, is a model you encounter often on the internet or on your phone in the form of apps. For example when you use a free service, where there exists a premium version. The minority pays for the majority.
4) Non-monetary markets, where a producer offers something for free and gets nothing in return. This model is known from open source software and probably the most famous exponent is wikipedia.

Only the last model is really mysterious. A lot of people are actually working for free, and they even like it! This may sound revolutionary and something that has been caused by the advent of the incredible internet. To be sure working for free has never taken the prime focus in neither capitalist, nor communist economies. Even on this point they could agree: labor is not supposed to be free.

However, I will argue that working for free is actually much, much more fundamental and in many ways it is the basis of human society.

Let us first try to understand more clearly what working for free entails. Working for free means that the work supplied does not facilitate a monetary reimbursement. But there are other forms of capital. In sociology and anthropology it is common to distinguish two other forms of capital: symbolic and social.

Symbolic capital can roughly be equalled to prestige or honor. While money is also symbolic, it is not what is meant by symbolic capital. Money is a form of token with a fixed price that can shift owner in a transaction. Symbolic capital cannot. It is a property of the owner and will always remain so. A familiar example is an Oscar. Being an Oscar Winner will stick to you forever, even if you sell your statue. However, symbolic capital can at a later stage be exchanged into monetary capital. This is the case for Oscar winners, who can more easily raise money for their films, and therefore also their personal wages.

The same thing goes for open source software development. While many are very idealists, they also earn symbolic capital in the form of being mentioned as contributor and getting it on their CV. This in turn increases your chances of landing a job.

Social capital refers to the connections between agents in the social network (not the movie). The more and the better relations you have the wealthier you are. This is important in forming and being part of coalitions. Acquiring social capital is important in many aspects of life. You may know it as networking. Like symbolic capital, social capital can at a later stage be exchanged into monetary capital (getting a job or business opportunities through good relations in your network).

The same thing goes for open source software conferences and meet up groups. This is where you meet people, network and hence acquire social capital. But you can only do so if you contribute work for free.

The human species has evolved to cover the entire face of the earth primarily due to our capacities for corporation and sociality. Prestige and symbolic capital has always been how you moved to the top of the hierachy and coalitions have always been how you could get things done in a way fortuitous to your needs. Symbolic and social capital are therefore the fundamental components of power and access to material wealth for humans. Symbolic capital is what gets you noticed by the opposite sex and gives you access to resources. Social capital allows you to build coalitions and scheme to overthrow the current leadership, and hey, if you happen to have some symbolic capital you may find yourself at the top. All this by working for free!

I can feel that some may still doubt me, so here is a small doubt section: imagine you are a software developer. You work for free on a project, where you don’t learn anything you couldn’t have learnt otherwise. You were never able to tell anyone that you did it, and the work was anonymous. You were not either permitted to know contact details or meet with other developers. Would you still do it?

We just took the symbolic and social capital out of the equation and then it didn’t look so good anymore, right?

Notwithstanding the impressive free contributions and technical prowess, Wikipedia and Mozilla are “just” the result of dispositions and tactics encoded through millenia in our genes. We all work for free, but we get paid in symbolic and social capital. So, when you download firefox, the millions of hours of free work put into it, were not actually free. They were just not paid in cash.

Borgerpoint

Jeg stødte for nyligt på en spændende konkurrence arrangeret af KMD og ITU. Den hed KMD Innovation Award. Opgaven var at finde en måde hvorpå IT kunne være med til at redde den danske økonomi og veldfærdsstat. Det er jo et vigtigt emne, som jeg også bekymrer mig om, så derfor valgte jeg at skrive mit forslag og deltage i konkurrencen.

Det går helt overordnet ud på at lave et point system for alle borgere. Første område at applicere det på er operationer, hvor store beløb spildes på udeblivelser. Når borgere kommer til de aftalte operationer får de point. Disse point kan derefter bruges til at støtte forskningsprojekter eller velgørende arbejde. Min ide lover, selv ud fra pessimistiske estimater, en indtjening til statskassen å over en halv milliard på tre år!

Håber at der også findes modige politikere, som faktisk tør at springe på ideen.

Et udklip af beskrivelsen følger herunder, og den fulde beskrivelse kan læses her:

Min datter på fem år fik for nylig halsbetændelse. Det betød, at hun skulle have en mikstur, som hun ikke kan fordrage: Vi har før prøvet det med skrig og skrål tre gange om dagen, når medicinen skulle indtages. Jeg fik denne gang den ide, at vi lavede det til en leg. Hun bestemte, hvor mange mindre portioner det skulle tages i. Når hun tog en portion, fik hun en skefuld yoghurt og sagde tallet. Så tog hun den næste portion, fik en skefuld yoghurt og fortsatte sådan, indtil vi var færdige. Til sidst glædede hun sig så meget til at tage medicinen, at hun spurgte, om hun måtte tage den. Det endte med, at hun selv huskede på, hvornår hun skulle tage medicinen, og klarede hele proceduren selv.

Det, vi gjorde, var at transformere en uoverskuelig og ubehagelig ting, som en sprøjte med penicillin mikstur er, til et spil, hvor man skridt for skridt kommer tættere på målet. Efter hver opgave kom en lille belønning.

Min datter er ikke ene om at føle, at behandling kan være uoverskuelig og ubehagelig, men voksne mennesker kan vælge det fra ved f.eks. ikke at møde op til undersøgelser og behandling. F.eks. kunne halvdelen af alle aflyste operationer i 2009 henføres til patientens udeblivelse. Dette er totalt set 16.175 operationer1.

At patienter ikke møder op til undersøgelse og behandling, er et problem af to årsager: For det første er behandling af sygdom vigtig. Ikke alene for den individuelle patients sundhed, men også for det generelle sundhedsniveau og dermed arbejdsudbuddet i Danmark. For det andet er det forbundet med et stort ressourcespild på sygehusene, at patienter ikke møder op til operationer – andre patienter kunne være blevet opereret i stedet og dermed nedbringe ventelisterne.

Der er derfor en stor potentiel gevinst at hente ved at nedbringe antallet af udeblivelser fra operationer. En måde at styre incitamenter på er at straffe, når man gør noget forkert. Man kunne således sende regninger til udeblevne borgere. Erfaringen er dog, at enhver form for brugerbetaling inden for sundhedsvæsnet er behæftet med stor politisk modstand i befolkningen. Derfor vil vi præsentere en løsning, der i stedet for en negativ straf opererer med en positiv tilgang, der skaber et overskud på et par hundrede millioner og samtidig kan skabe større politisk engagement i velgørenhed og forskning. Princippet kan endda videreføres i mange andre områder inden for det offentlige.

For at løse problemet med udeblivelser fra operationer vil vi foreslå at give borgerne et positivt incitament til at overholde aftaler. Eksemplet med min datter viser, at den simple øvelse at lave noget ubehageligt om til et spil kan have dramatiske konsekvenser for incitamentet til at udføre den ønskede adfærd2.

Måden at gøre det på er at iscenesætte aftalerne som et spil for borgeren. En simpel måde at introducere spiltankegangen i sundhedssystemet er at indføre borgerpoint. Når man vinder spillet, ved at møde op til tiden, bliver man belønnet med point.

Disse point kan derefter bruges i ”Borgershoppen”. I Borgershoppen er der udbudt en række konkrete velgørenheds- og forskningsprojekter. Man kan bruge sine point til at støtte velgørende foretagender eller forskningsprojekter, som ligger ens hjerte nært. Dette sker ved at købe støttebeviser for 100 point per stk.

Pengene til støtte skal tages fra den pulje af forskningsmidler, som Folketinget har afsat i finansloven til f.eks. ulandsbistand og forskning. Der kan være tale om, at politikere eller eksperter har fundet en række projekter værdige til støtte, men den faktiske støtte afhænger af, om borgerne ser værdi nok i det til at støtte det med deres point. Pointene kommer derfor effektivt til at fungere som stemmer i stedet. Det medfører, at borgerne vil få direkte indflydelse på prioriteringer, som i dag kun foretages af politikere og eksperter.

Dette introducerer samtidig et element af direkte demokrati i ulands- og forskningsstøtten, som vil være med til at skabe opmærksomhed om disse områder ved at folk reflektere over det. Der skal også være integration til sociale medier som Facebook og Twitter, således at man kan ”poste” til sin profil, at man har støttet et bestemt projekt.

Fordelene er, at patienten vil få en mere positiv oplevelse af behandlingsforløbet og kan få værdi ud af det ud over selv behandlingen. Der vil dog også være omkostninger i form af udvikling af IT -understøttelse og administration af borgerpointordningen. Den samlede økonomi er dog klart positiv (se nedenfor under økonomi).

Pointincitamenters effekt er slået fast med syvtommersøm inden for detailhandlen igennem de sidste tre årtier4. Detailvarebranchen har over en bred front fundet ud af, at det virker. Her flyder det over med pointordninger til en grad, så man f.eks. i USA næsten ikke kan gå ind i en butik uden at få smidt point i nakken. I Danmark kender vi det bedst fra Coops loyalitetsprogram, CoopPlus, og SAS’s Eurobonusprogram.

Det bagvedliggende psykologiske fænomen kendes under navnet ”medium-maximization”. Psykologisk forskning har vist, at det forstærker et incitament kraftigt, hvis man introducerer ”proxybelønninger” som f.eks. point.

Der er derfor god grund til at tro, at point også ville kunne virke i denne nye sammenhæng i sundhedssystemet.