Rethink-Reshape– Board of Directors Model for Global-Social-Mobile Digital Age: New World, New Reality, New Economics…

There is one thing all Board of Directors have in common… they do not function. ~Peter Drucker…

Ninety-five percent of Board of Directors are not fully doing what they are legally, morally and ethically supposed to do. ~Harold Geneen

Board of Directors must begin to rethink the meaning of corporate governance in today’s digital world. In addition to existing roles, boards now have responsibility for shepherding their leaders and organizations in the fast emerging global-social-mobile age… And, Board of Directors that avoid this obligation will risk having the organization fall prey to today’s fast moving social networks that are actively seeking corporate reform, accountability…

According to ‘Kleiner Perkins 2012 Internet Trends Report’; reality of digital age is creating unprecedented risks-rewards for corporation directors, leaders, shareholders... According to research by MIT and Cap Gemini; enterprises that fully deploy social and mobile technologies to engage their crowds (i.e., customers, prospects, alumni…) in the cloud; produce– 9% more revenues, 26% more profits, and 12% higher market valuation than their peers.

According to research; less than 30% of CEOs use social media, despite the fact that more than one billion people, customers, employees… doThe ‘Conference Board for Corporate Governance at Stanford University’ report ; 93% Board of Directors don’t use social-data intelligence to make informed decisions about their networks’ sentiments or engagement.

Also, research at University of California at Berkeley and MIT reveals that social media is a leading indicator of stock price movement. As such, Board of Directors of publicly traded companies need to be engaged with their stakeholders and know how they will act based on insights derived from social and cloud networks.

Bottom line: Board of Directors must begin to rethink-reshape their role in today’s digital world; more important, they must join the global-social-mobile ranks

In the article Rules for Corporate Governance in Social Age by Barry Libert writes: Corporate Board of Directors must rethink the role of corporate governance in today’s connected age, for example:

  • Rethink Strategy: Board of Directors must align their strategy with where value is found in today digital age. Corporate strategists are rethinking how to use technologies and people with common interests and passions to improve their performance…
  • Rethink People: As corporate directors, board members must fully understand that an organization’s next big idea may come from anywhere and anyone. As such, corporate directors must ask their management teams; how they are leveraging their collective wisdom…
  • Rethink Processes: Board of Directors must ask management how they are shifting their focus from inside-out to outside-in to drive growth and innovation. Social networks are most often outside the company and to tap this wisdom an organization  must shift its focus from inside-to-outside…
  • Rethink Technology: Technology is a strategic asset that must be leveraged for success. Boards must play a prodding, if not active role in ensuring that management rethink-reshape its technology strategy, such that it adds value-minimize risks by actively integrating today’s social-mobile-cloud and big-data technologies into everything it does.
  • Rethink Leadership: The concept of traditional, top-down management is quickly losing steam in world in which everyone has a voice, including; customers, employees, partners, investors… In context of increasing demand for accountability, transparency and openness involving all stakeholders– corporate directors must rethink the board composition and competencies.
  • Rethink Finance: Board of Directors and leaders can hold some historical and framing biases that make it a challenge for them to see and invest in today’s– intangible and unmeasured sources of value– social network, data intelligence… Leaders  must  rethink capital reallocation strategies, especially given research by McKinsey that indicates; most companies continue to invest in same things as they did last year…
  • Rethink Governance: The future for Board of Directors is less about traditional governance and regulatory compliance, and more about network alignment, capital reallocation to new sources of value and technology and business model strategies. However, looking backward through the lens of financial reporting will only go so far. Whereas, leveraging real-time data from social technologies and mobile networks offers a more complete view about the future desires and needs of their stakeholders.

Spencer Stuart U.S. Board Index 2012: This annual study examines the state of corporate governance among S&P 500 companies. The 27th edition reveals critical trends in director recruitment, board processes, compensation… Among the notable takeaways from this year’s proxy analyses are:

  • Board of Directors turnover continues to decline: S&P 500 boards elected just 291 new directors in the 2012 proxy year– the smallest intake in 10 years and a 27% drop over the past 10 years.
  • Restrictions on other corporate directorships more common: Given the time commitment required for effective board service, 74% of S&P 500 companies now limit other corporate directorships for their board members versus 55% five years ago.
  • First-timers and other corporate executives prove to be attractive pool: Board of Directors is recruiting more retired top executives and other corporate executives. Division/ subsidiary presidents and other line and functional leaders now make-up 22% of all new directors, versus 7% a decade ago. 30% of new independent directors are newcomers to outside public-company board service.
  • Mandatory retirement age rising: Nearly three-quarters of all S&P 500 Board of Directors –up from 55% in 2002 — set a mandatory retirement age for directors. Of that group, 22% set the age limit at 75 or older, versus just 2% in 2002.
  • Independent Board of Directors leadership becoming norm: Only 3% of S&P 500 boards have neither an independent chairman nor a lead or presiding director. And, while only 18  companies report a formal policy to split the chair/CEO role; 43% of boards– up from 25% in 2002 – now split the chairman and CEO roles.

In the article Measuring Effectiveness of Corporate Governance by Dr. Yilmaz Argüden writes: The essence of good corporate governance is ensuring trustworthy relations between the corporation and its stakeholders. Therefore, good governance involves a lot more than compliance. Good corporate governance is culture and climate including: Consistency, Responsibility, Accountability, Fairness, Transparency, and Effectiveness that is Deployed throughout the organization (i.e., ‘CRAFTED principles of governance’).

Board of Directors has the basic responsibility to ensure sustainable improvements in corporate valuations by providing strategic guidance and oversight regarding management decisions, as well as, selecting-changing management whenever necessary. Success can only be achieved on a sustainable basis, if Board of Directors behaves as role model for implementing the ‘CRAFTED principles of governance’ as well as, ensuring that the corporation follows the principles in making key decisions.

The Board of Directors is the most important element in corporate structures: The tone at the top determines the tune in the middle… The quality of governance must be continuously improved, but what is not measured, cannot be improved. Most attempts to measure the quality of corporate governance focus on compliance-related issues. Numerous rating models also seem to focus on the inputs of governance, such as, the composition of boards and the separation of the CEO and chairman roles.

However, they do not pay sufficient attention to the quality of information, decision-making processes, nor link the effectiveness of governance to output measures, such as; brand image, employees, customer satisfaction, profitability, value creation… The backbone of an effective evaluation model must focus on four main areas; three are Inputs and Output, namely;  Inputs: • The right people • The right team • The right processes… Output: • Improvement in business results.

In the article Cultural Dependence of Corporate Governance by Bob Tricker writes: The concept of the ‘corporation’ is a creation of the Western world and rooted in the notion that shareholder democracy, stewardship of directors, trust, and the belief that Board of Directors recognize their fiduciary duty to company. But today’s corporate structures have outgrown this simple notion. The corporate concept is now rooted in law and legitimacy of the corporate entity rests on regulation and litigation.

The Western world has created the most expensive and litigious corporate regulatory regime the world has yet seen. However, this is not the only approach; and certainly not necessarily the best. The Asian reliance on relationships and trust in governing the enterprise may be closer to original concept.

Hence, there is need to rethink-reshape the underlying idea of the corporation; contingent with the reality of power that can (or could) be wielded. Such a concept must be pluralistic, rather than ethnocentric; if it’s to be applicable to corporate groups and strategic alliance networks that are now emerging as the basis of the business world of the future.

The traditional Board of Directors governance model has been challenged for some time. While the model continues to evolve, it is not changing nearly fast enough to keep up with world around it. According to John Griswold; in the new world, the task before Board of Directors is; first, to acknowledge and identify the new priorities; second, to think in nontraditional ways in order to adapt their organization’s processes, policies, people.

As business reinvent themselves, so must Board of Directors. Effective boards ensure that they have– the right process, the right people at the right time. Great boards consist of independent directors who are ‘rowing together in the boat’. They see the development of strategy as a collective and collaborative effort between themselves and management, rather than the question of; ‘us vs. them’. The board must review its risk appetite on regular basis.

A great board will make succession planning a regular agenda item, and it will start the process as early as possible– even if it makes incumbents uncomfortable… it will also consider succession for chairman and rest of the board. Board of Directors of listed companies has an obligation to build and protect long-term– all stakeholders value and to ensure short-term decisions don’t jeopardize sustainability of the enterprise. Changing models is like changing lifestyles; well-established ideas and patterns of behavior are abandoned and replaced with new ideas, roles, activities…

According to John Carver; boards must govern with emphasis on; (a) outward vision rather than internal preoccupation, (b)encouragement of diversity in viewpoints, (c) strategic leadership more than administrative detail, (d) clear distinction of board and chief executive roles, (e) collective rather than individual decisions, (f) future rather than past or present, and (g) proactively rather than reactivity.

Rules of the Internet– Golden Rule of Netiquette: What Governs Internet Behavior, Code of Conduct… What are the Rules?

The Internet has matured into a world of its own and like the real world; it must begin to obey certain immutable rules. ~Tom Chivers

The Internet is often compared to the Wild West: Lawless, rule-less and wide-open for anything. However, as technology evolved from handful of hackers on Usenet bulletin boards to the billions of users on officially sponsored sites; customs, culture… rules of the Internet have evolved with it. But, who knows what new rules may be written? Hence, some people say there should be a formal code of contact, rules of behavior..:

An Internet etiquette or Netiquette with Netiquette Rules that are basic guidelines for normative Internet behavior. Netiquette being the social code of network communication that utilizes common conventions and norms as a guide for rules and standards; such as, ‘Golden Rule of Netiquette’: Do unto others online as you would have done to you… However, most people are smart enough to realize that, when you go on Internet, it’s like entering a foreign country…

In Internet culture, the 1%-rule or the 90–9–1 principle (sometimes also presented as 89:10:1 ratio) reflects a hypothesis that more people will lurk in a virtual community than will participate. The 1%-rule states that the number of people who create content on the Internet represents approximately 1% (or less) of the people actually viewing that content; e.g., for every person who posts on a forum, generally about 99 other people are viewing that forum but not posting.

According to Holly Goodier in conjunction with the BBC presented research in late 2012 suggesting that only 23% of the population (rather than 90%) could properly be classified as lurkers, while 17% of the population could be classified as intense contributors of content. Several years prior, communication scholars Eszter Hargittai and Gina Walejko reported on sample of students studied, from Chicago, where 60% of the sample created content in some form…

According to M. Roblyer and A. Doering; Netiquette covers not only rules of behavior during discussions, but also guidelines that reflect the unique electronic nature of the medium… Netiquette usually is enforced by fellow users who are quick to point out indiscretions and bad behavior… However, some people think that the time has come for an informed public debate about the boundaries of free speech in an age of social media…

In the article Modern Rules of the Internet (‘Revised Russo Translation’ with study notes) by OP Juan writes: Rules of Internet refers to somewhat unwritten, often changing set of rules assumed to be true or necessary, but often just common sense. There are many proposed laws, rules, codes of conduct… floating around Internet for regulating people’s online behavior… a few of these basic rules, laws, truths… which are commonly referenced are the following:

  • Rule 1: When you see text appearing on your screen, remember that there’s a human on the other side.
  • Rule 2: Internet interprets censorship as damage and routes around it; information wants to be free. (Gilmore’s Law)
  • Rule 3: For every opinion there is at least one equally loud and opposing opinion.
  • Rule 4: As an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one. (Godwin’s Law)
  • Rule 5: Never attribute to malice or conspiracy that which can be adequately explained by stupidity: People say hurtful things on Internet. (Hanlon’s Razor)
  • Rule 6: One cannot argue with stupid. (Callahan’s Principle). Inevitably, when someone comments with an off-the-wall, untenable, or distasteful viewpoint, some well-meaning soul attempts to argue them out of it. Don’t.
  • Rule 7: Don’t feed the trolls. A ‘troll’ in Internet parlance is someone who is deliberately provoking argument, being insulting, or just trying to derail the conversation off-topic. Arguing with troll is purposeless, that’s what they want.
  • Rule 8: Intensity of an online argument is  inversely proportional to the value of the stakes at issue. (Sayre’s Law)
  • Rule 9: Passion in an online argument is inversely proportional to the amount of real information available. (Benford’s ‘Law of Controversy’)
  • Rule 10: Those who are most eager to share their opinions are more likely to be those whose opinions are of least value. (Campbell’s Theorem). Alternatively: stupid people shout the loudest.
  • Rule 11: With every post/comment in an online conversation, relation to the original topic decreases. The Internets have a hard time focusing, it seems…
  • Rule 12: Likelihood of a post or comment being read by others decreases with every page of posts/comments that comes before it.
  • Rule 13: Likelihood of a post or comment being read by others is inversely proportional to the amount of time you spent writing it. You could call this the ‘too long, didn’t read’ principle.
  • Rule 14: Likelihood of a post or comment being deleted is directly proportional to the amount of time you spent writing it.
  • Rule 15: Likelihood of an error in a post is directly proportional to embarrassment it will cause the poster. (Skitt’s Law)
  • Rule 16: Any post written to correct editing or proofreading will itself contain an editing or proofreading error. (Muphry’s Law)
  • Rule 17: Without deliberate indication of humor, at least one person will mistake any parody for the real thing. (Corollary of Poe’s Law)
  • Rule 18: Without a deliberate indication of humor, it’s impossible to tell some instances of parody from the real thing. (Corollary of Poe’s Law)
  • Rule 19: It’s impossible to criticize an individual, group, institution or product without simultaneously advertising for them. In many cases, people have become more popular due to their detractors.
  • Rule 20: Lurk before you leap. If you’re new to a forum, a board, a blog-ring or the like, keep quiet until you’ve gotten your bearings.
  • Rule 21: It’s preferable to post in an existing thread than to start a new thread on the exact same topic. Join that conversation rather than start a whole new one.
  • Rule 22: There is no topic so thoroughly covered that somebody won’t bring it up again… but it shouldn’t be so.
  • Rule 23: What happens on Internet stays on Internet–forever. If something gets put on Internet, it never goes away. Consider this a warning to anyone who plans on someday running for office.
  • Rule 24: On the Internet, one is only as anonymous as one allows oneself to be. Some people are afraid of ever posting, blogging, or talking on Internet, for fear of stalkers finding out all about them. The truth is, with few exceptions, people will only find out as much about you as you yourself reveal.
  • Rule 25: As anonymity increases, likelihood of incivility increases. (Russo’s Theorem)
  • Rule 26: Never take the identity of another for granted. That hot girl on Facebook might really be a forty-year-old man.
  • Rule 27: Neutrality is valuable. To have a website that carefully considers both sides of a controversial issue is a treasured thing. Neutrality is the closest to objectivity…
  • Rule 28: Neutrality is finite. There are issues about which it’s impossible to be neutral.
  • Rule 29: Viable, successful Internet meme will be passed on. The term ‘meme’ refers to; an idea, behavior, style, or usage that spreads from person-to-person within a culture.
  • Rule 30: Internet meme only remains viable so long as: [People who are encountering it for first time] are greater than [People who have encountered it before]. (Carr’s Law)
  • Rule 31: When one transmits a meme after it has been declared unviable, one opens oneself to ridicule.
  • Rule 32: If you can imagine it, someone has imagined it already. It’s hard to be original with six billion other people also trying to be original.
  • Rule 33: Good screen names are already taken. You’ll have to resign yourself to adding a string of numbers on the end.
  • Rule 34: If you can imagine it, there is porn of it. (Yokai’s Law)
  • Rule 35: If you can imagine it, and there is ‘no’ porn of it, porn will be created. (Munroe’s Corollary). A scary thought.
  • Rule 36: Internet devours both concentration and time. I really think that, in order to maintain concentration in the digital age, you have to… oh, hang on…
  • Rule 37: 80% of everything is crap. (4 to 1 rule): 80% of all email is spam, 80% of all website content is copy/pasted from somewhere else, 80% of all websites are ads…
  • Rule 38: On Internet, all expressions, common phrases, and common nouns will eventually be reduced to acronyms.
  • Rule 39: Don’t go to Internet for counsel, for it will say; ‘yes’, ‘no’, or ‘ask somewhere else’. When multiple people are answering one question, expect multiple and conflicting answers.
  • Rule 40: Nobody ever ignores what they should ignore on Internet. (Reimer’s Reason).

The Internet is an ambiguous and unique form of communication due to the way people convey information to one another… unlike the ‘real world’ where people interact person-to-person, face-to-face…

According to Peter S. Vogel; when you’re in the midst of social change, it’s impossible to determine where it’s going… I think we are in the greatest social change in the history of humans, because there are no boundaries of geography or time.

According to Bruce Umbaugh; we haven’t even sorted out what happens when the differences in local culture meet global technology… not all parts of the world are as tolerant or open-minded as Western democracies.

According to Jamie Cohen; there are a lot of places in the world that are actively using the technology of the Internet to control the free communication among citizens, and to identify critics of the government and hurt them… we need to be mindful in what we advocate from our perspective, and that the tools that are implemented on the Net are tools for the global Net.

In other words, citizens of other countries already face actual, enforceable rules — unlike the folkways established by Web users in the West. For example, witness frictions of Arab Spring or restrictions of societies, such as; North Korea It’s the kind of perspective that provides a different context for issues raised by a ‘libertarian’; anything goes on Internet. It’s hard enough to stop ‘Star Wars’ comment boards from devolving into flame baiting, meme-generating files of NSFW  Yodas… However, for now, we’re still making our way through ‘series of tubes’, and nobody knows where boundaries lie. We joke, we grimace, and we marvel at the creativity of the hive mind.

The Internet is a big place and countless cultures have set-up residence. Eventually, what is now considered humor may lose its zing; what are now accepted as custom may become law. Will the rules ever become: ‘The Rules’? However, some experts say that the Internet isn’t some Wild West that needs taming. It’s a new and different system, which  can be even more abused by those who seek to implement laws and controls that just don’t fit the system…

Disruptive Innovation… Displace-Replace-Create: Transforms What Exists–Invents What Doesn’t–Obsoletes Marginal Value…

Disruptive Innovation: Disruptivators that we admire– the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules…

You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.

Disruptive innovation creates new markets, displaces-replaces existing markets, drives new growth, creates new opportunities, forms new companies… Few industries today are safe from the threat of potentially wrenching competitive and technological change…

The term disruptive technologies was coined by Clayton M. Christensen and introduced in his article ‘Disruptive Technologies: Catching the Wave’, which he co-wrote with Joseph Bower and further describes the term in the book ‘The Innovator’s Dilemma’. The central theory of Christensen’s work is the dichotomy of sustaining and disruptive innovation. Sustaining innovation hardly results in the downfall of established companies because it improves the performance of existing products along the dimensions that mainstream customer value.

Disruptive innovation, on the other hand, will often have characteristics that traditional customer segments may not want, at least initially. Such innovations will appear as cheaper, simpler and even with inferior quality if compared to existing products, but some marginal or new segment will value it…

According to Geoff Vuleta; disruptive Innovation as a core incompetence is as much a pro-company idea as it is a blunt reality check for many. Companies are not geared for disruptive change in large part because they have never had to be. Disruptive innovation provides an example of when common business-world advice to ‘focus on customer’ (stay close to customer, listen to customer…) can sometimes be strategically counterproductive.

While disruptive innovation is seen and understood in retrospect, it’s debatable whether it’s transferable into a formal, repeatable process. In today’s turbulent environment, leading disruptive innovation is more about best principles than best practices, and requires a disruptive approach to management itself. Whether going after disruptive innovations that leapfrog competitors and customer expectations, or focusing on ‘blue oceans’ that represent white-space opportunities to create entirely new markets, the leadership issues are similar.

Leaders must embrace ambiguity, live with uncertainty for long periods of time, and confront the critiques of naysayer both inside and outside of their organizations. According to Jeff Bezos; any time you do something big, that’s disruptive, there will be critics

In the article Leading Disruptive Innovation by Soren Kaplan writes: In today’s complex, dynamic world, having a disruptive innovation capability is mandatory, both for growing a business and protecting existing markets. But leading disruptive innovation requires new mindsets and behaviors, for leaders themselves and for the organizations that develop them.

Disruptive innovation that transforms or creates new markets has become the Holy Grail for many companies. Leaders today, however, face a big challenge when it comes to disruptive innovation. Many executives rise through the ranks of management, where predictability-control are valued and rewarded. Unlike operations management, disruptive innovation– whether creating or responding– involves uncertainty. Unexpected events, inevitable failures, and a fundamental lack of control are inherent to the process.

But few leaders are formally prepared to deal with realities of leading or responding to disruption. Perhaps the most defining characteristic of disruptive innovation is the great uncertainty that it creates for leaders, organizations, and entire industries. While most organizations possess a general awareness of the importance and necessity of disruptive innovation and change in general, there is a gap when it comes to understanding the deeper leadership qualities necessary for driving them. For example, many leaders rely on research and data for decision-making to manage daily operations, but during times of disruption, waiting for hard data to make decisions can quickly result in failure.

Leaders must be comfortable using whatever information they have on hand, integrating inputs from diverse sources around them, and then using their intuition to round out the decision-making process. The challenge for any business is that the competencies necessary for leading disruptive innovation are not formulaic or quantifiable.

According to Gary Hamel; new problems demand new principles. Put bluntly, there’s simply no way to build tomorrow’s essential organizational capabilities– resilience, innovation and employee engagement– atop the scaffolding of 20th century management principles. In an age of wrenching change and hyper-competition, the most valuable human capabilities are precisely those that are least manageable.

Few business schools, let alone companies, prepare their leaders to live with being misunderstood or criticized, especially for extended periods of time. When it comes to leading for disruption, recognizing that ‘the soft stuff is the hard stuff’ can make the difference between success and failure. Five strategies that begin to address inherent uncertainty of disruptive innovation and cataclysmic change are:

  • Listen–Start with yourself, not the market: Contrary to conventional wisdom, disruptive leadership is not about analyzing customer needs, creating specifications to meet each need, and building great products and services to meet them.
  • Explore– Go outside to stretch the inside: Leading through disruption requires an agile mind that appreciates ambiguity. Disruptive innovators know uncertainty contains as much opportunity as it does risk.
  • Act– Take small simple steps, again, again..: Disruptive leadership involves putting a flexible stake in the ground around a specific opportunity, and then taking a series of actions to intentionally challenge assumptions and rapidly change direction as many times as necessary.
  • Persist– Take the surprise out of failure: Leading for disruptive innovation involves creating ‘optimistic persistence’ in order to combat fear, pessimism and the tendency to retrench back into the safety of the existing business model.
  • Seize– Make the journey part of the (surprise) destination: Leading disruptive innovation is a process fundamentally laden with surprise, the core essence of uncertainty.

In the article Disrupt Yourself by Whitney Johnson writes: If it feels scary and lonely, you’re probably on the right track. The term ‘disruptive innovation’ has become an industry buzzword. We all want to start a disruptive company or invest in disruptive ventures, but in reality an innovation that takes place at the low-end of the market or where there is no market (yet) is just not that sexy. It’s a similar story when you contemplate disrupting yourself mid-career. There is the possible loss of stature and influence and the very practical loss of financial stability… Since disruptive innovations are in search of a yet-to-be-defined market, we can’t know the opportunity at the outset.

According to Christensen; markets for disruptive innovations are unpredictable, and therefore your initial strategy for entering a market will be wrong… Likewise on the personal level, the checklist of conventional planning doesn’t work either; disruption requires discovery-driven planning and it’s an unnerving and unpredictable path…

According to Amar V. Bhide; in 90% of all successful new businesses, the strategy the founders initially pursued didn’t lead to business’ success... Likewise on the personal level, nearly everyone hits a point in their life where they examine their trajectory and consider a pivot. We typically label this mid-life crisis, but isn’t it more often a re-thinking as to which performance attributes matter? Perhaps earlier in your career the metric was money or fame, but now you want more autonomy, flexibility, authority, or to make a positive dent in the world…

Firms seeking growth via new markets are 6x more likely to succeed than firms seeking growth by entering established markets, and the revenue opportunity is 20x greater. It’s counterintuitive, isn’t it? When we start in a place where no one else wants to play, where the scope of the opportunity appears limited, the odds of success actually improve.

Likewise on the personal level, perhaps you too are ready to disrupt yourself. Maybe your hand is forced by downsizing or new technologies are automating you right out of relevance. However, if you are really looking to move the world forward, begin by innovating on the inside and disrupt yourself…

Disruptive innovation, by its nature, destroys entire industries or segments of industries by making them obsolete. If you simply measure the economic impact on the fact that some industries are no longer present, or that those products are no longer being sold, you could argue that there’s a negative impact on the economy. But the nature of innovation is that we make things obsolete by making other things better and more powerful and changing the way we do things.

The end result is, generally speaking (and, yes, there are exceptions), better for everyone, enabling them to do more with less and do so more productively. Progress has an amazing way of destroying old ways of doing business, and we shouldn’t fear or worry about that, we should celebrate it. More and more leaders and companies recognize that they must proactively disrupt or risk being disrupted.

But business-as-usual leadership, where big visions are followed by detailed roadmaps and action plans do more than stifle disruptive innovation: They represent liabilities to success. Leading disruptive innovation involves adopting principles that fall outside the traditional training of managers and leaders.

New leadership competencies are required to navigate disruption. This means uncovering one’s deeper motivations to drive meaningful opportunities for others; pushing personal boundaries to challenge one’s assumptions; taking steps into the unknown with the view that failure isn’t failure at all but rather a stepping stone to learning and progress; and tuning into surprises as a kind of portal for gaining new insights and uncovering opportunities.

To lead disruptive innovation successfully requires that we disrupt the most fundamental mindsets and behaviors that have led us to our current success. For example, six-sigma and Kaizen and all other pearls of corporate wisdom that were, traditionally, foundation for business success, but are now minor players in the rapidly moving and highly competitive digital age.

An estimated 65-75% of all new products that established companies introduce into their markets fail. Business history is littered with wounded and extinct companies that failed to pursue disruptive innovation. Since companies innovate faster than customers’ lives change, most organizations end-up producing products that are– too good, expensive, inconvenient for many customers.

By only pursuing ‘sustaining innovations’ that perpetuate what has, historically, helped them succeed, and companies unwittingly open the door to ‘disruptive innovations’– simpler, more-convenient, and lower-cost products… Although disruption is the key to new growth, companies must never ignore their core offerings and continue to pursue ‘sustaining innovation’ to maintain growth, as well…

Internet Identity– Alias, Pseudonymity, Anonymity, Avatar, Mask..: ID Golden Rule– Verify, Authenticate, Vigilance…

Internet identity: We knew 10 years ago that Internet lacked an accurate identity service. If you think about it, the Internet would be better if we had an accurate notion that you were a real person as opposed to dog, or fake person, or spammer or what have you. ~Eric Schmidt

Internet identity: Who are you in cyberspace? One of the interesting things about Internet is the opportunity it offers people to present themselves in a variety of different ways. You can alter your style of being just slightly or indulge in wild experiments with your identity by changing your age, history, personality, physical appearance, even your gender: The username you choose, details you do or don’t indicate about yourself, information shown on your personal web page, persona or avatar you assume in an online community… all are important aspects of how people manage their identity in cyberspace.

Identity is a very complex aspect of human nature, and especially an Internet identity which is a social identity that some people prefer to use instead of their real names. Also, it’s far more malleable than ‘real life’ identity and people are free to redefine themselves as they wish. In Peter Steiner’s famous New Yorker cartoon; a canine computer user says; on Internet, nobody knows you’re a dog…

However, according to Chris Poole; who you are online is who you are offline. That rosy view of identity is complemented with similarly simplified view of anonymity. People think of anonymity as dark-chaotic. However, human identity doesn’t work like that either, online or offline. We present ourselves different in different contexts, and that’s key to creativity and self-expression. It’s not ‘who you share with’, it’s ‘who you share as’…

According to David Wiszniewski and Richard Coyne in ‘Building Virtual Communities’; point out– whenever individuals interacts in a social sphere they portray a ‘mask’ of their identity and that’s no different onlineidentity imagesIn  the article Guide to Protecting Your Online Identity by Leah Betancourt writes: Being online is like being in public. Nearly anything that gets posted can come back to haunt you… Problems start when what’s online isn’t accurate, isn’t yours or worse, isn’t yours anymore. When your online identity, including; content (e.g., written, video, images…) or even your brand– gets hijacked, or when data posted online won’t go away or even when someone lies and steals your online identity, getting it back can be difficult.

According to William McGeveran; the law does a terrible job of recognizing the distinct problems of online identity… the law protects expressions of identity online exactly the same as offline– a pseudonym or avatar is protected only if it’s identifiably connected to you, but if it’s not directly tied to your real world identity it doesn’t enjoy much legal recognition. As people get savvier with social media tools, they may be less likely to play fast-loose with their online identities…

In the article Online Identity: Authenticity or Anonymity More Important? by Aleks Krotoski writes: Before Facebook and Google became the megaliths of the web, the most famous online adage was; ‘on the Internet, no one knows you’re a dog’. It seems the days when people are allowed to be dogs are coming to a close. According to Sheryl Sandberg; most people only want online interactions supported by ‘authentic’ identity– but some critics say; it will have irrevocable effects on the openness of the web.

The pursuit of authenticity is creeping into the heart of most social media models; and in the current Internet landscape it’s playing an important role in how we engage with one another and with web content. For many people, Facebook and Google products are the sum total of their web interaction and they value a platform that provides confidence that– a person is who they say they are rather someone pretending to be them, is critical to a social network’s success… within this model, authentic identity is non-anonymous…

Yet a social network’s success need not only rely upon the direct link between online and offline identity. In Japan, for example; three most popular social networks operate pseudonyms at discretion of the account holder. An online identity can be as permanent as offline one: pseudonymous users often identify themselves in different social networks using the same account name.

Psychologists argue that this is valuable for development of sense of– who one is, who one can be, and how one fits into different contexts. This kind of activity is allowed even in countries where social network account holders are required to register for service using national ID, such as; South Korea, China… There online public identities are fabrications even with explicit link to government where activities online are traceable…

According to Andrew Lewman; for some people being anonymous is important… it gives them control, it lets them be creative, it lets them figure out their identity and explore– what they want to do or research topics that aren’t necessarily ‘them’… topics that they may not want to be tied to their real name for perpetuity…

In the article Having Online Identity is Important for Businesses by Scott Schnell writes: The most important decision business can make when establishing an ‘online identity’ is choosing the right domain name. In digital age; identity–domain names are central to all online activity and businesses should consider carefully when making their choice. People often turn to Internet first for information about businesses and products– whether they are shopping online or simply looking for business address, phone number… 

Having an  online identity is one of the most important assets for business. No matter size or industry, Internet presence is vital for business to help ensure customers can access the information they seek. A recent consumer study by PwC found– that online research is essential for driving traffic to physical stores.

Forrester research predicts that sales influenced by the  Internet in 2014 will reach $1.409 trillion. These are sales driven by consumers looking for product information ‘online’ while shopping in store, research products/services via social media, comparison shopping… It doesn’t include direct sales from e-commerce, which McKinsey estimates at more than $8 trillion, global. With more than 25 million businesses around globe ‘online’, those without online identity and presence are at clear disadvantage.

In the article Your Online Identity Matters by Bant Breen writes: More than ever, people turn to Internet to find information about others. It’s quite likely that someone you know has Googled you. Do you know what they found? Does it matter?  Yes, it matters. If you’re looking for job, recruiters have probably seen at least one of your social profiles.

According to Jobvite; 86% of recruiters check applicant’s online profiles. According to ExecuNet; 77% scan search engines for applicants and if they didn’t like what they see, you missed out. A Reppler study showed that 69% have rejected applicants based on what they found online. Your personal life can be affected too:

According to eHarmony study; nearly half of men and women have looked up their dates online before going out with them. The same site reports that online dating has become the third most popular way for newlyweds to meet in the last five years. Also, it impacts college and university acceptance as well.

According to ‘2011 Kaplan Test Prep’ study; 41% of law school admissions officers said, they Googled an applicant to learn more about them and 37% have checked out applicants on Facebook or other social networking site. Thirty-five percent discovered something that negatively impacted an applicant’s chances of getting into the school. However, don’t be on defensive; take control of your information and make sure that those who search for you online– see the best, most accurate version of you…

In the article Cybercrime and Online Identity Verification by Deb Shinder  writes: Verification of online identity has become much more important because we now conduct so much business over the Internet. When going online was just about casual chatting, playing games, browsing… identity mattered much less. Now we engage in all sorts of transactions, buying merchandise, making travel arrangements, doing banking, paying our bills, and so forth. We have to do those things as our ‘real selves’.

All of this means is that we have to provide a means for those with whom we do business or interact officially online to verify that we really are who we claim to be. However, doing so puts our credentials ‘out there’ where they’re at risk of being intercepted by cyber criminals and used for their own illegal/fraudulent purposes. Yet another way that identity is involved in cyber crime relates to psychology of online interactions.

Some people compartmentalize different aspects of their personalities and, for some of them, this is manifested as an ‘online persona’ that’s very different from the one that they present to the ‘real world’. The direction in which we’re heading seems obvious; just as we’re required to provide proof of identification for more and more interactions in the ‘offline world’, it’s likely that we’ll see the same trend ‘online’.

But, is that good or bad thing? It’s double-edge sword– it might make it easier to track cyber criminals, but that will come at a cost– privacy. It will be up to society to decide when the cost is too high. Consumers need to be sensible rather than paranoid to stay safe and protect their Internet identity… So a golden rule to remember is Internet is public space; if you wouldn’t shout or display something about yourself on the city street then don’t put it on Internet.

Online identity is a messy problem with lots of opportunities. Identity theft is one of the country’s fastest growing crimes affecting; children, elderly, and everyone in between. Whether it’s home address, phone number or even full social security number, the odds are good that personal and private data are on the Internet, just waiting to be stolen by a no-name crook.

Despite depth of problem, there are many ways to protect from becoming victim of identity theft, for example: Limit what you share; Use strong passwords; Avoid  spam email and suspicious Internet apps; Monitor your data online and offline… Above all else, be aware of your online reputation and privacy.

According to the report ‘Future Identities’; hyper-connectivity is a major driver behind our changing sense of identity. With over seven billion devices connected to Internet and some 60% members of social networks, the web offers unlimited capabilities to document all aspect of your life. This data is increasingly being mined for your insights, primarily by companies targeting for advertising, but also by criminals targeting for your online identity… for sure, your online identity is a valuable commodity…

According to New York Times article; it bemoans the ‘mind-boggling array of personal codes squirreled away in computer files, scribbled on Post-it notes or simply lost in the ether’. According to Aaron Brauer-Rieke; the password is a relic: a dated method of authentication… It’s a key example of ‘inelegance’ with which we handle identity on the Internet today. For more than a decade, technologists and policy wonks continue to dream-up better ways to– verify, authenticate, protect… your Internet identity.

 

 

Flipping the Sales Funnel–Bottom Side-Up: Turn Customers to Advocates to Salespeople– Shift Funnel Priority-Prospective…

Flip the funnel– turn strangers into friends, turn friends into customers, turn customers into salespeople. ~Seth Godin

Funnel: It costs roughly five-to-ten times more to acquire a new customer than it does to retain an existing one, and yet companies continue to disproportionately spend their budgets on the ‘wrong’ end of the funnel, e.g., the mass media, awareness side…

According to Joseph Jaffe; we haven’t paid enough attention to the ‘right’ end of the funnel, the word-of-mouth component that essentially acts as a multiplier for future business. The economic impact of an active, engaged, and loyal customer is tremendous. When you consider customer acquisition for your business, think about this question for a moment: How much of your sales come from repeat business versus first-time customers?

Now contrast that against how much money you spend against each segment. If you are embarrassed by the gaping disconnect, don’t worry; you are not alone. But, what if you did something about it? What if you turned everything on its head and instead of ending with a customer purchase, you began with it? What if you focused the lion’s share of your effort, energy, and budget on keeping customers versus attracting them? What if you could correct this imbalance and, in doing so, not only get your customers to keep coming back for more, but they tell others to do so as well?

According to Joseph Jaffe; do 180 on everything you thought you knew about sales and transform your existing customers into your best salespeople…  Selling is a funnel: You put undifferentiated prospects in the top… some of them hop-out; unimpressed with what you have to offer… others learn, hear from peers, compare offerings, and eventually may come out the bottom; as customers. If you’re like most salespeople, you’ve been trying to shovel more and more attention in the top of the funnel…

Here’s a different idea: What if you flip the funnel and turn it into a megaphone? What if you could figure out how to use the Internet to empower the people– who like you, who respect you, who have a vested interest in your success…The re’s little doubt that technology has changed things, the way we are influenced and how we influence others. Social media isn’t old-time marketing– it’s different… Here’s what you need to know…

Successful businesses understand that customer engagement does not end with the sale, but rather it begins with the sale (i.e., bottom of traditional sales funnel)… Traditionally, we prioritize limited resources and time on trying to find and convert new prospects (i.e., top of the funnel), whereas keeping those hard-earned customers (i.e., bottom of the funnel) has often been an afterthought. That’s because, until recently, there was little we could do to keep existing customers that was drastically different from the tactics used to attract new ones.

Historically, the best you could do after turning a prospect into a customer was to provide a great customer experience and just hope they come back to buy more– and, bring their friends with them. However, technology, e.g., social media, email… has changed the game. Social media is about recognizing that existing customers are your best assets. Also, technology enables us to influence consumer behavior, both before and after the sale by reaching out to existing customers… as easy as clicking– share or tweet buttons…

In the article Flip the Funnel: Are Your Existing Customers Working for You? by Bienalto writes: Companies must see existing customers in new light, and turn the old model of customer acquisition on its head. For example, instead of focusing all energy – and budget – on acquiring new customers, spend more time nurturing existing ones… Too many organizations under-serve existing customers– using automation, offshore call centers, technical solutions… as quick-fixes that don’t ultimately satisfy customer needs.

These organizations become complacent once a customer has jumped on board, and leave them to fend for themselves. However, the buck doesn’t stop once the sale is completed; rather the work is only just beginning. There must always be room for both; acquisition and retention… It’ about having conversations with customers, getting involved in community hubs, boosting customer referrals… call it– commendations, contents, conversations…

According to Joseph Jaffe; flipping funnel expands the number of customer connections, conversations, potential conversions– through repeat purchases and referrals– due to new shape of the acquisitions process that widens instead of narrowing at the bottom of the funnel …Retention-New-Acq_08-23-11_b

In the article Magical Marketing Funnel by Peter Cervieri writes: Companies spend a lot of time and money to acquire new customers, as evidenced by the hundreds of billions of dollars spent each year on print, radio, TV, billboard advertising… Once a customer is acquired, however, the company pleads poverty, and not much time or money is spent on servicing a newly acquired or lifelong customer.

However, over the next decade, business will be held accountable and judged no longer by ‘what they say’, but in fact ‘what they do’; no longer by ‘promises they make’, but by ‘promises they keep’. And this scenario, marketing’s role is one of collaboration, partnership, unificationThere is a shift from campaigns to commitments and flipping the funnel, and transforming sales from an uninvited guest to a welcome and invaluable one.

According to Joseph Jaffe; we funnel all these people down to handful who might purchase our product/service, but we never ask: What the hell are we doing? That is, why do we spend all of our time with people who; a) don’t know about us, or b) don’t care about us knowing about them? Its nuts because it’s not only outmoded, it’s actually doing us harm. Instead of spending millions trying to funnel the universe down to a handful, we should focus on that handful and use our creativity to figure out how to make the most of them.

A successful business today isn’t built on idea of one transaction per customer. It’s built on idea of multiple transactions from multiple customers. This may sound insanely obvious, but how many companies operate that way?

In the article Flip Traditional Marketing Funnel by Stan Phelps writes: If you subscribe to the principle that, 80% of your results are generated by 20% of your efforts, then I respectfully posit the Phelps corollary: 80% of traditional marketing efforts will net you 20% of the results. According to Joseph Wanamaker; half the money spent on advertising is wasted… the problem is that we don’t know which half.  

However, I think 50% is an understatement… however, there is a huge flaw when you focus the majority of your sales efforts on the purchase funnel: That flaw is ‘the revolving door effect’. If the majority of sales are mainly focused on prospective customers, you may only be adding 10% to 25% of new customers per year: But, many companies might say, well that’s great; sign me up right now for an increase of 10% to 25% of customers per annum.

But, the big issue is that most businesses have huge problems with retention: It may not be uncommon to lose 10% to 25% of the customer base in a given year. The net effect is that you might negate all of your gains, and in essence create a ‘revolving door’ by ignoring existing customers. The overwhelming traditional view of sales is mainly about acquiring new customers. Eighty to ninety percent of marketing budgets are aimed at getting new customers in the ‘purchase funnel’. We’ve become so preoccupied about generating ‘awareness and interest’ that we forget about our most important asset– existing customers.

We must be change; ‘flip the funnel’, but first heed Pareto’s Law and ensure that the existing 20% is generating a strong ROI. Once you’ve earmarked that vital 20%, it’s time to put the other 4/5ths to work by ‘flipping the funnel’ and putting the focus squarely on existing customers. By putting the focus on existing customers, you can generate three benefits: Reduce attrition, Increase profit, Promote loyalty.

In the article Purchase Funnel is No More by Robin Grant writes: The ‘purchase funnel’ is one of the main tenets of marketing theory, but we’ve intuitively known for a while that it no longer holds true– if it ever did. According to McKinsey Research; examining purchase decisions of almost 20,000 consumers across five industries and three continents, and came-up with what they call the ‘consumer decision journey, which says: The funnel concept fails to capture all the touch points and key buying factors resulting from the explosion of product choices and digital channels, coupled with the emergence of an increasingly discerning, well-informed consumer.

A more sophisticated approach is required to help marketers navigate this environment, which is less linear and more complicated than the funnel suggests. We call this approach the ‘consumer decision journey’. Because of the shift away from one-way communication– from marketers to consumers– toward two-way conversation… marketers need a more systematic way to satisfy customer demands and manage word-of-mouth.

The most important thing is to make sure that marketing activities– are aligned with consumer’s behavior– how they research and buy products… companies need to look at their messaging in light of where they have the greatest opportunity. The key touchpoint that most influences consumer’s decision is consumer driven– word-of-mouth, e.g., talking to friends, internet searches, third-party sites…

Most businesses spend roughly five-to-ten times more to acquire a new customer than it does to retain an existing one, and yet companies continue to disproportionately spend on the ‘wrong’ end of the funnel, e.g., the mass media or awareness side. What they haven’t paid enough attention is the ‘right’ end of the funnel, e.g., the word-of-mouth component that essentially acts as a multiplier for future business.

The economic impact of an active, engaged, and loyal customer is tremendous… same is true of opposite scenario, namely, the impact of angry customers and negative word-of-mouth or referrals. Using the flipped funnel model… transforms existing customers into your best salespeople.

According to Steven Noble, Forrester; the funnel model’s value as a framework for sales is finished and a new model; the customer life cycle provides a better fit: It puts customers at the center of effort, involves the entire brand experience, and describes an ongoing relationship… The customer life cycle transforms how you talk and think about the digital world…

According to Seth Godin; Every business has its 1%: Every business has a group of customers so motivated, so satisfied, and so connected that they want to tell the rest of the world about  you and what you do. Your challenge is to give these people a megaphone. To switch your view of the market from a vertical funnel (i.e., attention at top–sales at bottom) to a horizontal one, in which ideas spread from each customer to another… it’s the funnel for the digital age… 

Steganography– Hiding in Plain Sight: Business Data Security through Obscurity– Art of Covert Communication, Hide-See…k

Steganography is based on a kind of camouflage: where the familiar and superficial draws attention away from the occluded and hidden. Do they see the leopard’s spots, or the leopard? ~Stowe Boyd

Steganography is the art and science of hiding information by embedding messages within other seemingly harmless messages. It works by replacing bits of useless or unused data in regular computer files (e.g., images, graphics, sound, text…) with bits of different, invisible information… Since rise of the Internet one of the most important factors of information technology and communication is security of information.

Cryptography was created as a technique for securing the secrecy of communication and many different methods have been developed to encrypt-decrypt data in order to keep messages secret. Unfortunately sometimes it may not be enough to keep the contents of a message secret, it may also be necessary to keep the existence of the message secret.

The technique used to implement this, is called steganography, and it differs from cryptography in the sense that where cryptography focuses on keeping the contents of a message secret, steganography focuses on keeping the existence of a message secret.  For example; a firm suspected that an insider was transmitting valuable intellectual property out of its network, and after checking mail logs, investigators found the smoking gun; two e-mails with harmless-looking image attachments… It turned out, that the images were hiding important company intellectual property (IP) by using steganography…

Currently, steganography represents a classical paradox: It’s next to impossible to convince people to look for something they cannot see and do not think anyone is using, because there is no large body of empirical data to prove that steganography is being used to transmit information outside of corporate networks…

In the article Steganography by Bojana writes: The rise of the Internet brought many advantages to our society but modern users also face various risks. Our virtual lives are under a constant threat from someone breaking into our computers or account, so it’s essential that all our sensitive data is properly secured…

Encryption is a great way of preventing third parties from accessing data illegally, but the most effective protection would be to hide the fact– that such data even exist. In its original form, steganography refers to making hidden messages in such a way that only a sender and a recipient have access to them. When it comes to digital data, steganography is a common method of data protection and includes; concealing data within encrypted or random files.

Steganography allows you to conceal important data within other files on your devices in such a way that they don’t attract attention to themselves. Basically you can code a message within an MP3 song or a photo and no one ever needs to know that there is something more important beneath the surface. Stenography occupies certain bits of audio or image files, so they can be opened regularly without anything to point out that they contain a secret message…

In the article Steganography for Dummies by Scott Berinato writes: Steganography works not by beating security, but by avoiding it all together. In a risk-based security program, a picture appears to pose no risk and thus bypasses further scrutiny. In order to get to the secret message you must: 1) know that it’s there, 2) have software to extract it, 3) know the password required to extract it.

But the larger point is you can spend all the money you want on security technology with super-complex algorithms for determining what is suspicious and it won’t flag or inspect a picture, image– it’s a secret message. For example, a person could have been delivering this week’s betting lines for an online gambling ring they mastermind, or a map to the spot where to pick up a drug shipment, or trading hard copies of product development data at an airport…

Or, if they wanted even more security, they could have opened an online picture-posting account (e.g., Flickr) and put 1,000 images there, with certain ones containing documents… All that’s required is that the ‘cipherer and decipherer’ communicate– what to look for? where to look? For example, an e-mail with the subject ‘new pictures’ could be a code for ‘secret messages’…

In the article Protect Your Organization from Steganographic Data Theft by Tom Olzak writes: It appears that steganography is a growing challenge for forensics investigators and organizations using content monitoring or filtering to protect sensitive data. The art and science of steganography has been around for centuries. It’s used to write hidden messages in a way that prevents anyone but the recipient from interpreting them.  

According to Russell Kay; steganography strips less important information, ‘bits’, from digital content and injects hidden data in its place. This ‘bit’ replacement is typically performed across the entire image. Once the text is inserted in the image, the ‘stego-medium’ is locked with a password… According to Gary C. Kessler; details methods to detect and defend against theft by steganography include:

  • Looking for markers like the slight image color difference…
  • Large number of duplicate colors in an image can be indicator…
  • When ‘suspect image’ is larger than ‘base image’, there might be hidden information…

In the article Steganography by Hassam writes: Data security has been a cat-and-mouse game between those for whom data hiding is the ultimate goal and for those who would prefer being capable of deciphering hidden data. The history of this goes back centuries as substitution cipher was practiced in ancient battlefronts. Such schemes are called encryption in which useful information is transformed in such a way that only authorized persons can decrypt information. But the problem is that even this encrypted or scrambled form of information is a tell-tale sign that something fishy is going on.

Encryption poses a risk for the business to be successful, which is why they try to identify and restrict any encrypted data that attempts to travel in or out of a defined security parameter. But here comes the real twist in the story: what about the situation when it becomes very difficult to actually identify the presence of encrypted data?

The study of steganography explains this as the events of hiding valuables in unsuspecting places to ward off robber’s attention… In the digital world as well, where an apparent normal file, say an image, document, sound file… is used as a host to hide information in it. Since these files are exchanged very frequently, over the internet and other communication channels, it becomes very time-consuming to scan each and every file to detect the presence of hidden communication…

Several industrial uses of steganography include; bookmark information to thwart copyright infringement, proof of ownership of digital content, exchanging confidential data over insecure protocols…

In the article Steganographic Cipher: What This Means for Business? by Mott Marvin Kornicki writes: Cryptography protects the contents of a message, and steganography can be said to protect both messages and communicating parties. Steganography includes concealment of information in computer files. In digital steganography, electronic communications may include steganographic coding inside of a transport layer, such as; document file, image file, program or protocol.

Media files are ideal for steganographic transmission because of large size. For example; a sender might start with an innocuous image file and adjust color of every 100th pixel to correspond to a letter in the alphabet, a change so subtle that someone not specifically looking for it is unlikely to notice it… Digital steganography techniques include:

  • Concealing messages within the lowest bits of ‘noisy’ images or sound files…
  • Concealing data within encrypted data or within random data…
  • Concealed messages in tampered executable files…
  • Pictures embedded in video material…
  • Blog-Steganography: Messages are fractionalized and (encrypted) pieces are added as comments…

Steganography provides a means of secret communication which cannot be removed without significantly altering the data in which it is embedded. The embedded data will be confidential unless an attacker can find a way to detect it.

Steganography is still not widely used, and in the rare instances when it is used it is hard to identify. That’s what makes it so appealing… If you need to transmit data from one person to another or simply hide the very existence of data on your hard disk, steganography in combination with encryption is a good attempt.

On the other hand, enterprises need to be aware of this type of attack, as it poses a serious data leakage problem. The problem is that many companies don’t deploy countermeasures to steganography because they’re not aware of the problem.

According to Wood; steganography is more akin to obfuscation than serious security, however, if the data has been encrypted and mixed in with the host data then it is harder – but there are tools that use various techniques to spot content.

In a Frost & Sullivan report says; as steganography continues on its evolutionary path, researchers have unearthed new platforms where steganographic techniques could be employed to hide information seamlessly. Such efforts have rekindled the research and development efforts oriented toward steganography platforms and steganalysis and a number of researchers are working toward discovering new platforms that miscreants could potentially use to hide information. 

Researchers have shown that voice over Internet protocol (VoIP) could emerge into a popular platform for steganography, owing to its ubiquity and the difficulty in detecting hidden information in VoIP streams. In addition to VoIP, platforms such as images and other multimedia content will be widely used for concealing information.

New analysis finds that steganography is gradually gaining attention from the business community and steganalysis tools could slowly find a place in both medium- and large-sized enterprises that are concerned about protecting intellectual assets. Steganography is also gaining traction as a legitimate technology, used for covert communications, copyright marking, data security…

According to Gaurav Sundararaman; apart from the traditional platforms such as; audio, video, images… researchers are looking for additional platforms/digital media through which information can be hidden. An interesting idea under consideration is to have a separate steganographic channel in a network to send messages. Although each platform has many benefits, it’s very difficult to ascertain the single best platform to send hidden messages. Steganography is capable of mitigating piracy by aiding copyright marking…

In future, digital camera manufacturers could implement steganographic features of camera firmware to annotate pictures with the photographer’s copyright information. Going forward, legitimate applications such as tagging of multimedia content with hidden information could become an important application area for steganography.

According to Achyuthanan; there is a distinct lack of awareness about steganography, particularly among the business community… it’s a technology to keep an eye on – both from the perspective of the enterprise needing to protect sensitive information, as well as; the individual who wants to transmit data via one of the safest ways possible…

Litigation Protects and Ruins Businesses: Litigation Impact on Cost, Valuation… Social Media… Outlook for Litigations–2013…

Litigation is the pursuit of practical ends, not a game of chess. ~Felix Frankfurter… U.S. has more frivolous lawsuits and greater– cost of litigation per person– than any other industrialized nation in the world, and it’s crippling the economy. ~Jack Kingston

It’s inevitable that most businesses will face at least one legal dispute… Business litigation takes many forms, including; contract disputes, premises liability, misrepresentation, patents, employment matters… All have potential to bring about unwanted consequences for both small and large businesses.

According to Stephen J. O’Connor; ideally, business disputes can be resolved without resorting to litigation through direct negotiations, mediation, or arbitration, which are often faster, less expensive, and more private than litigation. However, sometimes litigation is unavoidable. When parties are not willing to consider other options or have found alternatives to litigation unsuccessful than litigation must be considered.

However, litigation has major drawbacks including: Negative impact on a company’s bottom line, publicized employee disputes tarnish company’s reputation, accusations of fraud or contract disputes can force a company to put business on hold… Litigation can ultimately diminish a company’s value, drive down sales, or even cause a business to fold.

The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify. Plaintiffs in these types of lawsuits may seek recovery of very large or indeterminate amounts, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time.

The cost to defend future litigation may be significant. There may also be adverse publicity associated with litigation that can decrease consumer confidence in company, regardless of whether the allegations are valid or whether the company is ultimately found liable…

Impact of Litigation on Business and Economy: There are two ways to measure economic harm caused by large number and often merit-less litigation: First, there are direct costs that defendants must bear to defend themselves, even against groundless suits. These costs can include; spiraling legal fees and expenses for discovery, documentation, pre-trial proceedings, trials, time that executives must spend preparing for and being deposed and testifying at trial, increased budgets to fund in-house law departments…

Under rules of the U.S.’s legal system, these costs are rarely recouped, even when a suit is so lacking in merit that a judge dismisses it. These direct costs also factor into additional litigation cost; e.g.,  company’s decision to pay settlement simply as price of avoiding the costs (e.g., financial, reputation, executive distraction…) of a trial. The second area of economic harm goes well beyond defendants’ immediate litigation costs to include– the larger losses to society as a whole.

For example, as litigation costs take an increasing share of company budgets, the result is fewer resources available for– research, capital investment, market development and other areas that boost productivity and generate new jobs. As surveys shows, U.S.’s many litigations directly impact its businesses’ ability to innovate; produce new goods and services and overall employment:

  • Survey of 500 U.S. CEOs found that lawsuits caused 36% of their companies to discontinue products, 15% to lay off workers, and 8% to close plants.
  • Gallup survey of U.S. small businesses found that 26% of owners said– fear of liability kept them from releasing new products, services or operations to the market.
  • U.S. state-by-state economic analysis of employment and productivity in 17 industries showed states that adopt reforms to reduce abusive litigation practices– exhibit higher productivity growth than U.S. states that do not.

In the article Litigation Outlook For 2013 by Daniel Fisher writes:  This year, for lawyers, Obamacare will be the gift that keeps on giving: The hastily drafted, 2000-page law that virtually no one read in its entirety before voting on it left so many details to government bureaucrats that it will provide grist for litigation for years to come.

According to Paul M. (‘Mickey’) Pohl; the first Obamacare case are just the tip of the iceberg, there will be huge amounts of litigation over other government regulations… For example; plaintiff lawyers will target manufacturers-big retail chains with litigation over relatively trivial matters, such as; wording on product labels… Pensions will also generate litigation as state and local funds run out of money and creditors challenge the idea that pension obligations stand before all others…

Hovering over all this is the ‘National Labor Relations Board’, which has angered businesses with politicized actions like the lawsuit against Boeing for shifting jet production to right-to-work South Carolina. Lawyers for social media firms will be busy as litigants testing boundaries of traditional law as it applies to new technology. Short-sellers who post baseless accusations against public companies… and people who commit slander online will face lawsuits for damages...

Finally, banks will continue to see lawsuits challenging lending practices and other consumer issues. Pohl and his colleagues’ list five categories that they think will provide especially lucrative employment for lawyers:

  • Regulation: Obamacare, environmental restrictions, new financial rules will all spawn litigation…
  • Consumer class actions: Manufacturers and retailers–consumer protection, product labeling…
  • Financial: Consumer banking and financial institutions lending practices…
  • Social media: Internet-website privacy, content, slander…
  • Pensions: Under-funded pensions– public-sector employees on one side and creditors and taxpayers on the other…

In the article Protect Your Business by lawyers.com writes: Any day you get served with a lawsuit is not a good day for your business. You cannot ignore lawsuit without suffering a judgment against the business; expect that defending lawsuits will involve an uncertain amount of time and money. However, by taking immediate action and active role in your defense, you increase your chances of achieving your best possible resolution…

As soon as your business is served with a lawsuit, important deadlines are established regarding your right to defend against the lawsuit. If you do not take appropriate action within deadlines, you can put your business at disadvantage and potentially lose your right to defend– even if the lawsuit has no merit.

You must immediately notify your company’s lawyer about the lawsuit so that your lawyer can determine important deadline dates. Promptly investigate the lawsuit’s allegations by determining who in your business is a potential witness and what business documents may relate to allegations.

Share information with your lawyer, as soon as possible, in order to determine the best way to interview witnesses and preserve documentation. However, lawsuit is not the only means to resolve a dispute, even after the lawsuit has been filed: Arbitration, mediation, neutral evaluator, settlement conference… are alternative dispute resolution that can be used instead of, or in conjunction with, a lawsuit.

Although the procedure differs for each alternative method, as a group they are less formal and generally less time-consuming and expensive than a lawsuit. You should evaluate your options regarding alternatives as soon as your business has been sued…

In the article Litigation: Risks and Opportunities of Social Media by Michael Lynch writes: Growing case-law allowing for the discovery of social media content has significant implications for litigation strategy… Although the growth and popularity of social media affects numerous aspects of litigation, the role it plays in civil litigation discovery has been one of the hottest issues.

The ‘Federal Rules of Civil Procedure 26(b)’ allows liberal discovery, such that; any non-privileged matter that is relevant to any party’s claim or defense– is discoverable. Most states have a similarly broad approach to discovery. In the past few years, social media has already dramatically changed the scope of discovery, and courts are weighing in on when social media content is discoverable.

As technology advances, potentially discoverable information that is generated and stored in social media sites must now be considered as part of litigation strategy. The growing case-law allowing discovery of social media content has significant implications for litigation strategy for both parties. Lawyers and their clients must keep in mind the risks and opportunities associated with social media.

One important step is to evaluate early on in a case whether relevant information exists on social media sites. This includes– researching information regarding the opposing party that can support its claims or defenses, and seeking discovery of such information. Even before litigation, lawyers should advise their clients that social media content may be discoverable. For instance, companies that use– blogs, Facebook pages, or other similar social media to promote themselves should be cautious about the nature of the content.

Companies should be aware that simply because the technology is private or available only for internal use will not necessarily insulate the content from discovery. Also, these issues may not just be limited to company-sponsored content; it could possibly extend to content that employees post on their personal social media sites…

What is the ‘value’ of litigation? Placing a value on litigation– that is, determining the probable outcome and its potential financial impact– is important for several reasons. For instance, it not only can help you weigh relative costs and benefits of various litigation strategies, but it’s also relevant for business valuation and financial reporting purposes.

The value of litigation is particularly significant in light of the ‘Financial Accounting Standards Board’s (FASB’s) proposed changes in the way loss contingencies are accounted for and disclosed in a company’s financial statements. These changes raise some concerns regarding potential disclosure of litigation strategies and confidential information.

Accounting for litigation and other contingencies is a challenge. But FASB’s proposed changes raise significant concerns, particularly from the defendant’s perspective. Under current standards, contingent assets, such as– a plaintiff’s potential recovery, generally aren’t recorded on financial statements until they’re recognized– in other words, until the litigation is completed and the contingency is resolved.

Contingent losses, on the other hand, such as– a defendant’s potential liability, may need to be recorded or disclosed in the financial statements. Loss contingencies are classified as– ‘probable’, ‘reasonably possible’ or ‘remote’. Companies must accrue contingent losses that are probable, provided the amount of the loss can reasonably be estimated. If a loss isn’t accrued, it must be disclosed if there’s at least a reasonable possibility that a loss has been incurred…

When making litigation-related decisions (such as; settle a case or bring it to trial), it’s helpful to view litigation as ‘investment’. For example, valuation experts use a variety of techniques– including; decision trees, real options analysis, discounted cash flow… to determine the potential ‘return on investment’ of various litigation outcomes. Also, from a business valuation perspective, pending litigation can have a big impact on what a hypothetical willing buyer would pay for a business; i.e., pending litigation increases a business’s risk, which in turn has an adverse effect on its value…

A courtroom is generally the last place any business would want to be. Aside from the large legal bills associated with corporate litigation, there is the added stress and time taken up by being involved in legal disputes.