Debate Rages On– Social Media ROI: Organizations are Clueless About Social Media Marketing Metrics and Investment Pay-Offs…

What is the ROI of Social Media? Many business executives still think in terms of the traditional ROI– it’s an easy number but does it tell whole, or correct story... Social Media ‘Return on Investment’ (ROI) is a term often used but rarely defined… According to Tereza Litsa; not every organization has the same ROI from using social media, and in fact, not even every campaign yields the same ROI… And this makes it hard to answer the question: What is the ROI of Social Media? Measuring ROI doesn’t have to be about putting an absolute value on a social media campaign…  it’s more about gauging whether or not a social campaign has achieved the desired goals to the extent that justifies the resources invested into it…

According to Susan Etlinger; survey found that the top social media challenges for many organizations are– inability to tie social media to business outcomes (56%)… lack of analytics expertise and/or resources (39%)… poor tools (38%)… only 30% of brands consider themselves to be ‘effective’ or ‘extremely effective’ at connecting social media with revenue… According to Jeremiah Owyang; while ROI is important, it’s not everything— 84% of survey reported primary business impact of social media is not revenue generation but to get insight that would helped them better meet customer experience goals…

In the article Social Media ROI by Elisabet Parera writes: Although social media has amazing power through use of Facebook, Twitter, LinkedIn… profiles; they were not created to track– investments, costs, results… And this is where Social Media ROI comes into play. There’s an unflinching rule in digital marketing: If you don’t measure the results of your actions, you’ll never know if they are workingThis is what Social Media ROI deals with; measure ‘financial’ effectiveness of campaigns on social networks… In other words, the ROI tracks the economic performance of an investment in order to evaluate how much each dollar or other resources invested has generated during a social media campaign…

This may seem quite logical but according to Convince & Convert; reality is that 40% of organizations don’t know whether their efforts on social networks are successful or not… Not only this, but according to another study; 3 out of 4 digital marketing experts don’t know how to measure Social Media ROI. The main difficulty for many organizations is that they are tracking the ‘vanity’ metrics without knowing why they are important. When they should also be tracking effectiveness of the investment– dollars and resources… and evaluating the gains   (or loss) from their investment in social media activities…

In the article Social Media and ROI by Steve Penhollow writes: Try to assign a monetary value to a– ‘like’, ‘tweet’… Before an organization can attempt to calculate Social Media ROI, it must decide which side of the debate it backs– to ROI or not to ROI? Yes, there is a debate over Social Media ROI and it churns as robustly as ever… Social is like PR or customer service…You may not get a direct sale out of it… but it does have important impact in building brand awareness, trust… and keeping an organization in the mind of consumers, stakeholders… 

Hence it’s silly to ask; What is the ROI of Social Media? According to Steve Woodruff; it’s exactly the wrong question… First an organization must define a specific strategy and develop specific measurable tactics before they can move into the ROI territory..The reason for tracking measurement in social media– whether ROI or other metrics, isn’t just to prove that social campaigns are generating value, but also to make adjustments to the direction of the value…

Part of the beauty of social media marketing is that you can measure nearly everything you do, but keep in mind that measurement is only effective if you know– what to measure and why… For some the goal may be as simple as– driving traffic and measuring conversions… And they see no need for ROIs… For other organizations ROI is important, e.g.; ROI may be investment gains from handling customer service issues through Twitter instead on the phone. Perhaps tracking store traffic from social media promotion, campaign… Metrics are integral to gauging the health of an organization’s social presence…

However, many organization just track what are known as ‘vanity’ metrics… Vanity metrics make you feel as though you are succeeding when perhaps you’re not… What counts as a vanity metric depends as how you define success, e.g.; if goal of social media campaign is to raise sales and revenue, then big numbers of– ‘likes’, ‘shares’,  ‘follows’… may not be enough. However, if you are receiving lots of– ‘likes’, ‘shares’… and that gets more ‘followers’, then you may feel that a campaign is effective– even though none of those– ‘likers’, ‘sharers’, ‘followers’… purchases a single item…

A vanity metric has no direct link with the overarching aim of your social media campaign to increase sales and revenue. That doesn’t mean that those numbers are not important; it just means that they are not going to achieve financial goals…  Surely, if you’re going to spend money on something in business, it should generate some kind of return… or at least cut some visible, measurable loss… However, the value of social media that’s immediately visible and measurable is just the tip of the iceberg. The bulk of value lies below the water line– and not in most major social media initiatives…

Economic Freedom Index– U.S. Plummeted from 6th to 17th, Hits Historic Low: Economic Freedom Drives Economic Prosperity…

Bad news for U.S.: According to Index Of Economic Freedom; the U.S. dropped 6 positions in ranking of economic freedom around the world to #17, its lowest level since these studies have been published… While most nations of the world increased their economic freedom, the U.S. saw a significant decline– rated now not ‘free’ but only ‘mostly free’… According to David Davenport; the main contributor is a new category in the study called ‘fiscal health’… This shows that a shocking 38% of U.S. gross domestic product now goes to government and also emphasizes the growing national debt and deficit…

Clearly the U.S. needs– more economic growth, less government spending, less debt– in other words more freedom… According to Milton Friedman; nations that put equality ahead of freedom end-up with neither, but nations that put freedom ahead of equality end-up with great measure of both. The Economic Freedom Index measures the degree of economic freedom in the world’s nations based on the number and intensity of government regulations on wealth-creating activity… It takes approach similar to Adam Smith’s ‘The Wealth of Nations’, i.e.; basic institutions that protect the liberty of individuals to pursue their own economic interests result in greater prosperity for society at large…

But then there are those who think this Index is just bull… According to Justin Katz; this Index is naked punditry masquerading as economic analysis and undermining real efforts towards passing legislation that will help to reform the business climate and contain the ever-growing power of corporations. And, in actual fact, the Index does not measure economic freedoms of families, but economic freedoms of corporations and the 1%-ers…

Index of Economic Freedom Report: Each year since 1995, this Index has ranked the world’s countries in comparative levels of economic freedom, which it defines as the degree to which governments allow labor, capital, and goods to move freely… and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself… In the recent 23rd edition, the Index analyzes economic policy developments in 186 countries, which are graded and ranked on 12 measures of economic freedom…

These measurement are based on 12 quantitative, qualitative factors, grouped into four broad categories, or pillars, of economic freedom. Each of the ten economic freedoms within these categories is graded on a scale of 0 to 100.  A country’s overall score is derived by averaging the ten economic factors with equal weight being given to each. The four categories are:

  • Rule of Law (property rights, government integrity, judicial fairness)…  
  • Government Size (government spending, tax burden, fiscal health)…  
  • Regulatory Balance (business freedom, labor freedom, monetary freedom)…  
  • Open Markets (trade freedom, investment freedom, financial freedom)… 

In the article Debunking Index of Economic Freedom by John Miller writes: Upon examination this Index it turns out to be a very poor barometer of either freedom defined or prosperity… For over a hundred years, the economic world has been engaged in a great intellectual debate:

On one side of this debate are those philosophers and economists who advocate an economic system based on private property and free markets– or what one might call economic freedom… Adam Smith was one of the first to argue economic freedom… According to Robert A. Lawson; key ingredients of economic freedom are; personal choice, voluntary exchange, freedom to compete in markets, protection of person and property…

On the other side of this debate are people who instead argue for an economic system characterized by centralized economic planning and state control of the means of production… These scholars argue that free markets lead to– monopolies, chronic economic crises, income inequality, increasing degradation of the poor… and that centralized political control of people’s economic lives avoids problems of the marketplace…

However the big question is: Do countries that exhibit greater degrees of economic freedom perform better than those that do not?  According to Robert Lawson; much scholarly research has been and continues to be done to see if the Index correlates with various measures of a good society, e.g.; economic growth, income equality, gender equality, equal life expectancy… While there is scholarly debate about exact nature of these relationships the results are uniformly positive…

 In the article U.S. Economy ‘Mostly’ Free by Ben Sasse Jim Demint write: The U.S. is the land of the ‘mostly free’ and home of the brave; but doesn’t the phrase ‘mostly free’ sounds wrong? However, that’s how U.S. economy ranks in the recent Index of Economic Freedom Report… Yes it’s bad news for the U.S. and especially for the poorest, most vulnerable citizens… For decades government has presumed itself competent to manage many aspect of the private sector… Although, the  intentions may be noble but outcomes are mostly– costly, clumsy, very ineffective, and counter productive. Government has saddled many organizations with combination of– byzantine tax code, predatory federal agencies, unnecessary regulations, monetary manipulations.

 Economic freedom is key to greater opportunity and an improved quality of life… It’s the freedom to choose how to produce, sell, use your own resources, while respecting others’ rights to do the same… Economic freedom is the engine that drives prosperity and is the difference between why some societies thrive while others do not. According to Anthony B. Kim; free-market capitalism is built on the principles of economic freedom– not to conserve the status quo, but to overturn and transform it…

Economic freedom means pushing out the old to make way for the new, so that real progress can take place. It means innovation in all realms: better jobs, better goods and services, and better societies… Economic freedom affects every aspect of an individual’s life. Living in a society with high levels of economic freedom leads to– higher income, lower poverty, less unemployment, longer life expectancy, and cleaner environments… More economic freedom improves business and leads to a higher quality of life for all citizens… But since the U.S. is only ‘mostly free’, clearly there is much to be done…

Succeed in Business– Build Better Mousetrap: Hugh Myth– Being Better Is Not Good Enough Anymore…

Ah: Build a better mouse-trap; not a ‘different mouse-trap’, but a ‘better mouse trap’… But; What does ‘better’ mean? According to Seth Godin; this is a hard lesson for marketing and business development people to learn– they don’t get to decide what’s better, the customer does! If you look at the decisions made about– features, benefits, pricing… how many of them are obviously ‘better’ and how many people might disagree? Build a better mousetrap and the world will beat a path to your door is one of the most quoted innovation credo: Yet it’s a myth…

Innovation experts call this the ‘better mousetrap fallacy’, because the credo focuses solely on technology and not on consumers… Consumers really don’t really care about a better mousetrap; they care about fewer mice… According to Ted Levitt; consumers don’t want to buy a quarter-inch drill; they want a quarter-inch hole. But many organizations still seem to take this credo literally…

Even though it’s can damage the business– it gives the impression that building ‘better’ things is all that it takes to build a successful business… According to John Seiffer; it’s just not true, yet the comfort of believing it forces countless organizations to endure pain of failure despite having something better. So yes build ‘better’ mousetrap if so inclined, but if you are looking to build successful organization: Innovate or Die…

In the article Build Better Mousetrap by Corbett Barr writes: It’s a trap many organizations fall into: They believe that if they just come up with the elusive ‘better’ mousetrap, i.e.; product, service, widget, app… then they can build a successful organization… But just being ‘better’ will not get customers beating a path to your door… There are few big problems with idea of ‘better’: First, ‘better’ is worthless on its own– its only a multiplier of execution– it needs entire value support system…

Second, ‘better’ is rarely new: Often what you think is ‘better’ isn’t really ‘better’ at all… Your ‘better’ may have actually led others with the same definition of ‘better’ down a path to failure… Hence the issue is not ‘better’, but ‘different’ like innovative– and it does not necessarily have to be completely your own original idea. It’s what you ‘add’ and ‘do’ that makes you ‘better’; different, unique, relevant, valued…

In the article Myth: Just Build Better Mousetrap by Steve Denning writes: Most people know the saying; build ‘better’ mousetrap. Its become quite a popular maxim. It’s a catchy line but it’s really bad advice and can be a disaster for organizations that follows its logic:

  • Building ‘better’ mousetrap embodies an ‘inside-out’ mindset: It means that your thinking is oriented from ‘inside-out’, rather than from ‘outside-in’ the organization… The ‘inside-out’ perspective characterizes the 20th Century thinking, whereas the ‘outside-in’ represents the shift in power from seller-to-buyer and characterizes the new business reality… According to Professor Ranjay Gulati; firms with an ‘inside-out’ mindset are much less resilient than those that adopt an ‘outside-in’ mindset… The logic is simple; know and understand the customer, rather than just guessing…
  • Building ‘better’ mousetrap is a continuous improvement mindset: It means the task of management is simply to focus on efficiency and continuous improvement. In effect, the mousetrap must keep getting better for customers to be delighted… But there are limits to ‘better’, and at some point ‘better’ becomes obsolete… Hence, organizations must move beyond continuous improvement and beyond just making things better… They must do things different by disrupting the value of ‘better’ through innovation…

In the article Build Better Mousetrap by Claude Whitacre writes: Build a better’ mousetrap is metaphor for; an organization knows what customers want better than customers themselves… an organization knows how to delight customers better than customers themselves…  The ‘better’ mousetrap approach makes the assumptions that key factors are aligned– customer expectation, competitive advantage, valued-added, price/performance…

However, in a highly disruptive and innovative market environment, basic assumptions may not be correct, e.g.; Do consumers really want ‘better’ mousetrap? Is the mousetrap market growing or shrinking? Do consumers still want to trap mice? A credo built into ‘better mousetrap’ scenario is– technology in search of market. The notion of technology alone is ‘better’ can be expensive risk that an organization can avoid by answering few simple questions: Who is the customer? What is the problem to be solved? How big is the market? What is the added value? What support and service do customer expect?

The notion that an organization can offer same, or nearly the same, thing as competition but only a little bit ‘better’ is a tough strategy and it will definitely face a struggle to survive. According to Robert E. Johnston; when challenged to build ‘better’ mousetrap the typically approach is to find ways to make it– stronger, lighter, quieter, faster, cheaper, nicer design, less visible… among other obvious low-hanging improvements. This approach, done well, will produce incremental innovation, but seldom anything more...

However, it’s interesting to observe that when organizations are challenged to imagine beyond non-incremental (beyond ‘better’) to breakthrough innovation, it seems that many organizations often just start with the safety that comes from something that they know and already works. Hence the logic is very straight forward, e.g.; since this new innovative idea’s is already proven to be feasible, all the organization need to do is innovate new value into something that is already known, proven…

The logic is simple, less risk, good to go: Right? Yes perhaps, if what you are looking for is just incremental or modest innovation… But if objective is inflict major disruption in market(s), then a more disruptive non-incremental innovative (or breakthrough) approach is required– but initially its feasibility may be in question… It’s easier to build feasibility into innovation, than to build innovation into feasibilityHence, the biggest challenge in a highly competitive disruptive market environment is to breakthrough existing mindset of how something is currently conceived, and embrace ideas that are more innovative than feasible…

Digital Globalization– New Era Of Global Flows: Changing Rules– Rise of Connectivity, Decline of Cross-Border Trade…

Globalization is the ever-increasing integration of– people, cultures, business interests, innovation, governments… But its a contentious issue with people on one side, arguing that globalization is changing the world for better– propagating a heightened level of economic growth, improving human rights, improving access to technology, goods and services… On other side, critics argue– its destroying indigenous cultures, increasing inequality, deteriorating interests of workers, diminishing sovereignty of countries, exploiting under-developed countries to further the interests of the few developed countries…

The world is in midst of a rise in protectionism– anti-trade policies are at highest point since 2008 financial crisis. According to Fabrizio Minei; in recent years, the amounts of money that are flowing across-borders has drastically decreased, which represents drastic shift from international commerce, with localized markets more dependent on domestic consumption for growth… There is a global trend towards– regionalism, with like-minded nations banding together in a club of traders, or mini-lateral groups operating as most favored-trading partners. According to Joshua Cooper Ramo; localism is on the rise– local banking, local production, local sourcing for food, restaurants… 

However others take different view; they say rather than signaling the death of globalization, the decline in traditional metrics signals birth of a new digital globalization– one that is re-balancing geopolitics with geoeconomics… To succeed in the digital era, companies need to think about globalization in a different way, using different metrics, devise new frameworks to develop winning strategies… According to Jeff Immelt; it’s time for bold pivot, developing  strategy that focus on localization… but localism combined within a global footprint…

In the article Digital Globalization by James Manyika writes: The conventional wisdom says globalization has stalled, but even though the global goods trade has flattened and cross-border capital flows have declined sharply since 2008, globalization as world connection is not in decline; rather it’s entering a new phase defined by soaring digital flows of data, information… Remarkably digital flows that were practically nonexistent just 15 years ago, now exert a larger impact on GDP growth than centuries-old trade in goods. And this shift makes it possible for many organizations to reach global markets with less capital-intensive business models… Although it too poses new risks and policy challenges as well…

The world is digitally connected more than ever and it has changed globalization in fundamental ways… The amount of cross-border bandwidth has grown 45 times larger since 2005, and it’s projected to increase by additional nine times over next five years… as digital flows of information, searches, communication, video, transactions, intra-company traffic continue to surge… In addition to streams of data, information, ideas… these digital flows enable movement of goods, services, finance, people… Virtually every type of cross-border transaction now has a digital component…

International trade was largely confined to developed nations and large multinational companies… Today a digital form of globalization has opened the door to developing nations, small companies, start-ups, billions of individuals… Tens of millions of small, midsize enterprises, worldwide have embraced the digital economy and developed global e-commerce markets… Approximately 12% of the global goods trade is conducted via digital e-commerce. Even the smallest enterprises are digital global via the internet; 86% of tech-based start-ups report some type of cross-border activity…

Even individuals use global digital platforms to– learn, find work, showcase talent, build personal networks… Over a billion people have international connections on social media, and over 500 million take part in some type of cross-border e-commerce. In this increasingly digital era of globalization, companies can better manage cross-border operations in– leaner, more efficient ways… Using digital platforms organizations can sell into growing global markets, while keeping virtual teams connected in real-time…

Researcher find that over a decade, all types of digital flows acting together have raised world GDP by 10.1% over what would have resulted in world without cross-border flows. This value amounted to about $7.8 trillion in 2014 alone with digital data flows accounting for about $2.8 trillion of this impact. These digital flows are key for growth, as they expose economies to– ideas, research, technologies, talent, best practices from around the world…

In the article New Era of Globalization by ING writes: Globalization is like a fault line on the world’s ideological map: Most people are either passionate supporters or violent opponents of globalization–there is virtually no middle ground. According to Mauro Guillen; globalization is not a feeble phenomenon, it’s changes how world works– it’s neither civilizing or destructive, it’s neither monolithic or inevitable… but it does requires open-mind to understand it. The world has under-gone historic developments in last few decades; internet, smartphones, social media, rise of China, emerging markets, fast cheap travel. But the notion that globalization is a uniting and unifying force that eliminates nations’ physical borders is diminishing…

However there are many tricky issues and popular disenchantment with the concept of globalization. There is need for new (different) approach on how globalization economic and political policy impact working people, e.g.; economic equality of opportunity for middle class workers, more responsive governance to empower individuals at the local levels… without sacrificing the benefits of globalization. According to Lael Brainard; globalization is not a choice; it’s a force– driven by logic of markets and technology. It’s not product or service but process– it transforms the way people work and live and the very map of the world: You can’t stop it but you can shape it…

 

Edge of Craziness: To Win Big in Business It Helps To Be– Little Nutty, Touch of Madness, Dash Hypomania.

Think craziness with a dash of hypomania… Hypomania is a mild form of mania… hypomanics are people who are brimming with infectious energy, irrational confidence, really big ideas… They think, talk, move, make decisions quickly… They live on the edge, between normal and abnormal… According to Rich Karlgaard; they are filled with energy; flooded with ideas; driven, restless, unable to keep still… they channel energy into the achievement of wildly grand ambitions. They are risk- takers, impulsive,  fast-talking, witty, gregarious, charismatic and persuasive… They are prone to feel persecuted when others don’t accept their vision, mission… Does this sounds like you? If yes, you are destined for greatness…

Craziness in business can be a game plan for game changers… It’s an age of disruption. You cannot do big things if you’re content with doing things a little better than everyone else, or a little different from how you did them before… In an era of hyper-competition and non-stop dislocation, the only way to stand out from the crowd is to stand for something– different… The most successful organizations don’t just out-compete rivals– they redefine terms of competition by embracing ‘one-of-kind’ ideas in a world filled with too much ‘me-to’ thinking. The business world is full of organizations that have made it big by– deviating from the usual, thinking different, being just a little hypomania…

In the article Craziness in Business by Jason writes: Needless to say people come up with a lot of crazy business ideas in some strange places, e.g.; in the car, in the shower, heck even in sleep… About 95% of them are complete and total garbage but the other 5% have a small shot at becoming something worth acting on… But how do you know which is the ‘home run’ or ‘dud’? Ask few questions, if the answer is ‘yes’ to all of them, then roll-up your sleeves and make it happen!

  • Does the idea solve a problem or desire? Necessity is the mother of invention. Ideas that are born out of need and/or desire– come complete with a built-in demand…
  • Is the idea executable? Think through how an idea is going to work. Do you have resources? Do you have passion, time, investment… to make it successful? Challenge yourself and get specific…
  • Is the idea marketable? Best business ideas market themselves: They have the ‘wow’ factor, or something that’s going to ‘turn heads’… When it’s  a different (more valued) mouse trap…
  • Does the idea have a shelf life? It might seem like a good idea today, but will it be a good idea in six months or five years? Think hard about where the ‘market’ is now, and where it might be headed. Will the idea still relevant down the road?
  • Is the value of the idea worth the investment? Crazy ideas can be– crazy smart, or crazy waste of time… Does the idea bring enough value to the customer, and can you make money?

A little ‘madness’ is the difference-maker in business– it creates the improbable, it makes something out of nothing, it enables leaps into the unknown. According to Barry J. Moltz; if a person is perfectly sane and follows all the ‘safe’ business rules they probably won’t do anything crazy, ridiculous… According to Brendan Boyle; innovation is right on edge of ridiculousness…

In the article Build A Disruptive Organization by Andreas von der Heydt writes: Disruption is king… It’s obvious that the old guard organizations in most industries are being challenged by countless number of cutting-edge disruption… But how can an organization become disruptive, how can you align an organization to be the leader in their industry? In general there are three options for a disruptive and visionary game changer:

First, develop your own disruptive business model… Second, further develop your existing business model in your current industry and/or in adjacent industries and categories… Third, take your existing business model and apply it to (completely) different industries… This is the deployment of existing and proven principles in other markets and industries, e.g.; Apple, Google, Amazon… and other organizations have done it and are doing it… The key is to find different, innovative ways to excite customers, replace outdated paradigms, strategies… The following principles might be useful:

  • Understand your business, evaluate and specify current business model: It’s an obvious starting point. But many organization just don’t do it…
  • Evaluate where your customers, markets, industry… might evolve to in 5 – 10 years… Will your existing organization and associated products still fit?
  • Become a disruptor— even a self-disruptor– and take the lead… In this digital age, the traditional first-mover vs. follower still has a powerful advantage…
  • Broaden your scope and imagine the impossible… Look outside of your current thinking patterns, explore different markets and industries… Think without ‘limits’…
  • Replace cautiousness with bold, strategic thinking… Disruptive strategies are driven by speed, audacity, craziness… Apply a long-term perspective, resist short-term investors and management…

The lesson is simple– it’s not good enough anymore to be ‘pretty good’ at anything… The most successful organizations figure out how to be ‘most’ in their field; most elegant, most simple, most exclusive, most affordable, most seamless global, most intensely local… For decades, many leaders have gotten comfortable with strategies, practices… that kept organizations in ‘middle of road’– it’s where things are safe, secure… But today with so much change, so much pressure, so much disruption… ‘middle of road’ strategy is the ‘end of road’…

Having a little craziness, a touch of hypomania… is an imperative for an organization to survive and thrive in this digital age… According to Joe Wilcox: it’s not about goals, it’s about pushing the boundaries, discovery, innovation… finding different ways of doing business to stay ahead of the pack… But it requires commitment to disruption, and a willingness to challenge established conventions…

But unfortunately these characteristics remains all-too-rare in many organizations, precisely because it can look– little nutty, crazy, strange, hypomania… Hence, next time you come across some weird business idea, don’t just push it away, think it over… it might be the billion dollar opportunity waiting to happen…

Algorithms are LifeBlood of Modern World– Age of Algorithmization, Rise of Algocracy: Yet You Know Nothing About Them…

Algorithms dominate the world… they are life blood of modern society… they are building blocks of business, government… they are the recipes for modern living. At its simplest level an algorithm is series of logical step-by-step instructions that give fast, accurate answers to a range of complex problems… All internet search engines, including Google, sift through thousands, if not millions of web-pages, to access content that you seek in an instant… and it’s all done with algorithms– simple set of mathematical rules embedded in software… Facebook, Tweeter, LinkedIn… in fact all on-line platforms and all apps use some form of algorithm… Every time you access automated teller machine (ATM), or book an air, or train ticket, or buy something online, you are using an algorithm…

The use of algorithms in daily transactions is unprecedented. Every time you use a computer– laptop, smart phone, mileage calculator in a car– you are using algorithms… Credit cards, identity cards, health cards… use algorithms to store, retrieve personal data… However, experts worry that there is too little transparency, too much control in hands of organizations that develop algorithms… Even though most of them are created with good intentions some may have unintended consequences… According to Danielle Citron; most people don’t think much about algorithms and their trustworthiness, transparency… but in reality the people who craft them may be less than honorable and embed within them all sorts of biases, sinister things… 

In the article World Run by Algorithms by Banning Garrett writes: The world runs by algorithms and the dependency will only increase in the future, especially as the planet becomes wired-up with tens of billions of sensors in the Internet of Things… Algorithms are key to systems that supply basic needs, they are the foundation of civilization. They are critical to energy systems, food production and distribution systems, water supplies, communications, virtually all governmental, health, educational, financial systems… Algorithms are critical to the functioning of national defense– from the systems that provide intelligence and reconnaissance to those that enable weapons…

The list of algorithms is virtually inexhaustible. We don’t ‘see’ them but without them the modern world would grind to a halt… They are essential for the modern world to function… However, algorithms are not regulated, there are no standards, no controls, no oversight… they are developed, implemented, managed, maintained… solely by their developers… According to Christopher Steiner; left unsupervised, algorithms can and will do strange things. As we put more and more of the world under the control of algorithms, we can lose track of who-or what-is pulling the strings…

In the article Importance of Algorithms by John Danaher writes: The term ‘algorithm’ can mystify people. Whether talk about decisions made by algorithms that personally affects people, or whether its talk about the ‘rise of algocracy’… there is danger of some people becoming overly alarmed, concerned about privacy, security… The reality is that algorithms are relatively benign and easy to understand (at least conceptually). It’s only the systems through which they are created and implemented that give rise to potential issues…

In the modern digital age, algorithms lie at the heart of all networks created on the internet and innovations emerging in areas, such as; AI, robotics, driverless cars, automation… Daily, people are exposed to ways in which websites use algorithms to perform– internet searches, personalize advertising, match potential romantic partners, recommend a variety of products and services… And some people may be perhaps less directly exposed but still affected by algorithms, such as; trading stocks, identifying terrorist suspects, assist in medical diagnostics, match organ donors… The multiplication of such uses is what gives rise to phenomenon of ‘algocracy’, i.e.; world is ruled and controlled by algorithms…

In the article Know More About Algorithms by Simon Elvery writes: Your life is dominated by algorithms, yet you know next-to-nothing about how they work, or their potential consequences… Hence it’s time that you learn and understand how algorithms work, and their growing impact on your life… The intrusion of algorithms in daily life is pervasive, in fact, it’s easy to overlook them entirely, or dismiss it simply as a natural consequence of modernity… While there is growing body of reports that discussion the critical nature of algorithms… most people don’t take the time or make the effort to learn how they may be impacting their lives… and still organizations continue to uses them to make important decisions that impacts everyone’s life…

Algorithms have become the arbiters of human decision-making; in almost any area you can imagine, from watching a movie, to buying a house, to self-driving cars… According to Barry Chudakov; the issue comes down to simple question: How can you learn, fully understand the implication, impact of algorithms on your actions and decisions? The answer is relatively straight forward– their overall impact on your daily life is incalculable, because their processes and transactions are mostly hidden from public view…

There is a general lack of algorithm literacy, which goes beyond basic digital literacy… Algorithms are invisible and even often referred to as ‘black box’ constructs… there is no transparency, no user interfaces, and the code is usually not available to the public… most people who use them are in the dark about how they work, or how/why/when they might be a threat… There a need for greater algorithmic literacy… Hence basic issues: Should you rely on them without knowing what they do? And who, if anyone, is policing them? 

 

The Oops Factor– When Well-Intended Actions Produce Unintended Consequences, and Unforeseen Outcomes…

They pop-up everywhere– the unintended, unanticipated, unforeseen. outcomes from well-intended purposeful decisions and actions. History is littered with organizations that failed or even excelled because of unintended consequences… The Law of Unintended Consequences states that most actions have at least one unintended consequence. In other words, each decision or action may have more than one effect, including unforeseen effects… But the concept is less of a law or rule and more of a call to decision-makers, to beware… According to Rob Norton; the law of unintended consequences is often cited but rarely defined and leaders have heeded its power for decades, but many have largely ignored it…

Decisions have intended as well as unintended consequences. According to Ruth Winett; before making strategic decisions try to anticipate the consequences of actions– think through the chain of events a decision is likely to trigger… Talk with customers, employees, experts… and try to gain insight about potential unintended consequences of a decision and its outcomes. Then decide if the action is worth the consequences… Too often organizations make strategic decisions, then surprised by its consequences. Remember, what may seem rational in moment may have far-reaching unintended consequences that can negate a well-intended and seemingly reasonable decision…

In the article Unintended Consequences by Rodger Dean Duncan writes: Unintended consequences is the handy term for outcomes that are not the ones foreseen by a purposeful act, e.g.; in medicine, unintended consequences are called ‘side-effects’– list of unintended effects for a drug is often longer than the narrative that promote it…  A well-intended action can be risky… According to Isaac Newton; for every action there is an equal and opposite reaction. Most every action you take has the potential for consequences you didn’t anticipate… Most decisions come with no guarantees, but there is also the reality that failing to make a decision, is a decision and it has consequences. Here are a few tips that might help:

  • Decide what to decide: Many decisions can and should be delegated to others… and that enables you to focus on those decisions that legitimately require your focus…
  • Be collaboratively independent: Confer with subject-matter experts, but avoid getting mired in decision-by-committee. Solicit views of credible sources but be prepared to own the decision…
  • Avoid information bloat: Information overload can lead to analysis paralysis, which can lead to fuzzy thinking and faulty decisions. Keep it simple…
  • Define your desired outcome: To the extent possible, clarify what the specific outcome must look like… Create boundaries that are specific, measurable, attainable, relevant, time-related…

In the article Unintended Consequences by Michael K. Shaub writes: When you make decisions, it’s tempting to think short-term and to constrain yourself in terms of potential unintended consequences. There are couple reasons: First, short-term consequences are the most identifiable; they are the easiest to anticipate… Second, long-term consequences are less identifiable and carry greater risk for unintended consequences… However one thing is for sure you cannot control everything that other people do and as long as other people are involved in a situation you can never be quite sure of the outcome… Just because there is a comprehensive plan of action that does not mean that the intended consequences will result… variables that are out of your control may very well dictate the outcome…

In the article Unintended Consequences of Business Decisions by Josh Linkner writes: Too often business problems are solved impulsively, e.g.; you hastily install a new policy, offer a generous incentive, add another step to the production process, cut prices, reduce quality to save costs… These type changes or adjustment are duct-tape solutions and they rarely stand the test of time… like the fable of the little Dutch boy who discovered a leak in the dike by putting his finger in the hole to stop the leak… but then a new leak sprung-out in another location… It’s about unforeseen issues that occur when you plug one problem and then a new one pops-up elsewhere…

It’s a dilemma: You act even though there are uncertainties and unknown consequences of your actions… and yet you must act for even to do nothing is to act… knowing that there will always be consequences… Change is an inherent part of business: Change is necessary; part of change is within your control and predictable; part of change is anticipating the unknown. You have a responsibility to act but you also have an obligation to accept, mitigate unintended, unforeseen consequences of your actions… Accepting responsibility for actions that were not intended is difficult but it’s there nonetheless…

Decision-makers must take time to think through all ramifications of their actions. The more strategic an action, the more thoughtfulness is required to make a effective decision… According to Chad Thiele; decisions are an imperfect art, and decision-makers must accept that with uncertainty there is always an– Oops factor… 

It’s realization that there are consequences with most decisions– some intended and others unintended… and the outcomes may not be exactly as anticipated… It’s important to continually– monitor, measure, adjust… Decisions have unintended consequences and, in turn, they impact still other decisions. they may also have unintended consequences… Act prudently: Beware of Unintended Consequences…